The Northern Territory news Fri 10 Oct 2014
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52 BUSINESS FRIDAY OCTOBER 10 2014 NTNE01Z01MA - V1 Roller-coaster jobless figures defying belief SYDNEY: Australias unemployment rate supposedly hit an 11-year high in September problem is, nobody trusts the numbers. Official labour market figures have been all over the place in the past few months, showing surprising, if not downright unbelievable, results. The figures showed unemployment at a 12-year high of 6.4 per cent in July, before suggesting a record 121,000 jobs were added to the economy in August. Both results blindsided economists and even left the Australian Bureau of Statistics sceptical, although an initial investigation found no deficiencies in its methodologies. But on Wednesday, the ABS admitted there were problems with the way it adjusted the data to remove the effect of regular seasonal influences. Its seeking independent advice to develop an appropriate method for adjusting the data in future. In the meantime, it replaced seasonally adjusted labour force estimates already published for July and August with unadjusted figures, and said the unadjusted and seasonally adjusted figures for September were the same. The September figures, released yesterday, show the unemployment rate rose to an 11year high of 6.1 per cent, from 6.0 per cent in August. The total number of people with jobs fell 29,700 to 11.593 million. The fiasco has left economists in the dark as to the state of the labour market, TD Securities head of Asia-Pacific re search Annette Beacher said. Confidence in these figures is wafer thin at present, she said. National Australia Bank senior economist David de Garis said economists had little faith in the ABS numbers and were instead looking to other surveys and indicators to get an idea of how the labour market was tracking. Im just trying to close my eyes to them a little bit for a few months until we get over this situation and see what the ABS comes up with as an alternative way of measuring unemployment on a month-bymonth basis, Mr de Garis said. ANZ economists said more weight needed to be placed on other indicators of the labour market, which were showing signs of improvement. The ABS drama would cause headaches for the Reserve Banks interest rate deliberations, they said. This will also complicate the monetary policy decisionmaking process in coming months, particularly given the RBAs reticence in the past to tighten monetary policy settings until the unemployment rate has at least stabilised, the economists said. HSBC chief economist Paul Bloxham said yesterdays figures suggested the jobless rate had been stable at about six per cent in recent months. Im just trying to close my eyes to (the ABS figures) a little bit for a few months NAB chief executive Andrew Thorburn says the banks senior executives will have their bonuses cut due to the poor result Picture: CARMELO BAZZANO NAB suffers another heavy loss in battle of Britain SYDNEY: National Australia Banks troubled UK operations have taken another bite out of its earnings, delivering a $1 billion-plus hit to its books. NAB yesterday said a string of writedowns and provisions would drag down its full-year earnings between 12 and 14 per cent to between $5.1 billion and $5.2 billion. But it said it would lift its fully franked final dividend 2 to 99 when it unveiled its fullyear results on October 30. NABs shares closed up 32 higher to $32.47, though its gains lagged behind those recorded by other major banks. Chief executive Andrew Thorburn, who was appointed to the role in August, said the latest writedown was disappointing and the bank needed to do better. The feedback that Ive had from investors over the last few months is that we do need to improve our performance and thats what I want as well, he said. Mr Thorburn said the banks senior executive team would have their bonuses cut as a result of the slide in earnings. Its clear this result is well down on expectations and on our plan, and as our bonus pool is based on cash earnings and return on equity, then we can also expect and know that that bonus pool will also be reduced, he said. But he remained confident about the long-term outlook for the bank, which has con sistently underperformed its big four rivals: the Commonwealth, Westpac and ANZ. I think we have a core franchise which is really strong and has a lot of potential, he said. Mr Thorburn said the writedowns and provisions would result in an after-tax hit of $1.34 billion to NAB. Most of the charges are linked to misconduct by its UK operations, where the industry is reeling over scandals surrounding the selling of pay ment protection insurance and interest rate hedging products. The bank announced pretax provisions of 420 million ($A766.63 million) and 250 million relating to the PPI and interest rate hedging products. NAB also announced a $297 million impairment linked to capitalised software, mostly within its Australian business. The bank said the benefits linked to the software had been substantially below what had been expected. Low rates fail to fire new builds Best and brightest new ideas Banks lead on top day for market SYDNEY: Low interest rates are doing what they are meant to do boost housing prices, a Reserve Bank official says. The problem is they are not encouraging the building of new housing, the RBAs head of financial stability Luci Ellis says. Part of the anticipated effect of monetary policy is to induce more construction activity, she said yesterday. Higher prices are the incentive to get that expansion, which is indeed happening. But it is worth noting that the vast bulk of that new borrowing is to purchase existing properties. In 2013-14 house prices grew more than 10 per cent nationally, and 15 per cent in Sydney, driven by a big rise in investor activity, mostly in existing homes. MELBOURNE: A shark alert, new baby-making science and a cloud-based payroll system are the top three new ideas from Australias most innovative companies. According to the annual BRW list of most innovative companies, this years winner is accounting software developer Xero for its new payroll and tax platform. Advertising company M & C Saatchi developed the Clever Buoy shark alert. A worldfirst smart ocean buoy which can detects sharks and sends an alert to people on the beach. And Melbourne-based medical design and development group Planet Innovation was third placed this year for its development of a new incubator used in IVF embryo selection. MELBOURNE: The share market has achieved its largest daily rise in almost two months on signs of continued low interest rates in the United States. Local shares followed the lead of Wall Street, which rallied after the US Federal Reserve appeared to indicate it was in no rush to raise interest rates. Equity investors are always attracted to the prospect of continued low interest rates, optionsXpress market analyst Ben Le Brun said. The Feds comments also pushed down the value of the US dollar. The markets loving that message from the Fed last night, Mr Le Brun said. Banks and other financial companies were the strongest performers, pushing the main indices about 1 per cent higher.