TOPIC : Building Australia's future

Mike, there is no doubt that engineering will be one of Australia’s growth professions not just because of resources and the building of roads, rail and ports. In the future we will also see growth in areas like reducing carbon, where environmental studies will require more engineers. But its really sad to learn that our scientists are still not finding jobs. I wrote that comment after attending the ATSE Clunes Ross awards which was a celebration of the development of Australian science. Five years ago engineers were doing it tough which is one reason why we now have so few. Thanks for alerting us to the fact that on the ground it remains tough for science graduates.

Robert Gottliebsen 16 May 2008 1:11 PM

TOPIC : Building Australia's future

Robert I get extremely annoyed when I read these stories about the need for scientists. I returned to Australia in 2000 after two years as a research fellow (chemistry) at Oxford and basically found that a science career in this country meant the occasional job advertised at CSIRO or a lowly paid job doing quality control. There is a stark difference between career paths in science in the USA and UK with the career oblivion that science will lead all but a minority to in this country. When you read of shortages in science what this actually refers to is shortages at the bottom end of the scale. The scientific equivalent of assembly line work in a factory. Engineering on the other hand seems to be a different matter though. From all I have seen you can definitely expect to make a good career in engineering this country. Yet time and time again I have found that a higher degree in chemistry is the career equivalent to having cancer or leprosy here in Australia.

Mike Honeychurch 16 May 2008 1:08 PM

TOPIC : Building Australia's future

TOPIC : Budget 2008

TOPIC : Budget 2008

There seems to be an illusion that assisting with internet costs, telephones etc is a substitute for assistance called cash that one needs at the service station or the supermarket. Pensioners need help with daily expenses not only with utilities. Not every pensioner has a computer and internet so it's not equal. You're playing the same game as Coles and Woolworths that give a discount on their fuel via the checkout regardless if you have a car or not. Those without are propping up those that have. It's unfair and one-sided.

brian casey 16 May 2008 12:44 PM

TOPIC : Budget 2008

Dear Mr Swan

Shame, shame, shame.

I live in a residential housing estate of approximately 650 residents, most of whom are aged pensioners, paying a minimum of $118 to $196 per week site fees after owning their own home. A single pensioner in this village has trouble putting food on the table and several I have spoken to do not even eat meat any more as they can't afford it. You have an unreal surplus and also provide tax cuts for the working families who earn up to $150,000.

I challenge you to live on the pension after paying out site fees and utilities and insurance and see if you have any money left for food let alone the luxury of eating out or a game of bingo.

These people have worked hard all their lives, paid their taxes, some have even fought for this country and this is the gratitude you show them.

How would you like your parents treated this way?

I do hope you remember where your votes come from.

Shame on you.

Irene Broadhead 16 May 2008 12:40 PM

TOPIC : Budget 2008

What benefits have pensioners received in the 2008 budget, I cannot even find a mention of this group. Are we non-existent?

jackie taberer 16 May 2008 12:37 PM

TOPIC : Budget 2008

We are the clever country. Innovation, invention, research and development, commercialisation! How can our ideas travel that path with the demise of the Commercial Ready scheme (with no notice) and no alternative. Many SME's will wither and die, some will never be born – just remain an idea. Is this smart! No, this is stupidity.

terry crawn 16 May 2008 12:36 PM

TOPIC : Budget 2008

I will continue to receive the baby bonus with the new budget but I still view it as unfair. The reason it was bought in was to encourage higher birth rates in Australia. So presumably we now only want to encourage high birth rates among lower income earners? The rich still pay tax and should still be entitled to receive such a bonus, especially when it costs them more to take time off from high earning jobs after having a baby.

Kristin Harmer 16 May 2008 12:29 PM

TOPIC : Budget 2008

The budget now means tests the subsidy for people who want to go solar. Lower income workers would probably not be able to afford the $5,000 after subsidy required to put in a basic system... and without subsidy the sums don't add up even over 10 years! The Rudd government has its head in the sand when it comes to greenhouse - maybe coal mining unions have had a word?

James Szabadics 16 May 2008 12:26 PM

TOPIC : Budget 2008

Anna Burgdorf's assertion that innovation trickles down from luxury cars, and therefore these shouldn't be taxed, is a bit far fetched. Audi may be a luxury brand in Australia, but is quite the 'common' peoples car in Europe, particularly in its home Germany. Rated above Opel (GM) and Volkswagen (part owner) but under BMW, Mercedes and Porche in the fancy stakes. A lot of Europeans view Japanese made cars as luxurious or better, it must be the exotic thing.

Most of the improvements Anna talks about are brought about by 'meddling' improving EC safety and environmental standards, which seem to be constantly tighter, not the inventiveness of Audi and other luxury marques, as they try to stay up to date about standards forecast for 2012 and further. As to tax on luxury cars, which is after all only a tiny segment of the australian new car market, stunting the regeneration of the Australian car fleet and therefore be environmentally unsound, this could easily be remedied by promoting the manufacturing and buying of local cars with a much smaller carbon footprint.

Another argument is that driving off older cars is less damaging than the constant renewing with cars that have a modern shelf life of 5-6 years. Also a luxury brand improvement. As to the price of $57,123 being a ridiculously low threshold, this makes it clear that, the 'free for all'-particularly the well off middle class- in the last years of the Howard/Costello era has made some delusional about prices. Spin me another one. Look at it as just another sin tax like alcohol and gambling. This one is on vanity.

Gerrit van Dijk 15 May 2008 5:11 PM

TOPIC : Fighting the skills shortage

Robert, I think it is commendable that you are encouraging young people to enter the science fields.

Unfortunately, being a scientist pays nowhere near enough, especially in Sydney.

A scientist friend who works for a leading scientific company has been told by its senior management that you do the job "for the love of it, not for the money".

Why not both?

John Mihail 15 May 2008 5:07 PM

TOPIC : The rise of sovereign funds

TOPIC : Budget 2008

I am appalled at the comments and judgements made by our new Treasurer in respect to the supposed 'rich' in our country. I find this budget divisive at best and am completely saddened at the marketing ploy of the Government to make people think that any couple earning over $150,000 a year are apparently 'rich'. Wayne Swan was quoted as saying "Can we as a country afford to pay family payments and transport payments to millionaires while on the other hand we do have a lot of people on relatively low incomes". This is outrageous. My husband and I are now "millionaires" because we earn a combined income of $150,000 a year?

It is almost as though Wayne Swan is wanting to create a kind of prejudice against couples that are both employed, with the aim of getting his budget through parliament. Playing 'two person working families' against the rest. I can tell you that we are not rich and we are struggling like everyone else to pay our mortgage. We have not been able to get ahead in past years due to the amount of HECS, private health cover and other taxes we have had to pay. Because I will not be eligible for maternity leave we were counting on the Baby Bonus to help us to have a family. For us, this may now not be possible.

I pray I am missing something because I think this budget is awful and hurts those that work hardest for our country. I am at a loss as to why more people are not reacting badly. I guess I will be able to save money though on being able to pull out of Private Health Care. I just hope I don't get sick and end up in the hospital waiting queue. I can't bear to think of the negative impact this new Government is about to have on our hospitals. Kevin Rudd and his team have done a wonderful job to this point. I just can't help but think that they should outsource the finance management of this country to a group that know what they are doing.

Nicole Cottrell 15 May 2008 10:32 AM

TOPIC : Budget 2008

What about the poor pensioners? Don't the government have any concern about how we try to manage on the small amount we receive? Also the one-off payment that we received from the Liberals – what has happened to that? Again another let down.

pam Jackson 14 May 2008 3:20 PM

TOPIC : Budget 2008

When John Howard was in government, he generously paid aged pensioners (especially the self-funded and partly self-funded ones) $500 a year as a bonus. He also removed the horrendous 15 per cent on lumpsum payments, which the "greatest treasurer on earth" (Keating), had trebled from the original 5 percent. Socialist governments have always been known to heavily tax the doers, to appease the masses with easy grants and hand-outs. I just wonder, whether this government, in it's obsession with the demands of the younger generation, has forgotten us already.

Nos Lapre 14 May 2008 3:18 PM

TOPIC : Westpac and St George merger

You write that Westpac has the ability to pay more than other potential suitors. If the St George board doesn't canvass other offers, we'll never know.

I'm a SGB shareholder and unashamedly of the view that money in the hand trumps everything.

lance arthy 14 May 2008 3:13 PM

TOPIC : Budget 2008

This budget appears to be Labor's first attempt at squeezing the middle layer of salaried middle income aspirants who formed Howards bulwark. In the last election this layer fractured helping Labour win. The choice being offered now is either to move upwards or drop downwards along the real income spiral. What's the point in pouring money into education and research, the building blocks of this middle layer, if its rewards are to be chipped away? As always being salaried doesn't help.

Ash Gholkar 14 May 2008 1:35 PM

TOPIC : Oxiana and Zinifex to merge

I think Zinifex is currently very undervalued and I wouldn't be surprised if they were taken out before the merger, particularly now that they have all but acquired Avebury. As I am an Ox shareholder and a Zinifex shareholder, bring it on... the merger that is. I'll be happy to take my money off Xstrata after the merger... not before...

Derek Lightbody 14 May 2008 1:30 PM

TOPIC : Budget 2008

I have not heard anything that Wayne Swan has done to aid, in particular single pensioners. My husband died a few months ago. Prior to his death we were received the full pension plus carer help. Suddenly one goes from almost $1000 dollars a fortnight to $570. I cannot understand how any government can know that when one is single or widowed that the expenses incurred are exactly the same with the exception of food. All other expenses stay and it is incredibly hard to live on such a paltry amount of $235 a fortnight. However, I guess we will still receive a paltry increase every year and subsequently the prescriptions then go up, also private health care. I really find it fascinating that these politicians do not actually live in the real world. I really would love to see them manage on a pension - they just don't understand and I guess as we get older we become invisible and are not of any concern to the government of the time.

Helen Wiggins 14 May 2008 1:00 PM

TOPIC : Budget 2008

I agree with Anna from Audi Corporate - the threshold should be increased to say $70,000 which would mean a good many of the four cylinder and some six cylinder sedan cars would escape this very unfair tax.

Finance Manager - Zonefresh Gourmet Markets

Mark Chester 14 May 2008 12:55 PM

TOPIC : Centro smashed by the credit crunch

Ken Lionnet may be waiting a long time for a distribution to be paid from Centro. If they need a liquidity facility to be put in place before the end of May, there can't be too much left in the coffers. On the other hand, CER may be in line for one. Glenn Rufrano has made it clear that he considers CER to be a 'managed fund' like the syndicates, the wholesale funds and CAF/CAWF. These other funds have still been distributing, albeit for smaller amounts than usual.

It is more likely that a distribution could be made from CER this financial year for at least that part of the business that is not affected by the Centro re-financing (Super LLC). This would have an immediate effect on the share price because it would indicate to the market that CER is indeed 'ring fenced' from Centro to the limit of Super LLC. The other benefit is that Centro would be able to get its share of this CER distribution to assist its cash flow. It all depends on whether the banks will agree and whether it fits into the overall strategy to recapitalise Centro and/or CER.

Doug Parry 14 May 2008 12:54 PM

TOPIC : Budget 2008

From a big picture viewpoint, this Budget was much as expected (in terms of the surplus and reduced public sector demand) and represents only a modest tightening of fiscal policy. Our calculations point to an approximate structural tightening of the Budget of around one quarter of a per cent of GDP per annum in the next few years (see the Medium Term Fiscal Context section). But certainly it is not a horror Budget and not one that will radically crunch the economy or inflation.

The Government has implemented much of its election agenda with the pre-announced tax cuts very much at centre stage. Other measures, although numerous, are relatively small. These include increased child care rebates, raising the Medicare levy threshold, additional funds for older Australians and their carers, and increased education spending. On the other side of the ledger, upper class welfare has been trimmed (mean tests for baby bonuses and welfare payments). Interestingly, the largest ongoing savings come from running the public service more efficiently ($2 billion per annum) and cutting the previous Government’s programs ($1 billion per annum). Other areas of focus include: extra money to boost the supply of new housing, and a welcome cut in withholding tax as part of a push to enhance Australia’s role as a financial centre and climate and water funding (see section on detailed measures). Finally, the Government confirmed its intention to conduct a detailed review of tax policy – with the report due late 2009.

The other big headline catcher is the establishments of an infrastructure fund (around $21 billion), an education fund ($10 billion) and a health fund ($11 billion). These all are funded from the current and next year surpluses. Clearly the focus here is on addressing perceived bottlenecks and inadequacies. While potentially productivity enhancing, if the money is spent quickly that would not be consistent with tighter policy or taking much heat out of inflation. Overall a Budget that implements most of the new government’s agenda - rather than a radical tightening of policy. The RBA would see it as “leaning in the desired direction” but not much more.

Chief Economist - NAB

Alan Oster 14 May 2008 12:02 PM

TOPIC : Budget 2008

The dropping of the 'Commercial Ready' program for product innovation and commercialisation is a major blow for manufacturers trying to make headway in a very difficult export environment. This program partially funded the R&D for technology and other projects. We thought the 'dumbing down' of science and innovation in Australia was about to change, given the rhetoric of the pre-election government. Now it looks set to worsen for technology exporters.

Geoff Condick 14 May 2008 11:29 AM

TOPIC : Budget 2008

I agree with Alan that most of the economic commentators this morning failed to understand the budget and the job it needed to do in today's economic climate. He was also correct in nominating my old colleague Alan Mitchell of the AFR as the only one talking sense. There are three points to be made about the budget:

1. It is the task of the Reserve Bank, not the government to 'fight' inflation. The budget's job is to set a fiscal and political strategy capable of responding to future needs and pressures. Despite his muddled and contradictory statements about the inflation genie, Swan has done this.

2. There is adequate evidence already emerging that demand pressures are easing and reflationary policies may be needed to avoid recession in the non-resource sectors of the economy. The special funds created from the surplus will be useful in this, although how they are to be used, and what role private enterprise will have is unclear.

3. The tax cuts which some commentators have repeatedly criticised as inflationary are a vital tool to combat wage demands which could and still might destroy Swan's 'responsible balance'.

But I disagree with Alan on Swan's performance. In his 7.30 Report interview he was obviously on an adrenaline high. His speech however was delivered as if he didn't know what the words meant. As one letter-writer summed it up this morning, he looked like an artificially-inseminated cow that knew something was happening but didn't understand what. I suppose that's what the Treasury does to new Treasurers!

Former ABC Economics & Finance Correspondent

Geoffrey Luck 14 May 2008 11:07 AM

TOPIC : Budget 2008

I am very disappointed with the revised baby bonus scheme. It discourages people to work. I am surely going to sit at home so that I can get the baby bonus because if I start working our family income will cross the threshold. By the way, if expenditure for all babies is the same and we pay higher taxes, why shouldn't we get the baby bonus? Ridiculous!

Meenal Singh 14 May 2008 11:02 AM

TOPIC : Inflation concerns

It seems obvious to me that the principle cause of inflation is skyrocketing global energy costs. The easiest way to combat these is to develop alternative energy sources and forms of transport that consume less or no oil. So how much did the 2008 budget assign to alternative energy sources and forms of transport this year? Last night the price of oil hit $127. So much for fighting inflation.

Dexter Bland 14 May 2008 10:30 AM

TOPIC : Budget 2008

The 2008 budget can be portrayed as embodying a moderate tightening of fiscal policy. And that’s a distinct change from the Budget’s of previous years, which we’ve consistently argued, have, through the net impact of the policy decisions contained within them, amounted to an ill-timed loosening of fiscal policy. The specific savings decisions are a mixture of the bold and the unadventurous. The decisions to means-test the ‘baby bonus’ and Family Tax Benefit Part B (for stay-at-home-spouses), effectively denying them to families with annual incomes in excess of $150,000, are especially praiseworthy as an attempt to improve the targeting of such measures. Indeed the pity is that there wasn’t a broader assault on so-called ‘middle-class welfare’.

On the other hand, we’re a bit sceptical of the one-off ‘efficiency dividend’ which is projected to save over $400 million a year from agency running costs and represents the largest single expenditure saving in the Budget. Previous experience with such measures suggests that they are actually a way of avoiding hard decisions about what programs should be cut, end up being pushed down to the lowest level of management possible, and more often than not result in reduced efficiency and standards of customer service.

Nonetheless, these and other savings have allowed the Government to fund other important priorities, including climate change, education, dental health, housing affordability and Indigenous disadvantage. There’s also a fillip to Australia’s funds management industry through reductions in the withholding tax rate on property income and capital gains (though not interest) paid to foreign investors. One other notable aspect of the Budget is that it has created a more compelling vision of how it will deploy the enlarged surpluses which it is projecting over the next four years.

In sum, this is an appropriate Budget for challenging economic circumstances. It doesn’t add to upward pressure on inflation and interest rates, as recent Budgets have done; nor does it take undue risks with a more uncertain outlook for economic growth than at any time in the past five years. It acknowledges that bringing inflation down will entail some sacrifices (including a rise in the unemployment rate), but attempts to spread those sacrifices more fairly than would have been the case if the task of slowing domestic demand had been left to monetary policy alone (as it has been up until now). Having brought down an ‘appropriate’ Budget for current circumstances, and having kept faith with the voters who installed it at the last election, it is very much to be hoped that the Rudd Government will be willing to spend political capital more adventurously in the two budgets before the election.

Chief Economist - ANZ Bank

Saul Eslake 14 May 2008 10:19 AM

TOPIC : Budget 2008

TOPIC : Budget 2008

The luxury car tax is both divisive and discriminatory. Divisive in that it further divides the real rich (to whom money is no object) from everyone else. It is discriminatory in two ways. First it seems to be levied on cars only and not other so called luxury items (what about jewellery, antiques, boats etc) and second a family purchasing say two cars at $40,000 each, pays no luxury tax, but another family choosing to buy one car for $80,000 gets slugged the luxury tax. These stupid taxes seem to be typical of Australian Labor governments. Genuine reform would see this particular tax scrapped not increased. New Zealand does not have a luxury car tax!

Edward Hausler 14 May 2008 9:13 AM