National Disability Insurance Scheme uptake: Council of Australian Governments met to review the NDIS which would invest $1 billion in a trial to replace the current disability insurance scheme with a single system to improve care and lift average funding to $35,000 per person. Support split along party lines, with Labour SA, Tasmania, and ACT agreeing to fund the trials and Liberal WA, Qld, NSW and Victoria not reaching a deal. Deal would cost NSW an extra $70 million, Victoria an extra $40 million, could support an additional 15,000 people in the two states, deal is worth $300 million in federal funds to NSW and $100 million to Victoria. Gillard: “If you value a national disability scheme, you will find the money.” NSW premier says too much of the program is allocated to administrative projects, Victoria says needs more time to consider, “I think we owe it to the disability sector to get this right and that’s what I intend to do.” Trials in SA. Tasmania, and ACT will cover up to 10,000 disabled people from mid-2013. Queensland premier says state is unable to fund the program, will consider in 2014. [CR: It is interesting to watch the politics. If you don’t agree with the program structure, you are painted as hating people with disabilities, and politics get in the way of addressing the core issues.]
House prices rising slowly: Australian Property Monitors data: House prices rose nationally by 0.4% in June quarter from previous quarter, second quarter rise in a row, prices up 0.9% since start of the year. Impact by NSW and Victoria government incentives to purchase property ending in June, leading to potential future downward trends in coming months. Brisbane is the most affordable of all mainland capitals (30% cheaper than Sydney), has recorded eight consecutive falls in median house prices. Boom conditions expected to drive prices higher in Perth and Darwin. [CR: While uncomfortable, would we not want a continued slow decrease to re-balance?]
Price decreases and deflation: Vegetables up 5.2%, furniture up 4.5%, bread down 3.1% (impact from $1 supermarket loaves), domestic holiday travel and accommodation down 4% (impact from strong AU dollar for international travel, competition between airlines), audio, video, and computing equipment down 3.8% (impact from discounting in past 6 months, price deflation from manufactures competing for market share). [CR: Increasing competition resulting in price decrease will drive innovations in efficiencies, but will it be at a cost of innovations in R&D?]
Victorian car parts manufacturing CMI Industrial closure: Two plants in Melbourne, 67 employees in Campbellfield, 52 at West Footscray will wind down in October. In April, CMI issues caused a temporary stand down of 1800 workers at Ford Australia. [CR: A smaller company impacts on the whole supply chain. Ongoing manufacturing challenges.]
Billabong considering shutting stores and buyout: CEO Laura Inman took the helm in May, releasing turn-around strategy end of the month, “In order to make sure that we absolutely do the right things at the right time.” Earmarked 150 stores for closure, identified 85 more stores that are marginal and may go if sales cannot be improved. Billabong has 12 brands in over 100 countries doing wholesale and retail. Shareholders believe Billabong’s turnaround as a public company may take too long and may be better off in private hands, considering a $695 million takeover bid from private equity firm TPG.
Apple sales up but shares fall: Apple sold 28% more iPhones in the last quarter than same time last year but growth did not meet expectations as shares fell 5% in after hours trading. Apple suffers from likelihood of new device release announcement causing delays in consumer purchases. Analyst John Jackson of CSS Insight: “Apple is in that rarest of all positions where the Street will punish them for anything less than an excess of success.” For quarter ending June 30, Apple sold 17 million iPads at $US9.17 billion revenue, compared to 9 million iPads and $6.05 billion revenue the year prior. Apple reported net income of $US8.82 billion, up from $US7.31 billion last year. Revenue was $US35.02 billion compared to $US28.57 billion last year. Figures were above Apple’s predictions but fell well short of Wall Street analysts estimates, who take Apple forecasts with a grain of salt due to the company’s long history of underpromising and overdelivering on its financial performance. [CR: Apple can’t win. It sells more than they said, but they get punished for not selling what analysts think they should have done. They also get slammed for people wanting their next product.]
Olympics – Australian dominate contracts and budget comparison: Forty Australian companies have picked up 46 contract deals in London. When London won the 2012 Olympics in 2005, the government predicted a budget of $3.8 billion – that has now soared to $17.7 billion, but remains far less than the $44 billion cost of the Beijing Games. [CR: Can’t help but soar. Once secured, there is no competition to ensure there is accountability for original promises. What are they going to do, move the Olympics or say they can’t hold them again next time?]
Olympics – Consumption impacts from technology changes in the last four years: Monthly video viewership up 330%, Facebook has 900 million accounts compared to 90 million four years ago, Twitter carries over 140 million tweets per day compared to 1.1 million, there are over 50 million tablets in the market that did not previously exist. [CR: It will be interesting to see who the technology “winners” will be this year.]
Olympics – cost stats for hosting countries from 1976: Montreal (1976) – Cost $US1.5bn, three decades to repay debt; Los Angeles (1984) – Cost $US546m, first Olympics to make a profit since 1932; Seoul (1988) – Cost $US4.0bn, Elevates the nation’s role in the region; Barcelona (1992) – Cost $US9.4bn, Games generate profit of $US5 million; Atlanta (1996) – Cost $US1.8bn, Cost recouped through commercial partnership; Sydney (2000) – Cost $US3.8bn, Best games ever, but loses $US2.1bn, tourism falls from 3.4% to 2.6% of GDP by 2008; Athens (2004) – Cost $US12.8bn, Costs exceeded budget by $US8.2 billion; Beijing (2008) – Cost $US44bn, Most expensive games on record leaves legacy of infrastructure.
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