Prime Minister Malcolm Turnbull said while US’ withdrawal represented a “big loss”, the deal should not be abandoned.
“It is possible that US policy could change over time on this, as it has done on other trade deals,” Turnbull said. “There is also the opportunity for the TPP to proceed without the United States. I’ve had active discussions with other leaders as recently as last night.”
Turnbull also said Japanese Prime Minister Shinzo Abe, whose country was the only one to have ratified the deal to date, reiterated his commitment to the deal through a phone call on Monday.
Trade Minister Steve Ciobo said he had reached out to fellow signatories. “I’ve had conversations with Canada, with Mexico, with Japan, with New Zealand, with Singapore, Malaysia,” Ciobo told the ABC on Monday. “So there’s quite a number of countries that have an interest in looking to see if we can make a TPP 12 minus one work.”
Ciobo also said the deal had been designed to enable other countries to join.
“Certainly I know that Indonesia has expressed a possible interest and there would be scope for China if we were able to reformulate it to be a TPP 12 minus one for countries like Indonesia or China or indeed other countries to consider joining and to join in order to get the benefits that flow as a consequence.”
Housing investment in New South Wales continues to grow as current levels are getting close to record highs, new Australian Bureau Statistics reports revealed.
Latest ABS data found that the value of residential lending in the state reached $7.19 billion in November 2016, the highest on record for the year and a significant 25.5 per cent increase from the previous month’s $5.7 billion.
The November value was also the second highest on record for NSW, with the highest being $7.36 billion in June 2015.
Investor loans constituted 56.7 per cent of all approved residential lending in NSW over the month, making it the highest market share nationally, followed by Victoria’s 45 per cent.
NSW’s residential investor lending represented 56.1 per cent of all approved lending in Australia in November. “This is clearly a record result, eclipsing the previous high of 48.8 per cent reported over March 2016,” said Andrew Wilson, chief economist at Domain Group.
“The strong Sydney market remains a magnet for investors with demand set to continue to rise attracted by continuing solid price growth and a tight rental market with rising rents consolidating gross yields.”
Wilson expected the NSW market to continue its growth, prompted by the possibility of better investment property taxes and rate cuts after 2015’s hike in mortgage rates.
“Residential investors have stormed back into the market since May 2016 driven by the prospect of possible changes to the tax treatment of investment property and interest rate cuts,” said Wilson.
“NSW generally and Sydney specifically remain the epicentre for what has re-emerged as unprecedented activity from this group.”
Cameron Kusher, head of research at CoreLogic said while NSW and Victoria might seem promising, investors should be mindful of the long-term risks.
“It’s clear that demand for mortgages from the investor segment is picking up, particularly in New South Wales and Victoria, which are proxies for Sydney and Melbourne respectively,” said Kusher. However, he added that investors should also think about the risks from long-term value growth phase as well as the historically low rental earnings.
Sydney, which is only topped by Hong Kong, beats other cities including San Jose (fifth most expensive) and Los Angeles (eighth).
The survey rates housing markets based on the World Bank-recommended “median multiple” principle, which divides median house price with median household income. A score of 5.1 and above is categorised as “severely unaffordable”.
10 Least Affordable Housing Markets
1 Hong Kong 18.1
2 Sydney, NSW, Australia 12.2
3 Vancouver, Canada 11.8
4 Santa Cruz, CA, USA 11.6
5 Santa Barbara, CA, USA 11.3
6 Auckland, NZ 10
7 Wingcaribbee, NSW, Australia 9.8
8 Tweed Heads, NSW, Australia 9.7
9 San Jose, CA, USA 9.6
10 Melbourne, VIC, Australia 9.5
The report found that 47 of Australia’s 54 markets are categorised as “seriously unaffordable” or “severely unaffordable”. The report’s co-author, Hugh Pavletich said the contrast between Australia’s land size and its housing prices indicates a “decentralisation” issue.
“State and local governments have lost the control of their costs and their capacity to finance infrastructure properly,” said Pavletich.
“Sydney house prices are about 12.2 times annual household incomes which is grossly excessive… What housing should be in normal markets is at or below three times household earnings, so Sydney is four times what it should be.”
The newly-sworn in NSW premier, Gladys Berejiklian said in her first press conference that housing affordability would be one of her policy priorities.
“I want to make sure that every average hard-working person in this state can aspire to own their own home,” said Berejiklian.
Do you procrastinate about taking care of financial matters in your life? Recently a fascinating article about financial procrastination appeared online.
The author publicly admitted that “after years of procrastinating,” he finally logged on to his retirement account. It took him years to get around to dealing with it because the entire task made him anxious.
Moreover, he stated he didn’t remember his password, and his account choices were a mess.
For many of us there is nothing special about any of this. Most people dread and put off dealing with financial matters.
However, what was astonishing about this story is that the writer is an eminent economist who does research in personal financial matters such as savings, annuities and mortgages. If this man has trouble dealing with his retirement accounts, is there any hope for the rest of us?
Do you have to be smart to be rich?
There are many reasons people procrastinate on dealing with financial matters. There is even a new special field in psychiatry that deals with the issues people have surrounding money, spending and saving. Unfortunately, while many of us have issues about money, the specialized help that is available is primarily useful for people with lots of wealth or income.
Some of my research can help people who procrastinate about dealing with their finances. One reason many people don’t want to deal with money issues is because they think they are not smart enough. However, when I looked into this, the results were very clear: there is no relationship between intelligence, measured by IQ, and a person’s wealth. It’s generally true that the smarter you are, the more income you earn. However, earning more doesn’t give you any special advantage in saving or building wealth.
Sendhil Mullainathan, the economist who wrote the column on procrastinating, appears to be a poster child for the lack of a relationship between IQ and wealth. He is clearly very smart: he won a MacArthur genius award and is a full professor at Harvard.
But he probably doesn’t have much wealth since he states in the article, “I want to reach my retirement with a nest egg that allows me to maintain my current lifestyle and to travel a bit.” Rich people don’t dream of retiring with just enough money to take a few trips.
If you are putting off dealing with money issues because you don’t think you are smart enough, don’t wait any longer. Being smart isn’t going to make you rich. Whether you are dumb or smart you can save. The secret is simple: just spend less than you earn.
Are you richer than you think?
Many people don’t want to deal with their financial issues because they expect the news to be depressing. Most of us are experts at avoiding bad news. However, another research paper I wrote shows that for most people, the financial news is actually much better than expected, which is perhaps another reason not to procrastinate.
The National Longitudinal Surveys, a long-running research project sponsored by the Bureau of Labor Statistics, asked people to estimate their net worth. Then the survey took them step by step through the value of all of their assets and the value of all their debts. From this information I was able to calculate their actual net worth. The result for most people was much better than they feared. For every dollar of wealth actually held, the typical individual believed they only had 62 cents.
In simple terms, the research showed that the typical person underestimates their financial position by more than a third. The financial unknown is scary but the actuality for most people is not as frightening as they fear.
I encourage all of you to sit down, close your eyes and ask yourself: are we in debt, break even or do we have money? Write down your best guess for how much you are in debt or how wealthy you are. Then add up all of your assets and subtract all of your debts (an easy online calculator is available here). The results will pleasantly surprise most of you.
Why should you avoid procrastination?
Research suggests people who avoid procrastinating do financially better. A recent working paper by two economists Jeffrey Brown and Alessandro Previtero shows that people who procrastinate are less likely to participate in savings plans, take longer to sign up when they do decide to participate, and contribute less money to their retirement plans than non procrastinators.
You will not become rich or suddenly have enough money to retire by reading just one article. However, know that lots of people procrastinate about financial matters. If you have been procrastinating because you don’t think you are smart enough or because you fear the results, research suggests you will find the news is not bad.
So make that first step and try to deal with that financial task you have been putting off. It is like jumping into a pool, lake or ocean; the water is really not as bad as you fear, and taking the jump will likely make you (feel) richer.
Petrol prices have risen by up to 20 cents a litre in a number of areas in Australia, following the December agreement between the Organisation of the Petroleum Exporting Countries and non-OPEC oil producers to cut production.
While Melbourne prices remained steady at $1.22 per litre, Sydney and Adelaide’s prices reached above $1.40. Other capital cities fell in between these extremes, with prices around $1.30 a litre.
There were also some local variations, with some parts of Tasmania – such as Hobart and Launceston – reaching $1.46 a litre.
Experts have recommended motorists to fill up quickly before the prices rise even further.
“The low petrol prices are not sustainable and prices are likely to lift markedly in coming days,” said Savanth Sebastian of stockbroking firm CommSec.
The Australian Competition and Consumer Commission (ACCC) warned that the price hike could be exacerbated by the falling Australian dollar.
“The ACCC is concerned that petrol prices are increasing in Sydney, and those in Melbourne, Brisbane and Adelaide may increase in the coming days,” said ACCC chairman, Rod Sims.
“Motorists should get in early, shop around, and consider filling their tanks before prices jump.”
Sebastian said the petrol price hikes would be applied around the world.
“The focus now shifts to see if oil producers comply with the stated production cuts,” said Sebastian.
“The early indications are that producers are already notifying customers in Asia, Europe and the US of cuts to oil deliveries from January. Importantly for motorists it means higher pump prices in the medium term.”
ASX has finished in the red for the first time in 2017, due to falls in big banks, unstable oil prices and decline in investor confidence.
While brent crude strengthened by the end of the trading session to $US55.05 a barrel, fears that the OPEC-led deal to cut production might not be implemented properly by its participants diminished investor confidence.
The benchmark S&P/ASX 200 Index and the All Ordinaries Index each dropped 0.8 per cent to 5760.7 points and 5813 points respectively. Investors sold out of every sector, with banking receiving the most impact. Commonwealth Bank of Australia fell 0.5 per cent, as Westpac declined by 0.8 per cent. National Australia Bank was down 1.2 per cent and ANZ Banking Group dipped 1.5 per cent.
The US dollar also weakened as the post-election euphoria winded out. “The US dollar appears to have entered a consolidation phase since last week after a period of market optimism associated with prospective Trump policies,” NAB economist Vyanne Lai said. As a result, the Australian dollar rose 0.6 per cent to US73.72¢.
Property prices in Sydney and Melbourne shows no sign of slowing down while prices in other cities fall, experts predicted.
Property research group SQM Research predicted that if the cash rate remains unchanged throughout the year, Sydney and Melbourne’s house prices could grow by 15 to 16 per cent.
Low interest rates will keep Sydney and Melbourne markets strong due to high income and population growth in these cities, said Moody’s economist Emily Dabbs.
“Affluent areas tend to be driven by the prosperity of local economy, and right now both Sydney and Melbourne have the fastest-growing economies in the nation,” said SQM managing director, Louis Christopher.
However, apartment prices in Sydney, Melbourne and Brisbane could fall by 15 to 20 per cent in the next two years, AMP capital chief economist Dr Shane Oliver predicted. “There’s a [supply] indigestion problem, but Sydney won’t have a supply problem for another two years,” Dr Oliver said.
On the other hand, Perth, Darwin and Adelaide’s prices are expected to continue falling due to dwindling population and high unemployment rate.
“The unemployment rate in Perth, for example, is quite high compared to the rest of the country,” said Dabbs. “That’s really hampering any income growth and making it difficult for households to pay higher prices for houses.”
Construction industry analyst BIS Shrapnel said house prices would rise in all capital cities except Perth and Darwin, and apartment prices would fall in Brisbane and Melbourne.
Do you know where your money is? If you immediately think of cash, then there’s a good chance you’ve just patted a pocket or looked in a purse to reassure yourself. But if you thought of your savings and investments, then there’s actually a good chance you have no idea where your money is – other than to draw the quick (and misleading) conclusion that it is “safely in the bank”.
After all, where else would it be?
We recently saw the revelation that another major bank – this time Germany’s Deutsche Bank – could collapse. According to Germany’s economy minister, Sigmar Gabriel, it “made speculation its business model”, though now claims to be the “victim of speculators”.
But there is an alternative to this banking model that isn’t based on financial speculation. Research that colleagues and I have done into economic resilience would suggest that many people might be better off investing in alternative finance and, to encourage them, the government should guarantee alternative finance investments up to a maximum of £5,000.
Finally, an alternative
The UK is the home of Europe’s rapidly-growing alternative finance (or “alt fin”) movement, which is fast becoming a major player in the financial sector. Valued at £3.2 billion in 2015, a big part of its appeal is that we can often know more precisely where our money is and what it is doing. Whereas with mainstream banks, your money is used to fund various investments, often on financial markets that you have no control over, investors in alternative finance projects tend to invest in a specific project.
Alternative finance has been around since at least 2004, with the founding of online peer-to-peer lender, Zopa. But a far broader range of options have sprung up since the financial crisis. In our research, we found online peer-to-peer platforms that bypass the banks entirely, community share schemes that allow both direct investment in and democratic influence of a given project, and crowdfunding to support a local SME business take off. Greater transparency so that people know exactly where their money is and what it is doing is key.
Beyond this there are many different financial arrangements, all with different implications for funders and fundraisers. Peer-to-peer loans, bonds and debentures have to be repaid with interest. Community shares are regulated to keep dividend payments low, but give shareholders a say in the governance of the fundraising organisation.
Despite the very public loss of reputation suffered by high street banks following the financial crisis in 2007, we still seem to trust them with our money. In wondering how mainstream banks were able to return so quickly to “business as usual”, one answer is that we did too. A big reason for this might be that we didn’t know what else we could do with our money and the perceived risks of new ways of investing.
There are understandable anxieties about alternative investments at a time of significant restraints on household budgets, especially when two in five of the UK workforce have less than £100 in savings. This is why the government should step in and guarantee retail investments in alternative finance.
It’s a relatively small ask compared to the Financial Services Compensation Scheme, which is the current guarantee of cash deposited in UK-regulated accounts in banks and building societies up to a limit of £75,000 – even though such investments provide very little financial return to savers or deliver tangible social or environmental value from this money.
We argue that the government should help the process of building trust in alternative finance investments by providing this maximum guarantee with the condition that investment is directed into the “real economy” and not just financial markets.
Proceed with caution
Of course, any such guarantee should be approached with caution. After all, this suggests a breaking of the “risk/return” cycle – a basic tenet of banking that with any investment comes risk – and potentially opens the way to abuse, with people making risky investments with the comfort of a government backstop.
But if we are to build a more resilient financial system, we need a far greater range of options for where to direct our money. Alternative finance is not perfect, and a growing entanglement with mainstream finance may see the sector start to resemble mainstream practices. To manage the process of truly democratising finance and providing genuine alternatives to putting our money “safely in the bank”, the Financial Conduct Authority should play a leading role as regulator.
And if a taxpayer guarantee sounds contentious, it is worth remembering that the risk/return cycle was significantly broken by the process of bailing out the banks in 2007-08. Banks, too big to fail and to jail, currently create 97% of “money” through credit, preferring to speculate on money and financial markets in the hope of creating profit, rather than investing in the “real economy”.
If the practice is good for safeguarding the hidden financial speculation of the few, why not for safeguarding the transparent material social and environmental gains for the many?
In continuing to assume the mainstream banks are the safest place to invest, we might be missing the opportunity to make our money do good by working harder for us and our communities.
Tax dodging by Australian-based multinationals through offshore tax havens has cost Australia up to $4.8 billion in 2014, according to a new Oxfam Australia report.
The report claimed that Australia lost $4-4.8 billion in 2014 as a result of tax dodging. It also revealed that the top offshore tax havens used by Australian multinationals are Bermuda, Cayman Islands, Netherlands, Switzerland and Singapore.
The report followed the new data released by the Australian Tax Office (ATO) on Friday, which shows that 36 per cent of large companies, or 679 companies in Australia did not pay any tax in 2014-2015. McDonalds Asia-Pacific, Chevron Australia and Vodafone Hutchison are among the list of large companies that failed to pay tax.
In the report, Oxfam criticised the Federal Government’s plan to cut corporate tax further to 25 per cent in the next ten years.
“There is no winner in the race to the bottom on corporate tax,” said Muheed Jamaldeen, senior economist at Oxfam Australia.
The advocacy group said that tax incentives are ineffective to encourage payment due to the lack of parliamentary and public scrutiny.
“As a result, tax incentives are often ineffective and have become associated with abuse and corruption,” the report said.
“Tax revenues are needed to fund public goods and services, which contribute to the reduction of poverty and to the development of social and economic infrastructure.
“It is crucial that the Australian Government modifies current legislation so that multinational companies that function in or from Australia report publicly on their incomes, employees, profits earned and taxes paid in every country in which they operate.”
Dr Helen Szoke, chief executive at Oxfam Australia said the federal government should take action to make companies “pay their fair share”.
“The Federal Government must act swiftly and can no longer ignore the need for laws that will force big companies to publicly report on their incomes, taxes paid, profits and employees in every country in which they operate,” she said.
If you are an employer and looking to get a police check report for employees you can use National Crime check. They provide quick online police checks and offer bulk checks for staffing.
It is a popular new year resolution, but investing in a stock market could indeed be an overwhelming decision for beginners – is it the right choice, and how can you get profits out of it? Here are a few explainers to help you start.
What is a stock market?
Investopedia defines stock as “a share in the ownership of a company”. Stock market acts as a platform where buyers and sellers exchange securities, such as shares and derivatives.
The price of stocks changes according to current demand and supply level. Depending on your investment goals, you could hold shares for a few weeks (swing trading) or buy and sell quickly after a day or less (intraday trading).
Is stock market right for you?
If you are risk-averse, probably not. The dynamic of stock market involves constant changes, and it would suit you only if you are comfortable with a level of risk.
Stock markets also work best for patient investors, whose judgments are not easily clouded by fear or greed. Sometimes it is best for investors to hold rather than quickly sell in hopes of great returns, which could induce panic and trigger bad decisions. Investors should also research the company properly before buying in instead of depending on big names. By learning about the company, investors will be able to analyse and expect changes in the market better.