Australian Economy

Viewing posts in the Australian Economy category

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...
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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...
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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...
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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...
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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...
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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...
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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...
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Survey says….cut!

survey by Chris Becker David Scutt has the results from Livewires latest survey from financial industry types, including managers traders and SMSF investors. Charts below, but here's the interesting takeaways: Of the 80% who think RBA will "move" only 8% thought they would hike next year, everyone else says down Financial advisors are least likely to agree, but all fund managers think so International equities are the favourite go to asset Majority see the AUD at 70-79c next year with only 3% say below that figure Hmm, the contrarian in me says short the majority view, especially the...
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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...
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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...
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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...
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ANZ-RM consumer confidence at 5-month low

ScreenHunter_20 Apr. 10 19.28 By Leith van Onselen The ANZ-Roy Morgan Research (RMR) consumer confidence index fell by 0.2 points (-0.2%) in the week ended 14 December to 110.2, to the lowest level in five months and well below its long-run average reading of 113.2 (see next chart). ANZ chief economist, Warren Hogan, claimed the "sticker shock" from the weak national accounts figures for September, along with negative headlines about the federal budget, had weighed on consumer's moods: "The key question now is whether this drop in confidence is sustained and slows consumer spending in the crucial Christmas shopping...
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East-West Link tunnel of pork exposed

ScreenHunter_5488 Dec. 16 10.03 By Leith van Onselen As expected, the release of the East-West Link business case by the new Victorian Government has revealed the project never stacked-up, producing a negative return to taxpayers once dubious "wider economic benefits" were excluded. From The AFR: [New Treasurer, Tim Pallas] said the East West Link business case showed deception and “public malfeasance and fraud of a massive scale”. But he was unable to point to a specific lie by the former ­Napthine coalition government. The original business case for the East West Link showed a return of just 45¢ on the dollar and sent...
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Petrol prices at 4-year low

ScreenHunter_04 Sep. 23 15.14 From CommSec: According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 3.8 cents per litre to a near 4-year low of 132.4 cents a litre in the week to December 14... The Australian petrol price has fallen to just shy of 4-year lows but it has further to fall. In fact the Singapore gasoline price is at 5-year lows, while the domestic wholesale (terminal gate) price fell by a further six cents to a fresh 4-year low... Figures from MotorMouth show that all capital city petrol prices fell last week. Melbourne prices have fallen for the past 57...
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New car sales trending down

ScreenHunter_01 Apr. 17 11.28 By Leith van Onselen The Australian Bureau of Statistics (ABS) today released new motor vehicle sales for the month of November 2014, which registered a 0.6% seasonally adjusted monthly fall in the number of sales, and a 3.8% decrease over the year (see next table). Sales in November fell in five jurisdictions and rose in three. As shown in the below chart, new car sales are trending down once more after flatlining over recent months. However, sales of Sports Utility Vehicles (4WDs) remain strong, offset by weakness in the other categories: Looking at the mainland states, you can...
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Kiwi services economy leaps over Aussie

7813502_600x400 by Chris Becker More evidence this morning that the NZ economy has a little more robustness post-mining boom with its performance of services index (PSI) print for November released this morning, expanding again: It paints a stark picture compared to that of the latest Australian PSI in November, which printed at 43.8 and is still in terminal decline: Net migration is helping immensely here, adding to services demand alongside the NZ property bubble (particularly in Auckland): More interestingly, there's been a sharp return of Kiwis to the homeland from the usual No.1...
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The red book of consumer anguish

fear From Westpac's fantastic Red Book of consumer attitudes: ― The Westpac–Melbourne Institute Index of Consumer Sentiment fell 5.7% in Dec from96.6 in Nov to 91.1. The fall takes the Index to its lowest level since Aug 2011 when it briefly slipped below 90, and prior to that, since the tail-end of the GFC. ― Daily responses indicate the surprisingly weak Q3 national accounts was the main negative infl uence in the month. However, disillusionment about the Budget and a continued sharp slide in Australia’s commodity prices and the AUD would also have weighed on sentiment. ―...
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Australian property and the economy we want

ScreenHunter_5361 Dec. 09 17.23 One of the key themes amongst a lot of the comments on any given real estate related piece here at MB is the discussion about how and when there is some form of correction (if we set aside the spruik of endlessly elevated, or foreign or investor demand into the stratosphere) in Australian real estate prices, about how this comes about, and about how the economy manages that. At one point earlier this week I found myself chewing over the Australian economy with the Oz analyst of an investment bank (in the UK – we mulled it by skype) and in particular the experiences of the UK/Eire (he is Irish) and...
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Lending finance well past peak

ScreenHunter_05 Jul. 26 10.23 By Leith van Onselen Today's Lending Finance data, released by the ABS, revealed that lending growth is well past its peak. The below charts, which track lending on a trend basis, illustrate the current state of play. First, total finance commitments peaked in June 2014, and have been trending down ever since, down 4.1% since June: The overall fall in finance commitments has been driven by commercial, where the value of commitments have fallen 7.5% since June 2014: By contrast, owner-occupied housing finance commitments (excluding renovations) hit a new record in October, but are...
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Victoria takes legal action against Uber

ScreenHunter_5443 Dec. 12 09.47 By Leith van Onselen The fight against Uber's ridesharing service, Uber-X, is getting ugly, with Victoria's Taxi Services Commission (TSC), headed by former ACCC head, Graeme Samuel, taking legal action against 12 Uber-X drivers in Melbourne yesterday. As shown in the above video extract from ABC's 7.30 Report, former ACCC head Samuel ironically seems intent on crushing competition against the rent-seeking taxi industry: a move that spells bad news for customers and drivers alike, who would effectively be left paying exorbitant fares to taxi licence plate owners. We should not forget that...
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“Mad” Adam Carr for RBA head

imgres By Leith van Onselen RBA Governor, Glenn Stevens', interview with The AFR contained the below tidbit whereby he slammed those of us who argued Australia is suffering from an "income recession", claiming that we are painting an incorrect picture of the Australian economy: AFR: Is there a sense that, with nominal GDP not growing and the income measures so weak, that the pie here is – notwithstanding what happens to the exchange rate and any substitution – not growing here any more? And that people now are squabbling over a pie that’s not growing? MR STEVENS: Yes. Well, the pie is not...
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Youth unemployment crisis deepening fast

ScreenHunter_3946 Sep. 01 12.43 By Leith van Onselen Yesterday's soggy labour force data for November revealed even more bad news for Australia's youth, with unemployment for those aged 15 to 24 years old rising to 14.1% in trend terms (from October's revised 14.0%) - the highest youth unemployment rate since September 1998. As you can see in the next chart, total employment growth for those aged 15-24 years of age has been more or less negative since the Global Financial Crisis (GFC), whilst the rest of the labour force has experienced positive growth (see next chart). Moreover, full-time jobs have been hit particularly...
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Economic reform must fuse left and right

ScreenHunter_5421 Dec. 11 13.47 Cross-posted from The Conversation: After the defeat of the Abbott government’s higher education bills in the Senate, Education Minister Christopher Pyne invoked the legacy of past “reforms” that had been violently contested at the time of their introduction but were now accepted. Pyne cast the Abbott government as being on the side of history, but it is a bad history that he evokes. Enduring reform programs from left and right necessarily include elements from the other side of politics. Capitalism and socialism are less opposites than feuding twins. Historian Martin Sklar, later Sarah...
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Unemployment in detail: QLD stinks it up

ScreenHunter_10 Mar. 29 12.46 By Leith van Onselen As summarised earlier by Houses & Holes, the Australian Bureau of Statistics (ABS) today released labour force data for the month of November, which registered a marginal increase in the headline unemployment rate to 6.26% (from 6.25% in October), with unemployment climbing to the highest level since September 2002. The result was in line with analyst’s expectations. In trend terms, the unemployment rate rose to 6.26% in November (from 6.23%) - the highest unemployment since August 2002 (see next chart). Total employment jumped by a seasonally adjusted 42,700 to...
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Jobs beat

url The Australian Bureau of Statistics has just released its November Labour Force survey and the results are a healthy beat to the upside: SEASONALLY ADJUSTED ESTIMATES (MONTHLY CHANGE) Employment increased 42,700 to 11,637,400. Full-time employment increased 1,800 to 8,059,400 and part-time employment increased 40,800 to 3,578,000. Unemployment increased 4,700 to 777,700. The number of unemployed persons looking for full-time work increased 13,500 to 545,900 and the number of unemployed persons only looking for part-time work decreased 8,800 to 231,700. Unemployment rate increased by less than...
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