Hockey: Immigration a “lazy” way to grow

ScreenHunter_6423 Mar. 06 08.45 By Leith van Onselen Finally, a senior member of Australia's main political parties, Treasurer Joe Hockey, has admitted that relying on endless population growth (immigration) to juice the economy is a "lazy way to grow": Mr Hockey said the government was forecasting a drop in immigration as a percentage of the total population. "Immigration is a rather lazy way to try to grow your economy," Mr Hockey told ABC radio. "What we've got to do is increase our output per hour." Hallelujah. Not only is it a lazy way to grow, but excessive levels of immigration can also lower living standards for...
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How long can household incomes defy gravity?

ScreenHunter_4044 Sep. 05 12.36 By Leith van Onselen The Reserve Bank of Australia (RBA) yesterday released real household disposable income (HDI) data, derived from the December quarter national accounts (released Wednesday), which revealed that real per capita HDI rose by 0.2% over the quarter and was up by 0.1% over the past year (see next chart). As shown above, Australian households are experiencing the biggest income shock since the early-1990s recession, with per capita real HDI falling since June 2012, down 0.7% over that period. However, real per capita HDI has held-up much better than national disposable income...
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IGR unmasks Australia’s failing retirement system

ScreenHunter_6346 Mar. 04 10.06 The Fourth Intergenerational Report (IGR), released yesterday, contained some interesting tid-bits which help to illustrate why Australia's retirement system is failing, despite its massive (and growing) cost to taxpayers. First, superannuation (my emphasis): In 2013-14, around 70 per cent of people of Age Pension age were receiving the Age Pension. Of these, 60 per cent were in receipt of the full-rate pension. As Australia’s superannuation system matures, and compulsory contributions increase, many Australian workers will retire with much larger superannuation balances. The proportion of...
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The true drivers of intergenerational theft

ScreenHunter_08 Feb. 03 14.45 By Nicholas Reece Intergenerational theft is the new slogan being used by the Abbott government to sell the intergenerational report and convince Australians of the need for tough budget cuts. But if Prime Minister Tony Abbott and Treasurer Joe Hockey want to have a good look at intergenerational inequity they don't need a new report from the Commonwealth Treasury, they need a mirror. Because when it comes to enjoying the largesse of government the Prime Minister and Treasurer are part of the Baby Boomer generation born between 1946 and 1965 - a group that has benefited more than any other in...
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Australia’s “historical low” skills shortages

ScreenHunter_6416 Mar. 06 07.27 By Leith van Onselen The Department of Employment has released a bunch of new reports on skills shortages, which reflects research undertaken between July and December 2014 by the Department. The results, which build on the Skill Shortages Statistical Summary, released in January, significantly undermine the Abbott Government's sweeping changes to the foreign worker visa program, which will make it much easier for Australian businesses to import foreign workers. According to the Department of Employment, "employers continued to recruit skilled workers with little difficulty in 2014",...
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RP Data weekly Australian house price update

ScreenHunter_15 Mar. 05 15.42 By Leith van Onselen In the week ended 5 March 2015, the Core Logic-RP Data 5-city daily dwelling price index, which covers the five major capital city markets, rose by 0.23% - the second consecutive weekly rise (see next chart). The rise in home values was driven entirely by Sydney and Melbourne, which more than offset falls in Adelaide and Perth (see next chart). Since the beginning of the year, home values have risen strongly in Sydney and Melbourne, are up slightly in Brisbane, and have fallen elsewhere (see next chart). However, over the past 12 months, home values have...
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Links 6 March 2015

ScreenHunter_01 Apr. 02 06.19 Global Macro / Markets / Investing: Why This Tech Bubble is Worse Than the Tech Bubble of 2000 - blogmaverick.com Mark Cuban: We’re in a Tech Bubble—and It’s Worse Than 2000 - Bloomberg Why The Low-Volatility Anomaly Exists - Alpha Architect Goldman Sachs On The Rise And Danger Of Shadow Banking - Value Walk Negative Interest Rates Yield Positive Results—So Far - Wall Street Journal North America: Washington Strips New York Fed’s Power - Wall Street Journal Los Angeles Sees Health Benefits as Its Smog Haze Clears - Wall Street Journal U.S. Companies Are Stashing $2.1...
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Where are the safeguards in data retention?

ScreenHunter_6329 Mar. 03 14.37 Cross-posted from The Conversation: Prime Minister Tony Abbott wants the mandatory data retention laws passed this week despite a number of concerns still being raised about the proposed legislation. The Parliamentary Joint Committee on Intelligence and Security (PJCIS) last week released its report and recommendations on the government’s Telecommunications (Interception and Access) Amendment (Data Retention) Bill 2014. Communications Minister Malcolm Turnbull and Attorney General George Brandis this week said they support all 39 recommendations in the bipartisan report. So let’s take a...
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IGR outlines ageing challenge

ScreenHunter_6389 Mar. 05 12.13 By Leith van Onselen The Australian Treasury has released its much anticipated 4th Intergenerational Report, which attempts to assess the long-term sustainability of current Government policies and how changes to Australia’s population size and age profile may impact on economic growth, workforce and public finances over the next 40 years. As expected, the report highlights the rapid ageing of the population. Male and female life expectancy are forecast to rise  - from 91.5 years today to 95.1 years in 2055 for males, and from 91.5 years today to 95.1 years in 2055 for females (see next...
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Live: Launch of the Intergenerational Report

ScreenHunter_08 Feb. 03 14.45 ...
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Retail sales continue to slow

ScreenHunter_13 Jul. 15 15.13 By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released retail sales figures for the month of January, which registered a 0.4% seasonally-adjusted rise in sales over the month, meeting economist’s expectations. Annual sales growth clocked in at 3.6% and are slowing fast: The below chart maps out seasonally-adjusted sales growth by segment on a monthly and annual basis: As you can see, this month's rise was led by department stores (+2.2%), cafes, restaurants and takeaway food (+2.0%), and "other" retailing (+1.0%), whereas sales actually dropped in food...
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David Murray urges negative gearing reform

ScreenHunter_12 Sep. 23 12.54 By Leith van Onselen The final report of the Murray Financial System Inquiry, released in December, was critical of Australia's tax incentives that enable investors to claim losses from their investments against unrelated wage/salary income. Specifically, the report noted that the extreme growth in mortgage debt had been driven, to a large extent, by the favourable tax treatment provided to housing, and recommended that the Abbott Government's White Paper on tax explicitly seek to remove these tax concessions, specifically capital gains tax and negative gearing concessions: Capital gains tax...
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Roy Morgan unemployment jumps

ScreenHunter_10 Mar. 29 12.46 By Leith van Onselen Roy Morgan Research (RMR) has released its unemployment estimate for the month of February, which registered a 1.2% lift in the unemployment rate to 11.0% from 9.8% in January. However, unemployment was down 1.3% over the year (see next chart). The jump in unemployment in February was mostly seasonal, according to Gary Morgan: “Looking at the month-to-month Roy Morgan Australian figures shows the usual February patterns with full-time employment falling compared to a month ago – full-time employment has fallen in February in ten out of the last twelve years while...
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Big Australia is making us poorer

ScreenHunter_277 Nov. 14 12.57 By Leith van Onselen Former head of the Business Council of Australia (BCA) and Audit Commission chair, Tony Shepherd, has called on the Government to lift Australia's immigration intake in a bid to raise living standards and add $1.6 trillion to the economy. From The Australian: Tony Shepherd, has warned that the ­migration intake should be maintained at current levels and then rise in the years ahead to confront the challenges of an ageing population... In a sign that Australians will live healthier and longer lives, by mid-century there will be about 35,000 people over the age of 100. The...
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Hockey targets illegal foreign property sales

ScreenHunter_4459 Oct. 13 10.08 By Leith van Onselen Following the shock announcement on Tuesday that the Foreign Investment Review Board (FIRB) has ordered the sale of the $39 million Point Piper home Villa de Mare, purchased illegally by Chinese national Xi Jiayin, Treasurer Joe Hockey has announced more illegally purchased homes are being pursued by FIRB. From The AFR: "It's amazing how many phone calls we've received this morning...We want to be in a position where we maintain, preserve and enhance the integrity of the foreign investment regime and Australians ... any Australian that goes to an auction needs to know that they...
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FIRE sector party pushes Oz risk to GFC eve

Capture By Leith van Onselen Yesterday's national accounts release for the December quarter confirmed that Australia's FIRE economy - Finance, Insurance and Rental, Hiring & Real Estate Services – continues to bath in sunshine, maintaining its record high 11.3% share of the Australian economy (see next chart). With finance and insurance doing especially well, hitting an all-time high 8.6% GDP share (see next chart). Since financial markets were first deregulated in the mid-1980s, the FIRE economy has grown at nearly twice the pace of the rest of the economy, sucking the life out of the...
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AFG: Mortgage demand explodes after rate cut

ScreenHunter_06 May. 13 11.32 By Leith van Onselen Australian Finance Group (AFG) has released its housing finance data for the month of February, which registered a massive increase in monthly mortgage applications, with both the number and value of applications also up strongly on the same time last year. The number of mortgage applications rocketed by 49.3% in February and were up 12.1% over the year to 9,799, whereas the value of applications jumped by 58.1% over the month and by 16.2% over the year to $4,368 million (see next chart). According to AFG: The $4.3 billion of mortgages processed in February included a...
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Living standards fall more than in any recession

ScreenHunter_28 Jun. 12 16.40 By Leith van Onselen To add some perspective on why MB believes the Australian economy is so fragile, and why living standards are falling, I have once again taken the time to deflate three measures of the domestic economy, as provided in the December quarter national accounts (released yesterday), by the ABS' population data, in order to ascertain the underlying strength of the economy in per capita trend terms. The three measures chosen are: National Disposable Income (NDI), which is "considered a good measure of progress for living standards because it is an indicator of Australians'...
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Who’s regulating the financial regulators?

ScreenHunter_6368 Mar. 04 14.56 Cross-posted from The Conversation: ­ Scandals involving Australia’s financial advice sector and the regulation of it have continued into another month, the latest chapter of which has involved NAB’s financial advice division. But this is not the first time NAB has attracted attention for its behaviour and the oversight of it. There was the time when the Australian Investments and Securities Commission (ASIC) allowed NAB to review and massage ASIC’s own media statement about NAB malfeasance. And the controversy when it was discovered senior lawyers from NAB had been allowed into ASIC,...
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Don’t like McMansions? Blame government policy

ScreenHunter_03 Apr. 02 11.00 By Leith van Onselen Jane Goffman, principal of consultancy firm Active Planning, has penned a piece in The Canberra Times this afternoon lamenting the increasing popularity of McMansions across the nation's capital - a trend also present in other jurisdictions around Australia: ...recent inquiries show all that is changing and increasingly the one-size-fits-all approach to planning that the ACT has borrowed from other cities produces XL homes crowded into small, medium and large blocks of land... The appetite for extremely large new houses on blocks large, medium and small is putting pressure...
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GDP in detail: Stuck in the slow lane

ScreenHunter_13 Jul. 15 15.13 By Leith van Onselen As summarised earlier, the Australian Bureau of Statistics (ABS) today released the national accounts for the December quarter, which registered a 0.5% increase in real GDP over the quarter and a 2.5% rise over the year. The result just missed market expectations of 0.6% growth over the quarter and 2.5% growth over the year. On a per capita basis, real GDP rose by just 0.2% and was up by only 1.1% over the year. More importantly for living standards, real national disposable income per capita was unchanged over the quarter and was down 0.9% over the year. According to the...
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The great grey gouge of the West

ScreenHunter_6346 Mar. 04 10.06 By Leith van Onselen There's an inter-generational war going on in the UK, which is also being played-out across most developed nations, whereby older generations are 'making out like bandits' at the expense of their children and grandchildren. Here's the Financial Times: Average twentysomethings have seen their living standards slip from a position of comparative affluence to well below par over the past 35 years as average pensioners have enjoyed a rapid rise up the national league tables of incomes... They come as David Cameron intensifies his efforts to woo older voters, pledging to...
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Stock on market surges in Perth, Darwin

ScreenHunter_03 Jan. 30 13.18 From SQM Research comes their stock-on-market data for February, which registered a 0.1% rise over the month and a 1.6% increase over the year: As shown above, there is significant divergence between capital cities, with stock levels down over the year in the frothy markets of Sydney and Melbourne, but up massively in the mining-heavy jurisdictions of Perth and Darwin. According to SQM: While property listings were mostly steady over the month, in Perth and Darwin they were much higher from a year earlier, reflecting weakness in those property markets given the mining downturn. Sydney...
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SQM: No housing bubble

ScreenHunter_6337 Mar. 03 17.08 By Leith van Onselen SQM Research's managing director, Louis Christopher, released his weekly email newsletter last night, which attempted to dispel the notion that Australia has a housing bubble [my emphasis]: Well, the Reserve Bank surprised markets today by holding interest rates steady. Moreover, it made clear in a statement that while Sydney’s market may be hot, property elsewhere isn’t so hot, with more varied performances in other cities in recent times. We think today’s statement will put to rest talk of a national housing bubble. The RBA doesn’t appear to be too concerned about...
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Business rallies against secretive TPP trade talks

ScreenHunter_3418 Jul. 23 10.44 By Leith van Onselen Fairfax's Peter Martin is reporting today that the Australian Chamber of Commerce and Industry (ACCI) has called on the text of the Trans-Pacific Partnership (TPP) - the US-led trade agreement between 12 Pacific rim nations (including Australia) - to be opened and negotiations monitored in real time by the Productivity Commission (PC): The ACCI wants negotiating drafts to be shown to community and business groups who would then be under an obligation to keep them confidential. Negotiators would retain their power to conclude deals without reference to the parliament but...
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