Unconventional Economist


Deloitte: Stimulus to rescue retail

By Leith van Onselen Deloitte believes that post-election stimulus will help the retail sector rebound in 2020: After a tough end to 2018, retailers faced yet another period of weak demand and declining retail spending over the March quarter of 2019. However, it may not be all doom and gloom for the sector, with some


Education industry queues up to milk international students

The rapid growth in international students (see next chart) has led to accusations that Australia’s universities are treating them as “cash cows” to be milked for lucrative fees and easy profits. And it’s not hard to see why. According to research by Jerry Zheng, the content editor for OneClass, international tuition fees (17.88%) at Melbourne University


Links 18 June 2019

Global Macro / Markets / Investing: Blockchain will Dominate Gambling in the Future – Medium Did Capitalism Kill Inflation? – Bloomberg French authorities confirm that €3.5mln house in Biarritz belongs to Putin’s family – People Policy Project Americas: Goldman says the costs of Trump’s tariffs have fallen ‘entirely’ on US businesses and households – CNBC


Australia set for a granny flat boom

From CoreLogic comes a spruik about granny flats as a solution to Australia’s housing affordability woes: More than half a million home owners across Australia’s eastern seaboard have enough space on their property to build a granny flat, which could boost home values by 30 per cent and add around 27% to rental income. Combined


Australia needs a royal commission into high-rise ‘death towers’

MB’s call for a royal commission into Australian construction standards and practices has received support from Martin North, John Adams and Edwin Almeida, who discussed the issue in detail last night. Interestingly, Edwin Almeida claims that there are also widespread problems with low-rise construction, and points the figure at all levels of government. He also


Coalition tax cuts to favour men over women

By Leith van Onselen The Australia Institute (TAI) has released new research showing that men will receive the lion’s share of the Coalition’s higher-income tax cuts: The final stage of the Morrison Government’s unlegislated income tax plan, stage 3(a) favours males by a ratio of almost two to one, according to a new distributional analysis


“Recession-like” conditions hit Australian retail

By Leith van Onselen Fairfax’s senior business columnist, Stephen Bartholomeusz, believes that recent earnings downgrades at Target, Kmart and Wesfarmers is pointing to “recession-like” conditions for the retail sector: The broader retail environment is recessed – non-food retail sales were falling in the lead-up to the Federal election and the economy is growing at its


Westpac: Auction market “solid”

From Westpac’s Matthew Hassan: Given the intense focus on Australia’s housing markets at the moment and in light of our recent commentary around the best way to interpret auction market results (see here) we are now putting out short previews each Friday and summary updates the following Monday setting out how results should be viewed. Preliminary assessment


Huge cracks develop in Sydney’s apartment market

By Leith van Onselen Amid growing concerns over flammable cladding and build quality, alongside fears of an oversupply, developers are hitting the breaks on new apartment projects: According to Steve Mann, the Urban Institute of Australia chief executive, the number of “deferred and abandoned” apartment projects in Sydney has increased 110 per cent in the


Macquarie founder demands visas for wealthy Chinese migrants

By Leith van Onselen Macquarie Private Bank founder and executive chairman of fund manager Atlas Advisors, Guy Hedley, has demanded that the Morrison Government open the immigration floodgates to wealthy Chinese. From The Australian: The Morrison government needs to resuscitate the visa scheme designed to lure wealthy Chinese investors… The SIV program grants people who


Another vertical slum evacuated amid severe cracking

By Leith van Onselen On Christmas Eve, all residents at Sydney’s 392-apartment Opal Tower were evacuated after serious cracking was discovered. And five months later, around half of the complex remains unoccupied with engineers still undertaking remediation works. Back in February, Bronwyn Weir – the construction lawyer who last year co-authored a key industry report


Auction clearances surge

CoreLogic has released its preliminary auction report, which reported a sharp rise in the national clearance rate driven by Sydney and Melbourne. The preliminary national auction clearance rate was 66.4%, well above last week’s preliminary clearance rate of 51.3% and also way above the 52.4% final clearance rate recorded in the same weekend of last


Universities slash entry standards for international students

ABC Four Corners’ recent report on Australia’s international student trade, entitled “Cash Cows”, provided damning evidence that Australian universities have badly lowered entry and teaching standards in a bid to entice large numbers of lower-quality, full fee-paying international students: “In terms of attracting international students, universities will do whatever they need to do…they are the


Links 17 June 2019

Global Macro / Markets / Investing: Trump’s Trade Threats are Really Cold War 2.0 – Counter Punch Saudi energy minister says hopes to balance oil market before next year – Reuters A Morgan Stanley economic indicator just suffered a record collapse – CNBC Study finds that a GPS outage would cost $1 billion per day


Weekend Reading: 15-16 June 2019

Global Macro / Markets / Investing: Bitcoin causing carbon dioxide emissions comparable to Las Vegas or Hamburg – Science Daily Why are we still pretending ‘trickle-down’ economics work? – The Guardian Official Goes Rogue, Says Climate Change May Cause Next Financial Crisis – Vanity Fair World’s Retirees Risk Running Out of Money 10 Years Before


“China forever” international student and tourism boom turns bust

By Leith van Onselen The sudden sharp decline in Chinese tourists and international students has caught Australian authorities off-guard, raising painful memories of when booming Japanese arrivals slowed suddenly in the late-1980s. From The AFR: …the narrative that the boom is going to last forever is no longer accurate. China’s economy is slowing and its


Dan Andrews: Victorian infrastructure can’t outrun population ponzi

By Leith van Onselen Victorian Premier, Dan Andrews, has tacitly admitted that the state is unable to build infrastructure fast enough to keep pace with manic immigration-driven population growth. From The AFR: “We are pretty well at full-tilt with sand, gravel and concrete,” Mr Andrews told The Australian Financial Review’s National Infrastructure Summit in Melbourne


NSW demands infrastructure cash from feds

By Leith van Onselen As the NSW Government’s infrastructure building program approaches $100 billion, and Sydney’s population grows out of control, NSW Premier Gladys Berejiklian has subtly the federal government pay its fair share. From The SMH: Ms Berejiklian made a subtle push for greater financial commitments from Canberra, citing the state’s $90 billion in


Youth labour market hits the skids

By Leith van Onselen Yesterday’s ABS labour force release for May revealed a deteriorating Australian youth labour market – i.e. those aged 15 to 24 years old – with both full-time and total jobs growth falling and unemployment and underemployment rising. The trend headline unemployment rate rose to 11.8%: Total employment growth for those aged


International students engulfed in English cheating scandal

In February 2014, a BBC Panorama investigation exposed systemic student visa fraud, which included secret filming of government-approved English-language exams and showed candidates having their tests being fraudulently completed by “fake sitters”. A subsequent investigation by the British Home Office led to 50,000 English language tests taken by international students being declared invalid, 34,000 international student


Links 14 June 2019

Global Macro / Markets / Investing: The Countries with the Most Monstrous Corporate Debt Pileups: US Fizzles in 24th Place! Canada Shines in 11th Place – WolfStreet The global boom in natural gas demand is about to slow, the International Energy Agency says – CNBC Oil sinks 4 % to $51.14 on rising US crude


Direct road pricing inevitable as fuel excise revenue collapses

By Leith van Onselen Yesterday’s AFR National Infrastructure Summit featured robust discussion about direct road user charges: New Infrastructure Australia chief executive Romilly Madew said road user charging was definitely on the infrastructure agenda and needed to be pushed through to compensate for falling income from fuel taxes as people shifted to electric vehicles. Michael


Final auction clearance rate tumbles back into the 40s

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 3.0% decline in the final national auction clearance rate to 58.0% – well below the same weekend last year (53.8%) and below last week’s 58.0%: As