The federal government has warned that the economy still faces a rough ride, even though another rise in the jobless rate was more moderate than experts had predicted.

The unemployment rate struck a six-year high of 5.8 per cent in June data released on Thursday, rising one notch from the 5.7 per cent posted in May.

This was slightly less than the 5.9 per cent predicted by economists.

Still, there was a solid 21,400 drop in the total number of people employed in the month.

The total number of jobs lost in May was also revised to 8,500, up from an originally reported 1,700.
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Falling inflation could lead to another official interest rate cut even though the Reserve Bank of Australia (RBA), as expected, decided to stay on the rates fence for another month.The RBA’s board held its monthly (except for January) monetary policy meeting on Tuesday.

At the end of the meeting the RBA governor Glenn Stevens issued a statement confirming the interbank overnight cash rate, the benchmark for short-term rates in Australia, would stay at 3.00 per cent.

The cash rate has been at that 49-year low since April where it steadied after an eight-month series of cuts from a 12-year high of 7.25 per cent.

The reasons given for the decision were a virtual repeat of the statement made a month earlier.

There are signs the global economy is steadying but risks still abound, while the Australian economy is showing signs of life in the housing sector though business investment is being pared back.
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Federal Treasurer Wayne Swan says he’s encouraged Australia remains one of the best performing economies in the world but there’s still no room for complacency.

In his latest economic update, Mr Swan used three reports - from the World Bank, International Monetary Fund (IMF) and Organisation for Economic Co-operation and Development (OECD) - to support the strategy the Rudd government had taken to deal with the global recession.

He took particular note of an IMF statement that budget deficits were appropriate in current circumstances.

“This is a big tick for our strategy,” he said.
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Cyber criminals purporting to be the Australian Taxation Office (ATO) are using a sophisticated email scam involving personal tax returns to fleece consumers, a computer security company says.

The scam ATO email, which promises a $250 bonus on top of a tax return, links the taxpayer to an online form that asks for personal details including ATM pin, credit card details and tax file number.

Instead of submitting the form online, the website asks for a printed version to be mailed to an address.

Symantec Australia and New Zealand managing director Craig Scroggie said cyber criminals captured the details when the print button was pressed, allowing access to the accounts.
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Banks would lose their cover under the commonwealth-backed guarantee of deposits if they made unaccountable decisions on interest rates, a private senator’s bill proposes.

Family First senator Steve Fielding introduced legislation to the upper house on Thursday aimed at tightening controls on home loan interest rates.

Leading banks would need the treasurer’s approval if they wanted to withhold a rate cut or increase rates beyond Reserve Bank adjustments.

Should a bank’s reasoning not sway the treasurer and the bank insist on moving interest rates, it would lose access to the deposit guarantee scheme.
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Margin loans are to be specifically regulated for the first time in Australia.

Financial Services Minister Chris Bowen introduced to parliament amendments to the Corporations Act on Thursday to protect consumers from harmful lending practices and reduce the risk of them losing their homes.

Mr Bowen said that while margin lending had dropped during the past 12 months, it had skyrocketed during the past decade — from $4 billion in June 1999 to $37 billion in December 2007.

“Over the past 12 months, in the fall-out from several high-profile financial collapses, many investors lost hundreds of thousands of dollars due to margin loans,” Mr Bowen said.
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The International Monetary Fund (IMF) has upgraded its economic growth forecasts for Australia, but warns that output will remain below potential for a number of years.

In a report on Australia, the IMF says the downturn has been milder than in most other countries.

“This is because of strong commodity exports, a flexible exchange rate, a healthy banking sector, and a timely and significant macro policy response,” it said.

Federal Treasurer Wayne Swan said this is “another clear endorsement” of the government’s economic strategy.

The IMF expects gross domestic product to contract by a modest 0.5 per cent in 2009, before growing 1.5 per cent in 2010.
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Fears NSW first home buyers could miss out on federal government grants have been allayed, with state government legislation to administer the payments being passed on Wednesday.

NSW Treasurer Eric Roozendaal had warned that federal payments of up to $14,000 for first home buyers purchasing a new property and $7,000 for an existing home were at risk because the state opposition planned to vote against the enabling legislation in the lower house.

The opposition said it voted against the bill because other sections of the legislation contained a host of unpopular measures, including a duty on the transfer of businesses.
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Allegations linked to the OzCar auto finance facility look set to dominate parliament this week, with Treasurer Wayne Swan and Opposition Leader Malcolm Turnbull both facing demands to resign.

The furore over assistance to a car dealer friend of Prime Minister Kevin Rudd took a new turn on Sunday, with a motor industry leader insisting the Brisbane dealer got no special treatment.

The remarks by Michael Delaney, executive director of the Motor Traders Association of Australia (MTAA), signal a potential lifeline for Mr Swan.

Opposition Leader Malcolm Turnbull distanced himself over the weekend from an email purporting to show Mr Rudd’s office had directed a public servant to help car dealer John Grant gain dealer finance.
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Premier Anna Bligh says Queenslanders should view the state’s debt as a mortgage, not a hefty credit card bill.

Queensland is expected to record a $1.95 billion deficit for 2009/10.

Its debt level is projected to blow out to $85.5 billion by 2012/13 - the highest of any state.

A day after the Queensland budget was handed down, Ms Bligh said that borrowing to invest in infrastructure during a global recession was good debt.

The opposition has criticised the government for wracking up an enormous debt on what it called the taxpayer credit card.
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The federal coalition’s “reckless” decision to vote down Ruddbank, which was intended to assist the commercial property sector, will put thousands of jobs at risk, Labor says.

But the government won’t say if it will try again to get its fund through the Senate.

The Rudd government wanted to commit $2 billion in taxpayer funds to a partnership - dubbed the Ruddbank - with Australia’s four big banks, to assist developers to access loan funds in the event foreign banks withdraw finance due to the global recession.
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Labor is refusing to say whether it will push ahead with a plan to prop up the commercial property sector after its proposal was voted down in the Senate.

The government’s business vehicle, dubbed Ruddbank by its critics, would have seen the nation’s four big banks match a $2 billion commitment from Labor to refinance commercial property loans if foreign money dried up.

The coalition declared it would oppose the scheme in March.

On Tuesday, the Greens supported the opposition to kill off the scheme - at least temporarily.
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The government says banks who might be contemplating an interest rate rise should heed its strong condemnation of the Commonwealth Bank’s move to lift rates by 10 basis points last week.

Deputy prime minister Julia Gillard said the Commonwealth was being selfish a time when all Australians and businesses needed to work together.

Community services minister Jenny Macklin said mortgage holders had every reason to be furious with the Commonwealth Bank.”

That follows reports that other banks might be preparing to follow the Commonwealth and jack up mortgage interest rates.
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Australian banks no longer need the government’s guarantee on deposits and it’s time for the confidence-building measure to be scrapped, a Liberal senator says.

Julian McGauran, a member of the Coalition Economics Committee said the big four banks were now using the guarantee only to increase their market dominance.

Senator McGauran said the Commonwealth Bank had just lifted interest rates, and last month the National Australia Bank and Westpac sold bonds without needing the guarantee.

He said the banks were swinging back to healthy profits and building comfortable margins in their operations, including ATM fees and charges.
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The federal government’s stimulus packages will put 80,000 long-term unemployed people in work over the next decade, Treasurer Wayne Swan says.

He says Treasury modelling indicates the extra people in work would lead to lower spending on unemployment benefits by almost $4 billion over four years.

Mr Swan says the more than $52 billion of stimulus the government has pumped into the economy could deliver workers an extra $100 billion in earnings over the next 10 years.

The higher incomes would deliver an extra $23 billion of tax revenue into government coffers.
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