adplus-dvertising
Connect with us

Economy

Australia Monitoring World Economy, Wages for Future Rate Path

Published

 on

(Bloomberg) — Australia’s central bank will pay “close attention” to household spending, wage and price setting behavior and the global economy as it decides how fast and how far to raise interest rates, Governor Philip Lowe said.

“Developments in each of these three areas will affect the pace at which inflation returns to target and whether the economy can remain on an even keel,” Lowe said in a speech Tuesday. “The board expects to increase interest rates further over the period ahead. We are not on a pre-set path though.”

The Reserve Bank is in the midst of its fastest tightening cycle in a generation, having increased the cash rate by 2.75 percentage points since May as it joins global counterparts in trying to get control of inflation. Yet it has also staked out a different stance to overseas peers by recently slowing the pace of hikes as it tries to deliver a soft landing for the economy.

Lowe reiterated the RBA is “resolute in its determination” to ensure the current period of soaring prices is only temporary and “will do what is necessary” to return inflation to its 2-3% target. The central bank’s benchmark rate currently stands at 2.85% — the highest level since April 2013.

In his speech, titled “Price Stability, the Supply Side and Prosperity,” the governor reiterated that the RBA is open to resuming half percentage-point increases if inflation fails to decelerate as forecast. At the same time, the board hasn’t ruled out leaving borrowing costs unchanged “for a time” as it monitors the impact of earlier hikes on households.

Responding to a question after his address, Lowe said he believes the RBA’s policy transmission mechanism that normally takes around 18 months to two years for maximum effect might be different this time around.

“It’s quite likely the lag is going to be a bit longer than it normally would be, and that complicates our task as well,” he said. The governor cited the large buildup in savings by Australians during the pandemic that is supporting consumption and the jump in people taking out fixed mortgages to lock in lower rates.

As a result, those on fixed rates haven’t been impacted by higher borrowing costs yet, but they will begin to pay them next year. In the meantime, that’s slowing the transmission of monetary policy, he said.

Supply-Side Inflation

Lowe also looked to the future of inflation in his speech, suggesting that consumer prices are more likely to be driven by supply-side factors than the demand drivers of the past due to:

  • The “reversal of globalization:” international trade is no longer growing faster than the global economy while barriers to trade and investment are more likely to be increased than removed
  • The global working-age population is declining and this trajectory is projected to intensify
  • The frequency of extreme weather events has increased and is likely to continue, disrupting production and prices
  • The energy transition in the global economy, with the investment response to recent higher commodity prices “negligible,” suggesting more supply constraints in future

Lowe described these developments as “first-order issues” that are likely to “affect the inflation dynamic here and elsewhere, leading to more variability in inflation from year to year.” He said if they do come to pass then there are several implications.

First, “it is increasingly problematic” to set a narrow range that inflation is always supposed to be within, the governor said, adding a “strong nominal anchor” will be more important than ever.

He highlighted that Australia’s inflation target with its focus on the “average over time” is appropriate, as is the flexibility provided by its medium-term target range.

A key implication of more variable inflation, he said, is that the monetary policy environment “is likely to be more challenging” for central banks.

“An adverse supply shock increases inflation and reduces output and employment,” he said. “Higher inflation calls for higher interest rates but lower output, and fewer jobs call for lower interest rates. It is likely that we will have to deal with this tension more frequently in the future.”

The remarks come amid an independent, government-mandated review of the RBA that is looking into everything from the board’s structure and governance to its mandate and objectives.

Lowe reiterated that the supply-side challenges don’t undermine the RBA’s ability to achieve its inflation target on average, though they are “likely to complicate the task.” That is one reason a strong underlying budget position is key, he said.

(Updates with comments from Q&A in sixth to eighth paragraphs.)

Source link

Continue Reading

Economy

Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

Published

 on

 

VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Economy

N.B. election: Parties’ answers on treaty rights, taxes, Indigenous participation

Published

 on

 

FREDERICTON – The six chiefs of the Wolastoqey Nation in New Brunswick distributed a survey on Indigenous issues to political parties ahead of the provincial election, which is scheduled to kick off Thursday. Here are some of the answers from the Progressive Conservative, Liberal and Green parties.

Q: How does your party plan to demonstrate a renewed commitment to recognizing our joint treaty responsibilities and acknowledging that the lands and waters of this territory remain unceded?

Progressive Conservative: The party respectfully disagrees with the assertion that land title has been unceded. This is a legal question that has not been determined by the courts.

Liberal: When we form government, the first conversations the premier-designate will have is with First Nations leaders. We will publicly and explicitly acknowledge your treaty rights, and our joint responsibility as treaty people.

Green: The Green Party acknowledges that New Brunswick is situated on the unceded and unsurrendered territories of the Wolastoqiyik, Mi’kmaq and Peskotomuhkati peoples, covered by the Treaties of Peace and Friendship. Our party is committed to establishing true nation-to-nation relationships with First Nations, grounded in mutual respect and co-operation as the treaties intended.

Q: How does your party propose to approach the issue of provincial tax agreements with First Nations?

Progressive Conservative: The government of New Brunswick operates in a balanced and fair manner with all organizations, institutions and local governments that represent the citizens of this province, including First Nations. Therefore, we cannot offer tax agreements that do not demonstrate a benefit to all citizens.

Liberal: Recent discussions with First Nations chiefs shed light on the gaps that existed in the previous provincial tax agreements with First Nations. Our party is committed to negotiating and establishing new tax agreements with First Nations that address the local needs and priorities and ensure all parties have a fair deal.

Green: The Green Party is committed to fostering a respectful relationship with First Nations in New Brunswick and strongly opposes Premier Blaine Higgs’s decision to end tax-sharing agreements. We believe reinstating these agreements is crucial for supporting the economic development and job creation in First Nation communities.

Q: How will your party ensure more meaningful participation of Indigenous communities in provincial land use and resource management decision-making?

Progressive Conservative: The government of New Brunswick has invested significant resources in developing a robust duty to consult and engagement process. We are interested in fully involving First Nations in the development of natural resources, including natural gas development. We believe that the development of natural gas is better for the environment — because it allows for the shutdown of coal-fired power plants all over the globe — and it allows for a meaningful step along the path to reconciliation.

Liberal: Our party is focused on building strong relations with First Nations and their representatives based on mutual respect and a nation-to-nation relationship, with a shared understanding of treaty obligations and a recognition of your rights. This includes having First Nations at the table and engaged on all files, including land-use and resource management.

Green: We will develop a new Crown lands management framework with First Nations, focusing on shared management that respects the Peace and Friendship Treaties. We will enhance consultation by developing parameters for meaningful consultation with First Nations that will include a dispute resolution mechanism, so the courts become the last resort, not the default in the face of disagreements.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Economy

Canadian Coast Guard crew member lost at sea off Newfoundland

Published

 on

 

ST. JOHN’S, N.L. – A crew member of a Canadian Coast Guard ship has been lost at sea off southern Newfoundland.

The agency said in a release Wednesday that an extensive search and rescue effort for the man was ended Tuesday evening.

He was reported missing on Monday morning when the CCGS Vincent Massey arrived in St. John’s, N.L.

The coast guard says there was an “immediate” search on the vessel for the crew member and when he wasn’t located the sea and air search began.

Wednesday’s announcement said the agency was “devastated to confirm” the crew member had been lost at sea, adding that decisions to end searches are “never taken lightly.”

The coast guard says the employee was last seen on board Sunday evening as the vessel sailed along the northeast coast of Newfoundland.

Spokeswoman Kariane Charron says no other details are being provided at this time and that the RCMP will be investigating the matter as a missing person case.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Trending