Economic growth healthy

Australia’s economy grew 0.6 per cent last quarter, a slight improvement from the September quarter, taking growth for the year to 3.1 per cent.

Economists expected the economy to grow by 0.6 per cent in the December quarter and 3 per cent for 2012.

The annual growth was the highest since 2007, when the economy grew by 3.8 per cent.

Growth in the fourth quarter was driven by a 1.1 per cent contribution from public investment and 0.6 per cent from net exports, the Bureau of Statistics data showed.

Private investment fell 1 per cent while there was a 0.4 per cent slide from changes in inventories.

The mining, manufacturing, health and finance sectors all contributed about 0.1 per cent to GDP growth.

At the same time, the terms of trade fell by 2.7 per cent in the December quarter.

Some analysts revised their estimates upwards this week, after a raft of economic data - such as the first estimates of companies’ 2013-14 capital expenditure, retail sales and current account deficit - pointed to continued momentum in the Australian economy despite an expected slowdown in mining investment.

Yesterday, the Reserve Bank kept interest rates at 3 per cent, saying that the current settings were appropriate for the economy with subdued non-mining investment and moderate consumer spending.

At the same time, retail sales bounced back from three months of falls, rising by 0.9 per cent in January, while the current account deficit narrowed and government spending increased.

Australia's economy has remain resilient despite global economic headwinds and a strong currency, with its counterparts in Europe, the United States and Asia continuing to battle high unemployment and a fragile recovery.

The Australian dollar spiked to 102.77 US cents, a high for the day, following the data release.

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Lies, damned lies and Labor claims

Ross Gittins

I guess you've heard the news: the Gillard government has obtained new analysis of data from the Bureau of Statistics showing that Tony Abbott's election commitments inflict brutal damage on working families, particularly those in western Sydney, increasing taxes and cutting support to families.

According to Treasurer Wayne Swan, Abbott's commitments include scrapping the tripling of the tax-free threshold, axing the new schoolkids' bonus and abolishing family payments from the household assistance package introduced in June last year.

The government tripled the tax-free threshold from $6000 to $18,200 a year from July last year, we're told, delivering tax cuts to all taxpayers earning up to $80,000 a year. Most of these people received savings of at least $300 a year, with many part-time workers receiving up to $600.

The schoolkids' bonus is worth $410 a year for primary school students and $820 a year for secondary school students to families who receive family tax benefit part A.

The household assistance package increased payments to families who receive benefit part A by up to $110 per child and by $70 per family for those receiving benefit part B. The median family income in Fairfield is $106,000. This family, with two children both in primary school, father working full-time on $86,000 a year and mother working part-time on $20,000 will be almost $1500 a year worse off, we're told. The mother will pay $600 more in tax and they will lose $820 in schoolkids' bonus and $72 in other benefits.

The median family income in Penrith is $118,000. This family, with two primary and one high school student, the father earning $70,000 and the mother on $48,000, will be $2300 a year worse off, we're told. The father will pay $250 more in tax, the mother will pay $300 more, and they'll lose $1640 in schoolkids' bonus and $108 in other benefits.

Terrible, eh? There's just one small problem. This stuff is so misleading as to be quite dishonest.

For a start, this is just politically inspired figuring, which doesn't deserve the aura of authority the government has sought to give it by having it released by the Treasurer with a reference to ''new analysis of Bureau of Statistics data'' and allowing the media to refer to it as ''modelling''.

It's true you'd have to look up the bureau's census figures to get the details of the median family in a particular suburb, but after that the ''modelling'' could be done on the back of an envelope.

There's a key omission from Labor's description of its wonderfully generous household assistance package: why it was necessary. Its purpose was to compensate low and middle-income families for the cost of the carbon tax. Since the Coalition promises to abolish the carbon tax, Abbott has said that all the compensation for the tax will also go. (Strictly speaking, the schoolkids' bonus is linked to the mining tax, but the Coalition is also promising to abolish this tax, and Abbott has said the bonus, too, will go.)

The trick is that Abbott has yet to give any details of how or when these concessions would go and what they'd be replaced with. But this hasn't inhibited Labor. It has happily assumed what the Coalition intends and is presenting its assumptions as hard facts.

The most glaring omission from Labor's calculation of the hip-pocket effect of all this is its failure to acknowledge the saving households would make from the abolition of the carbon tax.

Based on Treasury's original calculations, this should be worth about $515 a year per household, including $172 a year from lower electricity prices and $78 a year from lower gas prices.

Some Labor supporters argue that even if the carbon tax is abolished, prices won't fall. This is highly unlikely. The state government tribunals that regulate electricity and gas prices would insist on it. And a Coalition government would no doubt instruct the Australian Competition and Consumer Commission to police the wider price decrease.

Labor's repeated claim to have tripled the tax-free threshold from $6000 to $18,200 a year has always been literally true, but highly misleading. That's because it conveniently ignores the complex operation of the low-income tax offset.

When you allow for this offset, which Labor has reduced and changed without removing, the effective tax-free threshold has increased by a much smaller $4500-odd from $16,000 to $20,542. This explains why the tax cut arising from the seemingly huge increase in the threshold is so modest (for many, $5.80 a week) and also why the move yields no saving to anyone earning more than $80,000 a year. For them, the threshold increase has been ''clawed back''.

The idea of a Coalition government bringing about an actual increase in income tax is hard to imagine. Labor omits to mention Abbott has promised a modest tax cut, though he hasn't said when it would happen.

Labor also omits to mention that the generous schoolkids' bonus replaced its earlier 50 per cent education tax refund, which offered savings of up to almost $400 a year on the eligible expenses of primary school students and up to almost $800 for secondary students.

Labor has assumed that Abbott would merely abolish the schoolkids' bonus without reinstating the education tax refund. Maybe he would; maybe he wouldn't - he hasn't yet said. But only a one-eyed Labor supporter would trust Labor to read Abbott's mind.

It didn't take the announcement of an election date to ensure the informal election campaign would begin as soon as we were back at work in January. It's a daunting thought.

But at least it gives people like me plenty of time to demonstrate the dishonesty of the claims being made.

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Leftist opposition to LEGAL immigration

THERE is a certain irony to a man with a very thick Scottish accent [Labor senator Doug Cameron] banging on about the evils of 457 visas, the arrangement that allows workers to come to Australia on a temporary basis.

Ditto the woman whose family came from Wales to make a better life. According to Julia Gillard, migrants must be put at the end of the queue and the 457 visa program must be kept in check.

Lacking any systematic evidence of actual rorting of the program, the Prime Minister has decided to rely on "community feedback" - code for lost votes - to clamp down on the program and to impose additional red-tape on all employers, most of which comply with requirements.

Perhaps the most bizarre proposed new condition is English language competence of temporary migrants. For jobs that do not require English language ability, this makes no sense at all.

Were such a condition introduced by the Coalition, there would be accusations of racism. But we should not forget the deeply protectionist and anti-immigration roots of the union movement that has been baying for changes to 457 visas.

Gillard has also claimed that "we inherited from the previous government a 457 temporary foreign-worker visa program that was totally out of control".

If the number of 457 visa holders is indicative of control, then it actually looks as though this government has lost control of the program. In 2007-08, there were 111,000 457 visas granted; in 2011-12, the number was 125,000.

Britain remains the largest source of 457 visa holders, with other significant countries including India, Ireland, the US and The Philippines. While there has been some fluctuation over the past few years, the industry that accounts for most 457 visas is healthcare and social assistance. There are also significant numbers of 457 visa holders working in construction and IT.

The program is good policy. There are various conditions attached, including the need for local labour market testing and the requirement for market wages to be paid.

Given these safeguards are met, employers can access productive and enthusiastic workers from overseas when local workers are in short supply.

And for construction projects which are temporary, the use of 457 visa holders makes sense, particularly where the project is located in a remote location to which it is difficult to attract Australian workers.

Certainly, a good proportion of 457 visa holders do apply to stay in Australia. These people must fulfill the same requirements as other permanent skilled migrants, including the waiving of any entitlement to welfare for a two-year period.

"Trying before you buy" makes a lot of sense for these individuals.

If Canberra is serious about Australia being an open and innovative country hooked into Asia, there is no place for the retrograde changes being made to the 457 visa program.

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Teachers angry over lost perk

The new conservative government is moving fast.  And Queensland is unicameral:  No pesky upper house to hold things up

QUEENSLAND is taking "a giant step backwards" in the classroom and defying world best practice by banning teachers from professional development during school time, national education experts warn.

Principal and teachers warn student learning will suffer in state schools as a result of the controversial move.

But Education Minister John-Paul Langbroek says parents want to see their children have the same teacher throughout every school day and denies the move is a cost-cutting measure.

The State Government has sparked widespread concern and surprise by its decision to ban Professional Development (PD) during school time in state schools, amid a national focus on improving teacher quality in a bid to boost student results.

Grattan Institute school education program director Dr Ben Jensen said the ban was a giant step backwards.

"It goes against what the best schools in Australia are doing and what the best systems around the world are doing and directly runs against the idea that schools should operate in a way that continually improves learning and teaching, which should be our objective,'' Dr Jensen said.

He said schools needed to move towards a model in which professional learning was built in to how they operated daily, rather than running largely ineffective PD courses and workshop.

Professor Brian Caldwell, who was hired by the State Government in 2010 to provide a review of teacher education, backed Dr Jensen, saying PD was essential to boost teacher quality.

But Mr Langbroek said it was better for students if PD happened outside school time.  "Parents expect continuity with respect to teaching in the classroom," he said.

"For this reason the Government made the decision to limit professional development to the six pupil free days each year, school holidays or afternoons after school."

He said concerns had been raised about some instances in which it was difficult to do PD outside school hours and the Government was working towards "an appropriate solution'' around those.

Queensland Association of State School Principals president Hilary Backus said the six pupil free days for PD was not enough time given the introduction of new national curriculum, increasing technology and workplace demands.

"QASSP absolutely supports teacher continuity...however, If we are to improve student outcomes we have to improve teacher quality,'' Mrs Backus said.

Queensland Teachers' Union president Kevin Bates said if the ban remained students would "miss out on a whole range of opportunities - not as a consequence of teachers not being willing to - but teachers not being able to deliver the newest educational practices and theories''.

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