Cabinet leak: Sydney to Parramatta in 15 minutes

A final decision on the route for the Sydney Metro West rail link is shaping up to be a contest between a line that provides an express 15-minute service from the CBD to Parramatta with only five stations, and a 25-minute route with 12 underground stations known as Metro Local South.

Another route known as Metro Rapid promises a 20-minute journey at speeds of up to 130 kilometres per hour along a train line with 10 stations that takes in Five Dock and North Burwood.

Trains on the express route would travel at up to 160 km/h and those on the Metro Local South route at up to 100 km/h.

The fourth route, and the least likely to eventuate, would be Metro Local North, which would run via Drummoyne and under Sydney Harbour to Ryde in the north before finishing at Parramatta.

All four options in the Cabinet paper seen by Fairfax Media and the ABC run from Pitt Street in the CBD and have benefit-cost ratios well in excess of 1, meaning the benefits such as travel time savings for tens of thousands of commuters exceed the costs of constructing and operating the line.

The preferred option – Metro Local South – along which driverless, single-deck trains would run takes in the Bays Precinct at Rozelle, Lilyfield, Concord and Silverwater.

The 15-minute express option, with only five stations, performs the worst when subjected to benefit-cost analysis. Although the fastest route on offer with impressive time savings, it has only two points of interconnection with heavy rail or light rail networks, limiting its use.

Its benefit-cost ratio of around 1.7 is about the same as that presented in the business case for the WestConnex toll road.

The Metro Rapid option has a much higher benefit-cost ratio of around 2.5, meaning the benefits are more than twice the costs. Metro Local South and Metro Local North have benefit-cost ratios well in excess of 2.

Among the benefits identified for the project are public transport time savings, reduced train and station crowding, shorter waiting times, improved rail reliability and private vehicle travel-time savings.

The analysis raises questions about why the Metro West rail project wasn't considered as an alternative to WestConnex, given that most of its variants have better benefit-cost ratios.

Excluding it as an alternative when WestConnex was first considered made the $16.8 billion toll-road project appear to be the best available option.

An internal Transport for NSW memo released under the NSW Government Information Public Access Act refers to a Cabinet directive not to consider public transport alternatives to road projects.

It suggests Cabinet forbade the consideration of public transport alternatives to toll-road projects including the F6 Extension and the Western Harbour Tunnel and Beaches Link.

 

"It would be extraordinarily foolhardy to consider that academic transport economists, transport practitioners and a range of stakeholders will not raise these issues," it said.

"There is considerable political and reputational risks associated with not considering options."

The Metro Local North and Metro Local South routes would each cost up to $15 billion to build (in 2016 dollars) and around $2 billion to run over 30 years.

In contrast, the Metro Rapid would cost around $13 billion to build and the Metro Express less than $12 billion.

 

 

But the Metro Local North and Metro Local South options allow the government to recoup money from developers who buy air rights above 12 new underground stations. It boosts the expected benefit-cost ratios from around 1.8 to around 2.3.

The number of stations will also be crucial to determining the final price for constructing the line because a typical underground station can cost between $400 million and $500 million.

Transport and Infrastructure  Minister Andrew Constance said no decisions had been made on either the funding mechanism or development around Metro West.

Well planned cities needed smart investment in both road and rail infrastructure. "Thanks to the strength of the NSW budget, we can invest in both. Our $41.5 billion investment in roads and rail infrastructure is evenly split between roads and public transport," he said.

While the Berejiklian government is still some time away from revealing the exact route for the new metro line running mostly through tunnels, it has named Parramatta, Olympic Park, the Bays Precinct and the central city as locations for stations.

Under its timetable, the new line will be built next decade and be operational in the second half of the 2020s. It will link to the $20 billion-plus metro railway under construction, the first stage of which from the city's north-west to Chatswood is due for completion in 2019.

The second stage will continue on to the central business district, Sydenham and on the existing Bankstown line, and should open in 2023.

The new Sydney Metro West will also dovetail with the planned 22-km light rail line to be built in two stages from Westmead and Parramatta to Olympic Park and Strathfield. Construction is due to begin next year at a cost of more than $3.5 billion.

In The Sydney Morning Herald

Read more >>

CommSec: Adjust your maps, we're three-speed

Australia is no longer a two-speed economy. Commonwealth Securities says we're now “three-speed”.

“Western Australia is in a group by itself,” the stockbroker says in its State of the States report released this morning. [MON] “The next level comprises the Australian Capital Territory, Victoria and South Australia, then there is a gap before the next four: Tasmania, NSW, Northern Territory and Queensland.”

NSW slots into the also-ran category by virtue of appalling weak economic growth compared to historical averages and other states. Growth in the June quarter was just 8 per cent above the NSW decade long average compared to 28 per cent in Western Australia, 21 per cent in the ACT, 16 per cent in South Australia, and 12 per cent in the second-poorest performer Tasmania.

Retail spending in NSW was up just 11 per cent on the decade long average, compared to 20 per cent in the leading state Western Australia.

Dwelling commencements were down 18 per cent on long-term averages while those in Victoria were up 28 per cent and in the ACT up 82 per cent.

“NSW is struggling to find an X-factor that will drive growth,” said CommSec chief economist Craig James. “It has above average population growth, but so does the ACT and Western Australia"...

The CommSec methodology disadvantages traditionally strong states such as NSW by comparing their current performance to their historical averages. Mr James defends the method by saying it is how the Reserve Bank assesses interest rates. "Just as the Bank does with interest rates we use decade-long averages to decide what is normal," he says.

South Australia and Victoria, both traditionally weaker than NSW, look exceptionally strong when measured against historical performance.

South Australia’s construction work is up 40 per cent on the long-term average, Victoria’s 25 per cent, and NSW just 15 per cent.

Mr James told the Herald the state’s prospects might be about to turn up. “The new government has committed itself to getting more homes and units built, that should spark retail spending and employment as it did in Victoria. And the benefits of the mining boom might start to roll. NSW might move into the second tier, but a lot would need to go right. At the moment it is more of a Tasmania than a Victoria,” he said.

Published in today's SMH and Age


THREE SPEEDS

CommSec rating, strength

TOP SPEED:

Western Australia - economic growth

SERIOUS CONTENDERS:

Australian Capital Territory - home building
Victoria - dwelling starts, retail
South Australia - construction

WAY BEHIND:

Tasmania - employment
NSW - population
Norther Territory - employment
Queensland - investment


Related Posts

. Multi-speed or two-speed, NSW looks sick

. It's a two-speed economy aright. Hello Sydney..

. Two speeds. Governor Stevens pwned!

CSSOS

Read more >>

Multi-speed or two-speed, NSW looks sick

NSW is vying with flood-ravaged Queensland for the bottom spot in the latest CommSec economic league table, slipping below previously weak states such as South Australia and Tasmania.

The quarterly report puts the NSW economy last or near last on most of the measures assessed by the stock broker, and a narrow second-last to Queensland overall.

“Queensland has been hit by once in a generation floods and cyclones. It is understandable that it is struggling,” said CommSec chief economist Craig James.

“But for NSW the problems are deeper. Nearly every other state has had something to propel growth, whether it be housing in Victoria and the Australian Capital Territory or mining in Western Australia. NSW has weak on planning, weak on delivering infrastructure to the places that need it, weak on building railways to the houses that will need them. There is a new government in place now and there should be no excuses.”

The CommSec table puts Western Australia in number one position as the best economy, with the Australian Capital Territory in second place.

The table measures performance relative to historical averages rather than absolute performance... a methodology that disadvantages traditionally strong states such as NSW.

“We are trying to find how each economy is performing compared with its normal,” said Mr James. “Just as the Reserve Bank does with interest rates, we have used decade-long averages to to decide what is normal.”

NSW is at the bottom of the pack when its economic growth is compared to its decade average, with growth just 9 per cent higher. Western Australia’s is nearly 30 per cent higher. NSW is near the bottom of the pack on retail spending with current spending 12 per cent higher than the decade average compared to 22 per cent for Western Australia.

For home building NSW is 17 per cent below the decade average whereas the leader, the Australian Capital Territory, is 80 per cent above it.

“NSW has not had a government focused on these things. Victoria, now in third place, could soon climb to the top. You have to ask why Victoria, why not NSW and the answer has to be NSW needs to be focusing more on getting people coming in to the state, keeping down the cost of living and keeping down the cost of housing.”

“The new government does want to do that but people want to see results. They are what it will be judged on.”

Treasurer Wayne Swan acknowledged Sunday parts of the economy were weak.

“We are seeing out there a cautious consumer but the fundamentals underlying our economy are strong,” he told Network Ten. “We have the strength to withstand adverse international events, although we are not entirely immune from them.”

Published in today's SMH and Age


Related Posts

. It's a two-speed economy aright. Hello Sydney..

. Two speeds. Governor Stevens pwned!

. The paradox of mining

CSSOS

Read more >>

It's a two-speed economy aright. Hello Sydney..

Gaining jobs

Victoria + 25,300
Queensland + 4900
Western Australia +17,100
South Australia +11,100

Losing jobs

NSW - 22,100
Tasmania -1200

ABS 6202.0 Six months to June, trend

Clear enough?

Sydney has joined the upper ranks of the world’s most expensive cities as its economy turns sour. New figures show NSW shedding jobs at the fastest rate in the nation, losing 22,100 workers during six months in which every other state bar Tasmania built up employment.

The Bureau of Statistics figures show Victoria gained 25,300 jobs in the six months to June, Western Australia 17,100; South Australia 11,100 and Queensland 4900.

The losses in NSW turned what would have been a respectable national jobs performance into a mediocre one and helped redefine economic geography.

Victoria is emerging as a winner from what Treasurer Wayne Swan calls the “patchwork economy” along with the mining states of Western Australia, Queensland and - these days - South Australia.

The losing states - whose economies are lagging on a measures including wages, consumer spending, jobs and population - are NSW, the ACT and Tasmania.

The decline is new... During the second half of 2010 NSW outperformed the rest of the nation by a wide margin.

“A mirky election would explain some of it,” said Westpac economist Justin Smirk. “We knew what the result would be but didn’t know what the new government would be like. Consumers normally hide out during election campaigns.”

Sydney’s outsized finance sector might have something to do with it too. “Finance firms were hording labour last year in anticipation of good times. Now they are slimming down by not replacing staff,” said Mr Smirk.

The worldwide cost of living survey released yesterday by the Economist Intelligence Unit moves Sydney up two notches to become the sixth most expensive city in which to live.

Sydney’s prices eclipse those in London, Vienna, Rome, and New York. Only Toyko, Oslo, Osaka, Paris and Zurich remain more expensive. The survey includes rents, electricity, public transport, private schools and the price of domestic help.

The intelligence unit priced a one-day business trip to Sydney at $US627. The cost included one night's accommodation, a two-course meal, a simple meal, two taxi journeys, a drink in a hotel bar and an international newspaper.

The managing director of the Sydney-based funds management firm Rismark International Christopher Joye said much of the apparent increase would have measured the 20 to 30 per cent surge in the Australian dollar.

“Australians earn Aussie dollars, so a lot of that increase has had no impact on us. In fact the higher dollar has lifted our purchasing power. We can buy overseas goods more cheaply.”

“On the other hand we are now a more expensive destination for immigrants and visitors who pay in their own currencies. Our cost of living is increasing faster than other developed countries and this will get worse as the investment boom squeezes out our remaining spare capacity.”

Australia’s national unemployment rate remained steady at 4.9 per cent in June as jobs growth did little more than keep pace with population growth. The NSW unemployment rate climbed to 5.2 per cent. Victoria's slipped to 4.6 per cent and Western Australia’s to 4.2 per cent.

Treasurer Wayne Swan welcomed what he said was evidence of one of the strongest economies
in the developed world. “When the global financial crisis hit, our unemployment rate was the same as the United States. Now it is half that,” he told parliament.

Published in today's SMH

Related Posts

. Memo RBA: Spending's shrinking

. About that surging jobs market

. We're being swamped. Less.

6202.0

Read more >>

NSW sees the light, two (arguably three) elections too late

Related Posts

. Fixing the sick joke that is NSW

. Sydney is a disfunctional city; NSW a failed state

. The NSW government is a joke

. Beyond satire

. Who'd live in NSW?

Read more >>

Who'd have thought? After everything, NSW leads the way

Building jobs
NSW +22,000 (4.8%)

Holding firm
Victoria (5.0%)
South Australia (5.8%)
Tasmania (5.6%)

Losing jobs
Queensland - 22,000 (5.6%)
Western Australia - 11,000 (4.2)

Seasonally adjusted, rounded to nearest 1000 (Unemployment rate)
ABS 6202.0 February 2011


A surging NSW jobs market has presented Kristina Keneally with a pre-election gift - three months of the best unemployment figures since Morris Iemma was premier.

The February unemployment rate of 4.8 per cent follows 4.9 per cent in January and 4.6 per cent in December, all below 5 per cent for the first time since mid-2008.

More than 22,000 new jobs were created in February alone. Over the past three months NSW has created 28,000 new jobs, double the 14,000 created in Victoria and streets ahead of Western Australia and Queensland which have lost 13,000 and 23,000 jobs in the same period.

"We are a two-speed nation, but not in the way you would think given the focus on the mining boom," said Westpac economist Justin Smirk...

"NSW isn't being boosted in a way other states are not. We are benefiting from the mining boom having about the Australian average of mining income, but without the contracting property markets of Queensland and Western Australia."

"We create jobs providing business services to mining companies in the rest of Australia and
are not as tourist dependent as Queensland, so we are not suffering as much from the high dollar."

The February employment figures show Queensland to be very much a special case, losing 22,000 jobs in the month, enough to offset the NSW gain.

Nationally full-time employment jumped 47,600 offset by a fall in part-time employment of 57,700, almost all of it in the two flood affected states of Queensland and Victoria. Total hours worked rose as the gain in full-time hours worked more than offset the slide in part-time hours.

"There is nothing in this data that disrupts the strong medium term outlook for Australia," said ANZ economist Julie Toth.

"February's news was always going to be affected by the floods. That disruption will be temporary, the medium term outlook is solid."

The national unemployment rate held steady at 5 per cent. Excluding Queensland it was 4.9 per cent.

The dark side of what is now an extraordinary jump of 302,000 new jobs in the past year is that in net terms none of them have gone to teenagers. There are 300 fewer teenagers employed than there were 12 months ago.

"There is nothing good that you can say about youth employment going backwards," said Bill Mitchell of the Centre of Full Employment at the University of Newcastle. "An economy that excludes its active teenagers from any employment growth at all is not one using its capacity to potential."

"The longer-run consequences will be very damaging."

Published in today's Age

Bill Mitchell

Related Posts

. Jobs, jobs, jobs. Unless you're young, young, young

. Unemployment with a 4 in front of it. Good for men

. NSW is sick no longer

6202.0

Read more >>

What is it with the Coalition and figures on billboard? (photos)

Here's the latest, in NSW:

A $500 carbon tax on families?

Gee, Labor's government debt was going to reach $315 billion:




What ever happened to that prediction?

* Hint: It's now projected to peak at around one third of that figure.



Related Posts

. Debtwatch: How things change

. The Debt Truck: Running on empty

. The agreement on carbon tax

Read more >>

NSW is sick no longer

NSW is now the engine of Australia's employment growth producing jobs at a far faster rate than any other state or territory and at twice the rate of Western Australia.

A surge in employment of 55,000 last month, all of the jobs full-time, took the took the total number of full-time jobs created this year to an all-time record of 300,000 - with one month left to go.

NSW created almost four in every ten of those jobs, piling on jobs in the past six months an annualised pace of 5.1 per cent, double Western Australia's 2.6 per cent.

Premier Kristina Keneally the NSW unemployment rate of 5.1 per cent was now below that of every state other than Western Australia.

"Since its peak the NSW unemployment rate has slid 1.7 percentage points, compared to a 0.5 nationally," she said.

The biggest drivers of jobs growth in NSW have been the education, health and aged care industries suggesting it is part of a general lift in the state's economy rather than deriving from mining...

Last week's generally weak national accounts showed state final demand growing in NSW as it fell back in almost everywhere else.

Nationally employment is growing at an annual rate of 3.7 per cent, double the rate of population growth and way above the 2.5 per cent forecast for this financial year in the November budget update.

"This is simply a stunning figure," said Treasurer Wayne Swan. "We have produced record job creation during a very difficult period."

"It shows we got the big economic calls right during the global recession and are continuing to get them right to support employment and to support people in work. There will be some people in a patchwork economy who are not doing as well as others, and particularly in the lead up to Christmas it’s always important to acknowledge those people, but these are figures are the envy of the rest of the world."

Full-time employment passed 8 million for the first time in November as total employment passed 11.4 million. A record 66 per cent of Australians either worked or made themselves available for work leaving the national unemployment rate above 5 per cent at 5.2.

HSBC economist Paul Bloxham said were it not for the jump in the number of people prepared to work in the past six months the unemployment rate would already by 4.5 per cent.

"It would be putting additional pressure on an apparently scarce resource, labour, and driving up its price, wages. Instead we have new supply coming on line with the market economy drawing in more warm bodies."

"As long as this continues, it's a Goldilocks story of Australia."

Nomura Securities economist Stephen Roberts said unemployment was set to fall quickly through 5 per cent, "a level that in the past has been consistent with accelerating wage pressure".

He expects the Reserve Bank to push up interest rates as soon as March.

ANZ economist Katie Dean said said the figures added to a growing risk that consumers "won't remain as restrained at the checkout".

The consensus forecasts released at this week's business economists forecasting conference have interest rates steady until mid next year and then increasing three times in quick succession before year's end.

New jobs this year, unemployment rate

NSW 132,000 5.1%
Victoria 93,000 5.5%
Queensland 71,000 5.5%
Western Australia 41,000 4.5%
South Australia 16,000 5.6%
Tasmania 3000 5.4%

ABS 6202.0 November, seasonally adjusted.

Published in today's SMH and Age


Related Posts

. Fixing the sick joke that is NSW

. Sydney is a disfunctional city; NSW a failed state

. Who's making all those jobs then?

6202.0

Read more >>

Prime Minister Gillard says the city of Sydney is exploding. In fact it's growing more slowly than most.

New population statistics show a net 13,800 NSW residents pulled up stumps to move interstate over the past year, roughly the same as the number of Australians from all states who moved to Queensland.

The NSW exodus eclipses that of South Australia - the only other state to lose a significant number of locals - which parted with 3300 residents last year.

Victoria, Queensland and Western Australia gained both locals and immigrants with the three states recording Australia's fastest population growth rates of 2.13, 2.44 and 2.65 per cent.

By contrast NSW, South Australia and Tasmania grew a desultory 1.64, 1.32 and 0.89 per cent.

And despite Prime Minister Gillard's talk about population pressures on Western Sydney, the forecasts published by the Bureau of Statistics suggest the biggest pressures will be elsewhere.

By 2021 Queensland and Western Australia combined will be bigger than NSW.

By 2051 Brisbane and Perth combined will be bigger than Sydney...

But by then Sydney will be big indeed. According to the Bureau's "medium" projection Sydney will be a city of 6.7 million by the middle of this century, up from the present 4.5 million.

The high projection has Sydney passing 7.2 million residents, the low projection has it reaching 6.4 million.

By then the high projection shows Melbourne bigger than Sydney with 7.5 million people, and Brisbane and Perth combined far bigger with 4.5 million and 3.8 million.

NSW will get left behind partly because its own residents are leaving, partly because its traditionally high share of migrants is shrinking, and partly because with South Australia its population is having babies at the slowest rate on the mainland.

NSW is amongst the most aged of Australian populations with almost one million of its residents - 14 per cent - now aged 65 or over. Only South Australia and Tasmania, each with 15 per cent, have older populations.

Western Australia is the most youthful state, with only 11 per cent of its population aged 65 or over, and the Northern Territory by far the most youthful region with only 5 per cent of its population over 65.

The latest projections have Australia's population climbing from 22 million to a high between 30 million and 40 million in 2051 with a central projection of $34 million.

By then NSW will account for just 29 per cent of Australia's population, down from its present 33 per cent.

The ABS projection projection is lower than the figure of 36 million included in this year's International Report and the ABS figures suggest it may soon be lower still.

Australia's immigration rate fell last year and is set to fall further in response to changes in the rules governing foreign students and working visas.

Published in today's SMH


HEADING NORTH

Local movements;population growth

NSW - 13,800 1.64%
Victoria + 1800 2.13%
Queensland + 13,500 2.44%
South Australia - 3300 1.32%
Western Australia + 2300 2.65%
Tasmania - 50 0.89%

ABS 3101.0, Net movements 2009


Julia Gillard's attempt to distance herself from predecessor Kevin Rudd on the question of population growth sits uneasily with the latest population statistics.

Released on Thursday as Ms Gillard took the prime ministership the ABS figures show population growth slowing sharply during 2009 with the growth rate slipping from from 2.16 to 1.99 per cent.

The December quarter increase of just 0.41 per cent is lower than at any time during the financial crisis.

The change reflects a lower birth rate as a mini baby boom eases and also lower immigration during the financial crisis. But recent government changes to the rules governing foreign students and working visas suggest the lower immigration rate might be here to stay.

The Bureau's central projection has Australia's population climbing from 22 million to 34 million by 2051, somewhat less than the 36 million projected in the intergenerational report greeted by Mr Rudd with the observation that he welcomed a "big Australia".

Prime Minister Gillard said yesterday population minister Tony Burke would henceforth be known as the "minister for sustainable population" and said she did not "believe in a big Australia".

"I am a migrant," she told the Nine network. "My parents came here at a time that the country was saying to the world we’ve got a population of around about 11 million, we want to build it up. The big focus then on populate or perish."

Melbourne Lord Mayor Robert Doyle dismissed her stance as naive.

"I'm not sure how you stop Australia’s growth," he said. "It is a bit naive to say you are against a big Australia. If not a big Australia then what Australia?"

The former Opposition leader said high value industries such as biotechnology would help the city prosper, but that Australia needed "a larger and more educated population to grow more of those jobs".

The Committee for Melbourne said the city had to have a long term plan for growing the population, rather than pretend growth would not happen.

Chief executive Andrew MacLeod questioned whether the community was concerned about population as such or that Australia’s infrastructure could not cope with future numbers.

"No one in Australia supports mandatory controls for natural population size, so we need to recognise that growth would come even with no migration,’’ he said.

Greg Evans at the Australian Chamber of Commerce and Industry said while growing cities did place pressure on infrastructure it was also important that Australia be able import skilled workers.

The Australian Conservation Foundation supported the Prime Minister but said she now had to develop a strategy.

"A sensible population policy would set clear targets and plans for dramatically reducing greenhouse pollution, improving water and energy efficiency, stabilising the population in the long term and protecting key ecological assets," said spokesman Chuck Berger.

Former NSW premier Bob Carr said 80 per cent of Australians would agree that Australia needed "breathing space".

"Immigration has been run at levels that are simply too
ambitious," he said.

Monash University demographer Bob Birrell said the Prime Minister’s comments were a "huge departure" from Mr Rudd but questioned whether Ms Gillard was serious as the debate had to deal with immigration.

Opposition Leader Tony Abbott said "Kevin Rudd's big Australia was her big Australia for months" and asked "what is she actually going to do to make a difference?"

"I tell you what, if she wasn't wasting money on overpriced school halls we'd be able to have some of the decent infrastructure to actually cope with this increased population," he added.

The ABS figures show Victoria, Queensland and Western Australia to be the fastest-growing states with annual population increases of 2.1, 2.5 and 2.6 per cent. NSW, South Australia and Tasmania are the slowest-growing advancing by 1.6, 1.3 and 0.8 per cent. NSW and South Australia are actually losing locals to other states while Victoria, Queensland and Western Australia are gaining.

Published in today's Age


Related Posts

. Sydney is a disfunctional city; NSW a failed state

. The NSW government is a joke

. The Premier State ain't the jobs state

3101.0

Read more >>

Good news out of NSW? Someone's building homes.

At last, good news for Sydney homebuyers.

Council approvals for new houses and apartments jumped to a six-year high in March with a seasonally-adjusted 3814 new dwellings given a tick, the first month to boast more than 3000 since 2007.

In what seems to be a delayed response to government stimulus and a sign that credit is easing more than half the new dwellings were units or flats, a sector that has been in the doldrums since the global financial crisis.

Sydney is the centre of the resurgence with 1834 new homes approved in March, 1077 of them in high rise apartments or flats.

Nationally March saw the biggest activity since October 2003, with a seasonally adjusted 16,597 new homes approved. Of those, 6200 were new units or flats.

"Reports of the demise of dwelling construction would seem to have been exaggerated," said Westpac economist Matthew Hassan...

"However there's a chance the bulk of this rise is a one-off rather than a renewed leg-up."

Mr Hassan said the jump was almost entirely driven by units, "a notoriously volatlie segment that inclues large and lumpy developments. As such the March rise might be followed by a fall in April, although credit data suggests underlying trends may be improving".

ANZ property economist Ange Montalti said the resilience of approvals in the face of successive rate rises showed builders were reacting to fundamentals. "There is a housing shortage," he said. "The population is growing strongly".

"The strong momentum in prices this past year will have given builders confidence that apartment developments can generate required rates of return."

Treasurer Eric Roozendaal welcomed the jump saying it showed NSW "leading the nation in the growth of residential building approvals, another sign the green shoots of recovery are growing in the NSW".

Aaron Gadiel, chief executive of developer lobby group Urban Taskforce, said it was great NSW was "getting away from the abysmal numbers of 2009, but the state still has a long way to go in order to get its housing approvals and construction rates to a reasonable level."

Housing Industry Association economist Ben Phillips said much more needed to be done and forecast even stronger construction, notwithstanding the end of the First Home Buyer Boost.

"Housing starts should be up 18 per cent this year on a very weak 2009. There's a shortfall of about 200,000 houses," he said.

The apparent resurgence in home building will both be welcome and treated warily by the Reserve Bank.

On one hand more homes will reduce pressure on house prices and rents, weakening inflation.

Governor Stevens told a business audience last year he would regard what happened to housing as a measure of his success saying "if all we end up with is higher prices and not many more dwellings it will be very disappointing, indeed quite disturbing."

On the other hand rapid construction will drive up demand for materials and workers at a time when the economic is set to boom.

The Reserve Bank Tuesday lifted its forecast for inflation to the upper end of its target band, indicating that what happened to inflation would guide its future decisions about interest rates now that they were back to "average levels".

Published in today's SMH


Related Posts

. Fixing the sick joke that is NSW

. Sydney is a disfunctional city; NSW a failed state

. The NSW government is a joke

. Who'd live in NSW?

Read more >>

Fixing the sick joke that is NSW

My friend Geoff writes from Sydney:

"I am seriously considering setting up a cross-party organisation called 'NSW Centre Party' or somesuch to try and hold the balance of power in both houses with the following objectives:

1) Remove all retirement benefits other than statutory superannuation from Parliamentarians and Ministers both former and existing. Make all payments to Parliamentarians and Ministers available on the web, plus all their office accounts; all published on the web. No using stamp allowances for party political literature ever again.

2) Set up a Department of State Development modeled loosely on the Singapore Ministry of National Development and provide effective interdepartmental coordination for projects deemed to be significant. Close down the Departments of Small Business.

3) Encourage business by radically reducing Government red tape and making government information and services available on-line, if necessary by reconceptualising service provision across departments.

4) A policy framework to encourage Sydney to grow at a faster rate by reducing the fixed costs of developing land and by completely restructuring the current development control framework.

5) Forced amalgamation of Councils to achieve a minimum population base of 500,000 in Sydney with a firm division of responsibility between the State Government and Councils. (Four rather than about 16 Councils in Sydney and about another six for the rest of NSW) There are currently over 150 Councils in NSW; all overstaffed and overpaid.

6) Introduce a congestion charge for central Sydney and gradually introduce road use charges with the aim of raising sufficient cash over 30 to 50 years to pay off a giant upfront loan to extend the rail network, including the provision of a fast train from Williamtown to Kiama. This would open up a lot of cheap flat land to development which would provide housing for working families.

7) Fix DOCS by splitting off its child protection responsibilities and making this their highest priority.

8) Fix the Education department by focussing on outcomes and not class sizes, and by allowing private providers to contract to provide education to State students at open tender.

9) Fix the health system by providing a system of polyclinics to take the load off Emergency Departments.

10) Reestablish the Building Services Commission.

11) Spill all positions on government boards, quangos and stats and appoint based on merit using a transparent system."

I really, really like it! Pity I moved to Canberra and lost my vote.

Read more >>

Sydney is a disfunctional city; NSW a failed state

Richard Ackland lays it out starkly in today's SMH:

"Sydney is not a lovely place in winter. The CBD is a biting wind tunnel, Frank Sartor's granite footpaths are stained with the grease from spilled milkshakes, the sun is thin, the faces chapped and there's a pervading pong of rotten cooking oil and urine.

You've more chance of being crippled for life by a wild-eyed skateboarder than you have of finding a delicious and inexpensive meal after 2.30 in the afternoon..."

Playwright Louis Nowra brilliantly spelled out the whole incredibly sad story in the May 30-31 Weekend Australian Magazine.

Highlights on the link below:

In the outer suburbs there is little transport infrastructure, health services are stretched and cultural amenities are virtually non-existent. These suburbs are awash with drugs, domestic violence and family breakdown. The underclass has been herded into isolated Housing Commission estates and forgotten. The so-called "hard-luck suburbs" were created by politicians who didn't care...

Sydney's rail system is a disaster. "We have not built the infrastructure that will be needed in the future," a frustrated Ron Christie, former coordinator general of rail and author of the 2001 Christie Report, said last month. His report had predicted that, unless the network were extended, Sydney would be "doomed to a future under which more than half the urbanised metropolitan area ... will not be served by the rail system"...

In the year to April 2008 Sydney ferry crews reported 13 collisions with their own or other vessels; the year before there was a collision between a ferry and a boat that killed four people. The average age of Sydney ferries is 17 years and all the government spokesmen can say is that they might talk about a "replacement strategy" later in the year...

Even an attempt to emulate the small-bar culture of Melbourne has been ineptly handled, not helped by the Australian Hotels Association, which fought against it. This powerful lobby would prefer you to drink in beer barns and spend your money on the pokies. The idea that some people would like to sit in a small, comfortable venue, drink wine and not play the pokies is anathema to them...

Politicians have allowed bikers free rein, whether it be dealing in drugs or using my Kings Cross as a nocturnal battleground. One of the results of this refusal to combat the problem is that a brutal fight broke out in Sydney airport in March. Anthony Zervas, a Hells Angels associate, was beaten to death in front of ordinary citizens and a CCTV system that didn't work. Only then, when, as Premier Rees said, "the violence had spilled over into the public domain", did the Government decide to do something. But it was too late. The bikers had become so powerful that Rees now has extra bodyguards to protect him.

Even the Gay and Lesbian Mardi Gras, a symbol of Sydney's tolerance, has found itself tainted by violence. At this year's event, police barely held their own as drunken troublemakers went on a rampage in Hyde Park, destroying the atmosphere of the world-famous party.

And don't get any Sydneysider talking about the health system. Not so long ago I was rushed to hospital in an ambulance. It took the paramedics three attempts over several hours to find me a hospital with a spare bed. During my stay I saw overworked, stressed nurses and doctors trying to function in a system collapsing around them.

All this reminds me of the two years I spent in Melbourne during the early'90s, when Joan Kirner was premier. She was the last of a long line of Labor leaders who had avoided dealing with longstanding problems with the city's infrastructure. The result was disorganised government and a city reeking of failure and lassitude. It took Jeff Kennett, the Liberal premier, to finally restore a sense of pride to Melburnians. He may have acted the dill too many times but he had the energy and ferocity of a cattle dog plus a burning conviction that his beloved city could be revitalised.

Broken cities can be fixed. Take New York. During the'70s and'80s it was crime-ridden, dispirited and close to bankruptcy. It took energetic and enthusiastic men and women to turn it around, and they did. Now New York is again one of the great cities of the world.

The trouble with Sydney is that it has outgrown the imagination of its politicians. A city is a complex web of economic, social and cultural factors and a great city needs good public transport, health services and energy supplies, but it's more than that. It needs a sense of pride, of youthful enthusiasm, an architectural landscape that thrills its inhabitants and visitors, a cultural exuberance and social diversity that creates a melting pot of ideas and a sense of purpose, which in turn creates optimism and happiness. At the moment it's wallowing in a malaise of apathy and cynicism.

As I was putting the final touches to this story my computer went blank and the fan overhead slowed and stopped. It was the third blackout in a couple of weeks. Rees now says that blackouts will continue for some months yet. It was another sign, if any more were needed, that Sydney is on the verge of a nervous breakdown.

Photo: baddogwhiskas@ Flickr

Read more >>

Odd news on employment

A surprise jump in employment in October masked a hollowing out in Victoria and a rapid deterioration in NSW.

The Bureau of Statistics says an extra 34,300 Australians found work in the month, bringing the total gain in employment since June to 62,000 – more than predicted in Wednesday’s budget update.

Australia’s unemployment rate remained steady at 4.3% as it has for six of the last seven months.

Employment Minister Julia Gillard said still expected the rate to worsen to 5% as forecast in the update.

“We have been very clear with the Australian public that we anticipate an increase in unemployment. We expect unemployment to be at 5 per cent by the middle of next year and above that by the middle of the year after,” she said...

The Finance Minister Lindsay Tanner told Fairfax radio said he wasn’t prepared to trust the result.

“Look, monthly figures fluctuate. The monthly figures are very unreliable, so whether they go up or down significantly, people of both sides of politics always express great caution about emphasising monthly figures,” he said.

The figures show that 17,500 people lost their jobs in NSW in the month, one of that state’s worst results on record.

The NSW unemployment rate edged up from 4.8% to 5.2%.

Victoria retained the jobs it had, but employment increased by only 200 workers throughout the month keeping its unemployment rate steady at 4.4%.

But beneath the surface Victoria's labour force is hollowing out. More than 4,000 full-time jobs have been lost in past six months, replaced with 5,500 extra part-time jobs.

The net effect, calculated by The Age using a formula that treats two part-time jobs as equivalent to one full-time job is a mere gain of 700 full-time equivalent jobs – the worst performance of any state apart from NSW which lost 61,600.

The mining states of Queensland and Western Australia did better much than Victoria, gaining the equivalent of 40,400 jobs and 37,500. The smaller states of Tasmania and South Australia also did better, gaining 7,000 and 5,200.

Unemployment in Western Australia and Tasmania, fell to record lows of 2.2% and 3.5%.

“Looking through the data our view is that as private investment is postponed or cancelled amid an increasingly gloomy outlook jobs prospects will dim,” said JP Morgan economist Stephen Walters.

“Officials probably will not take too seriously a job report that indicates that firms rushed to employ tens of thousands of new workers as equity markets collapsed, the world's major economies plunged into recession, and governments in many countries were forced to bail out their respective banking systems.”

Westpac’s Bill Evans said employers might be reluctant to shed skilled labour during the downturn after having had such difficulty finding it during the upswing.

Mr Tanner said the economy remained “very sound”.

“The fundamentals are strong and we have got good business investment, we've got good balance sheets, we've got good banks, and still, a significant budget surplus. So it's not what's happening here that's the problem, it's just these downward pressures internationally. If they get seriously worse, then we're in uncharted territory.”

JOBS: RISING, FLAT AND FALLING

Growth in six months to October

                 Jobs*    Jobless    

Qld       +40,400        -400

WA       +37,500      -8100

Tas          +7000      -1600

SA           +5200     +4700

Vic            +700       -1500

NSW    -24,200   +17,100

Aust  +61,600     +14,200

Source: Bureau of Statistics. * Trend growth in full-time equivalent jobs. National and state trends estimated separately. 

Read more >>

Just when you thought NSW couldn't get more stupid...

it has handed over $30 million to the organisers of a V8 Supercar race

Really.

The new Premier Nathan Rees says the event will "contribute $A110 million to the state's economy between 2008 and 2013, at a cost to taxpayers of just $A30 million.

Does he read widely? (Unlike his Education Minister.)

If so, he'll know about the alleged economic "benefits" of V8 Supercar races.

To quote from myself:

In Canberra in 2000 a series of V8 car races was meant to bring the city $11 million to $13 million each year by creating a “vibrant city”.Our government kicked in $4.5 million in capital works and a $2.5 million per year subsidy, which climbed to $4.7 million.

The ACT Auditor General looked at the books. Mark Harrison, the consultant who prepared the report, was stunned.

Here’s what he told me at the time: “The Cabinet submission couldn't even add up the numbers properly in its columns. It didn't discount future cash flows, which had the effect of exaggerating the net benefits of the project by more than a third. It involved double counting, and the benefits it did list were vastly exaggerated.”

He concluded that the event had actually cost the territory money. In his language, it brought “significant negative economic results”.

As I went on to outline (all this is really very well known):

Most of the people who go to these events are locals. If they spend money or time there, it is likely they are not spending money somewhere else.

Most of the non-locals come from other states. Even if their spending boosts the ACT’s economy, it doesn’t boost Australia’s.And if ever thousands (or millions) of visitors did come from overseas for a big event and spend like crazy, the main effect would be to push up Australia’s exchange rate and hotel room rates. And perhaps even interest rates.

It's not as if the NSW Premier can spare the money.


ACT Auditor-General’s Office, Performance Audit Report. V8 Car Races in Canberra, Costs and Benefits July 2002.

Peter Martin, The Economics of Big Events, Insight, SBS TV, October 09, 2003.

Read more >>

The NSW government is a joke

...a joke that keeps on giving. Enjoy it!

From Friday's SMH:

Yes, Minister, you pay for public schools.

"AFTER just days in her job as the state's Education Minister, Verity Firth was shocked to discover that the State Government provided most of the funding for public schools.

Ms Firth told the Herald she was concerned and more than a little surprised at the discovery.

"When you think about the actual percentage of education funding that comes from the states versus the amount that comes from the Commonwealth, the states overwhelmingly fund primary and secondary school education," she said.

"I think I was a bit ignorant about that. I think I'd always assumed it was a bit of a 50-50. It's not at all; it's about 80-20 … we need a better partnership on that."

Okay, so she's just been made the Minister.

But for how many years did she vote on budgets on before that without reading them?

Read more >>

Beyond satire

NSW. The latest update.

Why oh why didn't we kick out this government on either of the last two occasions when we had a chance?

Read more >>

"Being debt free sounds terrific . . .

...until you ask the economists’ question: at what cost?”

Nicholas Gruen with an excellent column in today's Financial Review.

It's about how NSW Labor dug its own grave.

Read more >>

Iemma's downfall

Some wiz on YouTube foresaw the whole thing back in June.

It's worth watching again this afternoon while reading the Saturday papers and marvelling at the wonder that is NSW.

Read more >>

Who'd live in NSW?

Alexandra Smith in today's Sydney Morning Herald:

"In 1998 the lid was lifted on the corrupt world of NSW railways, revealing that supplying prostitutes could win you a contract, fake medical certificates signed by a dead doctor would get you a day off work, and you could claim overtime while playing golf.

Ten years later it seems little has changed in RailCorp and the stench of corruption is slowly engulfing the NSW public sector.

In past 12 months the Independent Commission Against Corruption has held inquiries into three State Government agencies - the Roads and Traffic Authority, RailCorp and the Department of Housing; the NSW Fire Brigades has joined the list this week."

Read it and be glad if you live outside of the Rum Corp state.

UPDATE: Police and the state of NSW, by former NSW Auditor General Tony Harris

Read more >>

Great quotes

Seldom do Coalition senators make recommendations that are critical of a government program, let alone multiple critical recommendations ... but the Access Card is so bad they have swallowed their fears and spoken out.

Opposition Access Card spokeswoman Tanya Plibersek.
The Australian, March 16, 2007


Peter Debnam is running an amazing campaign and I think there's going to be a very strong reaction.

Pru Goward, Liberal candidate for Goulburn on her leader's performance in the NSW election.
AAP, March 15, 2007


Coles has always kept the market fully informed.

Sarah McNeil, Coles Group Corporate Affairs.
AM, March 16, 2007

Read more >>