Unconventional Economist


Australia’s low-skill visa system is wrecking productivity

Yesterday’s annual productivity report from the Australian Bureau of Statistics (ABS) revealed that multifactor productivity (MFP) – the key driver of Australian – fell by 0.4% in 2018-19, with labour productivity also registering its first ever fall of 0.2%, or 0.8% when adjusted for the quality of work: The result led to the usual head-scratching


Australia’s high-rise apartment crash turns apocalyptic

Yesterday, the Australian Bureau of Statistics (ABS) released its dwelling approvals data for November, which revealed that dwelling approvals nationally have crashed by 35% in trend terms from the March 2015 peak, driven by a mammoth 52% decline in unit and apartment approvals: Today, I want to focus on the high-rise apartment segment, which is


Chinese international students cheat their way through university

The latest data from the Department of Education revealed a massive boom in Chinese international student enrolments, whose numbers have roughly doubled over the past six years to 240,000: One nasty side-effect of this boom has been the surge in contract cheating services, as revealed in several reports over many years. For instance, “functionally illiterate“


Links 3 December 2019

Global Macro / Markets / Investing: Elites Create Money From Thin Air While we Have to Work for Ours – 7Bitcoins The Way Out for a World Economy Hooked On Debt? Yet More Debt – Bloomberg Sudden Plunge in 3 Hong Kong Stocks Offers a Cautionary Tale – NY Times Americas: John Deere demands further


Australian multifactor productivity crashes

The ABS has released Estimates of Industry Multifactor Productivity for 2018-19, which reveals that multi-factor productivity (MFP) – the driver of living standards – declined by 0.4% in 2018-19: On an hours worked basis, market sector multifactor productivity (MFP) fell 0.4% in 2018–19, the first decline since 2010–11. Market sector gross value added (GVA) grew


How Ralan torched Chinese investor millions

Earlier this year, developer Ralan collapsed owing creditors at least half a billion dollars. Included among those impacted were hundreds of buyers who bought apartments off-the-plan and who are now  facing deposit losses of up to $70,000 or more. Many of these buyers were Chinese were targeted in an elaborate ponzi scheme and faced millions


VET fee scandal slugs taxpayers another $500m

It was described as the “biggest public policy scandal in Australian history: the systematic rorting of the vocational education and training system (VET)”. It was the reckless policy first introduced by the Howard Government and then expanded by the Gillard Government, which gave private VET providers virtually unregulated access to government subsidies for every student


Australia’s superannuation “dogs breakfast”

The Australian’s Judith Sloan is the latest commentator to lambast Australia’s compulsory superannuation system. Sloan notes that various reports from the Productivity Commission have outlined the key problems with the system, including its unclear purpose, excessive fees, and unaccountable governance. However, the biggest issue remains the legislated increase in the contribution rate to 12% by


Sydney busses so overcrowded they don’t stop

As Sydney’s population continues to grow like a science experiment on the back of never-ending mass immigration: The city has experienced growing congestion across all public services and infrastructure, including roads, public transport, schools and hospitals. The latest example is Sydney’s busses, which according to a new Auditor-General report, have become so crowded that they


Australia’s dwelling approvals crash deepens

The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of October. At the national level, the number of dwelling approvals tanked by a seasonally adjusted 8.1% to 13,049. The overall fall in approvals was broad-based, with both units & apartments (-11.3%) and houses (-7.0%) diving. In the year to October


Premium properties drive price rebound

Following on from this morning’s MB report covering the five major capitals, CoreLogic has released its full dwelling value results for November, which also captures the smaller markets and regional areas: As shown above, the smaller capitals and regions also had a mostly positive month in November, with Hobart (+2.3%), Canberra (+1.6%) and the combined


Aussie property values surge 2% in November

CoreLogic’s dwelling price results have been released for November, which reveals a booming 2.0% increase in values over the month at the 5-city level, driven by surging values across Sydney (2.7%) and Melbourne (2.3%): It was the fifth consecutive monthly acceleration in home values at the 5-city level: Over the November quarter, dwelling values rose


Auction clearances go BOOM!

Auction clearance rates surged over the weekend, with the preliminary rate nationally rising to 78.9% from 72.9% last weekend: Auction clearances were also way above the 41.3% recorded in the same weekend last year: Sydney’s preliminary clearance rate was 84.7%, up from 82.3% last weekend, and way above the 41.6% recorded in the same weekend


Links 2 December 2019

Global Macro / Markets / Investing: Automakers Offer Record Incentive Spending As Trillion Dollar Auto Bubble Becomes Unsustainable – Zero Hedge Why Amazon won’t dominate in groceries – Venture Beat Global Auto Sales Expected To Crash More Than After The Financial Crisis – Zero Hedge Forgiving Student Debt Would Boost Economy, Economists Say – NPR


Australia’s retirement system warped by houses

Although older Australians have captured an increasing share of Australia’s wealth: Largely because they have increased their home ownership rates over the past 55 years at the same time as home values have skyrocketed: The situation is nowhere near as rosy for Australia’s renting pensioners, who have the highest rate of rental poverty in the


Australia plunges towards outright deleveraging

The Reserve Bank of Australia (RBA) has released its private sector credit aggregates data for the month of October 2019: A chart showing the long-run breakdown in the components is provided below showing broad-based weakness: A long-run breakdown of owner-occupied credit (0.44% MoM; 1.26% QoQ; 4.79% YoY) and investor credit (-0.02% MoM; -0.19% QoQ; -0.18%


PBO: Infrastructure spending to tank

The Parliamentary Budget Office (PBO) has forecast that Australia’s net infrastructure investment will peak at $38 billion in 2019-20, before falling over the next three years. This is primarily due to expectations that the net debt of the state governments will blow out to around $156 billion by 2022, which would constitute the states’ highest


Australia’s superannuation system is welfare for the rich

Just a week after The Australia Institute (TAI) released a report – funded by Industry Super Australia – backing an increase in the superannuation guarantee (compulsory superannuation) to 12%, the chief economist of TAI, Richard Denniss, has blasted Australia’s superannuation system for “stealing from the poor to give to the rich”: Welcome to the topsy-turvy


Labor: Temporary visa tsunami is crushing wages

Labor has called for an urgent review of the temporary visa system after the latest report from the Australian Population Research Institute (APRI) revealed a high concentration of temporary migrant workers across large swathes of the economy (see below table). From The Australian: Labor has called for an urgent examination of the temporary visa regime


Lunatic RBA blames oldies and women for low wage growth

In the Q&A after Tuesday’s address to ACOSS, assistant RBA Governor, Guy Debelle, blamed higher participation from women and older Australians for adding to labour supply and lowering wages: “It’s ultimately fundamental economics that with demand and supply, if you run out of supply, then the price is going to go up. When demand exhausts


The great housing shrinkflation continues

During the peak of the last housing cycle in 2017, MB coined the phrase “shrinkflation” to describe the peculiar situation whereby housing prices rise strongly alongside crashing sales volumes. Australia’s housing market is experiencing another round of shrinkflation with dwelling values surging at the same time as turnover remains anaemic. A new report from CoreLogic


Abul Rizvi: $53,900 wage floor too high for ‘skilled’ visas

Abul Rizvi, former Deputy Secretary of the Department of Immigration and one of the architects of Australia’s faux ‘skilled’ migration program, has penned an article claiming that the $53,900 wage floor for regional skilled migrants is too high: On 16 November 2019, the Government’s much-touted regional migration visas took effect. One of these is a


Links 29 November 2019

Global Macro / Markets / Investing: US stock market record highs amid strong economic data – Yahoo 5 More Signs That The Global Economy Is Careening Toward A Recession – Most Important News How the IMF can battle gradual irrelevance – Jordan Times This digital currency could build a more sustainable global economy – European


NZ Labour’s immigration lies exposed again

In the lead-up to the September 2017 general election, the New Zealand Labour Party launched a plan to reduce immigration by around a third in a bid to relieve chronic housing and infrastructure pressures (especially around Auckland): …in recent years our population has been growing rapidly as record numbers of migrants arrive here. This has