Unconventional Economist


Anzac Day Links: 25 April 2019

Global Macro / Markets / Investing: ABC’s of Business Cycle Theory: Beyond Keynes vs. Hayek – Medium S&P 500, Nasdaq On Pace to Close at All-Time Highs – WSJ The World Economy Is A Pyramid Scheme, Steven Chu Says – Forbes Tesla’s Share Forecast is Turning Bearish from Bullish – Trade Site Reviews Beware of


‘Botched’ $10b inland rail another infrastructure white elephant

By Leith van Onselen I had previously given in-principle support to building an inland rail freight line linking Melbourne and Brisbane: Rail is particularly well suited to two types of freight: Bulk Freight: rail is suited to the provision of high volume bulk freight services to export facilities because it generally requires well defined point-to-point


Sydney’s light rail farce escalates

By Leith van Onselen In the wake of the massive cost blow-outs and delays hitting both the Parramatta Light Rail Project and the Eastern Suburbs Light Rail Project, the former head of Infrastructure NSW, Paul Broad, in June described the Eastern Suburbs Light Rail Project as a waste of money and a vanity project that should have never been


CPI in detail: Bullhawks crash!

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released the Consumer Price Index (CPI) data for the March quarter 0f 2019, which registered plummeting headline and underlying inflation on weakening domestic demand. According to the ABS, headline CPI was flat (0% growth) in the March quarter, 0.5% below the December quarter’s 0.5%:


ACCI attacks Labor’s token increase in migrant wage floor

By Leith van Onselen The Australian Chamber of Commerce & Industry has expressed concern about Labor’s proposal to increase the minimum annual wage of temporary skilled migrants. The ACCI’s employment director Jenny Lambert warns that applying the increased Temporary Skilled Migration Income Threshold across the board would increase the shortage of skilled labour in regional


Manchurian Dan destroys wages

By Leith van Onselen A fortnight ago, Victoria’s Premier Daniel Andrews marched with the Change the Rules union rally demanding better pay for Australian workers: Premier Daniel Andrews says the objectives of Wednesday’s massive union rally in Melbourne’s CBD are more important than any disruption caused by the huge march. The Labor leader joined roughly


ATO launches seven deadly sins negative gearing blitz

By Leith van Onselen The Australian Taxation Office (ATO) is taking aim at the army of negatively geared property investors, targeting seven commonly rorted deductions claimed by landlords. From The Australian:   Over-claiming interest expenses… Classifying capital work as repair work… Holiday home rorts… Family ties… the most common sin here is where the owner places


Labor loons to give unlimited visas to migrant elderly parents

By Leith van Onselen In one of the craziest policies ever written, a Shorten Labor Government will dramatically age Australia’s population by uncapping visas allowing migrants to bring their elderly parents into Australia for continuous periods of three or five years. From The Australian: Labor has revealed its proposed three- and five-year sponsored parents’ visas


Universities deny problems with international student visas

By Leith van Onselen Hot on the heels of Dr Bob Birrell’s damning report on Australia’s ballooning international student trade, and the erosion of education standards, universities have come out swinging, denying there are problems. From The Australian: Universities Australia chief executive Catriona Jackson said the English language standards set for international students were similar


Links 24 April 2019

Global Macro / Markets / Investing: New study finds that getting rid of debt doesn’t just unburden finances, it takes a weight off the mind that clears up cognitive functioning – MarketWatch Progressive Capitalism Is Not an Oxymoron – NY Times Trump is leading a global attack against central banks. It could end in disaster.


Auction clearance rate falls back into the 40s

CoreLogic has belatedly released its preliminary auction report for the Easter long weekend, which reported falling clearances on weak volumes. The preliminary national auction clearance rate was 49.0%, well below last week’s preliminary clearance rate of 58.2% and the 62.2% final clearance rate recorded in the same weekend of last year: Auction volumes nationally were


Wealthy Australians heaviest users of negative gearing

By Leith van Onselen The Grattan Institute’s Danielle Wood says she is not surprised by tax office data regarding negative gearing losses. The data reveals that the highest average losses are occurring in postcodes with the highest incomes, with Wood noting that those on higher incomes tend to be the keenest users of negative gearing.


ABC must stop publishing disgraced Migration Council

By Leith van Onselen For years, MB has questioned the efficacy of the Migration Council of Australia, which purports to be an “an independent, non-partisan, not-for-profit body established to enhance the productive benefits of Australia’s migration and humanitarian programs”. The Migration Council is chaired by one of Australia’s biggest business lobbyists, Innes Willox, who is


Class action launched over flammable cladding

By Leith van Onselen Alucobond supplier Halifax Vogel Group and its manufacturer 3A Composites are the target of a class action by apartment owners in a Sydney building. They are being represented by William Roberts Lawyers in the first combustible cladding class action in Australia. They claim that the cladding on their building does not


Aussies overwhelmingly support Newstart increase

By Leith van Onselen Last week, social services minister, Paul Fletcher, again dismissed calls to raise Newstart, claiming the government’s current policy is “appropriate”: Asked if he viewed an increase to the unemployment benefit as inevitable, Fletcher told the breakfast organised by the Australian Council of Social Service (Acoss) that the payment was already indexed


Desperate developers triple incentives to clear stock

By Leith van Onselen As stalled developments mushroom across the east coast amid the surge in completions: The AFR reports that desperate developers have more than triple sales commissions for agents: Property developers are more than trebling sales commissions to agents as lenders slash rates by up to 0.4 of a percentage point, increase discounts


Labor to lift skilled migrant pay floor from ludicrous to ridiculous

By Leith van Onselen While undoubtedly much better than the Coalition, the Labor Party also continues to fail Australian workers, promising a ridiculously low wage floor for temporary skilled workers of only $65,000 a year. From The AFR: Bill Shorten will announce today that the minimum wage for workers on a 457-style visa – known


Why international student visa numbers must be curbed

By Leith van Onselen Dr Bob Birrell from the Australian Population Research Institute (APRI) has released a new study, entitled Overseas students are driving Australia’s Net Overseas Migration Tide, which calls for international student numbers to be curbed. Below is the Executive Summary along with key data tables: There is widespread awareness that overseas students


MB Report: Three Economic Myths about Ageing: Participation, Immigration and Infrastructure

By Leith van Onselen Dr Cameron Murray and I were commissioned by Sustainable Australia’s Victorian party branch to examine the causes and implications of population ageing in Australia, and whether maintaining a high immigration program is a worthwhile policy response. Below are the Overview, Executive Summary and Key Findings from our report: Overview Population ageing


Big majority supports Labor’s negative gearing reforms

By Leith van Onselen Despite the vicious scare campaign launched by the Coalition and the property lobby, Labor appears to have little to fear from persisting with its negative gearing and CGT reforms, with the latest ABC Vote Compass – based on 223,533 respondents – showing that more voters support Labor’s policy than oppose it:


Links 23 April 2019

Global Macro / Markets / Investing: Is the Internet hollowing out the middle class? – Gerry McCovern IMF suggests effectively Banning Cash…. Cashing In: How to Make Negative Interest Rates Work – IMF Blog The Price of Universal Basic Income – James Allan Milton Friedman: What is Monetary Policy? – Infadium China,Ireland,India have sold over


Easter Long Weekend Links: 19-22 April 2019

  Global Macro / Markets / Investing: Mapping the Global Migration of Millionaires – Visual Capitalist China and Russia Buy Gold as US Keeps Gold Prices Artificially Low – Bunker Basics The Bank of England gives a masterclass on the “very real” risks of climate change – Qz Will we survive the next financial crisis? – Politico Belarus President


CoreLogic: High-rise apartment risks building

CoreLogic’s Cameron Kusher has released a research note looking at dwelling commencement trends across Australia’s various sub-components, which shows that risks are skewed towards high-rise construction: The Australian Bureau of Statistics (ABS) recently released the quarterly Building Activity data for December 2018. The release is a treasure-trove of data and includes information on dwelling commencements,


ABS employment in detail: defying gravity

By Leith van Onselen As summarised earlier, the Australian Bureau of Statistics (ABS) today released its labour force report for March, which registered a solid 25,700 increase in total employment but a 0.1% increase in the headline unemployment rate (to 5.0%) because of a 0.1% rise in labour force participation. In trend terms, the unemployment


Final auction clearances remain stillborn

By Leith van Onselen Last weekend, CoreLogic released its preliminary auction clearance rates, which revealed the following results: Today, CoreLogic has released its final auction results, which reported a 5.0% decline in the final national auction clearance rate to 52.2% – slightly below last week’s final clearance rate of 52.6%: As you can see, Sydney’s final