Australia in News

Volcanic Ash Costing Qantas $1.5m a Day

As European ministers held an emergency teleconference to discuss the crisis, the Australian carrier estimated more than 12,500 of its customers had been affected so far and it had accommodated more than 2000 passengers in hotels across the world.

The decision to ground flights over much of Europe is costing the airline industry $US200m ($218m) a day and another major player in Australia, Emirates, said it had lost $US50m since late from April 12 to April 18.

Qantas is looking at contingency plans that include flying to London via the US and landing customers desperate to get to Europe in alternative ports in southern Europe.

The hope remains the airline will be able to resume its usual services as soon as possible and it is investigating other airports in London should Heathrow be overwhelmed by demand.

Spokeswoman Olivia Wirth said flights were busy at this time of the year and the backlog would take some time to clear. Travel agent Flight Centre warned that this might lead to higher prices as seats become harder to get.

Qantas has been offering passengers stuck in Asian hubs such as Bangkok, Singapore and Hong Kong free flights home, as well as the option of rebooking, or a full refund. Singapore Airlines, which has 38,000 stranded customers after cancelling 25 flights a day between Singapore and Europe, said it would give delayed passengers priority.

Spokeswoman Susan Bredow said the situation did not appear to be getting worse.

Both airlines indicated they would wait until receiving the green light from authorities in Europe before resuming flights and would not follow the example of British Airways, Air France and KLM.

The European airlines have been conducting “test flights”, sparking controversy about whether the decision to close European airspace was too heavy-handed when their trials failed to indicate any damage to the aircraft.

However, experts said that the Europeans had been correct to err on the side of caution.

lcelandic volcanic ash cloud

Australian Opposition Suggests Cutting Under-30 Unemployment Benefits

Australia’s opposition leader Tony Abbott has confirmed that the coalition is considering a scheme which could deny unemployment benefits to people under 30 years of age.

Mr Abbott says the coalition wants to encourage people to take up jobs in areas where there are skills shortages, such as in the Western Australian mining sector.

The idea for the ban was first floated after Mr. Abbott held discussions with industry leaders in Perth earlier this week.

“I had a very free-ranging discussion with people who were complaining bitterly about the difficulty of getting people to work,” he said.

“I’m all in favour of a fair system, but I’m also in favour of a system where people have a go, where people pull their weight, and we’ll be making announcements in due course.

“There has got to be a system that encourages people to take up work where that work is available.”

“I did notice my friend Warren Mundine suggesting some time ago that in areas where unskilled labour is in demand that the dole shouldn’t be paid, and I think that’s the sort of measure that we should be debating in this country.”

Opposition employment spokesman Eric Abetz says a ban on benefits for the under-30s is one of a range of policy ideas being bounced around in the lead-up to the election, and says reactions to the suggestion will be assessed by the coalition.

Prime Minister Kevin Rudd says the proposal is another example of the coalition making policy “on the run”.

Australia Treasurer to Tout Investment Ahead Of G20 Meeting

Australian Treasurer Wayne Swan said that he will meet with key investors and business leaders ahead of a meeting of Group of 20 finance ministers in Washington DC later this week, touting Australia’s economic strength relative to many other developed nations.

In private meetings with investors, Swan said he will promote the “resilience and dynamism” of the Australian economy, which weathered the recent financial crisis better than most, due mainly to its strong banking regulations and ongoing Chinese demand for the country’s vast natural resources.

“Australia has come through the global recession in better shape than practically any other advanced economy, however the global recovery remains uneven and substantial challenges remain, particularly in advanced economies,” Swan said in a statement.

The treasurer will also meet with Terrence Checki, head of the Federal Reserve Bank of New York’s emerging markets and international affairs group.

Western Australia’s Strong Performance

The Australian Capital Territory has pulled away from West Australia to take the top spot while New South Wales has again been named as the worst performer.

A Commsec survey found that solid housing and broader construction activity boosted growth in the ACT.

But, Commsec’s chief economist, Craig James, says the ACT’s grasp on the top spot in tenuous.

“The ACT’s going to find it hard to remain on the top of the rankings, there is strong activity happening in the housing sector, construction more broadly, but as that work is done it may see the ACT slip down the rankings.

“If there’s a state that has the potential to climb to top spot, it is Western Australia.”

Sinosteel to Buy Iron Ore From Australia’s Brockman

Sinosteel Corp., China’s biggest iron-ore trader, agreed to buy future production of the steelmaking ingredient from Brockman Resources Ltd., extending its links with Australia.

Sinosteel signed an initial accord to buy as much as 10 million metric tons a year, or 50 percent of planned production, from Brockman’s Marillana project in the Pilbara region, the Perth-based company said in a statement. The agreement “allows for wider strategic investment discussions between the two groups,” it said.

The Chinese state-owned company paid A$1.4 billion ($1.3 billion) for Midwest Corp. in 2008 and has a stake in the Rio Tinto Group-operated Channar mine. Sinosteel in June won approval to mine ore at Koolanooka in Western Australia.

“Our company is keen to cooperate and partner with Australian companies with credible projects seeking to leverage our capability to supply raw materials for China’s steel industry, whether this is iron ore, manganese, chrome ore or coal,” the statement cited Li Ying, Sinosteel’s managing director in Australia, as saying.

Foreign Investment “Raises House Prices”

Foreign investment in Australian property is pushing up the price of housing and squeezing Australians out of the market, federal opposition housing spokesman Kevin Andrews says.

Changes to foreign investment rules by the federal government to allow non-resident overseas buyers to buy residential property in Australia was a problem, Mr. Andrews said.

After meeting with housing and real estate industry representatives in Perth on April 21 and in other capitals it was clear the number of non-residents buying into the market was increasing, he said.

“I’ve met with representatives elsewhere in Australia and it’s quite clear both that in Perth and in Sydney and Melbourne and elsewhere around Australia there has been a significant influx after the last few months of foreign non-resident buyers of residential property in our cities,” Mr. Andrews told reporters in Perth.

“I was told here this morning of instances where one family bought numerous houses, doing that by using the names of different family members on the contracts.

“This is forcing up the housing prices for young Australians. It’s meaning that Australians who go to auctions now or other ways of buying property are finding it much more difficult to get into the market.”

Houses bought for capital gains purposes were sitting empty in Australia in some cases, Mr. Andrews said.

“It’s totally inappropriate. It came about because the Rudd government changed the rules last April and the exploitation of these changes in the rules is to the disadvantage of many Australians,” he said.

The changes have allowed foreigners holding temporary visas to buy property in Australia, and the government has effectively lost control of monitoring the level of foreign investment in the market, a spokesman for Mr. Andrews said.