Skills shortages at an “historic low”

ScreenHunter_2989 Jun. 26 08.16 By Leith van Onselen The Government's planned relaxing of 457 visa rules so that employers can hire an unlimited number of foreign workers under a temporary working visa, potentially opening the system to widespread rorting, is looking even more egregious following the release today of the Department of Employment's preliminary skills shortages report, which reveals that the number of occupations suffering skills shortages is at an "historic low": Employers continue to recruit skilled workers without marked difficulty, and the number of occupations in shortage is at an historical...
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Australia’s terms of trade to get hammered

ScreenHunter_3560 Jul. 31 13.44 By Leith van Onselen The Australian Bureau of Statistics (ABS) released export and import prices for the June quarter, which portends big falls in Australia's terms-of-trade when the national accounts are released next month. According to the ABS, export prices fell by 7.9% in June quarter and by 1.9% over the year. By contrast, import prices fell by a more moderate 3.0% over the June quarter but rose by 5.7% over the year (see below table). The fall in export prices were driven by the following factors: This [7.9% quarterly] decrease was driven mainly by falls in the prices received...
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Dwelling approvals tank in June

ScreenHunter_01 Mar. 03 22.48 By Leith van Onselen The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of June. At the national level, the number of dwelling approvals fell by a seasonally adjusted 5.0% to 15,659. The overall fall was broad-based, with the volatile unit and apartment segment falling by 10.5% and the more stable house approvals segment falling by 2.2%. The result disappointed analysts’ expectations, who had expected a flat result over the month. In the year to June 2014, dwelling approvals rose by a seasonally-adjusted 16.0%, with house approvals up by 13.1% and...
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Investors still pigging out on mortgage debt

ScreenHunter_05 Apr. 15 22.08 By Leith van Onselen The Reserve Bank of Australia (RBA) today released its private sector credit aggregates data for the month of June: A chart showing the long-run breakdown in the components is provided below: Personal credit growth (0.6% MoM; 0.4% QoQ; 0.7% YoY) and business credit growth (1.0% MoM; 1.5% QoQ; 3.5% YoY) continue to grow at a modest pace in annual terms, whereas housing credit growth (0.6% MoM; 1.8% QoQ; 6.4% YoY) is stronger, although is remains at fairly subdued levels relative to its long-run average growth rate. The below chart shows that housing credit...
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Adelaide to force housing into CBD

ScreenHunter_21 Apr. 10 19.29 By Leith van Onselen South Australian planning minister, John Rau, has announced that he wants to more than double Adelaide's CBD population within a decade, as well as house another one million people in the existing urban footprint. From News.com: “If we had the same density as is in North Adelaide through the existing footprint of the city, we could probably absorb another million people or something,” he said... “I think within the next 10 to 15 years we should aim for 50,000 in the city, maybe even that is a little modest and we could push that harder,” he said... “People...
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RP Data house prices leap in July (members)

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen RP Data’s daily house price index for 31 July has been released, which has enabled me to calculate monthly price movements for the five major capital city markets. As shown below, home values at the 5-city rose by 1.55% in May, driven by a big 3.75% jump in Melbourne and a 1.45% rise in Sydney, more than offsetting the small losses recorded in the other major markets: It was the second consecutive lift in values after May’s large seasonal fall: Values at the 5-city level have now increased by 4.97% since the beginning of the year, with all major...
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The Coalition’s roads to nowhere

ScreenHunter_3539 Jul. 31 08.24 By Leith van Onselen Business groups have taken aim at the Abbott Government's road funding fettish, arguing that Australia's dilapidated rail freight network is in desperate need of upgrading and is hampering the nation's export competitiveness. From The AFR: Grain exporters are becoming increasingly frustrated with Australia’s poor freight rail networks, claiming lack of investment in rail infrastructure, which has reduced haulage loads and created track congestion, is forcing more grain onto trucks... GrainCorp’s supply chain manager, Matthew Warrington, told an industry conference in...
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Senators: Axe PPL if you want Budget support

ScreenHunter_3079 Jul. 02 09.04 By Leith van Onselen It seems Tony Abbott's paid parental leave (PPL) scheme, which was devised on the fly by Abbott and Rupert Murdoch, has no friends left and faces imminent defeat in the Senate. Following the Greens' reversal last week, in which they announced that they would now oppose the scheme, key Senate cross-benchers have called-on the Coalition to axe PPL if they wish to secure support to repair the Budget. From The AFR: Senators Nick Xenophon and Bob Day singled out the scheme ahead of separate meetings in Adelaide on Wednesday with Treasurer Joe Hockey... Mr Hockey has hit...
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Former chief minister opposes ACT light rail pork

ScreenHunter_06 Jun. 06 09.33 By Leith van Onselen Former ACT Chief Minister, Kate Carnell, has joined the growing chorus of people against the ACT Light Rail Project, arguing that the population density along the proposed rail route linking Gungahlin in the North and Civic is far too low to make the project viable. From The Canberra Times: [Carnell said] a price tag of $614 million for the project risked detracting from other infrastructure development in the capital... "I think it’s a great idea but we just couldn’t make it work 10 or 15 years ago, and I give you Canberra is a bit bigger now but it’s not bigger...
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Links 31 July 2014 (members)

ScreenHunter_01 Apr. 02 06.19 Global Macro / Markets / Investing: Industrial stocks are falling apart - Bespoke Don’t be fooled, all is not well for stocks - Yahoo Why ‘buy and hold‘ is a misnomer - A Wealth of Common Sense Money is coming out money market funds into equities - Financial Times North America: The US economy bounced back in Q2 at a 4.0% rate - Calculated Risk Steady but Slow Remains the Story of This Recovery - New York Times Is the economic recovery actually now trickling down to the middle class? - The Reformed Broker US housing data this month has been not so hot - Business...
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How big finance swallowed the UK economy

ScreenHunter_3536 Jul. 30 15.02 The below article, from The Conversation, serves as another useful counter-point to the Grattan Institute's latest report (debunked here), which argued that the Australian economy doesn't need to make things anymore, since "the nation has moved from prosperity coming from regional jobs in primary industry a century ago, to suburban jobs in manufacturing after World War Two, to city centre jobs in knowledge-intensive businesses today".   Something strange is afoot in the Office of National Statistics. Every time the Chancellor of the Exchequer takes a bow for his outstanding economic...
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Aussies still love their cars

ScreenHunter_04 Jun. 14 13.54 By Leith van Onselen The Australian Bureau of Statistics (ABS) today released its annual motor vehicle census (MVC), which revealed that Australian's affection for private transport shows no sign of slowing, with the total number of registered vehicles and the per capita number of vehicles rising more strongly than population growth. According to the ABS, the total number of vehicle registrations grew by 2.6% in the year to 2014, with average annual growth of 2.5% recorded between 2009 and 2014 (see next table). Growth in passenger motor vehicles was relatively weaker, however, at...
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How will the RET affect power bills?

ScreenHunter_3526 Jul. 30 13.16 Cross-posted from The Conversation: The review of the Renewable Energy Target is due to be handed to the federal government any day now, yet amazingly there are still conflicts over whether the policy makes electricity more or less expensive. Amid claims that the target raises power prices, most people will want to know what will happen to their bills if the scheme is wound back or scrapped. The economic analyses carried out so far have delivered wildly differing results. The most recent report says bills will fall if the target is scrapped, while others say the exact opposite. A deluge...
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How the CGT discount fueled property speculation

ScreenHunter_12 Sep. 23 12.54 By Leith van Onselen The Australian Treasury has released a new paper, which examines historical trends in capital gains taxes (CGT), as well as forecasting issues. While the paper is rather wonkish, and not particularly interesting, it does point-out that the decision by the Howard Government in 1999 to halve the rate of capital gains tax for investments held for more than year has fueled negatively geared property investment: ...the total effective concessions on capital gains income are significant. Both the indexation and discount methods have provided a strong incentive towards...
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Coalition’s internet policy is a gift to Murdoch

ScreenHunter_3454 Jul. 24 07.36 By Leith van Onselen The Coalition's draconian internet policy is one step closer to becoming reality after the release last week of the Online Copyright Infringement Discussion Paper. According to the Discussion Paper, the Government is seeking to make it easier for the copyright industry to sue internet service providers (ISPs), as well as force them to censor the internet by blocking various overseas sites that carry copyrighted content. Mark Gregory, Senior Lecturer in Electrical and Computer Engineering at RMIT University, last month contended that the Coalition's internet policy...
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Is defence one big entitlement industry?

ScreenHunter_3500 Jul. 28 11.40 By Leith van Onselen ABC's The Business last night aired a segment on the Defence discussion paper, released earlier this week, which questioned whether Australia should build defence hardware locally or instead purchase it off-the-shelf at lower cost offshore. It's an interesting issue, particularly in light of the Government's commitment to increase the nation’s defence budget to $50 billion within a decade, with defence spending’s share of GDP also targeted to increase to 2% of GDP from 1.6% currently. Included in this planned spending is the procurement of armoured vehicles,...
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Why Work for the Dole is poor policy

ScreenHunter_10 Mar. 29 12.46 By Leith van Onselen Employment Minister, Eric Abetz, has acknowledged business' criticism that its beefed-up "Work-for-the-Dole" program, which would require the unemployed to apply for 40 jobs a month in order to continue to receive benefits, could create a deluge of sham job applications, and has signaled possible changes. From The Guardian: Abetz emphasised that the government did not want “red tape and inconvenience to employers” and would listen to feedback... Asked whether there was a risk the 40-application rule would become a box-ticking exercise, with people applying for jobs...
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What Grattan’s city-centric report really showed

ScreenHunter_3524 Jul. 29 16.37 By Catherine Cashmore, a market analyst, journalist, and policy thinker, with extensive industry experience in all aspects relating to property. Follow Catherine on Twitter or via her Blog. “Too many workers live too far away to fulfil our cities’ economic potential” - is the conclusion of a recently published study by the Grattan institute. The report maps the dollar value of goods and services produced by workers within a particular area of Australia’s biggest cities. Demonstrating a disproportionate 80% is created on just 0.2% of the nation’s land mass. It mirrors findings...
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MB Members Report: Perth property at the precipice (members)

wile-e-coyote In last year's members report on the Perth housing market, we noted that storm clouds were gathering on the horizon for the Western Australian economy, thanks to the unwinding of the biggest mining and commodity price boom in the state's history. This, we argued, would take up to 18 months to manifest, which would presumably see Perth housing hit the wall sometime from 2015. This report revisits the Perth housing market and finds that the canary in the mine is dead, and represents a risky proposition for both housing investors and first home buyers alike. The evolution of Perth house...
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Links 30 July 2014 (members)

ScreenHunter_01 Apr. 02 06.19 Global Macro / Markets / Investing: The dangers of portfolio patriotism - Patrick O’Shaughnessy Stocks are not bonds, and vice versa - Blackrock Blog If you can't lose, you're a loser - Barry Ritholtz Why you need to have an investment plan - Irrelevant Investor Spread Your Wealth or Lose It - Bloomberg View North America: Home price gains are slowing down - Real Time Economics A possible miss on Q2 GDP - Humble Student The Injustice of Marijuana Arrests - New York Times Higher Minimum Wage, Faster Job Creation - New York Times The New Geography of U.S. Consumer Debt -...
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MPs to quiz Chinese on Aussie property purchases

ScreenHunter_06 May. 06 09.27 By Leith van Onselen From The Australian comes news that members of the Parliamentary into into foreign property investment will embark on a week long tour of China to help ascertain the degree of investment in Australian property: The delegation is being led by committee chair, Kelly O’Dwyer, who is joined by fellow Liberals Peter Hendy and Scott Buchholz and Labor’s Pat Conroy... This is not the reason for the trip but the MPs will have the chance to get China’s perspective about the sensitive foreign investment issues... And on the question of Chinese investment in housing,...
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QLD prepares for asset fire sale

ScreenHunter_2966 Jun. 24 15.17 By Leith van Onselen The AFR is reporting today that Queensland Treasury Corp has called for expressions of interest to sell $33.6 billion of ports, power generators, electricity distribution networks and water pipelines (see below graphic). Studying the for sale list makes me nervous, as most of the assets appear to be essential infrastructure, whose sale could potentially lead to deleterious outcomes for taxpayers. As argued previously, it is the degree of market competition that usually determines whether an asset sale is positive for the public. And essential infrastructure...
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S&P warns on increasing mortgage risks

ScreenHunter_30 Oct. 10 06.15 By Leith van Onselen Standard & Poors (S&P) has released a new report warning of increasing risks for the Australian housing market due to rising investor participation, slowing income growth and softening employment prospects, which could create mortgage repayment pressures for recent, highly leveraged, purchasers: All else being equal, falling interest rates have brought improvements to lending serviceability and, after a brief period of balance-sheet restoration, renewed lending demand, with Australian households--and investors especially--at the forefront. These easing conditions,...
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Consumer confidence highest since January

ScreenHunter_15 Mar. 18 16.24 By Leith van Onselen The ANZ-Roy Morgan Research (RMR) consumer confidence index has more than recovered from its Budget-induced slump, rising another 2.7 points in the week ended 27 July to 116.2, and is now at its highest level since late-January and some 2.7% above its long-run average reading of 113.2 (see next chart). According to ANZ chief economist, Warren Hogan: While the improvement in confidence was relatively broadly based last week, households’ perceptions about ‘financial situation compared to a year ago’, a subindex most closely correlated with consumer demand, has...
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No Nick, FHBs should not be allowed to use super (members)

ScreenHunter_3508 Jul. 29 09.47 By Leith van Onselen Independent senator, Nick Xenophon, has announced that he will introduce legislative changes in the Spring session of parliament to allow first home buyers (FHBs) to access their superannuation savings to pay a house deposit: Such a scheme successfully operates in Canada, called Home Buyers’ Plan, leading to improved housing affordability... In Canada up to $25,000 can be accessed for a first home, and it’s made a dramatic difference for housing affordability there. However, Senator Xenophon will be moving for changes to Superannuation Act 1976 to allow the...
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