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Australian Unemployment Jumps to 10-Year High; Aussie Drops – Bloomberg

Australian Unemployment Jumps to 10-Year High; Aussie Drops – Bloomberg.

By Michael Heath  Feb 12, 2014 11:04 PM ET
Photographer: Brendon Thorne/Bloomberg

Commuters ascend a flight of stairs at Martin Place in the central business district of Sydney.

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Australia’s unemployment rate climbed to the highest level in more than 10 years in January, spurring traders to pare bets on an interest-rate increase and sending the Aussie to its biggest drop in almost three weeks.

The jobless rate rose to 6 percent from 5.8 percent, the statistics bureau said in Sydney. The median estimate was an increase to 5.9 percent in a Bloomberg News survey of economists. The number of people employed fell by 3,700.

The softer-than-expected jobs report damped expectations the Reserve Bank of Australia will switch to tighter policy amid surging property prices, rising building approvals and a forecast acceleration in growth and inflation. Toyota Motor Corp., General Motors Co. and Ford Motor Co. have said they’re closing plants and shedding jobs in Australia as high production costs and a strong currency render them uncompetitive.

“While some may argue that employment is a lagging indicator, we would also suggest this print will be a negative for household income, sentiment and thus spending,” said Justin Smirk, a senior economist in Sydney at Westpac Banking Corp., which forecast the 6 percent unemployment rate. “In the details there is no silver lining.”

The Australian dollar fell to 89.43 U.S. cents at 3 p.m. in Sydney from 90.27 cents before the data’s release. Bets on how much the RBA will add to its cash rate in the next 12 months fell to 11 basis points, from 18 basis points yesterday, a Credit Suisse Group AG index based on swaps data showed.

Full-Time Fall

The number of full-time jobs declined by 7,100 in January, and part-time employment rose by 3,400, today’s report showed. Australia’s participation rate, a measure of the labor force in proportion to the population, was unchanged at 64.5 percent in January from a revised figure a month earlier, it showed.

The RBA cut the overnight cash-rate target by 2.25 percentage points between late 2011 and August to a record-low 2.5 percent to help offset the currency and spur industries outside mining, where an investment boom is waning.

Unemployment jumped to 5.1 percent in the resource-rich state of Western Australia, from 4.6 percent a month earlier. It jumped to 6.1 percent from 5.9 percent in Queensland. In the manufacturing hub of Victoria, joblessness climbed to 6.4 percent from 6.2 percent in December.

About 50,000 jobs in Australia’s auto and parts industry are in jeopardy after Toyota on Feb. 10 followed Ford and GM in announcing plans to quit manufacturing in the country.

Abbott’s Challenge

The decisions pose a challenge for Prime Minister Tony Abbott, who won an election last September pledging to restore confidence in the economy. The country’s main car plants are sited in districts where the jobless rate is already on par with the euro zone’s, and a waning mining boom is unlikely to soak up the additional labor.

“Over 60,000 full-time jobs have been lost since the Abbott government was elected,” opposition leader Bill Shorten told reporters in Canberra today. “What is the jobs plan of the Abbott government? What are they doing to stop the tens of thousands of jobs that are either going overseas or just disappearing?”

Consumer confidence fell 3 percent this month to the lowest level since July, a private report showed yesterday.

Unemployment in Melbourne’s Brimbank-Sunshine region adjacent to Toyota’s Altona plant and in the city’s Broadmeadows district that houses Ford’s main production lines was about 12 percent in September, according to government data. In the Adelaide suburb of Elizabeth where GM’s Holden has its main plant, it was 22 percent.

Commodity Currency

Manufacturing in Australia has been hurt by a commodities boom that helped drive the value of the local currency to $1.11 in July 2011, the highest level in the 30 years since exchange controls were dropped. While the Australian currency has since depreciated to about 90 U.S. cents, it’s still higher than at any point in the 18 years running up to 2007.

GM estimates it costs about A$3,750 more to produce a car in Australia than elsewhere. Ford said last May that its costs in the country were double those in Europe and four times those of its Asian divisions. The two carmakers will close their local plants in 2017 and 2016 respectively.

Even so, the RBA last week raised its inflation and growth forecasts, reflecting the currency’s decline from its peak last year, and reiterated its shift to a neutral policy stance. Low interest rates have driven up home prices and spurred a pickup in approvals for residential construction.

Home Prices

Sydney home prices jumped 13.8 percent in the fourth quarter from a year earlier, followed by Perth’s 8.7 percent, government data showed this week.

“For the RBA, these numbers are probably not a surprise,” said Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada in Sydney. “What it does suggest is that a market that’s starting to think about the possibility that the next move is up, and we may get a lift in cash rates later this year, these numbers argue strongly against that.”

To contact the reporter on this story: Michael Heath in Sydney at mheath1@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

Exclusive: Mont Pelerin Society Revealed As Home To Leading Pushers Of Climate Science Denial | DeSmogBlog

Exclusive: Mont Pelerin Society Revealed As Home To Leading Pushers Of Climate Science Denial | DeSmogBlog.

THERE’S a popular talking point coming from climate change denialists that all people who accept the science and the need to act on it are somehow blinded by faith.

In Australia, climate science contrarian columnists can barely touch their keyboards without typing out the words “global warming faith” or explaining how human-caused global warming is some sort of “new religion”.

This “climate religion” narrative often goes hand-in-hand with another favourite denialist talking point where climate scientists are only doing what they do because there’s a dollar in it.

Presumably the laws of physics, the melting ice sheets, the increasing risk of bushfires, the hottest decades on record and the acidifying oceans are also waiting for their cash.

Maurice Newman, the man hand-picked by Australian Prime Minister Tony Abbott to be the government’s top business advisor, loves both of these debating points.

Newman has described climate scientists as being a “global warming priesthood” and belonging to a new “religion”. In a second opinion column in two weeks in The Australian, Newman repeats his cynicism over the IPCC and climate scientists, describing them as a “cartel” that “will deny all contrary evidence”.  Newman even repeats the myth that in the 1970s scientists were certain the world was heading for global cooling, when in fact, as this study shows, a healthy majority of scientific papers were predicting the opposite.

Yet Newman has a deep belief system of his own, having long been associated with a form of “classic liberalism” – a particular world view which advocates small government and low regulation of the activities of businesses.

Not only that, but he is a member of a global society of influential business people, academics and think tank associates known as the Mont Pelerin Society who share the same broad ideology.

The Mont Pelerin Society

The Mont Pelerin Society was established in 1947 by free market economist and philosopher Friedrich von Hayek.

Maurice Newman, a Mont Pelerin member since 1976, has long been an admirer of the work of Hayek and fellow free market economist Milton Friedman, a past president of the Mont Pelerin Society.

Newman was responsible for bringing Friedman to Australia in the mid-1970s, at a time when Newman was helping to set up the Centre for Independent Studies – a Sydney-based free market think tank.

Mont Pelerin’s website explains that while all members don’t agree on everything, “they see danger in the expansion of government, not least in state welfare, in the power of trade unions and business monopoly, and in the continuing threat and reality of inflation.”

The Society, which holds a meeting annually in different parts of the world, also explains how its members see their society “as an effort to interpret in modern terms the fundamental principles of economic society as expressed by those classical economists, political scientists, and philosophers who have inspired many in Europe, America and throughout the Western World.”

To become a member, individuals have to be nominated by a current member and then seek endorsement by the membership committee before being endorsed.

DeSmogBlog has obtained a full list of the society’s members that includes senior representatives of many of the world’s foremost “free market” think tanks actively pushing back on proposed policy solutions to tackle climate change.

The list, from 2010, includes almost 500 people from 52 countries, with the bulk of members coming from the United States and the United Kingdom. The 70-page list includes private contact details. DeSmogBlog has decided to publish only extracts with contact details redacted.

Among the notable members is Charles Koch (list excerpt here), the US oil billionaire who has been a Mont Pelerin Society member since 1970.

Charles and his brother David have used their charitable foundations to funnel tens of millions of dollars into free market think tanks which fight environmental protection and deny the dangers of human-caused climate change.

In Australia, Mont Pelerin Society members include John Roskam (list excerpt here), executive director of the Institute of Public Affairs; Greg Lindsay (list excerpt here) , executive director of the Centre for Independent Studies; and mining magnate Ron Manners, executive director of the pro-mining think tank the Mannkal Economic Education Foundation.

All three organisations have actively pushed climate science scepticism and denial or heavily understated the risks of continuing to burn record amounts of fossil fuels.

Lindsay is a former president of the Mont Pelerin Society. In his 2008 “Presidential Address,” published in a Mont Pelerin newsletter, Lindsay claimed that climate change research had become an “industry” which lacked integrity.

His conspiracy theory was that scientists “have a vested interest in supporting the theory, so that the funding drip becomes a torrent.”

Lindsay also used the popular denial talking point that people who accepted the science of climate change were blinded by belief.

He said: “As many critics have pointed out, their belief in the theory, in too many instances, borders on the superstitious and mystical. The fact that so many minds are closed to any doubt strongly suggests that we are dealing with a new species of the kind of religious dogma which the Enlightenment developed to counter.”

The argument put by Lindsay back in 2008 is identical to that put by Tony Abbott’s chief business advisor Maurice Newman in recent columns, the latest only a few weeks ago.

Mont Pelerin in the United States

The US cohort of Mont Pelerin members includes many senior staff associated with “free market” think tanks that have manufactured doubt about the science of human-caused climate change or the need to act quickly.

Alongside Charles Koch, DeSmogBlog’s document shows that Mont Pelerin Society members include senior staff, directors and associates from groups his family foundations have helped to fund. These include the Cato Institute, Heritage Foundation, the Acton Institute, the Reason Foundation and the American Enterprise Institute.

Other members include Wall Street Journal editor and columnist Mary O’Grady and John O’Sullivan, a columnist with the conservative National Review.

The UK and Mont Pelerin

Members of UK free market think tanks including The Adam Smith Institute, CIVITAS and the Institute of Economic Affairs have also gained membership with the Mont Pelerin Society.

Long-standing climate science sceptic Julian Morris is also listed as a member.

Another UK member is Linda Whetstone, the daughter of Antony Fisher who founded the influential UK neo-liberal think tank, the Institute of Economic Affairs.

Antony Fisher established the Atlas Economic Research Foundation – a vast network of about 400 think tanks around the world that share the ideals of limiting the power of government. Alejandro Chafuen, the current president of Atlas, is also listed as a 2010 Mont Pelerin Society member.

Global network

The Mont Pelerin Society got its name from the location of the very first meeting in Switzerland, and members continue to have ample chance to network in their annual meetings.

In recent years, members have travelled to the Galapagos Islands, Prague (former Czech president Vaclav Klaus is a member), New York, Morocco, Tokyo, Sydney, Buenos Aires and Stockholm.

The opportunity for this powerful and influential group to share ideas is obvious.

In 2010, when members held a meeting in Australia, Perth-based mining magnate and member Ron Manners extended an invitation to those making the long trip down under.

A 2010 Mont Pelerin Society newsletter obtained by DeSmogBlog explained how Manners, whose think tank has hosted climate science denier Christopher Monckton, had organised a “fascinating tour” of mining and energy sites including a day tour of the remote Pilbara region described as the “ground zero” of the mining boom.

It should come as no surprise that the Mont Pelerin Society has more than its fair share of climate science deniers within its ranks.

Research has shown that belief in free market ideology is a predictor of the rejection of climate change science. This link was also revealed in Merchants of Doubt, a book by science historians Erik Conway and Naomi Oreskes.

About four out of every five climate denial books ever published, according to one study, have links to conservative and free market think tanks either through the authors or the publishers.

When it comes to efforts to block meaningful policy to tackle climate change, it seems free market groups and societies extolling their version of “freedom” are in fact a “ground zero” for climate science denial.

Indonesia recalls Canberra ambassador over Yudhoyono phone tapping attempt | World news | theguardian.com

Indonesia recalls Canberra ambassador over Yudhoyono phone tapping attempt | World news | theguardian.com.

 

Indonesia’s foreign minister, Marty Natalegawa, demands an explanation from Australia over spying revelations. Australia’s prime minister, Tony Abbott, is asked about the affair

Indonesia has recalled its ambassador to Australia following Guardian Australia’s revelations that Australian spy agencies attempted to listen to the private phone calls of the Indonesian president and targeted the phones of other senior figures in Jakarta, including his wife.

The Indonesian foreign minister, Marty Natalegawa, confirmed on Monday that he and the president had contacted the ambassador in Canberra and told him to return to Jakarta for “consultations”. He added that Indonesia was reviewing all information-sharing agreements between the two nations, a damning move given the new Australian government’s pledge to combat people-smuggling in the region.

Natalegawa said any tapping of Indonesian politicians’ personal phones “violates every single decent and legal instrument I can think of – national in Indonesia, national in Australia, international as well”.

He added: “It is nothing less than an unfriendly act which is already having a very serious impact on bilateral relations.”

Natalegawa said summoning the ambassador was “not considered a light step” but was the “minimum” that could be done to “consolidate the situation”.

“The ball is very much in Australia’s court,” he said, calling for an official, public explanation from Canberra.

He expressed frustration at the response he had received from the Australian capital, adding he would be speaking with the Australian foreign minister, Julie Bishop, later on Monday. Natalegawa dismissed any suggestion that phone surveillance was “common practice between countries”, saying: “I have news for you: we don’t do it, we certainly should not be doing it among friends.”

Natalegawa said he would be examining whether the phone tapping revelations were in violation of the Lombok treaty signed by the two nations in 2006, which aimed to enhance bilateral security co-operation.

The foreign minister, known for his reserved demeanour, spoke in an unusually forthright manner. He said he would be “quite flabbergasted” if tapping the private phone calls of the president had relevance to Australia’s security interests.

“I need quite desperately an explanation how a private conversation involving the president of the Republic of Indonesia, involving the first lady of the Republic of Indonesia, how they can even have a hint, even a hint of relevance impacting on the security of Australia,” he said.

Earlier on Monday, the deputy Australian ambassador to Indonesia, David Engel, was called to the foreign ministry for talks. After a 20-minute meeting, he described talks as “very good”.

 

Austerity Test Looms in Australia as Abbott Pledges Cuts – Bloomberg

Austerity Test Looms in Australia as Abbott Pledges Cuts – Bloomberg.

 

Australia plans to scrap carbon tax – Asia-Pacific – Al Jazeera English

Australia plans to scrap carbon tax – Asia-Pacific – Al Jazeera English.

 

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