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Unconventional Economist
A deep dive on the economy, politics and Australia’s housing market
On Tuesday night, I had a fabulous discussion with Martin North on the Australian economy, the state of politics and policy making, and Australia’s housing market. Key topics included: The Albanese Government’s upcoming increase in Australia’s immigration intake to record levels, and what it means for the economy and living standards. The idiocy of growth
The calm before the international student storm
The latest Overseas Arrivals and Departures figures from the Australian Bureau of Statistics (ABS) revealed that international student arrivals have failed to rebound following the reopening of Australia’s international border late last year. Only 35,110 international students arrived in Australia over the quarter – down significantly from the decade average of 98,000 quarterly arrivals: Over
Australian company insolvencies jump
Deloitte Access Economics’ Weekly Economic Briefing examines Australian company insolvencies, which jumped 23% year-on-year in June as companies grapple with high inflation, rising interest rates, shortages and a slowing global economy. The good news, however, is that insolvencies are still tracking below pre-COVID levels; although that will likely change over the year ahead: The average
Migration Council Chair demands cheap visa flood
The ACTU’s brilliant submission to the upcoming Jobs & Skills Summit demanded that all temporary skilled migrants be paid at least average weekly full-time earnings: Increase the Temporary Skilled Migration Income Threshold (TSMIT) – the salary floor for temporary skilled migrants – to Average Full Time Weekly Earnings (approx. $90,916.80 at November 2021) to be indexed
Coalition PC lackey blames low productivity for poor wage growth
In 2018, I lamented how the “esteemed government organisation – the Productivity Commission (PC) – is facing politicisation, with Treasurer Scott Morrison appointing former Liberal Party staffer, Michael Brennan, to head the Commission”: Brennan is a former staffer to former Liberal Finance Minister Nick Minchin and also served in that role for former Victorian Liberal
HIA forecasts housing construction bust
The Housing Industry Association (HIA) has updated its dwelling starts forecasts, which now tips a steady decline in detached house construction all the way to 2024 on the back of rising interest rates and high construction costs: It is anticipated there will have been 131,730 detached starts in 2021/22. This is just 6.7 per cent
Albo follows Rudd’s ‘Big Australia’ immigration plan
The similarities between the Albanese Government and the former Rudd Labor Government are uncanny. Both came to power following a long stint in the political wilderness and initially rode a wave of strong popular support. And both quickly established national summits to ‘solve’ the nation’s problems: The Rudd Government’s Australia 2020 Summit was a two
RBA rate hikes sink Aussie house prices
CoreLogic’s weekly Australian house price index, which tracks value changes across the five major capital cities, fell another 0.37% in the week ended 18 August – the 15th consecutive weekly decline: The decline in values was driven by the three largest capital cities, namely Sydney (-0.5%), Melbourne (-0.34%) and Brisbane (-0.39%): So far in August,
Links 19 August 2022
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Housing crash to plunge New Zealand into recession
BRANZ and Pacifecon have published their 10th annual National Construction Pipeline Report, which shows that New Zealand residential construction is expected to fall by more than one-third, or $11 billion, to $19.6 billion per year over the next five years. In turn, total construction activity is forecast to fall from a peak of $50.9 billion
Dan’s Suburban Rail Loop strangles Victorian Budget
To nobody’s surprise, the cost of building Melbourne’s suburban rail loop has doubled to $125 billion, with another $75 billion projected for operating expenses. That’s according to the Victorian Parliamentary Budget Office: According to the state parliament’s budget office, which published a report overnight, the north and east sections of the rail loop could blow
Weak earnings growth shatters RBA forecasts
The Reserve Bank of Australia (RBA) has to be the worst forecaster of wages and incomes in Australia. After being far too bullish on wages over the past decade: It got egg on its face yet again when yesterday’s wage price index for the June quarter came in soft. The RBA’s August Statement of Monetary
Immigration rebound slaughters Aussie renters
SQM research has released rental vacancies data for the month of July, with vacancies nationally remaining at a record low 1.0% and every capital city market zipped tight: The next chart shows the time series across the major capitals, with vacancy rates plunging over the pandemic: And the next chart, published in The AFR, shows
Australia’s jobs boom ends, extinguishing RBA rate hikes
The Australian Bureau of Statistics (ABS) has released labour market data for July, which showed that Australia lost 40,900 jobs (-0.3%) over the month, with hours worked also falling by 16 million (-0.8%): However, because the labour force participation rate fell by 0.3% to 66.4%, the nation’s unemployment rate actually fell by 0.1% to 3.4%
NAB scaremongers as real wages plunge to 2012 levels
NAB’s economics team has talked-up yesterday’s soft wage growth data, claiming private sector wages are in fact booming. In turn, this justifies further aggressive interest rate hikes from the RBA: NAB director of economics and markets Tapas Strickland had a clear message: “Ignore the headline [Wage Price Index] excluding bonuses.” Instead, he said to look
Labor fruit cake demands 800,000 migrants a year
Meet Cameron Milner. He’s a former Queensland Labor Secretary that was also then Opposition leader Bill Shorten’s top advisor. Milner has penned one of the most egregious articles I have ever read in The Australian attacking the “whining social services lobby groups”, defending the Stage 3 tax cuts, and lobbying for “a huge increase in
Australia’s housing ATM runs dry
ANZ Bank has released a revised outlook for the residential property market, forecasting that house prices in the nation’s capital cities will fall by 8% by the end of 2022 and by 18% between now and the end of 2023. Felicity Emmett from the ANZ Bank says the prospect of further interest rates hikes in
Labor blames “supply” for housing crisis, then drops record immigration
The federal Minister Housing and Homelessness gave an interview yesterday on the Today Show (video below) where she blamed Australia’s housing crisis on a lack of supply: “Ultimately [the housing crisis] is an issue of supply, and we need to get more homes on the ground as quickly as we can. And that’s what we’re
Links 18 August 2022
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Australian weekly economic indicators bounce
Roy Morgan CEO, Michelle Levine, has provided a useful update on Australian politics and economics, based on the firm’s latest surveys. First, Roy Morgan’s latest voting intentions tracker shows that the Labor Albanese Government has extended its electoral lead over the Coalition by 1%, and now leads 53% to 47% on a two-party preferred basis.
Aussie leading index dead cat bounces
Westpac’s Bill Evans with the index. It’s difficult to see how the economy could bounce in the face of aggressive interest rate hikes from the RBA and crashing house prices. Household consumption drives the economy and should fall as both rising mortgage repayments and the negative wealth effect from falling house prices bite. ____________________________________________________________________________________________ Growth
Soft Aussie wage growth tempers RBA rate hikes
Australian wage growth missed economists’ expectations in the June quarter of 2022, according to new data released today by the Australian Bureau of Statistics (ABS). Total wages grew by only 0.72% in the June quarter, missing analyst’s expectations of 0.8% growth. Private sector wages grew by 0.72% over the quarter, whereas public sector wages grew