March, 2019

Rudd plans mortgage help for jobless

The federal government has admitted not every retrenched worker with a mortgage will benefit from a loan repayment reprieve it has negotiated with Australia\’s four major banks.


The banks have agreed to offer a 12 month period of relief from mortgage payments to workers who have lost their jobs.

They will also consider extending mortgage contract periods and reducing repayments, and providing interest-only repayment options on other loans.

But smaller banks, credit unions, building societies and non-bank lenders – who make up 20 per cent of the mortgage market – are not part of the deal.

Treasurer Wayne Swan, who negotiated the reprieve “principles”, says the arrangements won\’t work for everyone, but will be available for those in greatest need.

“It means that workers who have gone through the trauma of losing their jobs will have up to 12 months grace from the stress of having to find the money to service their home loans,” he said.

Prime Minister Kevin Rudd says it will be up to the banks to decide which of its borrowers gain relief.

“Banks will make assessments based on the borrower\’s ability to meet new contractual obligations in the long term,” he told a jobs forum in Melbourne.

The government had asked the banks to provide “maximum flexibility” for borrowers suffering temporary hardship through “enforced unemployment”.

Mr Rudd acknowledged the Commonwealth Bank already had announced reprieve measures for its borrowers.

Mr Swan said discussions were underway with credit unions and mutual building societies about their “appropriate participation” in the agreement, saying some already had procedures in place for members facing financial hardship.

The opposition says the agreement provides little comfort for retrenched workers who have mortgages with smaller lenders.

“There are literally hundreds of thousands of Australians that do not have mortgages with the major financial institutions and therefore they may well not be covered,” finance spokesman Joe Hockey said.

Opposition housing spokesman Scott Morrison warned that capitalising interest could increase the risk of negative equity for some home owners.

“People who take on these options will end up with a greater debt and higher repayments at the end of the day,” he said.

Westpac CEO Gail Kelly says banks do not want customers in financial hardship to feel as though they have nowhere to go.

“The last thing we want to do with regard to mortgages is actually take over someone\’s home,” she said.

Westpac and St George have also extended their Assist program, which helps customers by extending loan terms or freezing repayments, to include small business.

In addition, the Westpac Group will provide $1 million in funding to organisations that provide financial counselling, including the Salvation Army and the Smith Family.

The ANZ says its customers are managing repayments well, but acknowledged there was “continued weakness” in the economy.

The bank had always supported borrowers facing hardship, CEO Brian Hartzer said.

“But we have decided to expand these in light of continuing difficult economic circumstances,” he said.

North Korea launches \’long-range\’ rocket

North Korea launched a long-range rocket on Sunday, defying months of pressure from the United States and its allies over what they warned would be an illegal ballistic missile test.


US President Barack Obama swiftly condemned Pyongyang\’s “provocative” act, South Korea denounced it as a “reckless” threat to world security, and the UN Security Council was to hold an emergency meeting at America\’s request. Japan said the rocket flew over its territory while the boosters landed safely in the waters off its coasts, and that it had not moved to intercept the rocket – something North Korea had warned would be seen as an act of war. But the launch, which the North said was a peaceful move to test a communications satellite, angered nations which have held years of nuclear disarmament talks with Kim Jong-Il\’s secretive communist regime. “The launch took place at 11:30:15 (12:30 AEST),” a South Korean spokeswoman said, breaking first news of a launch which the North had vowed would take place between April 4-8. There was no immediate announcement from Pyongyang. The North tested a missile and an atomic bomb in 2006, while in the midst of the six-nation disarmament talks, and Obama said Pyongyang had tested a Taepodong-2, its longest-range missile, with Sunday\’s launch. The North tested the Taepodong-2, which has an estimated range of 6,700 kilometres in July 2006 but it failed after 40 seconds. \’Violation of Resolution 1718\’ The US State Department reiterated it saw the launch as a violation of Security Council Resolution 1718, adopted after that test, which imposed sanctions on the North and warned against further nuclear or missile tests. The United States and North Korea have decades of hostility between them, dating back to the 1950-53 Korean war which ended without a peace treaty, and Pyongyang\’s secretive regime has often worried its neighbours. “Regardless of any North Korean claims, this is provocative activity which threatens stability and peace on the Korean peninsula and in Northeast Asia,” South Korean Foreign Minister Yu Myung-Hwan said. “North Korea\’s launch is a clear violation of (Resolution) 1718,” Yu said. Despite the flurry of confirmations and condemnations of the launch, it was not immediately known if the exercise had succeeded. A South Korean official said Seoul believed the rocket was carrying a satellite. “However, it does not necessarily mean that the launch was a success,” the official was quoted as saying by South Korea\’s Yonhap news agency. The other five nations in the disarmament talks had all called on North Korea to refrain from the launch, including China – the North\’s closest ally, which declined to make official comment in the aftermath of the launch. The Taepodong-2 could theoretically reach Alaska or Hawaii at maximum range, though North Korea was not believed to have configured a warhead for it yet. Window for launch The North had given a window for the launch beginning on Saturday, and the actual launch came not long after official radio announced favourable weather conditions in the morning. Analysts said North Korea wanted good film footage of a launch as part of plans to maximise its propaganda value. The regime is seen as eager to give its people news of a technological triumph to bolster support at a time of lingering uncertainty over the health of leader Kim. There are widespread reports Kim suffered a stroke last August. While apparently largely recovered, the incident has raised questions about who would succeed the 67-year-old. North Korea is also seen as trying to strengthen its hand with Washington in future nuclear disarmament negotiations. Pyongyang has said that bringing the matter to the UN Security Council – let alone any sanctions – would cause the breakdown of the disarmament talks.

Bonus payments roll out today

The Australian Taxation Office is set to roll out bonus payments to more than seven million Australians from Monday.


That follows last week\’s High Court decision rejecting a challenge to the validity of the payments.

Tax Commissioner Michael D\’Ascenzo said the 7.4 million people who had already lodged their 2007-08 tax returns would begin receiving their tax bonus payments this week.

Those who have already lodged their tax returns need do nothing more – payments will be automatically despatched to their banks accounts or home addresses.

Under the bonus scheme, designed to boost the economy, those with a taxable income of up to $80,000 will receive $900, $600 if taxable income is between $80,001 and $90,000, and $250 if taxable income is between $90,001 and $100,000.

Mr D\’Ascenzo said eligible people who have received their 2007-08 notice of assessment before March 27 could expect to receive their payment between now and May 16.

Those who received their notice of assessment after March 27 can expect their bonus payment around four weeks after receiving their notice of assessment.

Mr D\’Ascenzo urged people to be patient.

“Due to the large number of payments we ask that people don\’t call us about the progress of individual payments while we are still distributing them,” he said.

Tax office call centres will be open for seven days a week from May 16 to resolve any tax bonus payment issues.

It\’s not too late for those yet to submit their tax returns.

Mr D\’Ascenzo said these must be lodged by June 30 to be eligible, unless an extension has been granted.

ATO second commissioner Jenny Granger said the first payments would reach bank accounts on Tuesday night and the first cheques would arrive Wednesday morning.

Payments will be made in a random order based on postcodes in order to assist the postal and banking systems, she said.

“We hope to have them all out by May 15 of those that have already filed their returns,” she told ABC Radio.

The ATO would be making 7.4 million payments in the first round, prompting Ms Granger to make a call for patience.

As many as 1.2 million Australians have yet to file tax returns for 2007-08. They need to do so before June 30 to qualify for the tax bonus.

“The sooner you get it in, the sooner we can make the payments.”

The ATO which has received more than 500,000 inquiries about the bonus, mostly relating to changed addresses and bank account details.

“The size of this payment over such a short time is the biggest one we have done in our history,” Ms Granger said.

Swan says it\’s OK for people to save their bonus

Meanwhile, Treasurer Wayne Swan has given taxpayers the green light to save rather than spend their bonus.

Mr Swan said the payments will help stimulate demand and employment, especially in the retail sector where most of the money is expected to be spent.

The government\’s first economic stimulus strategy had a substantial influence on retail sales in December, January and February, the treasurer said.

“Some of it was saved and that is a good thing too because what that does is bring forward the time at which many people will further consume,” he told ABC Radio on Monday.

The bonus payment would fill the gap between now and when direct investment started flowing for school maintenance projects – nearly 6,000 of which were announced on Sunday – as well as residential housing construction and energy efficiency projects, Mr Swan said.

“It takes a bit of time to organise that direct investment,” Mr Swan said, adding it would employ people in the construction sector and increase demand in the supply line.

Man shoots his five kids, then himself

A man shot and killed his five children, between the ages of seven and 16, then turned the gun on himself after his wife told him she was leaving him, in the third mass shooting in the US in as many days.


James Harrison, 34, killed his children on Saturday inside his mobile home in Graham, 100km south of Seattle, then drove to a nearby casino and shot himself inside his car, Pierce County sheriff Paul Pastor told reporters.

Harrison on Friday looked for his missing wife and found her at a convenience store with another man. The woman said she was leaving Harrison to be with her new boyfriend.

Alerted by neighbours, police Saturday morning found the five children dead, some shot several times, inside the mobile home\’s bedrooms and one inside the bathroom. Harrison was found inside his car, the engine still running, with a rifle shot to the head.

Pastor described the crime scene on Sunday as a “horrible thing”.

“This was not a tragedy. It was a rotten murder,” Pastor said. “This appears to be the terrible work of the biological father. If that doesn\’t break your heart, I don\’t know what does.”

Six mass shootings in three weeks

The murders mark the latest spasm of gun violence in the United States which has been rocked by six fatal mass shootings in the past three weeks, including three police officers killed on Saturday by a 23-year-old man at his home in Pittsburgh, Pennsylvania.

The Pittsburgh attack came a day after a recently unemployed man stormed an immigrant services centre where he had been learning English in Binghamton, New York and went on a murderous rampage, killing 13 people before taking his own life.

On March 29, a heavily armed gunman shot dead eight people at a North Carolina nursing home, days after six people were killed in an apparent murder-suicide in an upscale neighbourhood in northern California\’s Silicon Valley.\’

And on March 10, an unemployed man killed his mother, grandmother and eight others on a vicious shooting rampage in Alabama.

\’Link with failing economy\’

Criminologist Jack Levin, of Northeastern University in Boston, Massachusetts, said there appears to be a link between the failing US economy and a rising body count.

“A mass killer is someone who has almost always suffered a catastrophic loss — that\’s the link between a recession and mass killings,” he said, citing the loss of a job, money or a relationship.

“Catastrophic losses serve as inspiration, or precipitant,” he told news agency AFP.

Westpac dampens rate cut expectations

Westpac Banking Corp Ltd chief executive Gail Kelly has dampened expectations that banks will pass on in full any interest rate cut by the central bank tomorrow, saying bank funding costs are still too high.


Mrs Kelly said the banks are paying more for deposits, and that the cost of wholesale funding sourced offshore is “higher than it\’s ever been”.

“The costs of funding have continued to go up,” she told the Seven Network\’s Sunrise program on Monday.

The board of the Reserve Bank of Australia (RBA) holds its monthly meeting on Tuesday to consider monetary policy and will announce its decision at 1430 AEST.

According to an AAP survey, the expected outcome of the meeting is too close to call, with economists almost evenly divided on whether further monetary policy action on interest rates is needed.

Ten of the 19 economists surveyed expect the RBA to lower interest rates at its Tuesday meeting, with seven favouring a move of 50 basis points and three leaning toward a smaller 25 basis point cut.

But the remaining nine believe the official cash rate will be kept at its 45-year low of 3.25 per cent.

Debt futures markets have priced in a 25 basis point cut on Tuesday. It the cash rate is cut by 25 basis points to three per cent, it will be the lowest since March 1960 when the average rate was 2.99 per cent.

A 50 basis point cut would put it under the all-time low of 2.89 per cent in January 1960.

The RBA left official interest rates on hold in March, after cutting by 400 basis points over five meetings between September last year and February.

The banks have passed on around 360 of those basis points to consumers in rate cuts.

Massive Antarctic ice shelf poised to fall

A Jamaica-sized ice shelf is close to wrenching itself away from Antarctica, following dramatic weakening of an ice “bridge” linking it to the continent, the European Space Agency (ESA) reports.


The icy umbilical cord tying the Wilkins Ice Shelf to two islands on the Antarctic peninsula “looks set to collapse”, ESA says.

The evidence comes from radar pictures taken on Thursday by its Envisat Earth-monitoring satellite, the Paris-based agency said in a press release on Friday.

Scientists have been keeping a worried eye on this ice shelf for years.

For many, it is a barometer of global warming, which has hit the Antarctic peninsula harder than almost any region on Earth.

The Wilkins Ice Shelf was stable for most of the last century, covering about 16,000 sq km before it began to retreat in the 1990s.

By last May, an ice bridge, about 2.7 km wide on average and just 900 metres at its narrowest point, was all that connected it to Charcot and Latady islands.

Over the past year, the ice shelf has lost about 1,800 sq km, or about 14 per cent of its size, in further breakup events, ESA said.

New pictures show “the beginning of what appears to be the demise of the ice bridge” itself.

This week, rifts formed along the central axis of the bridge and a large chunk of ice broke away. The stress patterns are now expanding rapidly, pointing to a likely imminent collapse of the link.

Ice shelves are ledges of thick ice that float on the sea and are attached to the land. They are formed when ice is exuded from ice sheet on land.

In the past 20 years, Antarctica has lost seven shelves.

The process is marked by shrinkage and the breakaway of increasingly bigger chunks before the remainder of the shelf snaps away from the coast.

It then disintegrates into debris or into icebergs that eventually melt as they drift northwards.

Scientists are especially puzzled that the Wilkins has suffered big breakups during the southern hemisphere\’s winter, when atmospheric temperatures are at their lowest.

One theory is that relatively warm currents from the Southern Ocean are scouring the underside of the shelf, thinning it rapidly from underneath.

In the past 50 years, the peninsula — the tongue of Antarctica that juts up towards South America — has experienced warming of 2.5 degrees celsius, which is many times higher than the global average.

In the early 1990s, many experts predicted that it would take 30 years for a shelf as vast as the Wilkins to be lost.

Antarctica is the world\’s biggest store of freshwater. Its ice, located on land in two vast slabs and on the peninsula, holds enough water to raise global sea levels by 57 metres.

The Antarctic ice shelves do not add to sea levels when they melt. Like the Arctic ice cap, they float on the sea and thus displace their own volume.

Sydney CBD gets green light for full power use

EnergyAustralia says its customers in Sydney\’s CBD can now use all the power they need despite two power outages last week that crippled the city and nearby suburbs.


About 20 key CBD building managers had been asked to reduce air- conditioning and other non-essential electricity use on Monday, to ensure demand could be met safely.

EnergyAustralia, the utility supplying Sydney\’s electricity, has downgraded its warning and says it has given building managers the green light to return to normal energy usage levels.

“We are meeting peak demand this morning and do not anticipate a need for buildings to reduce power use,” an EnergyAustralia spokeswoman said.

It would take weeks to restore the damaged 132,000-volt cable that caused last Monday\’s blackout but peak electricity demands will be met during that period, the spokeswoman said.

Sydney\’s CBD was thrown into chaos on Monday of last week when a massive peak-hour power outage forced the closure of major road links, blacked out traffic lights, and left dozens of people stranded in lifts.

The problem was caused by the failure of one of the four cables that supply two major substations in central Sydney.

About 70,000 homes and businesses, mostly in the city\’s north and surrounding suburbs were affected, plus inner eastern suburbs including Paddington, Rose Bay and Darlinghurst, were affected in that outage.

On Saturday, about 50,000 homes and businesses in the northern part of the Sydney CBD, parts of Surry Hills and the eastern suburbs lost power for about an hour after a transformer cut-out tripped at 10.28am (AEDT).

EnergyAustralia acting general manager Geoff Lillis said on Monday the blackouts were unacceptable and apologised to stakeholders and customers.

Mr Lillis said customers inquiring about compensation could ring the EnergyAustralia call centre.

“Compensation does depend on a number of factors and does depend on individual circumstances, and we\’re quite happy to work through those issues with our customers on an ongoing basis this week,” Mr Lillis told ABC Radio.

NSW Energy Minister Ian MacDonald said he hoped the city would avoid a third blackout.

“Let\’s keep our fingers crossed because the work that went on over the weekend, 24-seven, to rectify the fault … I think has been successful and they\’ve put new bushes in and we believe that the system will hold up,” Mr Macdonald told Fairfax radio on Monday.

“It\’s quite unacceptable, there\’s no doubt about that. It is going to take time to completely overhaul this system.

“It\’s a 40-year-old system that we\’re gradually fixing and improving.” EnergyAustralia says it could take up to eight weeks for Sydney\’s electricity supply to return to normal but the transformer which caused Saturday\’s blackout had been repaired.

Sydney Chamber of Commerce Chief Executive Patricia Forsythe said it was not good enough in the 21st century that Sydneysiders were wondering about the certainty of the electricity supply.

“It does not do our image as a great city in which to do business any good at all,” she said.

Ponting blames batting for Proteas loss

Captain Ricky Ponting has blamed poor batting rather than good bowling for Australia being bowled out for 131 in their seven-wicket loss to South Africa at Centurion.


In a shock form reversal following their 141-run win in Friday\’s opening one-day international in Durban, Ponting\’s world champions staggered to 5-19 in the eighth over at Centurion on Sunday.

The tourists were bowled out for 131 in 40.2 overs to the delight of a capacity crowd of 20,000.

South Africa replied with 3-132 in 26.2 overs with AB De Villiers (36 not out) hitting the winning boundary through cover.

The only time Australia had set a lower target in a non-reduced ODI match was in January 1979, scoring 101 at the MCG against England (in a 40-overs-per-side contest).

Opener Graeme Smith made 40 for South Africa and Jacques Kallis contributed 31 while Australia\’s Mitchell Johnson worked up good pace for his 2-47.

“That was as bad as we\’ve played in a long time,” Ponting said.

“We knew that the ball would probably swing a little bit this morning.

“It wasn\’t as if it was swinging around corners either. The wicket was very good.

“There were some poor shots today from the top-order players in particular and we exposed our middle order to the new ball.”

Australia face a struggle to rebound for the third match in the five-game series on Thursday in Cape Town.

“We\’ve had one poor performance and we\’ve got to move on from that,” Ponting said.

“We\’ve got a few days to try to turn things around. I\’m sure that you\’ll see a better team on Thursday.”

Left-armer Wayne Parnell (4-25) and pace spearhead Dale Steyn (4-27) took four wickets each for South Africa in a devastating display. Parnell, 19, was named man of the match in his just second ODI game.

Australia had been 6-40 before Callum Ferguson (50) and Johnson (30) added 63 for the seventh wicket.

It was the 24-year-old Ferguson\’s second half-century in his sixth match.

Rudd \’in harm minimisation\’ over jobs

The government seemed to be more concerned about dealing with the consequences of unemployment than in actually saving jobs, Opposition Leader Malcolm Turnbull says.


Unemployment was rising and it was something that had to be addressed, he said on Monday.

There were measures in the package the government announced on Sunday which if they were properly carried out could be useful, he said.

Supporting business \’should be priority\’

“The government seems to be more focused on dealing with the consequences of unemployment rather than ensuring that people stay employed,” he told ABC Radio.

“But the real focus of the government\’s attention should, as the focus of our policy has been, on supporting business, relieving the cost of employment to some degree from the shoulders of small business, providing tax relief, removing the heavy burden of regulation and red tape.”

Prime Minister Kevin Rudd yesterday unveiled a three-part jobs and training compact to address rising unemployment.

Warnings over joblessness

It includes a compact with young Australians, those who have retrenched from their jobs and local communities hardest hit by unemployment.

Mr Turnbull said a slowing economy would result in unemployment rising.

“But how far it rises and in what sectors it rises will depend in large measure on the confidence in the economy,” he said.

“Remember small business is the engine of job creation. It is the most flexible, the most enterprising part of our economy.”

Job ads slashed

Job advertisements on the internet and in newspapers dropped in March as employers cut back their hiring intentions.

The ANZ survey shows job ads fell 8.5 per cent to a seasonally adjusted 147,800 from February.

The annual decline was 44.6 per cent, the lowest in the survey\’s history.

Aust Stocks rise ahead of RBA decision

At 1200 AEST, the benchmark S&P/ASX200 was 13.


1 points, or 0.35 per cent, higher at 3748.7, while the broader All Ordinaries was 12.2 points higher, to 3686.2, up 0.33 per cent.

On the Sydney Futures Exchange, the June share price index contract was 19 points higher to 3759 on a volume of 10,364 contracts.

Trading halts ahead of RBA decision

Macquarie Equities client adviser David Halliday said trading was muted ahead of the RBA interest rate decision tomorrow.

“There will be a level of caution to a degree. We have got the RBA meeting tomorrow morning with a rates decision out tomorrow afternoon and the market is still very split as to how that is going to play out,” Mr Halliday said.

In morning trade, banking stocks generally were stronger, while resources and energy shares were down, he said.

“It certainly appears there is a bit of a rotation from resources into the financials again today. Banks and insurers and fund managers are all up.

“The weakness is really in the energy and resources.”

Big four banks rise

At 1205 AEST, shares in Macquarie Group were up by 5.13 per cent, or by $1.51 to $30.96, and all four major banks also had posted rises.

Commonwealth Bank had risen 17 cents to $36.23, National Australia Bank was up 46 cents to $23.30, Westpac was up 19 cents to $20.59 and ANZ had risen five cents, to $17.45, at 1205 AEST.

But Bendigo and Adelaide Bank Ltd dropped 7.2 per cent, or 58 cents, to $7.47, by 1209 AEST after the company revised its full year cash earnings guidance.