Hold Up the Banks to Account

Thank you to my bank. Which bank?

The big banks are refusing to bow to pressure from politicians urging them to pass on the Reserve Bank’s 25-basis-point rate cut.

The central bank has dropped the official interest rate to 3 per cent, its lowest level in 49 years, but so far only the Commonwealth Bank has passed on some of the cut.

The CBA was the first of the big four to announce its reaction; it is passing on 10 basis points of the RBA cut.
Banks resist rates cut pressure

Obviously the Reserve Bank lowered interests rates by 0.25% today to help the banks with their profits. Was the Rudd government’s bank guarantee meant to help customers or shareholders? I’d sleep better if there was real competition between the banks and some choice for customers. Greed is still the name of the game.

They even have the cheek to take more than half. It’s time the government insisted on real quid pro quo for their underwriting of the banks.

Kevin Rennie

Flick Crit: Elegy – sex not quite everything

Latest film review at Cinema Takes is Elegy: sex not quite everything:

Kingsley and Cruz make an unlikely pair in Elegy. It took a while to suspend disbelief in this romance/drama. Its protagonist, David Kepesh (Ben Kingsley), is a Literature academic, a lecturer in Practical Criticism at a New York University. Literature, art, photography, and theatre are his milieu. He is also a minor media celebrity.

The story is based on Philip Roth’s 2001 novel The Dying Animal, which I haven’t read. Kepesh is the latest in a long line of ageing male intelligentsia who have libido issues. Self indulgence and total lack of commitment are their essentials.

He is a serial hedonist who seduces one of his mature age students, Consuela Castillo (Penélope Cruz). She comes from a comfortable Cuban American family. Kepesh sets his sexual sights high. However, he ignores all the old clichés: no fool like an old fool; be careful what you wish for, you just might get it. His motto: “When you make love to a woman you get revenge for all the things that defeated you in life.”

Lowest Interest Rates in 49 years.

The Reserve Bank is due to announce whether it will move on interest rates at 2.30pm this afternoon. The jury is out as to whether it will slash rates by a further 50 basis points or leave them on hold.

Certainly there’s arguments for either outcomes. Some are saying that we should take a wait and see approach as to whether the current round of stimulus programs will have the desired effect before resorting to further stimulatory action by the RBA.

On the other hand, the official unemployment figures are due out this Thursday and by all accounts the prognosis is not good. Job ads fell 8.5 per cent last month, taking the annual decline to 45 per cent. This marks the 10th consecutive fall.

Everyone now accepts that the forecast of 7 per cent unemployment for next year is too low and we should be adjusting forecasts to 8%.

The Government is also due to lay down it’s Budget in May, which is expected to include large rounds of cuts, including cuts to “middle class welfare” as we have been warned. What does seem pretty clear is that this budget will have to be a mix of tough cuts and more targeted stimulus.

While there may be “green shoots” emerging in China, it seems that we’re still heading for worse economic times ahead – particularly in terms of unemployment.

The Opposition has accused the Government of spending money irresponsibly without measuring or evaluating the effects of such stimulatory measures.

The Government argues that the ground is moving so quickly, that it’s almost responding to challenges on a monthly if not weekly basis.

Failure to respond appropriately could have disastrous consequences for Australian businesses and the economy while over-spending also carries with it its own set of ramifications.

This week will be an interesting week in politics..

Disclaimer: The author of this post once lived in a rented flat.

Broadband Announcement – Another tick for Rudd

The Federal Government has unveiled its plans to implement a national broadband network that will provide “to the premises” connections of up to 100 times faster than current broadband speeds to over 90% of Australian, households, schools and businesses.

At a press conference this morning, Kevin Rudd hailed the announcement as the “largest infrastructure decision in Australia’s history” after deciding not to award the national broadband network contract to a company.

Prime Minister Kevin Rudd said the Government would lead the development of a national fibre-to-the-home broadband network up to “100 times faster than what many people use now”.

“Years of failed policy have left Australia as a broadband backwater,” he said.

“This new super fast national broadband network is the single largest national building project in Australia’s history.”

Mr Rudd said the Government would seek investment from the private sector to build the network.

Construction would begin in the middle of the year and take “seven to eight years”, he said.

Communications Minister Stephen Conroy said the decision was “a historic moment for Australia’s telecommunications sector”.

Mr Rudd described the $43 billion fibre-to-the-home scheme as the single largest infrastructure project in the country’s history and said it would create 25,000 jobs a year during construction, with 37,000 in the busiest year of construction.

Mr Rudd said the scheme was essential to boost long-term economic growth and set a path for the country’s economic recovery.

“It is the most ambitious, far-reaching, and long-term nation-building infrastructure project ever undertaken by an Australian government,” he said.

“Like the building of the Snowy Hydro, the building of the Sydney Harbour Bridge, this a historic act of nation-buidling.”

The Government would hold a majority share in the company, which will also be part-owned by the private sector, and will invest $43 billion into the project over eight years.

The Government will then gradually sell its share of the company five years after the project is completed.

Mr Rudd said the company would inject a “new competitive force” into the telecommunications market.

“Today we draw a line under a decade of policy area and neglect,” he said.

“This solves once and for all the core problem created when the previous prime minister privatised Telstra a decade ago without ever resolving the conflict of a private monopoly owning the network infrastructure and dominating the retail market.”

Mr Rudd said the broadband tender process was being scrapped because none of the submitted bids offered value for money to the taxpayer, but said anyone was open to invest in the new company.

Telstra was dropped from the bidding process last December after the Government rejected its proposal.

The Government had originally said in 2007 the tender process would be finalised by mid-2008, with construction to begin by the end of last year.

In the wake of dismal polling results for Malcolm Turnbull and the Coalition, the universal accolades for the way in which the Rudd Government has responded to the Global Financial Crisis – and Rudd’s popularity approaching record levels for an Australian Prime Minister – this announcement will come as a severe kick in the guts for the Opposition, who, by all accounts have failed miserably during the course of their 12 year tenure to implement a word-class and low cost broadband solution.

Holy Ice Sheet, Boltman!

Yesterday Andrew Bolt ran a story where he disputes a story in The Age that says:

Up to one-third of all Antarctic sea ice is likely to melt by the end of the century, seriously contributing to dangerous sea level rises, updated scientific modelling on global warming shows.

Now Andrew is technically correct, the melting of sea-ice does not in itself cause rising sea-levels- but he misses the point. The point about sea levels rising is because of the melting of the land-based ice. The sea-based ice works as a stopper for the glaciers, and without them the glacier ice will slip into the sea faster. Some of these glaciers are up to 300 metres thick.

Later in his article Bolt says that “even sea ice in the Arctic has failed to melt as predicted”. This is despite the story that has emerged from Antartica:

AN ICE wall damming the endangered Wilkins ice shelf against the Antarctic Peninsula has shattered, just as scientific alarms ring out about the region’s rapid warming.

Who to believe?