Monthly Archives: July 2019

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Services sector ends 2015 on a weak note

The services sector ended 2015 on a poor note, with activity falling in December for a third month following weak demand and heavy discounting before Christmas.

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The Australian Industry Group’s Performance of Services Index (PSI) dropped 1.9 points to 46.3 points in December, falling further below 50, indicating the sector is contracting at a faster pace.

Ai Group chief executive Innes Willox said the survey’s respondents said spending before Christmas was selective.

“Businesses reported an early onset of price discounting as competitors tried, largely without success, to maintain sales volumes,” he said.

Mr Willox said the outlook for the start of 2016 was far from encouraging, with another decline in new orders continuing falls that began in September.

During December, only the health and community services and personal and recreational services sub-sectors enjoyed a lift in activity.

Hospitality was steady, while the seven remaining sub-sectors all contracted.

Of note was the downturn in activity in the property and business services, which dropped to it lowest level June.

The sub-sector enjoyed solid expansion in the third quarter of 2015, but conditions deteriorated in the last two months of 2015.

Respondents to the survey put the poor end to 2015 down to commercial banks increasing their mortgage interest rates in order to meet increased capital requirements set by the financial regulator.

A cooling housing market, and ongoing weakness in business-to-business services also weighed on the sub-sector.

But CommSec’s chief economist Craig James said the survey’s results didn’t appear to line up with other recent retail or business surveys, employment data or anecdotal evidence.

“Retail sales are growing at a normal four per cent annual pace; Christmas sales figures were solid; and employment in the services sector has been soaring,” he said.

“So the services gauge may be more of an outlier at present.”

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Fears over unvaxxed kids at Qld centres

Queensland’s government is fearful infection could spread at childcare centres that accept high numbers of unvaccinated children.

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New legislation allows centres to refuse children who aren’t immunised. However, at least two providers have said they would welcome these enrolments.

“I would caution against that because you are creating a bed where infection can spread rapidly,” Acting Health Minister Dr Anthony Lynham said on Wednesday.

“If you have a cohort of children that are essentially all unvaccinated that would be extremely dangerous.

“I would be very fearful of an outbreak at a particular childcare centre, very fearful indeed.”

Dr Lynham said the centres would be leaning on those children that had been vaccinated to stop the spread of disease.

However, he said it was a personal choice for both parents and providers.

Churches of Christ Care, which runs 20 centres across Queensland, announced late Tuesday that it would welcome unvaccinated children.

“While unvaccinated children are not excluded, we do encourage all families to vaccinate children,” general manager Jane Carter said.

The centres will take precautionary measures including keeping records and monitoring, and special consideration will be given to unvaccinated babies.

Childcare provider C&K, believed to be the state’s largest, made a similar announcement last week.

Under the federal “no jab, no pay” law, which came into effect on New Year’s Day, parents who don’t immunise their children will stop receiving childcare benefits and rebates.

The legislation, passed in state parliament last year, gives centres the power to refuse to take children under five whose parents have failed to ensure they complete mandated vaccination schedules.

AAP cleo/mjg/glg

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‘Bikies behind Vic strip club shooting’

Bikie gangs are behind a drive-by shooting at a Melbourne strip club in which a man was shot in the face.

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The man, aged in his 40s, was shot outside the Kittens club in South Melbourne late on Tuesday night – the second drive-by at the venue in less than two months.

A car carrying at least two people drove past and three shots were fired from the passenger side, before the vehicle took off, police say.

The vehicle was later found burning in Melton West, about 40km away from the strip club.

Detective Superintendent Peter De Santo said the injured man was a bouncer who was hit three times in the forehead by shotgun pallets.

He blamed outlaw motorcycle gangs.

“At this stage, there appears to be a connection between the shootings, which are targeted, and OMCGs involvement in those drive-by shootings,” Det Supt De Santo told reporters on Wednesday.

He reassured Victorians the shootings were not random.

“These are targeted shootings and not indiscriminate shootings, and unfortunately even though they’re happening in the community, they’re more targeted than not,” he said.

The Echo Taskforce has taken over the investigation.

Det Supt De Santo said he did not believe it was a drug war or feud between bikie gangs, but would not go into more detail due to an ongoing investigation into two other shootings in early 2015, and 2014, believed to be linked to Tuesday night’s drive-by.

He warned those involved they were putting innocent lives at risk.

“South Melbourne is a very populated area, there’s a lot of restaurants there, and these shootings put innocent lives at risk,” he said.

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Record high for new car sales in 2015

The automotive industry is in 2016 gunning for a seventh straight year of more than one million new car sales, after setting another record in 2015.

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Motorists bought more cars than ever before last year, snapping up more than one million new vehicles for the sixth successive year.

Australians purchased 1.155 million new vehicles in 2015, eclipsing the previous full-year record of 1.136 million sales set in 2013, Federal Chamber of Automotive Industries (FCAI) data show.

FCAI chief executive Tony Weber expects a further 1.1 million new vehicles to be sold in the new year.

“When you have had a record year three years out of the last four, you wonder where the market will obviously go,” he said.

“(But) we don’t see anything on the horizon that will slow sales in terms of the broader economy.”

Mr Weber said the industry outperformed general economic conditions last year, with sales up 3.8 per cent compared to 2014.

“This is an outstanding result in that environment,” he said.

And the falling exchange rate won’t drive prices up for consumers, with competition red hot and interest rates at all time lows, Mr Weber said.

“That’s what’s driving the market. Competition is so strong prices remain low despite the depreciation of the Australian dollar,” he said.

CommSec chief economist Craig James said car affordability is at the best levels ever recorded.

“Car affordability is even stronger on a `quality adjusted’ basis – vehicles built in 2015 are far superior to those sold in the early 1970s,” he said.

It would take someone on the average wage to work for 23.8 weeks to purchase a new Ford Falcon in 2015, whereas it would have taken 31.6 weeks in 2010, CommSec research shows.

Mr James said vehicle sales should remain solid in 2016, with employment rising, record wealth levels and the Reserve Bank likely to remain on the interest rate sidelines.

“The area to watch is the housing market, as softer home prices could restrain car buying enthusiasm,” he said.

Encouragingly, it’s not just so-called `standard’ vehicles being sold, but luxury rides are taking a bigger share of total sales, Mr James said.

Sports Utility Vehicle sales continued to skyrocket in 2015, making it the fastest growing sector for a sixth year in a row.

SUVs now account for around 35.4 per cent of the market, up from 31.7 per cent in 2014.

And Toyota continued its reign as Australia’s favourite in 2015, posting the company’s 13th straight year as the market leader and 19th time overall.

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Govt rejects suggestion of $30 pap smears

Health Minister Sussan Ley has slammed claims the removal of bulk-billing incentive payments for pathology services will leave women paying $30 for a pap smear.

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Pathologists have warned of potentially fatal consequences if women are forced to fork out $30 for the cervical cancer screening test.

They say the cost will need to be passed on for all pathology tests, insisting previous government cuts mean laboratories will be unable to absorb the costs if the government goes ahead with its plan to scrap the payments from July 1.

Labor has vowed to block the measures in the Senate with opposition health spokeswoman Catherine King calling on the government to allow debate on the issue, amid concerns the measure could be bundled up with other Medicare regulations, making it harder to defeat.

Ms Ley’s office hit back on Wednesday, insisting the removal of the incentive payment was separate to the Medicare rebate paid for procedures like pap smears.

It argues stock exchange-listed pathology companies are concerned about the impact on shareholders, not patients.

“Medicare is not designed to be a guaranteed bankable revenue for corporations, nor is a taxpayer-funded payment like this provided to cross-subsidise other costs of doing business for pathology companies,” a spokesperson said.

The health minister has previously conceded “some may be worse off” under the changes.

Ms King says the government should have negotiated with the pathology sector to ensure bulk billing was protected.

Any barrier to accessing pap smears would have health consequences, she added.

“They introduce a very big blunt instrument, no warning, no negotiation with the sector,” she said.

Labor made cuts to pathology when in government, but Ms King said those savings were made in consultation with the sector and some were redirected to bulk billing incentives.