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News & Media

The Oxford Perspective - business news and views

17 January 2012

MOST BETS POINT TO RATE CUTS  
The acknowledged two-speed state of our economy appears to be locking in most economists to believe 2012 should see more cuts in interest rates. The only question is when, with some taking the view that the RBA (Reserve Bank of Australia) could wait out the first quarter of 2012 to see exactly what happens from the two cuts made late last year.

HOME LOANS LIFTED BY CUTS 
The two interest rate cuts late last year have already resulted in a positive boost. The ABS (Australian Bureau of Statistics) says home loans have risen 1.4 percent. Additionally, the first home buyer numbers are also rising with the total house finance number increasing by over two percent from late last year.

BUT THE DOLLAR WILL CONTINUE TO RISE     
The general opinion among currency traders is that the present resurgent Aussie dollar will continue to rise, but few are prepared to commit to a definite number. They cite the confidence in strong continued commodities prices which have withstood the GFC and are now well positioned to continue in demand from the leading Asian economies. This may be bad news for our exporters and inbound tourism operators but importers will become more profitable and inflation should be reduced.

CHINA TO THE RESCUE...AGAIN   
While the mining industry continues to record ever-increasing sales to China, it appears that huge market is also contributing to another vital aspect of our economy. Middle class Chinese are now booking tourist trips to Australia. They are expected to contribute no less than four billion dollars this year and that annual figure is tipped to grow to six billion within a few years.

PRIVATE CREDIT KEEPS GROWING
The total credit provided to the private sector by banks and other lenders kept growing right through the last months of 2011. The RBA said the rise was 3.5 percent over the previous 12 months.

MANUFACTURING HOLDING FIRM  
Industry information shows the manufacturing sector had a welcome upturn by the end of 2011. The growth was not confined to resources but right across the main areas of fabricated metals, chemicals, petroleum/coal, construction materials and textiles.

MAKING PAYMENTS 
Currently the business media is reporting the controversy of the Federal Government handing over continued millions of taxpayer dollars to a few car makers just for staying in Australia. To put this in perspective, a quick search of the World Bank's data shows last year many of the countries in the OECD paid a total of $50 billion to car makers for retaining their facilities. Considering most of the recipients are currently profitable companies, that is an incredible amount of subsidies.

View past editions:

• 6 December 2011
• 15 November 2011
• 1 November 2011
• 18 October 2011
• 4 October 2011
• 21 September 2011
• 6 September 2011
• 2 August 2011
• 19 July 2011
• 5 July 2011
• 21 June 2011
• 9 June 2011
• 17 May 2011