Unconventional Economist

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Gas cartel pays no tax, forces Aussies to pay more

While the gas cartel is busy forcing Australian energy bills up by sending our gas offshore, turns out the industry also pays minimal tax. According to a new report from The Australia Institute (TAI), major gas companies haven’t paid income tax in seven years despite earning $138 billion from their Australian operations: New analysis of

56

Airbnb behind Australia’s rental crisis

One of the big conundrums arising from the pandemic is the sharp fall in rental vacancy rates across Australia despite negative net overseas migration. Logically, the loss of hundreds-of-thousands of migrants should have seen Australia’s rental vacancy rate rise. However, vacancy rates instead plummeted. One plausible explanation is that Australian’s desire for additional space has

18

“Perfect storm” sends Aussie home builders bust

The situation has gone from bad to worse for Australia’s residential building industry. Following the recent collapses of major Australian construction firms Condev, ABG Group, Probuild and Privium, giant Metricon is now facing a similar fate: On Wednesday, it was reported that Metricon was in emergency talks with clients after falling into financial strife just

3

Australia experiencing ‘profit-price inflation’, not wage inflation

While the business lobby, its captured media, and the Coalition are all scaremongering about a ‘wage-price spiral’ if the minimum wage lifts in line with the Consumer Price Index (CPI), Jim Stanford from the Centre for Future Work has instead argued that “profit-price inflation” is the far bigger concern: De-unionisation, insecure work, and deregulation of

62

ANZ: Markets always wrong on Australian interest rates

The latest Australian interest rate forecast from the futures market tips the Reserve Bank of Australia to lift the official cash rate (OCR) to 2.7% by the end of this year, peaking at 3.4% by mid-2023: If the market’s projection proved correct, this would be the equivalent of another nine 0.25% interest rate hikes over

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Links 19 May 2022

Global Macro / Markets / Investing: JPMorgan Chase shareholders reject options bonus for CEO Jamie Dimon – Market Watch Crypto Billionaires Lose All of their Fortune to the Crypto Crash – Cryptolka Bitcoin Washout Is Leaving Mom-and-Pop Buyers Holding the Bag – Valkyrie Crypto Funds Fed’s Evans wants smaller U.S. rate hikes by July or

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Wealthy to reap most benefit from higher childcare subsidies

Analysis by the Australian National University (ANU) suggests that families on higher incomes will benefit the most from the child-care policies of both Labor and the Coalition. The analysts shows that the wealthiest 20% of households will save an average of $2,547 a year under Labor’s policy. In contrast, the Coalition’s child-care policy will result

3

Aussie consumer confidences plunges to August 2020 low

The mood among Australian consumers continues to worsen, with the ANZ-Roy Morgan consumer confidence index plunging to its lowest level since mid August 2020 when Australia was in the early stages of the pandemic: Four of the five confidence subindices dropped. ‘Current financial conditions’ fell 4.4%, while ‘future financial conditions’ dropped 0.4%. ‘Current economic conditions’

7

Scott Morrison should read own housing affordability report

Prime Minister Scott Morrison yesterday attacked Labor for claiming that the Coalition’s policy to allow first home buyers to borrow up to 40% of superannuation to purchase their first home would “blow up the housing market”: [Morrison] took a swipe at Labor’s criticism of the policy, saying the party had “lost touch completely” after it

12

Australian wage growth badly misses expectations

Australian wage growth missed economists’ expectations in the March quarter of 2022, according to new data released today by the Australian Bureau of Statistics (ABS). Total wages grew by only 0.65% in the March quarter, missing analyst’s expectations of 0.8% growth. Private sector wages grew by 0.65% over the quarter, whereas public sector wages grew

1

Roy Morgan unemployment jumps to 9.7%

Roy Morgan’s unemployment estimate jumped by 1.9% points to 9.7% in April – the biggest monthly increase since the initial stages of the pandemic just over two years ago. However, under-employment was unchanged at 8.4% in April: Key points as follows: Workforce increased 39,000 in April driven by the steep rise in unemployment: The workforce

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IMF: New Zealand’s housing bust threatens economy

A cross-country analysis shows that New Zealand’s residential housing market is by far the most expensive in the English-speaking world, measuring at 4.8 times the size of the economy: Capital Economics also estimated that New Zealand’s consumer spending growth is the second most sensitive to changes in house prices, behind Hong Kong: Given household consumption is

14

It’s official: Housing supply won’t keep pace with mass immigration

Last year’s NSW Budget revealed that the state’s housing shortage had all but disappeared thanks to the collapse in immigration: Building approvals are now running well ahead of the change in population, which is depressed due to the lack of inward migration. This suggests a potential oversupply in the near-term relative to the underlying demand

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Links 18 May 2022

Global Macro / Markets / Investing: Millennials and Gen Z Don’t See the Point in Saving for the Future – Business Insider Goldman Sachs warns companies to ready for a US recession, declaring it a’very, very high risk.’ – Coin Buzz Feed $3 billion in bitcoin was sold in a last-ditch attempt to save UST

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International students are still being routinely exploited

Over the decade leading up to COVID, the exploitation of international students became systemic across the Australian economy. Multiple reports bemoaned the rampant wage theft from international students, especially from migrant employers of the same nationality. For example, the 2016 Senate Committee report, A National Disgrace: The Exploitation of Temporary Work Visa Holders, noted that

6

Coalition’s super-housing plan would increase inequality

On Sunday, the Morrison Government announced that if reelected, it would allow first home buyers to borrow up to 40% of superannuation to purchase their first home, capped at up to $50,000 (see yesterday’s article). Under the policy, first home buyers would need to have $125,000 in their superannuation account in order to withdraw the

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Asking rents surge amid tight vacancies

Australia’s rental crisis continues to worsen, with SQM Research recording a surge in asking rents amid tight vacancies. While the national vacancy rate rose 0.1% in April to 1.1% on the back of the smaller capital cities (see below table), asking rents nationally soared another 1.4% over the month to be 13.8% higher year-on-year: According

11

Business lobby admits mass immigration suppresses wages

The business lobby has dished up another serving of ‘skills shortage we need more migrants’ tripe at Fairfax, while explicitly admitting that mass immigration is used to suppress wage costs: Senior Australian business leaders have urged the next federal government to address the nation’s labour crisis by boosting migration to fill jobs, warning a failure

7

Where’s the inflation panic surrounding Stage 3 tax cuts?

Over the past few weeks, we’ve witnessed the business lobby, mainstream media, the IPA and Coalition all hit out at the union’s and Labor’s call to lift the minimum wage by the Consumer Price Index (CPI), claiming that doing so would stoke inflation and force up interest rates. At the same time, these groups have

4

Canada’s housing market braces for interest rate shock

Like most English-speaking nations, Canadian house prices boomed over the pandemic, soaring 32% since February 2020 according to Teranet: The surge in prices was led by Canada’s largest city Toronto where prices surged 37% over the pandemic. However, like most nations, Canada’s mortgage rates have begun to rise, jumping by around 0.8% since March, according