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| Australia’s minority government to deliver first budget Posted: 09 May 2011 07:01 PM PDT  Gillard in China during her official visit April 26, 2011. — Reuters pic Treasurer Wayne Swan is promising a return to surplus by 2012-13 to help ease pressures on inflation, caused in part by the ongoing resources boom. With Australia's central bank warning of rising prices and possible interest rate hikes in the second half of 2011, Swan said the budget would help control inflation and prepare more people for work in an increasingly tight labour market. "Critically, given the economic circumstances we will hit in the years ahead, it means bringing the budget back to surplus, so we don't add to the inflationary pressures that come with that huge investment pipeline," Swan told reporters, referring to billions of dollars of investment lined up for Australian resource projects. The budget will be Swan's fourth, but the first under Prime Minister Julia Gillard, who toppled former Prime Minister Kevin Rudd last June before scraping back into office in a dead-heat election in August. Gillard's government relies upon the support of three independents and the Greens, who have promised not to block the budget, although they may try to amend some measures. After a series of deficits due to stimulus spending during the global financial crisis, this year's budget has been hit by a series of natural disasters that disrupted coal exports and destroyed key infrastructure in the mining state of Queensland. Government tax revenues have also been hit by a fall in demand from the country's second-largest trading partner, Japan, after it was struck by a huge tsunami and a nuclear disaster, and by a record high Australian dollar crimping export profits and tax revenue. FINANCIAL MARKETS SEE FEW SURPRISES Financial markets expect few surprises and little reaction from the budget. "The budget is expected to have few implications for financial markets, as we expect the status quo to be broadly maintained. That is, a return to a small surplus by 2012-13," said Paul Bloxham, HSBC's chief economist for Australia and New Zealand. "The budget bottom line is widely expected — thanks to press leaks — to be largely unchanged from last November's fiscal update, with a small surplus not reached until 2012/13. This won't be tight enough to prevent rate hikes. We still expect RBA (Reserve Bank of Australia) hikes of 100 bps by mid-2012." Economists expect the deficit for the year to June 30 to be around A$50 billion, or 3.6 per cent of GDP, with forecasts of between A$15 billion and A$20 billion for the deficit for 2011-12. The deficit is expected to peak at less than 4.0 per cent of GDP in the current budget year, below half the US shortfall and well below 10 per cent in Britain. Net government debt should peak at around 6 per cent of GDP, well below rates of 60 to 80 per cent in some key European economies. Swan has already said the budget would forecast unemployment, currently at 4.9 per cent, to fall further to 4.5 per cent, while economic growth will be hit by this year's natural disasters before rebounding in the 2011-12 year. HSBC said it expected GDP growth to be in line with central bank forecasts of 2.5 per cent this year, 4.5 per cent for 2011-12 and 3.75 per cent for 2012-13. The centrepiece of the budget will be a package to boost workforce participation and increase skills training, designed to move people off welfare. The budget will also include details of Australia's skilled migrant intake for the coming year, with business urging the government to dramatically increase the number of skilled immigrants to help fill worker shortages, particularly in the mining and construction industries. With the employment department saying Australia will need an extra 1.3 million workers by 2016, Swan said the budget would help increase the workforce by 500,000 people. Swan has promised a tough budget with a tight rein on spending, but pre-budget leaks have said little about expected areas to be cut. Some tax perks for middle and high income earners are likely to be cut, and the government has already announced cuts to fringe benefits tax concessions for company cars. Welfare changes will force teenage mothers back into the workforce or training, and will impose new work and training requirements on the long-term unemployed. Media reports said the government would also spend up to A$2 billion (RM6.47 billion) more on mental health services, and increase parenting allowances for older teenagers who remain in school or training programmes. The opposition has criticised the budget because it will not include details of a planned carbon tax, due to start in July 2012. The government said the carbon tax cannot be included, because details of the scheme are still being worked out. — Reuters Full Feed Generated by Get Full RSS, sponsored by USA Best Price. |
| Four dead as security forces fire on Yemen protest Posted: 09 May 2011 05:06 PM PDT SANAA, May 10 — Yemeni forces fired at protesters blockading a government building yesterday, killing a shopkeeper and three protesters in Taiz, a city that has seen some of the largest demonstrations against President Ali Abdullah Saleh, witnesses said. Security forces, some in armoured vehicles, moved in to disperse the protest, wounding at least 80 protesters in the industrial city. The latest violence came as the Arabian Peninsula country's main opposition group awaited word on whether Gulf Arab states could revive a deal to edge Saleh out of power within a month. Saleh, who refused to sign the transition deal, has clung to power despite three months of street protests that regularly draw tens of thousands of people, even though many of his allies have deserted him including a general who has backed protesters. "A large force of police and army attacked protesters and then chased them in residential areas. They opened fire and used tear gas heavily," said Bushra al-Maqtari, an activist in Taiz. A shopkeeper who ran a small kiosk was killed by a stray bullet, and two protesters were also shot dead amid heavy gunfire as security forces tried to disperse a protest near the education ministry, a doctor treating the wounded said. A third protester later died of his wounds, the doctor said. Thousands of demonstrators in Taiz shouted anti-Saleh slogans and demanded the postponement of school exams, while protests erupted elsewhere in the impoverished country that Saleh has ruled for nearly 33 years. Clashes were reported in the Red Sea port city of Hudaida, where security forces stormed a university campus to break up protests, wounding six, activists said. Six more people were wounded in clashes in Dhamar province, south of Sanaa. The unrest has included workers' strikes. The Canadian oil company Nexen Inc, said it halted production at its Yemen operations because of a labour disruption. Yemen produces around 280,000 barrels per day of oil, including about 110,000 barrels of light crude, which is in short supply globally after the loss of Libyan output in February. OPPOSITION The United States and neighbouring oil giant Saudi Arabia want the Yemen standoff resolved to avert chaos that could enable al Qaeda's Yemen wing to operate more freely. But neither has been successful in mediation efforts so far. Yemen's opposition coalition, which includes Islamists and leftists, said it still had hope that Yemen's wealthy Gulf neighbors, meeting in a summit in Riyadh on Tuesday, could bring the deal to end the crisis back to the negotiating table. "The Gulf initiative is the last initiative the opposition can work with. We are waiting for decisions of the Gulf summit, and based on that we will take a decision," said Sultan al-Atwani, a senior opposition leader. "We expect the Gulf leadership to stick to the initiative as it is, and if that does not happen then we will meet to decide what (move) to take," he said. The opposition had said the deal, which Saleh refused to sign on April 30 in a last-minute reversal, was modified to let Saleh sign as party leader rather than president, as he demands. But Atwani said the opposition did not accept those changes. The opposition now wants the Gulf states to raise the pressure on Saleh to commit to a transition. Yemeni youth groups leading mass protests have called on the Gulf states, under the umbrella of the Gulf Cooperation Council, to withdraw the plan. Many demonstrators across Yemen — who include students, tribesmen and activists — have vowed to stay on the streets until Saleh goes. At least 154 have been killed in the unrest. "We expect the Gulf leadership to take a practical position on the distortions of President Saleh and supporting the choices of the Yemeni people," Atwani said. A deal, if revived, may see Saleh appoint a prime minister from the opposition to lead a transitional government and set a presidential vote for 60 days after he leaves. It would also grant immunity from prosecution to Saleh, his family and aides. — Reuters Full Feed Generated by Get Full RSS, sponsored by USA Best Price. |
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