Federal Treasurer Wayne Swan has accused the opposition of voodoo economics, saying its credibility on the subject is a “smoking ruin”.

His comments came after the Reserve Bank predicted on Friday that the Australian economy would grow by 3.25 per cent in 2010, and by 3.5 per cent next year.

“I welcome these stronger forecasts, but we certainly can’t take these stronger forecasts for granted,” Mr Swan told reporters in Sydney on Friday.

“I think we can be optimistic about the future, but there is certainly no room for complacency.”

The government was at one with the forecast views of the central bank, but Opposition Leader Tony Abbott was practising voodoo economics, Mr Swan said.
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Christmas stockings may be a bit skinnier this year despite a high level of consumer confidence, and an economy that is outperforming other advanced countries.

Treasurer Wayne Swan concedes that the country still faces many challenges, such as rising unemployment, but his government will be working just as hard to ensure an enduring economic recovery.

Still, one financial market strategist, who has a nose for predicting official interest rate decisions correctly, does not believe the Reserve Bank of Australia (RBA) will lift the cash rate again in December.

Last week’s monthly Westpac-Melbourne Institute consumer sentiment survey found that while confidence fell 2.5 per cent in November, on the back of rising interest rates, it remained 38.3 per cent higher than a year ago with optimists still clearly outweighing pessimists.
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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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A range of new tax relief measures come into play from Wednesday, which will further help business and jobs in the face of the global recession, Treasurer Wayne Swan says.

Income tax cuts, refunds for education expenses and increased child care benefits form part of a new wave of stimulus for the economy, and come on top of the one-off welfare and tax bonuses dished out this year.

“These payments have overwhelmingly benefited low and middle-income Australians and have been very effective in supporting business activity, limiting job losses and keeping Australia from falling into technical recession,” Mr Swan said in a statement.
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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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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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The banking industry says all home lenders should sign up to the federal government’s initiative to support borrowers who have lost their job and are struggling with mortgage repayments.

Treasurer Wayne Swan announced on Sunday that 144 retail banks, building societies and credit unions have now signed up to the government’s set of “principles” that assist borrowers who are experiencing financial difficulties during the tough economic times.

“People will have some more flexible options if unfortunately they become unemployed and experience difficulty paying off their mortgage,” Mr Swan told the Nine Network.

“While Australia is weathering the global recession better than most countries, we are not immune to its impacts, including an expected rise in unemployment.”
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Wayne Swan says reports his position hangs in the balance and that he should resign over the OzCar affair are “ridiculous” and “absurd”.

Opposition Leader Malcolm Turnbull says the treasurer should resign for misleading parliament about trying to help Queensland car dealer John Grant, a friend of Prime Minister Kevin Rudd, get a government backed loan.

“I regard that characteristic as completely completely ridiculous, even absurd,” Mr Swan told the Nine Network in reference to Sunday’s newspaper headlines.

Mr Swan said he stood 100 per cent behind all of the statements he had made to parliament.
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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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photo credit: WetsunThe economy has avoided a much feared recession on paper, but Prime Minister Kevin Rudd has warned the nation could still experience further periods of negative economic growth in the future.

Exports and household spending helped the economy grow by 0.4 per cent in the first three months of the year, preventing a second consecutive quarter of negative growth that defines a recession.

Mr Rudd welcomed the figures released in Wednesday’s March quarter national accounts, given the global economy is suffering its worst recession in 75 years.

“Among the major advanced economies, Australia has the fastest economic growth, the lowest debt, the lowest deficit and is the only one of the major advanced economies to now not be in recession,” Mr Rudd told parliament.
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It looks like Labor had the wealthy firmly in its sights when formulating this year’s budget.

The top income level for recipients of what’s been termed middle-class welfare is now set at 150-thousand dollars and the budget’s locked that in by pausing CPI indexation here for the next three years.

High-income individuals will no longer be able to offset deductions from non-commercial business activities again their incomes in a move targeting those with hobby farms and the like.

From the 2009/10 financial year those earning more than 250-thousand dollars per year will instead have these excess deductions quarantined meaning they can only be offset against any future income from that business.
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The federal budget will be about jobs, nation-building and a path back to surplus, federal Treasurer Wayne Swan says.

The budget is expected to forecast a $58 billion budget deficit for 2009/10, downward revisions to growth, and a jobless rate prediction for 2010 above the 7.0 per cent forecast made in February.

“There are no easy answers when you are facing a revenue writedown of something like $200 billion,” Mr Swan told reporters in his traditional pre-budget doorstop in Canberra.
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The economic forecasts underpinning the budget will have to be bad to be believable.

When Wayne Swan hands down his second budget, most of the attention will be on who gets what and who, eventually, will pay for it.

But the economic forecasts used in the budget figuring should be just as important.

After all, a tax cut is not much use if you don’t have a job, so the forecast for economic growth and unemployment are not to be ignored.

They will certainly be bleaker than the forecast made a year ago, when the Treasury expected gross domestic product (GDP) to expand by 2.75 per cent through the 2008/09 year ending June.
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Treasurer Wayne Swan has admitted the government will break election promises in Tuesday’s federal budget.

He cites unprecedented revenue write-downs of about $200 billion and the global recession as the reasons why the government will go back on its word to voters.

“That does mean hard decisions and it may mean that there will be changes to previously announced policies and we accept full responsibility for that,” Mr Swan told reporters in Canberra on Saturday.

“Changes to policy is something that has been brought about by the global recession.”
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The government will make tough decisions in Tuesday’s budget even if it means changes to previously announced policies, Treasurer Wayne Swan says.

But Mr Swan denies that amounts to broken promises in the budget, saying any changes to policy have been brought about by the global financial crisis.

Mr Swan also warned independent senators, who have criticised expected budget changes to the private health insurance rebate, that any move to block savings measures in the budget would effectively stop a rise in the pension.
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