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Thursday 22nd August 1996
Thursday 22nd August 1996
The prospect of a further cut in official interest rates has sparked a new interest rate war in home lending with Aussie Home Loans cutting their two year fixed rate from 9.5% to 8.75%. It's really great to have such an active non-bank competitor in the mortgage market as it really keeps the banks on their toes and has forced them to reduce their massive profits raked from Aussies wanting to buy a home of their own.
Now let us remember that the politicians stand to score from these promises so its a sure thing that, despite a lot of bluster and rage that will be expressed to the masses through the media by members of the Opposition, that the Budget will go through. One doesn't have to look back to far to see how the Labor pollies reacted when Carmen Lawrence was nearly bankrupted after the Senate forced her to pay her own legal expenses late last year. (Do a search on the Penny Easton Affair - under GWB news). If the Labor MPs had just paid Au$1,000 each into a fund established to assist her they would have covered her expenses, but no, it was all bluster, photo opportunities and hot air.... so what else is new?
Getting back to the Budget, Prime Minister John Howard rated it a seven or eight out of ten for keeping election promises and a 9.9 out of 10 for being sensible economics.
"I think the overwhelming majority of Australian people believe that the right balance was struck last night between the fiscal responsibility we had to accept and the maintenance of the things that the Australian people voted for," he said.
In other business news Woolworths, Coles Myer's main competitor in the retail market, is to sell petrol. Woolworths chief executive, Reg Clairs, yesterday unveiled the retail giants moves to become a significant petrol distributor. The announcement yesterday sent Woolworths shares up 4 cents to Au$3.01
The Australian Stock Market has made significant gains since the Budget was announced on Tuesday, rising over 21 points yesterday to 2286. The catalyst was a Standard and Poors Australian credit rating which changed from neutral to positive on the Australian outlook. The Australian dollar rose to US79.1cents from US78.66cents on Tuesday.
In other good news Bill Shields, the Macquarie Bank chief said, "We expect both short and long-term interest rates to rally a little further as a result of the Budget, although another cut in the official cash rate to 6.5% is likely to be couched more in terms of improved inflation and inflation expectations than Budget restraints."
In other sporting news, Boomers star Shane Heal, who played a major role in the Aussies success in mens basketball at the Atlanta Olympics, is bound for the NBA in the USA after signing a US$1.5 million 3 year contract with the Minnesota Timberwolves.
Justice Donald Hill yesterday supported the tax office in a ruling that interest added to personal injury compensation was taxable.
Those effected range from butchers who lose a finger to injured footballers, survivors of rape and crippled car accident victims will all be effected by the decision.
The tax office now has the power to go back over compensation packages for the past four years and extract about Au$10 billion from more than 300,000 compensated victims.
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