To no one's surprise Wayne Swan has approved the takeover of St George by Westpac.
http://www.abc.net.au/news/stories/2008/10/23/2399637.htm
One reason given was "The St George banking brand will also benefit from Westpac's lower funding costs, helping it to offer lower interest rates on loans."
However a quick check of both bank's websites shows that St George already offers cheaper home loan rates than westpac!
http://webapps.stgeorge.com.au/rates/rates.asp?State=NSW&Category=Home+Loans
http://www.westpac.com.au/internet/publish.nsf/Content/PBHLHCPI+Interest+Rates
Of course they both offer a myriad of options to confuse all but the closest scrutiny, but there they are. The facts.
The takeover of St George by Westpac will reduce competition in the Australian banking industry. Is there anyone who thinks that Westpac will drop it's home loan rates to match St George?
Swannie has got this one wrong. In a few years the name St George will have gone the way of Bank of Melbourne and other small independent institutions offering real choice for consumers.
All is not lost though. The shareholders of St George still need to approve the deal. The mums and dads can still strike a blow for freedom of choice in the marketplace for all of us.
Visit http://www.savethedragon.org.au/ for more information.
Thursday, October 23, 2008
Tuesday, October 14, 2008
Rudd and Swannie "At least we're doing something"
The $10.4 billion will help the following groups:
- pensioners for a month
- low income families with children for a month
- the home building industry for 1-2 years
- real estate agents
- property developers
- a limited amount of kids fighting for training places, although by the time they're trained no one will want apprentices
- The Chinese, by increasing sales of toys and imported goods. Also nails, and items used extensively in the building industry
- The banks, because helping the banks "remain in business" is translated by the Federal Government to mean "helping the banks make billions of dollars in profit". It also seems to mean that the banks need to be able to afford to buy other banks. (CBA & Bankwest, Westpac & St George). Apparently reducing choice increases competitiveness.
- Kevin Rudd, Swannie and the team - because now no one can accuse them of doing nothing
The $10.4 billion will NOT help the following groups:
- people with jobs and no kids, or whose kids have grown up
- people currently unemployed
- people in casual positions who were hoping to get stable employment next year
- renters
- self funded retirees (unless they've got a house up for sale)
- anyone likely to be affected by global warming (to be more explicit - everyone)
- the long term prospect for the building industry
- people who aren't shareholders in banks
- people with debt who are making their payments
- people with debt who are not making their payments on a long term basis
- people who have bought and lost a house in the past and now want to get back into the market
- exporters
- everyone receiving the one-off cash bonus. Once they've spent it on Christmas presents and paid off some old bills they'll be in exactly the same situation they are in now
- kids in schools, training and university
- anyone who buys a new home due to the home buyers grant. These people will move to the outer suburbs where there is no work or public transport and are about to find out what spending 3 hours a day in the car feels like.
- the long term future of the economy
- The Federal Opposition because the government keeps stealing all their ideas - even the awful ones
$10.4 billion and no official word on what it will do for the economy. That really is a lot of money that may have been spent for no real benefit. Aren't there other ways the Government could have helped out the economy and the people who need more?
I refer you again to the Southern Cross Climate Coalition.
Monday, October 13, 2008
A panicked response from Rudd and AMO
Another Missed Opportunity.
The Rudd announcement today of $10.4billion in handouts is the reactive easy way out to the current situation and represents the absolute dearth of policy talent in the Federal Government.
It is "shut up" money to all those who are feeling the pinch of the financial crisis, unless, of course you happen to be young, have a job and own your house. Out of the budget surplus goes payments to pensioners (who needed it) and carers (who deserve it) and then to first home buyers. Most of the first home buyers bonus will be eaten up by state duties and taxes anyway. Existing home owners have already been let down by the Government's refusal to try and pursuade the banks to pass on the full interest rate cut. This is just salt in the wound.
A paltry $157 million for new training places from the government who wanted to lead the "education revolution".
The voters will love it, the economists will love it, but it is a missed opportunity. The short term financial fluctuations in the market (and, taken in a long term historical view, these are short term fluctuations) have blinded the Australian Federal Government to the big picture items they campaigned on at the Federal Election.
A golden opportunity has been missed for a massive investment in infrastructure. There will still be an investment, but this $10 billion pork barrel of the worst kind will eat into that money dramatically.
Pensioners and carers did need some money. I'm not convinced they needed $8billion. The building sector does need stimulus, but how about being more creative and smarter about it?
There are a number of crises affecting the world today: Global Poverty, A new Nuclear Arms Race, and Climate Change to name but a few. The ALP said "we are different" in the election campaign. The ALP criticized the Howard-Costello Government for one off hand outs. My how things change when you're on the other side of the chamber.
Enough negativity, what would I have done?
The Southern Cross Climate Coalition is a group made up of the Australian Conservation Foundation, The Australian Council of Social Service, and, bless them, Australian Council of Trade Unions.
One of the plans they hit upon is to "eco-makeover" every house in Australia with things such as better insulation, more efficient heating, water tanks, solar power, etc. The goal is to reduce the power usage of Australian households and bring existing buildings up to current new building standards.
http://www.acfonline.org.au/articles/news.asp?news_id=1965
The plan is quite clever in that it creates jobs in the trades (plumbers, electricians, etc), reduces our greenhouse emissions and reduces the living costs of normal Australians who cannot afford to renovate or live in rental accommodation where there is currently NO incentive for the property owner to do so.
So, this package would create jobs, stimulate the economy, save money in the short term on power bills, reduce our greenhouse emissions and prepare Australians better for a Emission Trading Scheme. No handouts, just a positive bit of leadership and governance and a change from the Rudd Crisis Campaign.
The SCCC estimates $5500 per home. How many homes could we do for $8 billion? How many of those will belong to pensioners and carers?
The Rudd announcement today of $10.4billion in handouts is the reactive easy way out to the current situation and represents the absolute dearth of policy talent in the Federal Government.
It is "shut up" money to all those who are feeling the pinch of the financial crisis, unless, of course you happen to be young, have a job and own your house. Out of the budget surplus goes payments to pensioners (who needed it) and carers (who deserve it) and then to first home buyers. Most of the first home buyers bonus will be eaten up by state duties and taxes anyway. Existing home owners have already been let down by the Government's refusal to try and pursuade the banks to pass on the full interest rate cut. This is just salt in the wound.
A paltry $157 million for new training places from the government who wanted to lead the "education revolution".
The voters will love it, the economists will love it, but it is a missed opportunity. The short term financial fluctuations in the market (and, taken in a long term historical view, these are short term fluctuations) have blinded the Australian Federal Government to the big picture items they campaigned on at the Federal Election.
A golden opportunity has been missed for a massive investment in infrastructure. There will still be an investment, but this $10 billion pork barrel of the worst kind will eat into that money dramatically.
Pensioners and carers did need some money. I'm not convinced they needed $8billion. The building sector does need stimulus, but how about being more creative and smarter about it?
There are a number of crises affecting the world today: Global Poverty, A new Nuclear Arms Race, and Climate Change to name but a few. The ALP said "we are different" in the election campaign. The ALP criticized the Howard-Costello Government for one off hand outs. My how things change when you're on the other side of the chamber.
Enough negativity, what would I have done?
The Southern Cross Climate Coalition is a group made up of the Australian Conservation Foundation, The Australian Council of Social Service, and, bless them, Australian Council of Trade Unions.
One of the plans they hit upon is to "eco-makeover" every house in Australia with things such as better insulation, more efficient heating, water tanks, solar power, etc. The goal is to reduce the power usage of Australian households and bring existing buildings up to current new building standards.
http://www.acfonline.org.au/articles/news.asp?news_id=1965
The plan is quite clever in that it creates jobs in the trades (plumbers, electricians, etc), reduces our greenhouse emissions and reduces the living costs of normal Australians who cannot afford to renovate or live in rental accommodation where there is currently NO incentive for the property owner to do so.
So, this package would create jobs, stimulate the economy, save money in the short term on power bills, reduce our greenhouse emissions and prepare Australians better for a Emission Trading Scheme. No handouts, just a positive bit of leadership and governance and a change from the Rudd Crisis Campaign.
The SCCC estimates $5500 per home. How many homes could we do for $8 billion? How many of those will belong to pensioners and carers?
Tuesday, October 7, 2008
The Economy
Time for my take.
Today we're just going to talk about interest rates and Australian banks. The banks were facing an unenviable position this week. They new rates would go down and they knew that they would want to keep as much as they can for themselves. How else would the Commonwealth Bank be able to afford to buy Bankwest, and Westpac be able to afford to buy St George. Billions of dollars does not grow on trees, it must be gouged from customer's pockets.
Fortunately for the spin doctors and PR people at the banks they didn't have to worry about passing on the full interest rate. Our PM and our Treasurer kindly helped out by telling everyone that the banks would not be able to pass on the full rate decrease as they were struggling so much with the "credit crunch", "toxic debt" and other meaningless terms that journos like to use to try and convince us they know what they're talking about.
Fact is that the banks were making money before the rates came down. Fact is that they had already put their rates up above the RBA's rate on previous occasions. Fact is that they were making plenty of money, are secure and are safe.
Sad fact is that all those people who could have been given a 1% reduction on their mortgage / business loan / credit card won't get it.
Fact is that the reason they're not getting it is due to the champion of working families deciding not to stick up for them when they need him most.
Today we're just going to talk about interest rates and Australian banks. The banks were facing an unenviable position this week. They new rates would go down and they knew that they would want to keep as much as they can for themselves. How else would the Commonwealth Bank be able to afford to buy Bankwest, and Westpac be able to afford to buy St George. Billions of dollars does not grow on trees, it must be gouged from customer's pockets.
Fortunately for the spin doctors and PR people at the banks they didn't have to worry about passing on the full interest rate. Our PM and our Treasurer kindly helped out by telling everyone that the banks would not be able to pass on the full rate decrease as they were struggling so much with the "credit crunch", "toxic debt" and other meaningless terms that journos like to use to try and convince us they know what they're talking about.
Fact is that the banks were making money before the rates came down. Fact is that they had already put their rates up above the RBA's rate on previous occasions. Fact is that they were making plenty of money, are secure and are safe.
Sad fact is that all those people who could have been given a 1% reduction on their mortgage / business loan / credit card won't get it.
Fact is that the reason they're not getting it is due to the champion of working families deciding not to stick up for them when they need him most.
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