At last. An inquiry into Newstart!

The vote is on Tuesday

The Greens will today push for a Senate inquiry into Australia’s notoriously low Newstart unemployment allowance and are quietly confident they get the numbers.

The $35 per day allowance is one of the lowest in the 34-nation Organisation for Economic Co-operation and Development. The OECD said in 2010 it was so low as to raise questions about its effectiveness in “enabling someone to look for a suitable job”.

Once close to the pension, Newstart has been indexed differently since 1997. The Henry Tax Review found that if the indexation arrangements continued by 2040 a single pensioner would be paid “more than twice as much as a single unemployed person”.

The Greens motion has been drawn up by Senator Rachel Siewert who earlier this year attempted to live for a week on $17.15 per day, her calculation of the Newstart allowance after rent.

After setting aside money for power, gas, bus tickets and payments to keep a phone connected in order to receive offers of work she was left with $10.11 a day for food and other expenses.

The motion sets up a Senate inquiry to report by November 1 on the the “adequacy of allowance payment system for job-seekers and others”...

The Greens have spoken to members of other parties about the inquiry and believe it will get support when it goes to the vote on Tuesday.

An Age survey of government backbenchers in May found that one quarter believed NewStart was too little to live on - a stance backed by business representatives including the chief executive of the Business Council Jennifer Westacott who wrote earlier this year that entrenching people into poverty by expecting them to live on $35 a day was “not a pathway back into employment”.

But lifting Newstart by $50 per week as called for by the Council of Social Service would be expensive, costing $1.2 billion per year.

The Greens motion would allow the inquiry to also examine allowances tied to Newstart such as those for students and carers. The inquiry would be explicitly asked to examine whether the $102.80 per week gap between Newstart and the pension encourages people who should be classified as unemployed and looking for work to have themselves reclassified as disabled pensioners unable to work.

"The inquiry will provide an opportunity to examine some of the core assumptions of the allowance payment system - including whether widening the gap between the payment and the minimum wage has really been an effective incentive into work, the length of time spent on allowances by different cohorts of people and the profile of long term Newstart recipients,” Senator Siewert told The Age.

The government has resisted calls to lift Newstart to nearer the pension saying it was intended to be only a temporary payment whereas the pension was intended to be ongoing.

However in March Treasurer Wayne Swan acknowledged there was “a case about the gap that has opened up,” and in the May Budget his ‘spreading the benefits of the boom’ package included a twice yearly $105 supplement for Newstart recipients worth an extra 57 cents per day.

The Greens are prepared to negotiate about the terms of the inquiry but say they must include the adequacy of Newstart.

In today's Sydney Morning Herald and Age


Draft Terms of Reference

Inquiry into the adequacy of the allowance payments system

That the following matters be referred to the Employment, Education and Training References Committee for inquiry and report by 1 November 2012:

A) The adequacy of allowance payment system for jobseekers and others, with particular reference to;

i) The adequacy of the Newstart payment as an income support payment for jobseekers and the adequacy of all other allowance payments that support a range of recipients who study or provide care;

B) The appropriateness of the allowance system as a support into work, with particular reference to;

i) The effectiveness of the payment as an incentive into work;
ii)The effectiveness of the allowance payment system in facilitating transitions between working and other activities such as studying, caring and retirement or in the event of illness or disability and in helping or hindering recipients to overcome barriers to employment
iii)The impact of the differences between pensions and allowances on the transition between working and other activities;

C) The impact of the changing nature of the labour market, particularly the rise of insecure work and decline of unskilled jobs, on the;

i) Nature and frequency of individual interaction with the allowance payment system;
ii) Over and underpayment of allowances to recipients.


Australian Greens Newstart Background Briefing



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How big is Australia's LNG boom?

Big enough to inflame economic growth, big enough to inflame interest rates:

Australia’s natural gas boom threatens to set off a new round of interest rate hikes, pushing economic growth above the level with which the Reserve Bank is comfortable.

An analysis commissioned by the industry itself finds that by 2016 LNG investment will add 2.2 per cent to GDP growth.

Written by Deloitte Access for the Australian Petroleum Production & Exploration Association the study says over the next few years substantial additions to capacity will propel Australia towards becoming the world’s second largest exporter of liquefied natural gas. Of the 14 gas liquefaction plants under construction or firmly committed around the world, eight are in Australia. If all the planned oil and gas investments come to pass, they will comprise over 64 per cent of all Australian investment.

At present amounting to 2 per cent of Australia’s gross domestic product, by 2020 when production and prices peak, oil and gas should be worth 3.5 per cent of the economy.

Capital expenditure is expected to average $23 billion in capital outlays per year until 2017. Output of oil and gas is expected to peak at $46 billion in 2020...

The report says as a result Australia’s GDP should increase “significantly above the reference case”.

By 2016 GDP is expected to be 2.2 per cent higher than it otherwise would have been.

The finding implies pressure to push growth up from its long-term average of around 3.25 per cent to near 5.45 per cent, well above the level with which the Reserve Bank is traditionally comfortable.

The report says the boom will depress the economies of two states, NSW and Tasmania, while dramatically boosting those of Western Australia and Queensland.

“This suggests resources and activity are being reallocated from those states to the resource intensive states,” it says. “This occurs as part of the broader and national welfare-enhancing structural adjustments needed to capitalise on the resources boom.”

The report warns against direct measures to assist industries suffering as a result of the adjustment saying “any new policy rigidities or constraints such as explicit industry protection measures, mandated local content requirements, onerous project approvals frameworks and additional fiscal imposts will ultimately sacrifice economic welfare and intensify adjustment pressure on other sectors”.

Mandating that some of the gas be used in Australia would reduce financial returns, essentially acting “as a subsidy to other industries and a tax on developing gas reserves”.

“Many of the current calls for continuation and extension of the reservation scheme appear to have a legacy element. A form of domestic gas commitment was a feature of the State Agreement which covered the North West Shelf Project,” the report says.

“If subsidy arrangements are longstanding, they can become deeply entrenched. This stands as a key risk associated with any broader application of a domestic gas reservation scheme on the east coast. Like other forms of industry assistance, once such a policy is in place, it can be very difficult to unwind, whatever its merits or demerits.”

In today's Sydney Morning Herald and Age


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Play with the census. It's fun and interactive.

Thanks to Marc Moncrief and The Age data journalism team:

First takes

Tim Colebatch: For the first time, most Australians aged 25 to 34 are no longer Christians. Just 49 per cent identified with any Christian denomination - almost half of them Catholics - while 10 per cent declared themselves for Buddhism, Hinduism, Islam or Judaism, 3 per cent professed other beliefs, 29 per cent said they had no religion...

George Megalogenis: Australia is exploding with people and income to the west and the north as the most dramatic census in modern times alters the very idea of who we are as a nation.The resources boom is allowing workers to fly from their homes in Queensland to the mines of Western Australia; the immigration boom is making us more Asian; and Melbourne is on course to replace the stagnant Sydney as our largest city within 20 years...

Shane Wright: Western Australia is the fastest growing State, with nine of the 10 fastest growing local government areas in the country, and West Australians are enjoying the quickest rising family incomes in the nation. The State is also becoming far more cosmopolitan, with huge influxes of people from the Philippines, India and Fiji as well as traditional sources of migrants from Britain, South Africa and New Zealand...

Peter Martin: The census provides an insight into why many Australians feel they are going backwards. The typical household income grew 20 per cent in the five years to the 2011 census. But in the five years before that it climbed 31 per cent. In the five earlier years it climbed 24 per cent. Between-census income growth is its lowest in decades. Inflation is also lower than it has been in decades, making it look as if buying power is holding up. But the really big expenses are soaring. The typical household rent has jumped 49 per cent; the typical household mortgage payment 38 per cent. The mortgage increase is surprising in light of the coincidence that the standard variable mortgage rate stood at 7.80 per cent in both the 2006 and 2011 censuses. The extra payments are the result of extra indebtedness rather than higher rates...

Perth mortgage payments drove up the national total, soaring 54 per cent over five years (while Perth rents soared an extraordinary 78 per cent). Sydney mortgage payments climbed a more sedate 20 per cent, Melbourne payments 35 per cent.

Perth has become a higher-income city than Sydney, boasting a typical household income of $75,868, a touch above Sydney’s $75244 and Melbourne’s $69,316. Darwin and Canberra are by far the highest earning capitals, typically taking in $93,912 and $99,840 per household. Hobart remains in last place with a typical household income of $55,380.

Reflecting the income differences Western Australia’s population grew at the fastest rate in nation, swelling 14 per cent in the five years. Tasmania’s grew 4 per cent.

Western Australia’s East Pilbara was the fastest growing locality, expanding 83 per cent between 2006 and 2011. Almost four in ten residents of the East Pilbra were born overseas, compared to the Australia-wide average of three in ten.

Underline the unusual nature of the regional boom, census executive director Andrew Henderson said Australians typically “associate rural and remote areas with population decline”. The Western Australian trend was “right in the face of that”.

Men make up 76 per cent of the East Pilbra population compared to just below 50 per cent in Australia as a whole. In the 2011 census Western Australia shared with the Northern Territory the unusual distinction of housing more men than women. In every other state women outnumber men.

In today's Sydney Morning Herald and Age


Try this:

Or this great tool from the SBS:

The census site itself is here.

And yes, the ABS did have to set its population clock back.

Before:

After:

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It's census day everybody!

It'll all be here at 11.30 am AEST

And the ABS will reset its population clock. It's got a bit out of whack:

In fact the first small bit of census data released yesterday we have far fewer people.

In December it was 22.5 million people - 300,000 fewer than the clock suggests.

Tim Colebatch has the details.

This and much more at 11.30 am AEST!

Meantime, here's Graeme Hugo on why the census matters

And here's Australian Statistician Brian Pink on the big changes planned for next time

Read more >>

The rate cut was a closer thing than we thought

Even the RBA says the arguments were "finely balanced"

The Reserve Bank’s decision to cut its cash rate this month was a close-run thing. Minutes released yesterday describe the discussion of the 0.25 point cut as “finely balanced”. On one hand was domestic data which “generally had not suggested a significant weakening in conditions”. On the other was “clear evidence suggesting a softening in global conditions,” and increased uncertainty about the future in Europe.

The minutes note that lenders passed on only 0.30 to 0.40 points of the 0.50 point cut in May. As a result, typical interest rates on outstanding home loans were around 0.40 points below their long-term average, while rates on small and large business loans were 0.30 and 0.60 points lower.

The minutes indicate sympathy for lenders who hadn’t passed on the full 0.50 points referring to “strong competition among banks for term deposits and the continuing pressure this was having on the funding costs”.

They also quantify the contractionary effect of the May budget saying it is likely to be “considerably less” than the 3 per cent implied by the move to surplus... A range of 0.75 to 1.50 per cent is more likely, given the timing of the measures and the preponderance of cuts to spending which would have been offshore.

Deutsche Bank economist Adam Boyton said the minutes seemed to imply the prospect of a further easing in July was remote. But he said he still expected cuts amounting to 0.50 points by the end of the year.

In today's Sydney Morning Herald and Age


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Business lobby on another planet. Smith on tax and investment

A key member of the Henry Tax Review has rounded on business lobbyists calling for a cut in the company tax rate saying the government was right not to cut it and it’s wrong to say the review wanted it to.

“I advocated a cut in the company tax rate when I signed the Henry report,” former Treasury deputy secretary Greg Smith told a Committee for the Economic Development of Australia function in Canberra.

“But that was - from our point of view - a ten or a twenty year reform. We certainly didn’t see it as an immediate thing. And I certainly also imagined it would only occur in the context of a significant increase in rent taxes.”

“We’re not going to get that. With tax reform you’ve got to look at the whole, and once you fail on one front what’s desirable and the timing of what you do on another front has to change. I think the government is right to go slow on company tax.”

Mr Smith was particularly scathing of calls by the Business Council and others for even more investment in Australia.

“We already have the highest investment rate in the developed world. The idea that we can increase it in the next five years is ridiculous, completely absurd".

“We can try to restructure it and we should. We do infrastructure in the wrong places, we do the wrong things. But we are not going to get a higher share of GDP higher than 29 to 30 per cent without enormous trouble.”

"Already it's an enormous stress on our economy... It is leadign to a massive switch in the utilisation of rents from profit earners to workers in those industries."

“If you tried to go to 35 to 40 per cent of GDP all that would happen is that you would see interest rates and other adjustments creating further problems in order to offset the inflationary and other and marcoreconomic problems that such an investment level would bring."

Australia’s biggest problem was changing demography, not lack of investment. Life expectancy was advancing a year every decade and yet the super system encouraged retirement at 60.

“Now I’ve been personally associated with creating the superannuation industry in this country,” Mr Smith told the conference, referring to his role as an advisor to Treasurer Paul Keating in the 1980s. “I don’t feel very proud about that. I think it’s an achievement yes, but it’s not the answer.”

“We cannot have retirement going for 25, 30 years. That’s why the Henry Review wanted to get the preservation age of super up from 60.”

“Super is basically an early retirement system. It is not dealing with the very high costs of aged care and health in late retirement.”

The planned increase in compulsory super contributions was set to cost more in tax concessions than it would save by taking retirees off the pension.

In today's Sydney Morning Herald and Age


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Get real, you can't have it all - Parkinson

The next election will be austere if Treasury boss Martin Parkinson gets his way.

He told the Committee for the Economic Development of Australia in Canberra last night Australians to get real and realise they couldn’t “have it all”.

Ageing and rising expectations were likely to put “enormous pressure” on budgets. The taxation base was “weaker than had been imagined in the mid-noughties”.

“Much of the debate assumes we can have it all, with people simultaneously believing we can maintain or even reduce taxation levels while keeping the current range of social policy interventions with limited targeting and self-provision – and indeed adding to this with a long list of worthy, but expensive, new proposals,” he told the conference.

“The key point is that choices need to be explicitly debated. The examples of the United States and Europe, where decisions have repeatedly been put off in good times, are not models to emulate.”

Australia needed a “sensible discussion on what we expect governments to provide, and the tax system needed to support these expectations.”

Treasury will soon publicly release its methodologies for costing political promises, giving the community and political parties a clearer idea of how it evaluates policies. It was severely criticised by the Coalition after the 2010 election when it found what it said were up to $10.6 billion of errors in costings the Coalition had had certified by a two Perth accountants... The Coalition said the accountants were unable to replicate the Treasury’s methods because it had not made them public.

Treasury will also make the methodologies available to the new Parliamentary Budget Office which will independently cost political promises on request.

Dr Parkinson told the conference the typical Australian voter was ageing. By 2050 almost one quarter of Australians would be aged over 65.

“It is unclear what impact this will have on future Australian policy debates, but the experience in Europe and Japan hardly suggests that ageing populations are enthusiastic advocates of structural reform,” he said.

Australia’s economic success had been built on the “three pillars” of a floating exchange rate, an independent monetary policy and budget policy that aimed at running surpluses over the business cycle to build national savings.

“In the current environment of volatility and uncertainty with what can seem overwhelming global and domestic pressures, some have been tempted to suggest dismantling or undermining this framework,” Dr Parkinson said.

“I refer to a range of views – from questioning the value of the Reserve Bank’s current mandate, proposing a return to industry protection or exchange rate intervention, to significant restrictions on foreign investment while ignoring the role of foreign capital in raising Australian living standards.”

“It is our frameworks that have stood us in good stead through the global financial crisis and recent period of structural change, and they will continue to do so. And if you don’t believe this, ask yourself the following question: what would Australia look like today had any one of those policy pillars been missing in recent years?”

Dr Parkinson said he supported greater public reporting of foreign holdings of agricultural land, saying it could help dispel “myths and uncertainties”.

In today's Sydney Morning Herald


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Work for the dole is a dud in the UK, but our Coalition will do it

Why be guided by evidence?

Australia’s Coalition will press ahead with plans to expand work for the dole schemes despite a British finding they are ineffective.

A peer-reviewed investigation by the UK Department for Work and Pensions of its own mandatory work activity scheme has found it has done nothing for the employment chances of the unemployed Britons referred to it.

The study found that while being forced to work 30 hours a week got people off the dole for a few months, over the longer term referrals to the scheme had “no impact on the likelihood of being employed compared to non-referrals”.

Jonathan Portes, director of the British National Institute of Economic and Social Research retained to peer review the study said the scheme was “a complete policy disaster”.

“It is very difficult not to conclude that, whatever your position on the morality of mandatory work programmes like these, the costs of the programme, direct and indirect, are likely to far exceed the benefits,” he wrote on his blog.

Australia’s shadow minister for employment participation Sussan Ley said although she hadn’t seen the UK research the Coalition remained “very firmly committed to work for the dole”...

During the 2010 election it promised to make it the default option for Newstart recipients out of work for more than six months.

“I am not in a position to announce Coalition policy which is not announceable anyway, it’s too soon. But I have seen successful work for the dole programs. They usually have an extra component, a first aid certificate, literacy skills, something like that.”

Labor downgraded work for the dole schemes after taking office in 2007. They are now rarely used, only by Australians who have been out of work for a year, and only at the discretion of their job services provider.

In today's Age


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Remember the census? It's about to change, big-time

See below for a profile of the man with the ideas, Brian Pink

The avalanche of census data due for release Thursday is just a taste of what’s to come.

Until now each Australian has been asked the same set of questions on the 18-page form which has been hand-delivered to each of Australia’s 8.5 million households.

Next time, in 2016, there won’t be a form at all unless someone rings and asks for one. All that will be delivered is a letter - by post - including login details and a password. The success of the 2011 electronic lodgement campaign in which 30 per cent of households went online has persuaded the Bureau of Statistics to go for a “big bang” and abandon face-to-face contact.

The savings will amount to $100 million of the $454 million it costs to run each census. Initially they will all be used to beef up the technology. By 2021 the survey will be barely recognisable. Individually-tailored questions will be added to the core questions asked for 100 years.

“Until now the census has been the most expensive real estate in Australia. To get an extra question on the form has been bloody difficult because most of it has had to repeat the questions asked in previous surveys,” explains Australian Statistician Brian Pink.

“But once it becomes predominantly an electronic instrument we won’t have to ask the same questions to every person in the population. For instance special questions can pop up for people who are disabled. We can reach every disabled person in the country.”

“You take people with school kids, okay? Transport planners have been on to us for years about journeys to school. We ask about journeys to work, but we haven’t been able to ask about school because it would take half a page. With the electronic survey if you have children of school age you will be asked those questions but someone like me won’t. We might ask extra questions to people who have recently arrived in Australia.”

“It forced my team to start testing each other – to say hey, what about this. We don’t yet know the limits to what’s possible.”

One limit will be fatigue... But Mr Pink says the Bureau has discovered Australians stay happier for longer answering questions online.

“In both 2006 and 2011 people said it was much faster online. But our testing shows the time taken was about the same. What was happening was that people were taking more care with the answers - we know this from the quality of the answers.”

The online census will probably ask 25 common questions and another 10 to 20 special questions. For the first time some of the information will be provided by third parties.

“In their last two censuses Canada has given people the option of consenting to the tax office providing their income data so they don’t have to. Around 85 per cent have said yes. We will have that capability if our Tax Office agrees.

“When you get that the data becomes much more richer. To date the census has been a blunt instrument, we haven’t been able to ask too much. Tax information will tell us about income from rents, investment and all sorts of other things sorted by the type of household. And we will get it by being less intrusive.”

The ABS is already using Tax Office data to replace some its business data collections. Mr Pink says businesses love it, it bothers them less. It is also testing checkout scanner data provided by two large retail chains to see if it can replace some of the shadow shopping used to compile the consumer price index.

In today's Canberra Times and Sydney Morning Herald


LUNCH WITH
AUSTRALIA'S STATISTICIAN
BRIAN PINK

Brian Pink has squeezed me in between international meetings - one in Geneva, the next one in France - where he is planning something big; so big that it will create a sort-of ‘super-census’ able to collect far more infomation about us far more cheaply than ever before.

Australia’s chief statistician slips into Rocksalt, an intimate restaurant in the Canberra suburb of Hawker like a local, which he is. He lives in a nearby suburb of Belconnen, the north Canberra satellite where the Australian Bureau of Statistics has its headquarters 10 kilometres away from the apex of government in the parliamentary triangle.

“Our location is an advantage,” he says over dips. “Probably 60 per cent of my Canberra staff live in the Belconnen catchment.” It locks them in, keeps them with the Bureau. As does its unusual status of having an office in each Australian capital. “Many of the graduates we hire want to go back to their home states. We can let them - each state office has a specialty. All of our agricultural work is done in Tasmania for example. Our competitors can’t, they lose staff.”

Brian Pink has run the Bureau of Statistics for five years. Before that he ran Statistics New Zealand, landing the job because he was an ABS veteran, having joined what was then Australia’s Commonwealth Bureau of Census and Statistics straight out of university in 1966. “I processed motor vehicle registrations in the Sydney office by hand,” he tells me over calamari. “We had to count up the number of Holdens and Falcons on lists sent from the motor registry.”

“I said to the lady who was in charge of it - all of the adding machine operators were women - we ought to be able to write a program to do this. Before long I was computerising the office flexitime system.”

Canberra called. Pink didn’t want to go. The Northern Beaches were his playground. (His father has only recently died in the family home at Seaforth, aged 97.) He had married a woman he met sailing in Middle Harbour and was planning a family. He accepted on the proviso that it was only for six months and they could commute. “But they promoted me twice, so we moved to Belconnen.”

Harnessing the power of computing has been the dominant thread in Pink’s ABS career, as has putting distance between the ABS and politicians.

Within months of taking on the top job on his return from New Zealand he cut off the early access to key statistics traditionally offered to the Treasurer and other government ministers, insisting instead they see them at the same time as everyone else - 11.30 am. Beside my scarcely touched pumkin filos on the table are the labour force figures released an hour earlier. “Wayne Swan tweeted about these at 11.40,” I tell him. “Are you saying he hadn’t seen them until I had at 11.30?” Pink nods and says he lets government officials see them in a pre-release lockup in the Treasury building, but doesn’t let the officials out until 11.30.

“You would have heard those figures moved the dollar,” he tells me. Someone made money. I want to be absolutely sure no-one gets them early. I myself don’t see them until the morning they are released.”

There are occasional problems. Two years ago South Australia briefly lost its mantle as Australia’s biggest wine producer. A coding error gave to NSW. News reports alerted the ABS to the unlikely result and it tracked down and fixed the error. “I want people to challenge our data – that’s a good thing, it helps us pick things up,” he says pouring another glass of plain water. I tell him I am unhappy with the labour force release beside me on the table. I think the methods used by the ABS falsely make it look as if jobs growth stopped during 2011. He says he doesn’t believe there is a problem, but gives every indication he’ll put my concerns to his staff, giving them just as much weight as if they came from the Treasurer.

“My Act is very specific. Neither the treasurer nor prime minister can tell me how to go about my business. They can tell me what information to collect, but they can’t tell me how to do it, when to do it or how often to do it.”

Although appointed by the governor general on the recommendation of treasurer Peter Costello, Pink can only be removed by both houses of parliament.

“It’s different elsewhere. In Argentina the head of consumer and prices statistics was removed by the president and threatened with a treason charge for producing data the president didn’t like.”

“In the United Kingdom all manner of statistics are prepared and released by ministries. The minister decides on the timing and what’s said when they are released.”

Although a jetsetter and something of an international guru - he is chairman of the OECD Committee on Statistics, and vice chair of the United Nations Statistical Commission - Pink networks most with his colleagues in Canada and New Zealand, who coincidentally run their censuses in the same years as Australia. Together they are planning a ‘big bang’ for 2016 - the biggest step yet away from the Bethlehem census in which baby Jesus was born in the first books of the New Testament.

But first he needs to fix the ABS budget.

He arrived back in 2007 to find it a mess. Costs had been rising far faster than expected. ABS interviewers knock on 30,000 doors to prepare the monthly employment statistics. Once contacted each household stays in the survey for eight months, with most of the subsequent contacts by phone. But its been getting harder to find people at home.

“We’re at the stage now where 70 per cent of approaches are non-contact. We have to send our interviewers back at night. Even ringing back is harder. Australians are moving away from fixed phones.”

In order to make big savings quickly Pink slashed the number of households surveyed by a quarter, making parts of the employment survey less reliable. He later restored the sample size while setting in train a line by line examination of what the Bureau did and whether it was needed. A “couple of hundred” of the Bureau’s 2,900 staff lost their jobs. Pink decreed that half the job losses had to come from his colleagues in management. He was not popular. “Some felt I was a traitor. Others could see the decision was in the Bureau’s long-term interest. Ensuring the security of an organisation is lonely,” he says.

His next step could set the Bureau up forever.

The first results of the 2011 census go on line Thursday. They cost $20 per person to collect. In 2011 there were 22.7 million Australians, making the total cost around $454 million. Pink plans to cut it by $100 million.

The victims will be the army of 30,000 casual workers the Bureau has traditionally used to knock on every door in the country and leave an 18-page form.

In 2016 all that will be delivered is a letter, by post. Each letter will include details of web access and a password. Only if someone is determined not to complete the census online will they they be posted a form, after phoning a 1800 number. Only if nothing is returned will an ABS employee visit.

The change will not only save money, it will improve the quality of the answers. “Our testing shows people think it takes much less time to fill in the form online. It doesn’t actually, but it bothers people less. They give more considered answers and they are prepared to answer more questions. And we can ask them different questions.”

From 2021, after the 2016 changes have been bedded down, the census will no longer be one-size-fits-all document. Parents might be asked how their children travel to school. People with disabilities might be asked detailed questions about how they cope.

“Going digital completely reshapes your thinking about what’s possible. We could have never reached every person with a disability in the past. We wouldn’t know where to find them. We are tossing around the ideas about what’s possible now. We are coming up with thoughts as fast as Canada and New Zealand, and we are sharing them.”

And sharing the idea of letting the Tax Office in on the act. When Canada offered the option of ticking a box on the census form to allow the Tax Office to answer the income questions 85 per cent of the population said yes. Suddenly the data was far richer. “They knew how much each member of each household made from rents, from investments, and they could relate it to the number of children, the ages of adults - things that were never possible before.”

The ABS is already using Tax Office data to ease the burden on business. So long as businesses consent, the Tax Office rather than an ABS interviewer provides information about its sales and profits. It is also experimenting with scanner data from supermarket chains as a labour-saving alternative to preparing part of the consumer price index. Pink says one of the problems is that the data is so rich. Right now the Bureau surveys the price of a 200 gram Cadbury block to work out the price of chocolate. With complete scanner data it is hard to know where to start.

Reversioning data from other organisations is a holy grail for Pink. In New Zealand he combined tax data with files from the accident compensation scheme to discover that accident victims who had been out of work for six months never ever regained their previous income. “That would have been very hard to work out any other way - it’s an indication of the enormous potential there is in unlocking data we already have.”

Pink talks as if he doesn’t want to finish. But then says he’ll retire in two years time. He has two children in their forties. His son in Perth has just given him his first grandchild and wants him to buy a boat, moor it in Fremantle and stay in Perth for months at a time.

“That would mean you won’t be around in 2016 to see your vision for the census come to fruition,” I ask, surprised given the plans he has outlined, as he orders a cappuccino and I order a long black. “No I won’t,” he says. “I will have been a manager for fourteen years by then, almost seven in New Zealand and seven here. I’ve got good people coming up behind me. I don’t want to deny them the opportunity.”

I can’t really imagine Pink just walking away and I tell him so. He has spent three hours telling me how much there is to be done. “Even on a yacht I am sure you’ll take an enormous interest in every part of the plans for 2016,” I say as I get the bill. “I will,” he says as if he means it.

In today's Canberra Times and Sydney Morning Herald


RAISED Seaforth, near Sydney’s northern beaches. The eldest of two boys.

EDUCATED Balgowlah Boys High, University of NSW. Studied accounting, financial management and statistics.

1966 Joined Commonwealth Bureau of Census and Statistics

1987 Appointed Government Statistician for Western Australia

1997 Put in charge of technology services for the Australian Bureau of Statistics

2000 Headhunted to become chief executive of Statistics New Zealand

2007 Appointed Australian Statistician by treasurer Peter Costello



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Where we are. The economy in seven magnificent graphs

From Glenn Steven's address to the Brisbane Economic Forum:

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It's the carbon tax wot done it - we're gloomy no matter what

Me on ABC Nightlife. June 13, 2012

9 minutes, play or RIGHT CLICK to download mp3



Ask families if their finances have improved over the past year and they are likely to feel perky. Australians gave more positive answers to that question this month than last, and more positive answers than they did a year ago.

Ask about the economy and their answers are little changed over recent months.

But ask about family finances over the coming year and the answers are so overwhelmingly negative you need to go right back to 1990 to find feelings so bad.

Just 18.5 per cent of those surveyed in this month’s Westpac Melbourne Institute consumer survey expect their finances to improve in the year ahead.A much bigger 32.2 per cent expect them to get worse.

The gap - 13.7 percentage points - is the widest since the eve of Australia’s last recession in November 1990, more than twenty years ago.

“This is strikingly negative,” says Westpac economist Matthew Hassan. “To be more negative about future family finances now than during the global financial crisis is quite surprising.”

Mr Hassan thinks anxiety about the carbon tax is part of the explanation and points to special questions asked about perceptions of news. A relatively high proportion of of those surveyed reported hearing news about tax. The proportion who found the news positive was dwarfed by the proportion who found it negative...

Perceptions of international economic news were even worse. Almost everyone who reported hearing news from overseas found it negative.

Treasurer Wayne Swan will tell a Euromoney bond forum in Sydney this morning the most immediate source of uncertainty is the outcome of the Greek elections in three days time.

He will say there is no escaping the conclusion that Europe has a long and painful road ahead, with the most likely scenario rolling crises and volatility.

With the global outlook uncertain and markets punishing nations without a credible fiscal plan, it is “critical” Australia maintains budget discipline.

The overall Westpac consumer confidence failed to bounce after the Reserve Bank interest rate cut delivered at the start of this month, climbing a barely-measurable 0.4 per cent to be down 5.6 per cent over the year.

Views about whether now is a good time to spend improved. Australians were 6 per cent more likely to feel it was a good time to buy a car as in March and 2 per cent likely to believe it was a good time to buy a house.

In today's Canberra Times, Sydney Morning Herald and Age


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What's the deal with negative gearing?

Me on ABC Adelaide 891 June 13, 2012

11 minutes, play or RIGHT CLICK to download mp3



It began with these tweets Monday night:

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Economic apocalypse? Me with Felix Salmon and Tad Tietze

Radio National Sunday Extra June 10, 2012

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"Is the end nigh? Is everything we know and trust in the world economy about to collapse? And if so, what might come after the economic apocalypse? The news is currently filled with grim predictions about markets and economies—sovereign debt, austerity, loans and credit default swaps are the buzzwords of our time. Our panel explores the eurozone crisis and the world's present economic woes, and discusses what the economy of the future might look like."

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Governor Stevens: We need more confidence

Adelaide, this lunchtime:

"We need more confidence: confidence in our capacity to respond to changed circumstances, to respond to new opportunities, and to produce goods and services which meet market demands. It is also to be hoped that some of the recent positive data outcomes will give pause to reflect that, actually, things have so far turned out not too badly."

Glenn Stevens the Glass Half Full - 8 June 2012



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Introducing the Gina - it's worth $US1.50

Gina and the cost of going it alone

Andrew Probyn
The West Australian

It was pointed out to Treasurer Wayne Swan yesterday that if WA had seceded, the astonishingly good GDP figures would not be looking anywhere near as pretty.

But what if WA was its own nation?

"If we had a WA dollar and let's say it was called the Gina, it would be worth at least $US1.50 compared to the 96-97¢ the Aussie is worth now," economist Stephen Koukoulas said.

"The WA cash rate would be double what it is now, or about 7 per cent, and the WA Central Bank, if there was one, would be moving to slow the economy down to stop people having to pay $5.50 for crappy coffee"...

Continued at the West Australian

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GDP. We're booming, if you can believe it.

On one side of the country

North of the Brisbane line:

Trend growth in demand, year to March

Northern Territory 15.1%
Western Australia 13.6%
Queensland 7.8%

The South East:

ACT 3.2%
NSW 2.1%
Victoria 1.9%
South Australia 0.7%
Tasmania -0.2%



A surge in mining investment and an apparent upswing in consumer spending have delivered Australia one of the fastest economic growth rates in the developed world.

At 4.3 per cent, Australia’s annual growth rate is faster than any of the developed nations in the Organisation for Economic Co-operation and Development. The quarterly rate of 1.3 per cent is more than twice the most optimistic forecast.

One day after Coalition Treasury spokesman Joe Hockey described the Australian economy as “underperforming” Treasurer Wayne Swan used the March quarter news to lambaste the opposition for talking the economy down, denting confidence and then complaining about weak confidence.

He said business figures were also to blame, echoing concerns held within the Reserve Bank.

Asked who in the business community was relentlessly negative he declined to name names, telling ABC 7.30 there were “one or two who go out there and run the economy down all the time”.

“Let’s make these figures an extraordinary circuit breaker. This tide of negativity, this relentless negativity from the doomsayers has to stop. It insults the hard work that so many Australians put in to make our economy strong.”

“We have seven Eurozone economies in recession, as well as in the UK, and many more developed economies which are crippled by unemployment. This result says something very special about Australia and about our capacity to face up to the worst that the world can throw at us.”

New engineering construction - most of it related to mining - accounted for almost all of the quarter’s economic growth, jumping 19.7 per cent over the quarter and 53 per cent over the year. Consumer spending was almost as important, with the volume of goods and services bought swelling a near record 1.6 per cent over the quarter and 4.2 per cent over the year.

The figures suggest Australians bought 4 per cent more food during the quarter, 6 per cent more transport services and 3 per cent more health services, outcomes described by UBS economist Scott Haslem as “positively unbelievable”...

The consumer inflation rate reported in the figures is zero in the March quarter and 1.4 per cent over the year. Household incomes grew 2.5 per cent in the quarter. Household savings was little changed at 9.3 per cent of income.

The best measure of spending by state shows NSW spending slipping a seasonally-adjusted 0.3 per cent in the quarter, Victoria advancing 1.8 per cent and Western Australia climing a phenomenal 7.8 per cent.

More reliable trend figures show NSW spending climbing 2.1 per cent per year and Victoria 1.9 per cent. In contrast Western Australian spending balooned 13.6 per cent - a faster rate of growth than in China’.

The news sent the Australian dollar to its highest close in a fortnight - 98.48 US cents. The share market inched ahead 0.29 per cent.

Describing the figures as “surprising to all” shadow treasurer Joe Hockey said they would be better with a better government.

“Imagine how well our country could do if we had a good government,” he told a press conference. “This is not the time to make conditions more difficult for the mining industry. It is not the time to put a new tax on the mining industry.”

Asked whether he was running a scare campaign Mr Hockey said “the scariest thing in Australia is Wayne Swan and quite frankly if you look at his words over the last few months he confirms it.”

“Today the Treasurer is suggesting that everything is very rosy in Australia, but he is handing out cash to people and telling people it is pretty tough out there, that’s the government is borrowing money - to hand you cash.”

In today's Canberra Times, Sydney Morning Herald and Age


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Carbon tax angst. It's worrying the Reserve Bank

It's one of the reasons it cut. Me on ABC

11 minutes, play or CLICK THEN CLICK AGAIN to download mp3




The Reserve Bank is worried that Australians are unreasonably pessimistic about the economy and it believes the campaign against the carbon tax is to blame.

The Bank cut its cash rate 0.25 points yesterday in part because of a slowdown in China and turmoil on financial markets. But also central to its decision was a concern that no matter how good the economic news Australians are scarcely noticing in an atmosphere muddied by campaigning against the carbon tax.

The Melbourne Institute consumer confidence index barely moved after the Reserve Bank cut its cash rate 0.50 points and banks cut their mortgage rates by around 0.35 points in early May. Assessments as to whether now was a good time to buy a major household item went backwards. The survey was taken at about the same time as the government announced extra handouts to families in the May budget.

The Bank believes lobbying about the carbon tax is acting as a drag on consumer confidence and obscuring the benefit of the income tax cuts that will come into force with the carbon tax on July 1.

The governor’s statement released after yesterday’s board meeting referred to confidence obliquely, saying that despite modest economic growth and low unemployment households and businesses continued to “exhibit a degree of precautionary behaviour”.

If confidence does not lift and the global financial situation gets worse the Bank will cut rates again. It believes the very low official inflation rate gives it room to do so.

Treasurer Wayne Swan raised the possibility of further cuts yesterday saying the Reserve Bank had “further room to move”. He appealed for Australians to become more confident saying it was important they understood the economy was strong compared to the rest of the world.

“I know that as Australians watch these events unfold overseas, they get the impression that all of these things are happening in their backyard and perhaps in their economy, but our economy remains strong... We are not immune from these events but Australians can have confidence,” he said.

Shadow treasurer Joe Hockey said the Bank had cut rates to “near emergency levels”. The Bank’s cash rate stands at 3.0 per cent, just half a percentage point above the low of 3 per cent reached during the global financial crisis. But mortgage rates are nowhere near as low. During the crisis standard variable mortgage rates slid to 5.75 per cent. Ahead of yesterday’s Reserve Bank cut they stood at 7.05 per cent.

The Bank of Queensland was the first to move within minutes the Reserve Bank’s cut, dashing hopes it would all be passed on to borrowers. It cut its mortgage rates 0.20 rather than 0.25 points, taking its standard variable rate to 6.91 per cent. Queensland credit union QT Mutual passed on the full 0.25 points.

A cut of 0.25 points would slice a further $48 off the the monthly cost of servicing a $300,000 mortgage.

The major banks have yet to respond, with most considered unlikely to pass on the full cut.

Australia Institute researcher David Richardson said each day the big four banks delayed added $6.2 million to their collective profits.

The ANZ will announce its decision on Friday. The National Australia Bank said it stood by its commitment to offer the lowest rate of the big four.

Official advice provided to the Treasurer says the big four can afford to pass on the cut in full. But muddying the waters is an observation by the Reserve Bank in yesterday’s statement that renewed international turmoil is pushing up bank funding costs once more.

The Australian dollar jumped more than one US cent on the realisation the Reserve Bank’s cut was less than the 0.50 points some had expected and news that G7 finance ministers had called an emergency meeting on Europe’s debt crisis. Futures trading late yesterday assigned an 80 per cent probability to a very big cut of 0.50 points in the cash rate when the Bank board next meets on July 3.

In today's Canberra Times, Sydney Morning Herald and Age


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Recommendation overtaken by events. It's up to the board.

Announcement here at 1430 AEST

A $26 billion slide in the Australian share market, tumbling commodity prices and company profits and shrinking job vacancies have made the outcome of today’s Reserve Bank board meeting an open question.

The governor’s recommendation sent to board members Friday has been overtaken by events.

Weaker than expected news from China, India, Europe and the United States along with a 4 per cent slide in Australian first quarter profits and a 2.4 per cent fall in May job advertisements combined to push the ASX200 share index down 1.9 per cent to a six-month low of 3985 points. It was the first time the index had closed below the psychologically-important 4000 mark since November.

The market is now 41 per cent below its pre-crisis peak and down 10.2 per cent since the start of May.

The Australian dollar also slid to its lowest point for the year, closing down 0.4 of a US cent at 96.65 US cents on news of falling commodity prices and growing speculation the Reserve Bank will cut its cash rate by 0.50 rather than 0.25 points at today’s meeting. The oil price has slipped 8 per cent over the week and the copper price 3.9 per cent.

In Canberra Treasurer Wayne Swan briefed Cabinet on the weekend news describing jobs data in Europe and the United States as very disappointing.

Euro-area unemployment has hit 11 per cent, a new high for the region, and US unemployment has hit 8.2 per cent.

Mr Swan told Cabinet while European policymakers had made some progress they hadn’t done enough and it was not clear they would. The June 17 Greek elections were a potential flashpoint...

A report from financial regulators commissioned by Mr Swan showed Australian banks were well funded for at least six months ahead and could sit on sidelines for a while if funding markets deteriorated.

Australia’s economy and banks had limited direct exposure to Europe.

Chinese policymakers were well positioned to support growth and Australia’s budget surplus provided a buffer against global uncertainty and helped support Australia’s AAA credit ratings.

While the Reserve Bank took its decisions independently the budget had given it maximum flexibility to cut rates again if it chose to.

Throughout the day economists who had been predicting no cut switched to predicting a cut in the face of the run of bad news. HSBC chief economist Paul Bloxham said the global data was much weaker than had been expected and the US data was dismal. The Bank would try to stay “ahead of the game” by cutting 0.25 points.

Former Reserve Bank board member Warwich McKibbin told the Herald / Age from Washington that he thought the Bank shouldn’t cut, but only because the global situation was likely to get a lot worse and the Bank should wait and see what happened.

Stephen Koukoulas, a former economic advisor to Prime Minister Gillard ridiculed the idea of waiting until things got worse saying it was like refusing to treat a snake bite with antivenom cause there might be a second snake.

Saul Eslake of the Bank of America said he would prefer that the Bank kept its powder dry, but that if it did cut it should do 0.50 percentage points rather than 0.25 to show it was serious. If it did not cut it should be prepared to take emergency action between meetings around the time of the Greek election.

Business indicators released by the Bureau of Statistics showed company profits down 4 per cent in the March quarter and down 0.5 per cent over the year. Mining profits fell 10 per cent during the quarter. Inventories built up when goods are not sold climbed 3.4 per cent over the year. The TD Securities inflation gauge showed little evidence of price pressure with prices unchanged in may and up just 1.8 pc over the year

In today's Canberra Times, Sydney Morning Herald and Age


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A cut of 0.50 points? Again?

Things are looking bleak

The Reserve Bank is being urged to cut rates a further 0.50 points at its board meeting tomorrow in a dramatic bid to head off a downward spiral in confidence ahead of the introduction of the carbon tax on July 1.

The cut would follow the cut of 0.50 points in May and the two cuts of 0.25 percentage points in November in December. Combined they have cut the Reserve Bank’s cash rate from 4.75 to 3.75 per cent and taken the standard variable mortgage rate from 7.80 per cent to around 7.04 per cent.

AMP Capital chief economist Shane Oliver who is pushing for the cut says he doesn’t expect it to be fully passed on to borrowers.

“That’s one of the reasons the Reserve Bank should and will cut 50 points,” he told the Herald. “The trouble with doing 0.25 points is the banks will only pass on some of it. Westpac could afford to pass on the lot but I can’t see the others doing it.”

“Since the board last met we have seen further deterioration in Europe, universally poor Chinese data, and a turndown in the United States. At home house prices are turning down again and unemployment is set to climb"...

Dr Oliver expects Australia’s unemployment rate to climb to 5.2 per cent when the figures are released Thursday and to head toward 6 per cent by the end of the year. He expects the economic growth figures released Wednesday to remain below their long term trend.

“With the non-mining economy so weak and the overall economy growing below trend confidence is fragile. We’re hearing bad news on Europe, on house prices, on the United States and on China. Now we are about to get the carbon tax.”

“You could mount a logical argument that the Reserve Bank can afford to wait a month before cutting - financially it shouldn’t make much difference. But the impact on confidence would be immense. Households are hoping for a rate cut. Without one there’s a significant risk of psychological damage, of a downward spiral.”

Dr Oliver backs up Westpac chief economist Bill Evans who said Friday he saw a series of Reserve Bank cuts between now and Christmas taking the cash rate down from 3.75 per cent to 2.75 per cent.

The futures market is pricing in a cut to 2.75 per cent by August and a cut of more than 0.25 points tomorrow. The pricing reflects a dive in Australian 10-year government bond yields to around 2.8 per cent Friday, the lowest in 40 years. Increasing concern about the international economy is forcing investors to accept lower interest rates in return for the privilege of parking their money with the Australian government, which they regard as relatively safe.

The past week has brought news of big withdrawals from Spanish banks as 97 billion euro ($A124 billion) left the county, much weaker than expected growth in Chinese manufacturing and an upturn in US unemployment to 8.2 per cent.

Commodity prices fell sharply, the oil price sliding 8 per cent and the copper price 3.9 per cent. The Australian dollar slid to 97 US cents - its lowest point in eight months.

Treasurer Wayne Swan said the international news was a “reminder of how much better our economy has performed over the past few years”.

Returning the budget to surplus gave the Reserve Bank “room to cut interest rates further if the independent board thinks that’s necessary”.

In today's Sydney Morning Herald and Age


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Can you believe this? The market is pricing in 2.25% within a year

The cash rates implied by the futures market are here.


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