Unconventional Economist

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Housing finance slows

By Leith van Onselen The Reserve Bank of Australia (RBA) today released its private sector credit aggregates data for the month of April: A chart showing the long-run breakdown in the components is provided below: Personal credit growth (-0.1% MoM; -0.2% QoQ; 0.6% YoY) remains in the gutter, whereas business credit growth (0.0% MoM; 0.8%

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Greens finally give ground on fuel excise

By Leith van Onselen New Greens leader, Richard Di Natale, has confirmed that the Greens are negotiating with the Abbott Government to re-introduce the indexing of excise on petrol. From The AFR: The Victorian Senator, whose party wields the balance of power in the Senate, first met Mr Abbott during budget week and said “we’ve discussed a

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RBNZ macroprudential will smash Auckland investor lending

By Leith van Onselen Data released by the Reserve Bank of New Zealand (RBNZ) has shown that the RBNZ’s planned changes to its loan-to-value ratio (LVR) macro-prudential controls, which take effect on 1 October, could have a major impact on New Zealand investor mortgage lending. Under the announced changes, residential property investors in the Auckland

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Construction won’t save employment, DEEWR

By Leith van Onselen The Department of Employment yesterday released a report looking at Australian construction employment, which is says is the third largest employer in Australia, employing 1,055,200 workers or 9.1 per cent of total employment. The industry has also experienced strong employment growth over the past decade, growing by 221,400 (26.6%) over the

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Coalition members pursue beef with TPP

By Leith van Onselen Several Coalition members have stepped-up their resistance to the Trans-Pacific Partnership (TPP) trade agreement, vowing to oppose giving potentially contaminated US beef access to Australia in exchange for Australians receiving increased sugar access. Liberal Senate agricultural committee member, Bill Heffernan, has been particularly outspoken against the TPP, with The Land reporting

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Australia’s highly combustible ghost cities

By Leith van Onselen Australia’s new found fondness for expensive highrise shoeboxes has taken a potentially deadly turn, with ABC’s 7.30 Report last night running a segment on the cheap combustible cladding that has covered potentially thousands of buildings across Australia, which last November sent a Docklands building into a towering inferno: LEIGH SALES, PRESENTER:

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Cross-benchers propose huge boomer bribe

By Leith van Onselen Independent senators Jacqui Lambie, Glenn Lazarus and Nick Xenophon yesterday called for the Government to extend the Pension Loans Scheme – a state-run reverse mortgage scheme that allows eligible retirees to borrow against their homes to receive payments from the Government equivalent to the full age pension – to all retirees.

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The Salt of contradiction

By Leith van Onselen KPMG’s Bernard Salt is an interesting beast. For years he has been an “unabashed supporter of a bigger Australia”, producing reams of articles pushing rapid population growth and warning that to not follow this path would lead to an economic and fiscal catastrophe. Yet, over recent months, Salt has made contradictory

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Pressure builds on FIRB to police foreign buyers

By Leith van Onselen Several real estate insiders have spoken-out about illegal sales of Australian existing housing to foreign buyers, placing increasing pressure on the Foreign Investment Review Board (FIRB) to enforce the rules that preclude non-residents from buying-up pre-existing homes. From The Australian: Buyer’s advocate David Morell said there have been many illegal house

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Links 28 May 2015

Global Macro / Markets / Investing: Pimco and Hedge Funds Are Still Fighting Over Subprime Scraps – Bloomberg Gross Calls Bet Against Bund Well-Timed, Poorly Executed – Bloomberg North America: US companies Send More Cash Back to Shareholders – Wall Street Journal The Mansions That Are Swallowing Suburban Homes – Bloomberg Federal Reserve Board issues

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Phil Lowe warns on rising housing risks

By Leith van Onselen In the Q&A session to today’s speech, RBA deputy Phil Lowe warned about rising housing risks, which has necessitated regulatory action to slow mortgage credit growth. From The AFR: “My subjective assessment would be the level of risk in bank mortgage portfolios has risen over the past couple of years”… “Household

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David Leyonhjelm misses the point on taxes

By Leith van Onselen David Leyonhjelm, Liberal Democrat Senator for New South Wales, has penned a spirited piece in Online Opinion arguing that the level of taxation is far too high, both in a historical sense and when compared against other developed nations: The Coalition, Labor and the Greens will tell you that Australia’s tax

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Construction tumbles down mining capex cliff

By Leith van Onselen The ABS has released data on the value of construction work done for the March quarter of 2015, which registered a seasonally-adjusted 2.4% fall in total construction activity over the quarter and an 8.8% decline over the year. The result disappointed analysts’ expectations of a 1.4% fall over the quarter. The

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Youth employment crisis extends to mental health

By Leith van Onselen The budding youth unemployment crisis has been well documented on this site. Nevertheless, to summarise, total employment for 15-24 year-olds has fallen by 5.2% since the Global Financial Crisis (GFC), with full-time employment down by a whopping 17.9%. Youth unemployment has also surged from 8.8% in September 2008 to 13.6% as

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General Gotti launches total war on youth

By Leith van Onselen Dad’s Army’s Robert Gottliebsen (“Gotti”) is back today deriding Australia’s “young journalists” and defending the rights of older superannuants to avoid paying taxes: When is a retiree rich? The catch cry among the young journalists in many media organisations is that the real problem for the nation is that we have

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Mining bust crashes Pilbara property

By Leith van Onselen The mining bust in the Pilbara is fast turning into an epic housing bust, according to the Real Estate Institute of Western Australia: Median house prices in the Pilbara town of Karratha have plunged almost 34 per cent. …the average price in Karratha has fallen to $450,000, compared to $650,000 in

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Terms-of-Trade down 1.2% in March quarter

From Westpac: Australia’s trade deficit widened in the March quarter to a deficit of $3.7bn, a $1.0bn deterioration on the prior quarter. This is the preliminary estimate, released today by the ABS ahead of the balance of payments release on June 2. Australia’s import bill increased by 3.0% in the period, outstripping a 1.9% rise