Home sales rose in April but HIA calls for rate cuts: Midday roundup

The number of new home sales rose in April but the Housing Industry Association says more interest rate cuts are needed.

The HIA said new home sales rose 6.9% in April, seasonally adjusted, following a 9.4% fall in March.

HIA chief economist Harley Dale said the Reserve Bank needed to “get on with the job” and cut rates on June 5.

“We keep hearing that Australia is one of the world’s strongest economies in aggregate. That’s a redundant concept if people on the ground aren’t feeling and experiencing that, and they haven’t been for quite some time,” Dale said in a statement.

Almost half of all SMEs uninformed about carbon tax implications

Close to half of Australia’s small to medium business operators are uninformed about the carbon tax’s likely impact on their livelihood, according to research by MYOB.

The March 2012 MYOB Business Monitor surveyed 1,043 SMEs to find 42% still did not have a good grasp of how the carbon tax could affect their business.

Conversely, 37% overall understood ‘quite well’, 17% understood ‘very well’, while 4% didn’t know.

The most uninformed were those in agriculture/forestry/fishing and construction/trade (at 51% each), while the most informed were those in the finance/insurance sector(34%).

“It is deeply concerning that our research has found such a low level of awareness about the carbon tax impact on business amongst SMEs, the engine room of our economy,” says Tim Reed, chief executive of MYOB.

Markets open weaker

The Australian stock market opened weaker, after falls on the major European markets overnight, while Wall Street was closed for the US Memorial Day holiday.

At the official market open, the benchmark S&P/ASX 200 index slipped 0.65% to 4,041.2 points and the broader All Ordinaries Index dropped 0.6% to 4,095.2 points.

Investors fleeing Spanish debt

Spanish prime minister Mariano Rajoy has said the country is struggling to borrow cash, as investors flee the economically troubled country.

“With a risk premium at 500 points, it is very difficult to raise finances,” Rajoy told reporters on Monday.

Financial analysts fear if the country is not able to borrow more money to fund its banks, it will have to approach the international community for bailout funds.