Unconventional Economist


Mike Smith keeps services hopium alive

By Leith van Onselen ANZ chief, Mike Smith, has delivered more hopium on why services exports could save Australia from the commodities bust. From The AFR: Services exports from Australia have already overtaken the minerals trade and have greater potential for long-term growth, a new study shows, providing an optimistic outlook for the economy despite


If only Bill English was in charge of Australia

By Leith van Onselen New Zealand Finance Minister, Bill English, gave an interesting interview to ABC’s The Business last night, which provided a welcome contrast to the political imbeciles running Australia. Some key points from the interview include: The New Zealand Dollar is too high, particularly relative to Australia. The RBNZ’s macro-prudential controls on high


How FTAs are ripping-off content users

By Leith van Onselen Peter Drahos, professor in law at the Australian National University’s Regulatory Institutions Network and Professor of Intellectual Property at Queen Mary, London University, has written a well reasoned post about the hidden costs of including intellectual property clauses in so-called free trade agreements (FTAs). From The Canberra Times: Today, multinational companies


Property rentier collects its spoils

By Leith van Onselen Hot on the heels of Prime Minister, Tony Abbott’s gutless announcement that he won’t reform negative gearing, prime spokesman for the property industry, the Property Council of Australia (PCA), has released the following statement: Executive Director, Nick Proud, said providing certainty on the future of this tax measure will benefit housing


Abbott rules out negative gearing changes

By Leith van Onselen It seems the Government’s war on entitlements does not apply to wealthy tax shelters, with Prime Minister, Tony Abbott, last night ruling-out changes to negative gearing because he doesn’t want to raise taxes. From The SMH: Asked whether he would rule out changes to negative gearing, following an Australian Council of


RP Data weekly Australian house price update

By Leith van Onselen In the week ended 16 April 2015, the Core Logic-RP Data 5-city daily dwelling price index, which covers the five major capital city markets, rose by 0.47% – the eighth consecutive weekly rise (see next chart). Values rose across all major capitals except Brisbane (see next chart). So far in April,


Youth employment climbs off the canvas

By Leith van Onselen Yesterday’s improved labour force data for March revealed slightly better news for Australia’s youth, with unemployment for those aged 15 to 24 years old falling to 13.7% – down 0.2% from the 17-year high of 13.9% recorded in October 2014. Unemployment for the rest of the labour market also declined to


Coalition’s car reforms don’t go far enough

By Leith van Onselen As reported in The Australian, the Abbott Government is considering allowing personal imports of overseas vehicles, provided they are less than a year old and have travelled under 4,000 kilometres: Assistant Infrastructure Minister Jamie Briggs, who has been consulting on changes to the Motor Vehicle Standards Act, said the government also


Links 17 April 2015

Global Macro / Markets / Investing: Saudi Arabia Adds Half a Bakken to Oil Market in a Month – Bloomberg Fighting the Bubble in Bubbles – Bloomberg View World’s Biggest Wealth Fund Says Monetary Risks at Historic High – Bloomberg Bonds beware as money catches fire in the US and Europe – The Telegraph North


Near record new car sales

By Leith van Onselen The Australian Bureau of Statistics (ABS) today released new motor vehicle sales for the month of March, which registered a 0.5% seasonally adjusted lift in the number of sales, and a 4.4% increase over the year (see next table). Sales in March rose in four jurisdictions and fell in four. As


Household finance confidence falling

By Martin North, cross-posted from the Digital Finance Analytics Blog: We have released the latest edition of the DFA Household Finance Confidence Index, the results of are derived from our household surveys, averaged across Australia. We have 26,000 households in our sample at any one time. We include detailed questions covering various aspects of a


Unemployment falls to 6.1%

By Leith van Onselen The ABS has released the labour force survey for March, which revealed a 0.1% seasonally adjusted fall in the unemployment rate to 6.1%, with the trend rate remaining steady at 6.2% (see below table). However, last month’s result (previously reported as 6.3% seasonally adjusted and trend) was revised down by 0.1%,


The TPP trade deal needs transparency

By Leith van Onselen The AFR’s Greg Earl has called for greater transparency in negotiations for the Trans-Pacific Partnership (TPP) trade agreement – the US-led trade pact between 12 Pacific Rim nations, including Australia – following concerns raised by the Productivity Commission (PC), the ACCC, and the Harper Competition review: …the Productivity Commission, the Australian


Salt of the ponzi

By Leith van Onselen I appear to have provoked a little backlash from Bernard Salt after my recent article congratulating him on recognising the downsides of rampant population growth. “Unabashed supporter of a bigger Australia”, Salt reckons he has a solution to Australia’s deteriorating economy: ramp-up the population ponzi. From The Australian: With population growth coming


Abbott throws howling East-West Link tantrum

By Leith van Onselen You can’t fix stupid, I guess. Following the news yesterday that the Victorian Labor Government had struck a deal to cancel the East West Link toll road project, at a cost to Victorian taxpayers of $420 million, Prime Minister Tony Abbott launched a childish tantrum, claiming that the State Government has


ACOSS calls on Hockey to unwind negative gearing

By Leith van Onselen Ahead of the release of the Federal Budget next month, the Australian Council of Social Service (ACOSS) has called on the Government to unwind negative gearing by preventing rental losses from being claimed against unrelated wage/salary income, along with reducing the 50% discount on capital gains tax (CGT) for assets held for


A confidence hit for the economy?

By Leith van Onselen Yesterday’s “disappointing” consumer sentiment report for April, released by Westpac, was potentially significant for the Australian economy as it searches for growth drivers to offset mining’s decline. Following the 3.2% fall to 96.2 points, overall consumer sentiment slumped to well below the 100 point threshold separating optimists and pessimists, with the


Links 16 April 2015

Global Macro / Markets / Investing: Monetary policy in the future – Brookings Druckenmiller Bets on Market Surprise With China Boom, Oil Rise – Bloomberg Druckenmiller: I just know this is going to end badly; I can feel it in my bones – Business Insider Global property bubble fears mount as prices and yields spike


Aussies turn to VPNs to hide their tracks

By Leith van Onselen Ever since the Abbott Government proposed its data retention (metadata) scheme last year, I have argued that Australians would flock to virtual private networks (VPNs), allowing them to surf the web and download content anonymously (click here to read about how VPNs work), thus undermining the Government’s attempts to track their