Some alternatives to Pyne’s uni reforms

ScreenHunter_26 Oct. 16 10.41 Cross-Posted from The Conversation: The government will introduce amended legislation for higher education reform into the Senate next year for further debate. But how do we keep higher education sustainable if the package is torpedoed again? Here are three practical measures that would fix past mistakes and make Australian higher education funding sustainable. Cap funded university places The Rudd-Gillard government’s removal of the cap on funded university places has made Australian higher education funding unsustainable. It resulted in a 20% increase in student numbers between 2008 and...
read more

Hockey shuns tax reform

ScreenHunter_4209 Sep. 15 14.37 By Leith van Onselen Treasurer Joe Hockey has this afternoon shunned raising the GST, arguing that there is not enough money in the Budget to provide the necessary compensation to middle and lower income earners. From The AFR: [Hockey] said the recommendation earlier this week by the OECD that the 10 per cent GST should be raised to between 15 per cent and 18 per cent could not be made in isolation. “They are not looking at the full picture. If you increase the GST, you need to compensate middle and low-income Australians with significant tax cuts,’’ he told Channel Seven. “We...
read more

Resources jobs resume their descent

ScreenHunter_03 Jul. 23 09.31 By Leith van Onselen DFP Recruitment has released its mining and resources jobs index for November, which registered a fall of 4.2% to 60.90, marking eight falls out of the past nine months. Year on year, the number of mining and resources job advertisements has fallen by 31.3% nationally, but by only 2.6% in the last quarter. Moreover, since January 2014, advertised permanent opportunities have declined by 33% and Contract and Temporary roles have fallen by 25%. (see next chart). According to DFP, "the principle hiring factor driving the reduction in advertised vacancies is the price of...
read more

Population ponzi slows as mining unwinds

ScreenHunter_5522 Dec. 18 11.48 By Leith van Onselen The ABS has released its Australian demographic statistics for the June quarter of 2014, which revealed that Australia's population growth rate continues to fall, driven by declining growth in the two key mining states of Western Australia and Queensland. According to the ABS, Australia’s population grew by 1.58% in the year to June 2014 - the sixth consecutive quarterly decline in growth - albeit population growth remained well above the 30-year average of 1.4%. The growth in the number of persons in the year to June 2014 was 364,800, which was still 106,178 above...
read more

Stamp duty delivers $555m Budget windfall to NSW

ScreenHunter_5521 Dec. 18 10.18 By Leith van Onselen The NSW Government has today released its Half-Yearly Review for 2014-15, which recorded a massive $555 million Budget turnaround on the back of the booming Sydney housing market (see next chart). As shown in the table below, the 2014-15 Budget had forecast a deficit of $283 million, which now has been revised to a surplus of $272 million, with larger surpluses forecast over the forward estimates: The reason for the massive upward revision was booming transfer (stamp) duties, which "are forecast to be markedly higher, driven by continuing strength in the property...
read more

Why Abbott is failing on infrastructure

ScreenHunter_5488 Dec. 16 10.03 By Leith van Onselen Back in July, Prime Minister Tony Abbott gave an address to the 2014 Economic and Social Outlook Conference Dinner, arguing that Australia needs to invest heavily in infrastructure and outlining why he wants to be known as the "infrastructure Prime Minister" [my emphasis]: An essential part of our Economic Action Strategy is record investment in infrastructure. We need it to address the end of the investment phase of the resources boom. We need it to improve our country’s long-term competitiveness and productivity. And we need it if there is, indeed, to be an...
read more

PS redundancy costs pass $1 billion

ScreenHunter_07 Oct. 11 11.09 By Leith van Onselen The Canberra Times is running an article today claiming that the taxpayer bill for federal public sector redundancies has passed $1 billion: The redundancy bill for departing public servants and other government workers will be more than $1.1 billion in just three years, the latest government data shows. But the real cost of Commonwealth golden handshakes under Labor and Liberal governments since 2012 might be much higher, with the Treasury unable to shake its habit of vastly underestimating the cost of taxpayer-funded redundancy payouts... Monday's Mid-Year Economic...
read more

Why not offset oil price fall by raising fuel excise?

ScreenHunter_04 Sep. 23 15.14 By Leith van Onselen The Pascometer, Michael Pascoe, was on point yesterday afternoon, recommending that the Abbott Government should offset falls in oil/petrol prices by raising fuel, and in the process undo the Budget damage caused by the Howard Government's decision to freeze the fuel excise in 2001. From The SMH: [The Government should] seize the opportunity of crashing oil prices now to recoup all the indexation that has been forgone. Yep, I'm saying increase the price of petrol by about 12 cents a litre... Hey presto, around $5 billion a year would disappear from Joe's troublesome...
read more

White Paper to urge GST, superannuation tax rises

ScreenHunter_4198 Sep. 15 07.19 By Leith van Onselen The AFR has leaked some details of the upcoming White Paper on tax reform, which is scheduled to be released by the Abbott Government early next year. According to the article, the White Paper will recommend shifting the tax base away from personal income and company taxes by, among other things, raising the GST and increasing taxes on superannuation: The economy’s reliance on income and company taxes has barely shifted since the tax system was conceived after World War II, highlighting an urgent need for reform, the federal ­government’s tax white paper says... The...
read more

The history of Australian property values (redux)

ScreenHunter_5518 Dec. 17 15.43 By Philip Soos and Paul D. Egan This chart pack presents the latest statistics for 2014, updating the dataset provided earlier last year. When adjusted for inflation and quality, housing prices have boomed nationwide since 1996, hitting a peak in 2010, before undergoing a slight fall and rise. On current trends, a new, higher peak is likely to be set in 2015. Melbourne has been the epicentre of a number of historical real estate bubbles, with the latest iteration being no different. Compared to the other capital cities, Melbourne has experienced the largest escalation in housing prices,...
read more

Federal budget is not like a household budget

ScreenHunter_5512 Dec. 17 11.08 Cross-posted from The Conversation: Treasurer Joe Hockey is experiencing difficult times. Deteriorating terms of trade and an uncooperative senate mean that he cannot deliver the surplus when he said he would and he cannot continue to cut government expenditure without risking a recession. I have some comforting news for Joe Hockey: the importance of the whole deficit/surplus thing has been greatly exaggerated – with a lot of help from Joe himself of course. The focus on deficits and surpluses distracts us from what’s really important in the macro economy. Hockey and Abbott are very fond...
read more

Why forecasts of a bigger construction boom are wrong

ScreenHunter_01 Mar. 03 22.48 By Leith van Onselen Master Builders Australia (MBA) has forecast bullish growth in Australian new home construction, tipping that dwelling commencements will rise to over 200,000 for the first time in Australia's history in the year to June 2016. From The AFR: Low borrowing costs will fuel accelerate demand in the long-neglected NSW market, pushing the market figure of 194,310 housing starts in the year to June 2015 up to 201,557 in the year to June 2016, the MBA says. “Interest rates will remain low, working to release pent-up demand built up during a decade-long period of underbuilding...
read more

How NSW is driving the domestic economy

ScreenHunter_01 Oct. 04 00.04 By Leith van Onselen Westpac has released its Coast-to-Coast report, which provides an update on Australia's state economies. The report provides some interesting analysis showing that New South Wales is driving demand and consumption nationally on the back of its booming housing market: Economic conditions softened in the September quarter and growth remains uneven. These two points are clear from an analysis of the state economies. Nationally, domestic demand contracted by 0.3% in the quarter and annual growth slowed to 0.9%. NSW was the only state to record an increase in final demand in...
read more

Black gold loses its glitter

ScreenHunter_5444 Dec. 12 10.59 By Peter Schiff, cross-posted from Euro Pacific Capital The stunning 40% drop in the price of oil over the past few months has scrambled global economic forecasts, changed the geo-political landscape, and has severely pressured many energy sector investments. Economists are scratching their heads to determine if the drop is good or bad for the economy or whether cheap oil will add to or decrease unemployment, or complicate the global effort to "defeat" deflation. While all of these issues merit detailed discussions, the first question to address is if the steep drop is here to stay and whether...
read more

Youth unemployment crisis set to deepen

ScreenHunter_3946 Sep. 01 12.43 By Leith van Onselen I wrote last week how Australia's youth labour market has hit crisis levels, with unemployment for those aged 15 to 24 years old at 14.1% in November in trend terms - the highest level in over 16-years - versus only 4.7% for the rest of the labour force (see next chart). To add insult to injury, this deterioration in the unemployment rate comes despite the collapse in the labour force participation rate since the GFC, suggesting considerable hidden youth unemployment: Youth underemployment, which captures those employed part-time that would like more work, also hit...
read more

Leading index falls. Growth to stay below trend

ScreenHunter_13 Jul. 15 15.13 From Bill Evans at Westpac. The six month annualised deviation from trend growth rate of the Westpac Melbourne Institute Leading Index which indicates the likely pace of economic growth three to nine months into the future fell from –0.15% in October to –0.47% in November. This is the tenth consecutive month where the growth rate in the Index has been below trend. That follows thirteen consecutive months to February this year when the growth rate was above trend. The index continues to indicate that we can expect growth in the Australian economy to stay below trend in the final quarter of...
read more

Workers to get crunched by rising health costs

ScreenHunter_5507 Dec. 17 09.41 By Leith van Onselen A new report by the Actuaries Institute finds that the tax burden and private health insurance costs facing younger generations will rise dramatically in order to pay for the health needs of an escalating number of older Australians: Health care costs rise dramatically with age – health expenditure for an 85 year old Australian is more than four times that for a 50 year old. By 2049-50 the number of Australians over 85 will more than triple... Ageing is the most predictable factor which will influence future health expenditure. It is a key factor that affects our ability...
read more

OECD issues Australia tax reform challenge

ScreenHunter_5502 Dec. 17 08.15 By Leith van Onselen The OECD has released its biennial report on Australia, which recommends a program of comprehensive tax reform at the federal and state level, along with better targeting Australia's gigantic superannuation concessions. Regarding the federal taxation system, the OECD notes that Australia is too heavily reliant on inefficient personal income and corporate taxes, and recommends a shift in the tax mix towards more efficient consumption taxes: The government has initiated a review of taxation, which provides an opportunity to improve the efficiency of the existing system,...
read more

NSW Government rides the property wave

ScreenHunter_01 Feb. 17 18.55 By Leith van Onselen The epic investor-driven Sydney property boom has been well documented, with home prices there rising by around 26% over the past 18-months, according to RP Data (see next chart). One stakeholder that has been a big beneficiary of the Sydney property boom is the State Government, which has enjoyed a massive escalation in stamp duty receipts, rising by more than 85% over the past 18-months to $6.1 billion in the year to November, on the back of a 41% rise in transaction volumes and the above price rises (see next chart). The problem for the State Government in the...
read more

Perth and Darwin in mining-related rental bust

ScreenHunter_03 Jul. 23 09.31 By Leith van Onselen SQM Research has released its rental vacancy data for November, which revealed a slight 0.1% monthly increase in the national vacancy rate to 2.2%, but no change from November 2013: However, the unwinding of the mining boom continues to have a drastic impact on Perth and Darwin: Perth and Darwin have continued to record alarming increases in vacancies, whilst many of the other capital cities have remained stable year-on-year. However, Hobart and Melbourne have recorded yearly declines. SQM Research believes the falls in Hobart most likely relate to the recovery in its...
read more

Why PPP infrastructure deals need to change

ScreenHunter_06 Jun. 06 09.33 Cross-posted from The Conversation Victoria’s public-private partnerships (PPPs) are a mess. Their democratic standing has never been lower. They have always trumpeted better value for money and more timely delivery, but with the contract for the estimated $17.8 billion East West Link about to be “ripped up” it now looks more like a circus. Few winners will emerge from the coming fight. Though incoming Labor Premier Daniel Andrews should be applauded for planning to release the East West contract, the deadline for doing so has long past. Details released yesterday will allow Victorians...
read more

NGOs call for release of TPP trade pact text

ScreenHunter_3418 Jul. 23 10.44 By Leith van Onselen Forty-eight non-government organisations (NGOs) have issued an open letter to trade ministers and heads of delegations calling for the release of the draft text of the Trans-Pacific Partnership (TPP) trade agreement, in a bid to raise transparency and accountability. Australian signatories include: Australian Digital Alliance Australian Fair Trade and Investment Network (AFTINET) Australian Library and Information Association (ALIA) Australian Libraries Copyright Committee (ALCC) Electronic Frontiers Australia (EFA) Public Health Association of Australia...
read more

China Flash PMI at 7-month low

ScreenHunter_5494 Dec. 16 12.52 By Leith van Onselen More evidence of the Chinese economy slowing this afternoon, with the HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI) for December registering another fall, decreasing to 49.5 from 50.0 in November - a seven month low. The result missed analyst's expectations, with economists polled by Bloomberg expecting the flash PMI to fall to 49.8. The Flash China Manufacturing Output Index rose marginally to 49.6 in December, up from 49.5 in November - a two-month high. Commenting on the result, Hongbin Qu, Chief Economist, China & Co-Head of Asian...
read more

Hits and misses in new NBN plan

ScreenHunter_5459 Dec. 15 09.44 Cross-posted from The Conversation: Earlier this year, I attended a dinner for about 150 people. The first thing we all did was head for the bar to grab a drink, swamping the staff and setting back the dinner schedule by nearly two hours. We learned that it is better to place a bottle of cheap wine and a jug of lemon squash on each table just to manage the crowd. The same lesson is now being applied to the NBN. Last Sunday saw the long-awaited signing of two deals and new rules which will, hopefully, pave the way for the National Broadband Network under the current government’s...
read more

Macquarie: Chinese FAI growth to slide in 2015

ScreenHunter_5492 Dec. 16 11.36 By Leith van Onselen From Macquarie Wealth Management comes a useful note on the Chinese economy, where growth is set to slow further in 2015 on the back of weakening fixed asset investment (FAI): China’s NBS Friday announced another set of weak growth figures... In terms of commodity-specific numbers, steel production fell 0.2% YoY... [A]pparent steel consumption looks to have been down 7-8% YoY in November, when record steel exports are taken into account. Meanwhile, thermal power generation fell 4.2% YoY – the 5th consecutive month of negative growth... Industrial Production (IP)...
read more
Page 1 of 19512345...102030...Last »