Edit: China, Australia need each other: Smith September 3, 2009 - 2:09PM
The "long-term beneficial nature" of Australia-China economic relations will prevail over controversies like the Stern Hu and the Rebiya Kadeer issues, Foreign Minister Stephen Smith says. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Insert: China criticised over Stern Hu case http://business.theage.com.au/business/china-criticised-over-stern-hu-case-20090902-f8gq.html
Mr Smith also said in Perth on Thursday that it appeared reasonable to pursue a plan for joint military exercises between the Australia, China and the United States.
Fairfax newspapers have quoted US officials as saying the move is aimed at improving diplomatic relations between the nations and easing fears about China's military power.
On the treatment of the detained Stern Hu, Mr Smith said Chinese authorities were continuing to abide by an agreement on consular access to the Rio Tinto iron ore executive.
Mr Hu, an Australian citizen who was detained in July and charged last month along with three Chinese colleagues, faces a seven-year jail sentence on charges of bribery and obtaining commercial secrets.
Mr Smith said Australian consular officials were being permitted to visit Mr Hu every 30 days, as had been agreed between the two governments.
"To date the two consular visits have been effected within the 30-day timetable," he told reporters in Perth after attending the Africa Down Under mining conference.
"We now continue to make representations to the Chinese authorities that his case should be dealt with expeditiously."
He said the Australian Chinese relationship would "always see from time to time issues arise where there is a difference of view".
The latest of these was over the Australian visit of the exiled Uighur leader Rebiya Kadeer, which led to the cancellation of a high-level diplomatic mission to Australia.
"We have a very good economic relationship with China and that will continue as reflected by the Gorgon deal a couple of weeks ago," he said.
" ... the long-term beneficial nature of the relationship both to Australia and China will in the end prevail over any of these difficulties.
"We need to take a long-term view of our relationship and we need to be patient.
"That's the sensible thing to do and that's what we're doing."
Mr Smith said he could see no reason why Australia and the United States should not invite China to take part in joint military exercises under the plans reported on Wednesday.
Mr Smith said he would leave any comments on the moves to Defence Minister John Faulkner.
He said the Chairman of the Joint Chiefs of Staff, Admiral Michael Mullen, had already signalled defence's approval of the plan.
"Australia has defence cooperation and contact with a range of countries, and as Admiral Mike Mullen has said overnight, there's no reason that can't be contemplated with China," Mr Smith said.
Vendors wary as $1m home sales slump JONATHAN CHANCELLOR PROPERTY EDITOR September 8, 2009
The number of sales of homes for more than a $1 million has dropped dramatically across Sydney.
Estate agents have sold about 2650 houses and units for more than $1 million in the past six months, a 28 per cent drop on the number over the past two years, according to Australian Property Monitors.
Falling prestige home prices is the main reason vendors are holding on to their homes. The fall in prices has meant some prospective sellers are trapped, as any sale could be insufficient for their banks.
''But most Australian households, unlike those in the US and Britain, have avoided incurring a price collapse by holding on, aided by historically low interest rates,'' the head of research at Australian Property Monitors, Yvonne Chan, said. ''There have, however, been the occasional good bargain buying opportunities for some.''
The founder of Quiksilver, Harry Hodge, and his wife, Sandee, sold their Newport oceanfront home for $12 million last month, 20 per cent less than the $15 million purchase price in August 2007. It was bought by Sally Sims, wife of Tim Sims, director Australia's largest private equity firm, Pacific Equity Partners.
At Vaucluse buyers paid $3.45 million last month for a contemporary house sold for $5.04 million in February last year. The 31 per cent fall in price followed unsuccessful auctions in April and July.
The weekend's highest sale under the hammer was $2.26 million for an extended and renovated 1920s house in Cammeray with Middle Harbour views.
Its listing agent, Justine Ferguson, had marketed it with $2.2 million-plus hopes.
The Pine Street home last sold for $367,000 in 2002, when the 454 square metre property had now-lapsed development approval for two new houses.
The highest Sydney unit sale at the weekend was $815,000 in Wollstonecraft for a three-bedroom apartment in the Berkshire Park complex.
It was last sold for $540,000 in 2000. The vendors had briefly sought offers of more than $740,000 in 2005.
There was a 70 per cent weekend auction clearance rate.
Riding the tsunami PETER HARTCHER September 12, 2009
Pardon for walking across against a red light .. yes, am breaking the rules a smidgen .. just had to be here, too.
Successive governments contributed to Australian resilience in the face of the year-old threat to our prosperity.
When the Treasurer was told the news of Australia's economic growth rate for the first quarter of this year, Wayne Swan had just one word to say - an unprintable four-letter expletive starting with the letter F. It wasn't original or poetic, but it was delivered with feeling. It was uttered not because the news was bad but because it was remarkably good.
If the number had been negative, it would have provoked a great media outcry and a hundred iterations of the headline - It's official: Australia in recession. Malcolm Turnbull would have had to muster all his thespian powers to try to look worried in front of the cameras, while his inner politician was hooting with glee and punching the air.
Yet it would have been the most ordinary of events. Every other developed country was firmly in recession by the end of March. Australia would merely have been catching up.
Instead, something quite extraordinary happened.
Australia outperformed the world.
"Australia is the only developed country to avoid recession," attests the World Bank's chief economist, Justin Lin. "It is a unique achievement" in the midst of the sharpest global downturn since the Great Depression of the 1930s.
The economy suffered a mild contraction in the last three months of last year before growth returned. It was a single quarter of shrinkage in a world where two in a row makes a "technical' recession.
And the latest statistics show the recovery which so astonished Swan in the first quarter of 2009 actually accelerated in the three months that followed.
The world economy came down with pneumonia. Australia sneezed. Once.
"Australia has navigated the global recession brilliantly," says Anirvan Banerji of the Economic Cycle Research Institute (ECRI) in New York.
"It's interesting how surprised people have been about the Australian performance, but there's no other developed country that's done half as well. If you made a list of the developed countries that have done well in this recession, Australia is at the top, and then - well, it's not a very long list, because everyone else is in recession."
And ECRI, the most accurate forecasting institution in the world, sees the outlook for Australia remaining "pretty good". Where the average economic movement for rich countries this year is expected by the IMF to be a negative 3.8 per cent overall, Australia's is expected to be negative 1.4 per cent. Even this is looking to be excessively pessimistic.
But some of the best-known names in economic commentary were predicting otherwise early this year. Access Economics predicted that the economy "will unwind scarily fast" in 2009. "This is not just a recession," said the Canberra consultancy. "This is the sharpest deceleration Australia's economy has ever seen."
By August the Reserve Bank governor, Glenn Stevens, ventured to say it may be "one of the shallower" downturns Australia has experienced.
But isn't this all just dumb luck?
Australia is China's quarry. And China, after a brief falter, has rebounded. So isn't Australia simply riding the China boom?
It's certainly true that China's voracious appetite helped Australia avoid a jolting loss of exports.
So while the US suffered a 15 per cent slump in exports last financial year, and Japan a staggering 29 per cent, Australian exports were essentially unchanged, down just 0.2 per cent, protected largely by rampant demand from China.
But exports themselves have made only a slight contribution to Australia's recovery. In the second quarter of this year, for example, net exports actually sapped growth, contributing minus 0.2 per cent to national economic growth.
How much did the China factor contribute to Australia's recovery? "Not much," says Saul Eslake of Melbourne's Grattan Institute. So China contributed to national resilience, not to recovery. It is part of the national resilience, but only part.
The main drivers of Australian recovery have been the instruments of official stimulus. The Reserve Bank, by cutting interest rates to their lowest since the 1960s, and the Federal Government, by allocating $42 billion in extra new spending, sent a surge of cash and confidence into the economy.
In Europe, the most resilient country has been France. While Germany has seen the evaporation of 5 per cent of its economy this year and Latvia a breathtaking 20 per cent, France has contracted by about 3 per cent.
Yet after a conversation with Wayne Swan at the G20 meeting of finance ministers in London last week, the French Finance Minister, Christine Lagarde, was "very much impressed with the resilience of the Australian economy", according to one of her officials. "We should be learning from Australia."
All of this is part of something bigger that's been happening, largely unsung, in Australia, for years now. From being one of the world's chronic underperformers, Australia has become a model.
The country that the Economist magazine in 2007 labelled "Downwonder" has emerged as a model in two senses. It's an example of an economic success, but it's also a model in that it has developed a distinctive political economy. There is now an "Australian model".
The first time anyone really noticed something had changed in Australia was in 1997. The economies of some of our main trading partners in Asia fell into crisis, and Australia was sure to follow. But, confounding all expectations, the Australian economy continued to boom.
It was this Australian resilience in the face of crisis that led the US economist Paul Krugman to write in Fortune magazine in 1998: 'Australia, in case you didn't know, is the miracle economy of the world financial crisis.'
Singapore's founder, Lee Kuan Yew, said in the 1980s that Australians were fated to become the "poor white trash of Asia". By the time the Asian economic crisis had wreaked devastation in much of the continent, Peter Costello was able to proclaim Australia as "the strong man of Asia".
And it was not a one-off miraculous escape but the beginning of a new, and heretofore unsuspected, Houdini capability. Since then, Australia has withstood the US recession, the onset of a SARS-induced downturn in parts of Asia, and a severe drought. Others noticed. "Australia's economic performance has been the envy of Western countries for well over a decade," the Economist remarked in 2005.
In the 1990s - wrote the 30-nation club of rich economies, the Organisation for Economic Co-operation and Development - 'Australia became a model for other OECD countries'.
The global recession is the latest test of this model, and a severe one. The evidence so far is impressive. Australia's economy is, of course, far from perfect. But it is, one year after the global crisis began, less imperfect than any other.
Australia's banks not only survived but prospered, in substantial profit throughout the global crisis. The Big Four are now among the world's dozen top-rated banks.
Australia's economic stimulus package was one of the largest in the world proportionately, second only to China's, according to a forthcoming World Bank report. Yet Australia's government finances were in such a strong surplus pre-crisis that the country will emerge with the lowest government debt of any developed country, on current Treasury projections.
Australia's unemployment rate has worsened markedly, from 4.2 per cent in 2008 to 5.8 per cent today. Yet this is better than all but six countries - only Austria, Denmark, Japan, the Netherlands, Norway and South Korea have lower unemployment rates.
And even today's elevated rate is a level considered impossibly low in Australia until just a few years ago. The European Union average is the same as that of the US at 9.5 per cent.
If the global economic crisis were a "stress test" of the Australian model, it appears to have passed with flying colours.
Australia is a model in another sense, too. Its political economy offers an alternative to the two familiar options of the American versus the European. It enjoyed faster economic growth than the US over the past decade. Yet it also offers universal health care and other social welfare benefits that the US does not. Unemployment is lower than America's, and without the glaring income disparities that characterise US growth.
The US may be a rich country but its bounty is very unevenly shared. One result is that for the broad mass of its citizens, America has the sort of health indicators of a much poorer country. Australia has chosen a more egalitarian policy set. Life expectancy is the fifth highest in the world. Child poverty is half the American rate. No one in Australia dies because of lack of health insurance.
But neither does Australia suffer the customary handicap that goes with a humane welfare system - a crushing burden of government spending. As a proportion of gross domestic product, total government spending in Australia is the third lowest in the Organisation for Economic Co-operation and Development and slightly less than in the US. In 1996 Australia paid off all outstanding federal debt - the federal government became debt-free for the first time since the 1970s.
Western Europeans are leaving their children a debt of insupportable proportions.
Australia is a country that seems to have achieved a sweet spot, combining the vigour of American capitalism with the humanity of European welfare, yet suffering the drawbacks of neither.
John Howard as prime minister was keenly aware of the balance Australia's welfare system has struck. As he once observed: 'There is much in American society which I admire, but I have long held the view that the absence of an effective safety net in that country means that too many needy citizens fall by the wayside. That is not the path that Australia will tread. Nor do we want the burdens of nanny-state paternalism that now weigh down many economies in Europe.'
Howard was often criticised for allowing growing wealth disparities. Kevin Rudd has accused him of "extreme capitalism". Yet in the decade to 2004, Australians in all income groups enjoyed remarkably uniform gains.
Looking across the five categories of Australian incomes, the Bureau of Statistics reported that real disposable income grew at between 19 per cent and 22 per cent for all of them. This was chiefly accomplished through the Family Payments System, a giant redistribution of income from the high-income to the low-income. This was not so much "extreme capitalism" as measured socialism.
This did not close gaps in wealth - the rich remained rich and the poor remained poor, but each group was improving its situation at a similar pace.
Howard and Costello can take some credit for the emergence of the Australian model, but not all. The reversal in Australia's downward trajectory of relative prosperity began in 1983 with the bracing reforms of the Hawke-Keating years.
This Labor duo ended Australia's century of economic isolationism, breaking down the protective walls of tariffs, financial regulations and the fixed exchange rate. They also dismantled the system of industry-wide wages settlements, moving them to an enterprise-based system. These reforms were vital in giving Australia a flexible, open, competitive economy.
The Howard government built on these reforms. Howard and Costello gave Australia a more efficient tax system and a debt-free government sector, together with relatively egalitarian income distribution.
And Howard, champion of "balance", came to grief when he tried to fundamentally alter it. With Work Choices, he legislated to strip vulnerable workers of some basic entitlements. In the great balancing between efficiency and equity, Howard had veered too far towards efficiency.
He lost the 2007 election partly, though not entirely, because of this.
Australia is a case study in the benefits of economic reform tempered by a concern for fairness. It is a prototype society illustrating that vigorous capitalism can coexist with a humane welfare system. Affordably.
This is the emerging Australian model. Who would have thought? Or, as Wayne Swan might have put it, "F---!"
Note: this post for no nah nah nah .. heehaw .. we are better than you guys in some things too .. none of that at all. No .. hahaha .. NO BS .. just the way it is. No nationalism. Nothing, but fact.
In conclusion, it will be one of my most satisfying, one of my most enduring memories that, before the last federal election in Australia i was asked, by a talk-back jock, "Do you think that Work Choices will be a crucial factor in the election?"
You know what i said .. emphatically. LOL, aside .. that guy later banned me from calling his show again. Never told me why, though I asked, but for some small petty reason he did.
Was on his side, too. LOL, just lost my mouse and had to restart. It's a funny life.