Unconventional Economist


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


Auction clearance rates begin to fall

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 4.4% decline in the final national auction clearance rate to 68.5% – well above the same weekend last year (41.9%) but below last week’s 70.1%: As you can see, Sydney’s


RBA: Newstart lift would stimulate economy

In a Q&A after Tuesday’s address to ACOSS, assistant RBA Governor, Guy Debelle, admitted point blank that lifting Newstart would provide the economy with stimulus: Guy Debelle: “Newstart has been constant in real terms for the past five or six years. Sorry, 25 years… If those people got higher income, would they spend it? Probably


Grattan: Private hospitals less efficient than public

Earlier this week, The Grattan Institute released research arguing that gouging by specialists at private hospitals is driving up private health insurance costs and premiums. Interestingly, this report claimed that private hospitals are actually less efficient than their public hospital counterparts: Private hospitals need to lift their game too. They are less efficient than public


Actual capex records minor fall

The Australian Bureau of Statistics (ABS) today released data on capital expenditures (capex) for the September quarter, which registered a 0.2% seasonally adjusted fall in capex volumes over the quarter and a 1.3% decrease over the year (see below table). The 0.2% quarterly decline missed market expectations of 0.0%. The first chart below shows actual


Aussie towns lash Coalition’s regional visa farce

Predictably, Australia’s towns are unhappy about the Morrison Government’s farcical deeming of Perth and the Gold Coast as “regional” despite being bonafide metropolitan areas: Small regional towns like Swan Hill in Victoria are now competing for migrant workers against cities like Perth and the Gold Coast… Jason King’s business needs workers with skills, but it’s


Auditor-General slams Dan’s dodgy West Gate Tunnel deal

In late 2017, the Victorian Labor Government completed a shady $6.7 billion deal with Transurban to build the West Gate Tunnel Project, which will see Transurban contribute $4.4 billion towards the cost in exchange motorists paying $15 billion in additional tolls on CityLink until 2045. Former Premier Jeff Kennett described the deal as “absurd” and


Uber, not mass immigration, blamed for traffic gridlock

With Melbourne’s population having soared by around 600,000 people over the past five years: And the city turning into one giant construction site, a Victorian parliamentary committee is trying to pin the blame for Melbourne’s growing congestion on ride sharing services like Uber: The growth of ride-share vehicles since Victoria’s taxi industry was deregulated two


VIC builders panic as flammable cladding list hits 1200

Victoria’s building industry has called for an amnesty from prosecution for building dodgy high-rises with flammable cladding: The Master Builders Association says the Andrews government’s get-tough approach, including “litigious posturing” and rhetoric on dodgy builders, is damaging the effort to tackle the [flammable cladding] crisis. More than 1200 buildings with risky levels of flammable cladding


Australia aggressively targets Indian international students

Over the past five years, Indian international student enrolments across Australia’s educational institutions has skyrocketed by 138% to 126,000 as at August 2019: The number of Indian student visa applications granted has also soared by 125% over the past three years alone, signalling a further lift in enrolments: This explosion in Indian student enrolments is


Links 28 November 2019

Global Macro / Markets / Investing: WeWork shows that real profit still matters more than “growth” – The Drum Audi To Cut 9,500 Jobs To Fund Shift To Electric Vehicles – Forbes Decentralised finance in developing countries: it’s potential and constraints – Medium Americas: The great American labor paradox: Plentiful jobs, most of them bad


ATO fights back on backpacker tax

Last month, the Federal Court struck down the Coalition’s controversial ‘backpacker tax’, introduced in 2016, ruling that it is unlawful to charge non-residents higher taxes than Australian residents. Now, the ATO has appealed the case: The tax on working holiday makers meant foreign travellers on 417 or 462 visas, who earned less than $18,200, were


Fasco-housing complex welcomes Hobart to the nightmare

The 2019 National Shelter Rental Affordability Index has been released, which shows that rental affordability across Hobart has crashed and is now the worst in the nation: Greater Hobart continues to be the least affordable capital city in Australia. Rental affordability in Hobart has dropped considerably over recent quarters and it is now the only


80% of accountants to be automated. So why is Australia importing them?

The CEO of ASX-listed accountancy software company Xero believes 80% of accountancy jobs will be automated: According to data from asset manager Schroders, there’s an 80 per cent probability that a given accountancy job will be automated within 20 years. So if the profession is to survive, it will have to evolve, warns Steve Vamos.


Ross Gittins: High immigration is wrecking the Aussie way of life

Ross Gittins has done a great job covering Sustainable Population Australia’s (SPAs) new discussion paper entitled “Population growth and Infrastructure in Australia: the catch-up illusion”, of which I was the lead author: …despite the growth in the economy, on average our material standard of living is stagnant. All that immigration isn’t making the rest of


Australian residential construction work dives

The ABS has released data on the value of construction work done for the September quarter of 2019, which registered another 0.4% seasonally-adjusted decline in total construction activity over the quarter – the fifth consecutive quarterly decline – and a 7.9% decrease over the year: However, the result beat analysts’ expectations of a 1.0% decline


Property locusts swarm WA Government

Last month, property lobbies met with the Western Australian Government to demand a housing stimulus package: Major property industry players met senior McGowan Government ministers yesterday to plead their case for a sweeping stimulus package aimed at breathing life into the WA’s stagnant housing market. Removing stamp duty on the purchase of apartments, raising the


Surge in ‘low-skilled’ visas delivers low productivity economy

Dr Bob Birrell and David McCloskey have released a an excellent report, entitled Australia’s ‘Jobs and growth’ strategy: pathway to a low productivity economy, which argues that surging low-skilled migration is undermining wage growth and creating a low-productivity economy. Below are key extracts: Attempts to kick start growth in the Australian economy have so far