Leith van Onselen

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Migrant wage theft entrenched across Aussie economy

Fairfax’s Adele Ferguson continued her four year campaign against wage theft over the weekend, which mostly involves migrants on temporary visas: At 7-Eleven thousands of workers were students on visas who were underpaid… Since the 7-Eleven scandal there have been many more companies caught up in underpayment issues including Domino’s, Caltex, Retail Food Group, Pizza

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MYEFO still too optimistic on wage growth

After years of overly optimistic wage growth forecasts: Today’s Mid-Year Economic and Fiscal Outlook (MYEFO) has significantly downgraded wage growth from the 2019 Federal Budget: The four year forecasts are shown below, which projects that wage growth will rebound to 3% by 2022-23: MB does not support these forecasts. Unemployment is expected to rise materially

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Auction clearance rate slides into the 60s

Auction clearance rates retraced over the weekend, with the preliminary rate nationally falling to 69.2% from 74.5% last weekend: However, the nation auction clearance rate was still way above the 41.0% recorded in the same weekend last year: Sydney’s preliminary clearance rate was 73.6%, down from 78.1% last weekend, but way above the 41.3% recorded

12

Australia’s international student exports explode

The Australian Bureau of Statistics (ABS) released its International Trade: Supplementary Information, Financial Year, 2018-19 report, which includes interesting data on Australia’s booming international student trade. According to the ABS, total education ‘exports’ soared by $5.0 billion in 2018-19 to a record high $37.3 billion (see next chart). Expenditure on goods and services by international

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Links 16 December 2019

Global Macro / Markets / Investing: ‘Post-chemical world’ takes shape as agribusiness goes green – Japan Times Blockchain and AI could bring new outstanding results – Medium The New Trade Deal Could Help Boost The Global Economy Next Year – Stock Market News Hundreds Of Billions In Gold And Cash Are Quietly Disappearing – Zero

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Weekend Reading: 14-15 December 2019

Global Macro / Markets / Investing: U.S. coal production employment has fallen 42% since 2011 – Bic Magazine Morgan Stanley gears up for the new decade with job cuts – Euro Money The Rich Are Buying Physical Gold Bullion in Preparation for Recession – Gold Silver Bitcoin Americas: Why some economists are calling 401(k) plans

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Sydney’s wealthy elites are migrant NIMBYs

As we already know, Sydney is a primary entry point for migrants: And Western Sydney is the prime dumping ground for these migrants: With Western Sydney also projected to receive the lion’s share future immigration-driven population growth – i.e. an additional 1.2 million people over the next 20 years, according to the Greater Sydney Commission:

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Mirabile dictu: Perth rental market tightens!

The Real Estate Institute of Western Australia (REIWA) has released its rental data for the September quarter, which reveals that Perth’s rental market has tightened, with the vacancy rate falling to 2.5%: This is yet to translate meaningfully into rents, however, which remained flat over the past three quarters; although they have risen $10 for

11

Black Friday kills Christmas retail sales

I reluctantly ducked into Chadstone Shopping Centre earlier this week to buy Christmas gifts and was pleasantly surprised by how quiet the centre was. I hate shopping – even more so during Christmas, where the crowds are infuriating. I live reasonably close to Chadstone, therefore, rode my bike to avoid car parking. However, to my

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Expert: Migrant visa flood choking wages

David Alexander, managing director of government relations firm Barton Deakin, has penned a thoughtful article in The Australian explaining how the never-ending flood of cheap migrant workers is lowering Australian wages: The expansion in imported labour numbers in recent years has been dramatic. According to the Migrant Worker Taskforce Report, as at June 30 last

6

Flammable cladding crisis halts building projects

Back in June, the Australian Institute of Building Surveyors (AIBS) released a member communique warning that “the situation around Professional Indemnity (PI) Insurance has reached crisis point” with “a real possibility that without government intervention… private building surveyors may be forced out of work and the construction industry across Australia will be significantly impacted”. The

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CoreLogic’s daily property index validated by ABS

Last month, Martin North and John Adams challenged the credibility of the various private sector property indices, which were reporting strong rebounds in property values, claiming “the establishment has sought to kill the counter narrative that the market is falling”. I brushed off their claims at the time and said that “we’ll get confirmation when

4

Why infrastructure investment can never catch up

Fifteen years of rapid population growth has driven a massive infrastructure deficit across Australia’s cities although estimates of this backlog vary significantly. For example, the 2013 National Infrastructure Plan produced by the Federal Government’s advisory body, Infrastructure Australia, concluded that “we still face a significant infrastructure deficit, estimated at around A$300 billion”. Infrastructure Australia’s 2018

12

CoreLogic weekly house price update: More boom

In the week ended 12 December 2019, the CoreLogic 5-city daily dwelling price index, which covers the five major capital city markets, surged another 0.32%: The rise in values was broad-based, but again driven by Sydney and Melbourne: So far in December, dwelling values have risen by 0.54%, again driven by Sydney and Melbourne: Quarterly

12

Chinese arrivals hit record high

The Australian Bureau of Statistics yesterday published its overseas short-term arrivals figures for October, with Chinese visitors hitting fresh all-time highs. The number of short-term visitor arrivals rose by 2.7% in the year to October, whereas short-term resident departures rose by 2.9%. The ratio of annual arrivals to departures remained at 81.4%: Net short-term arrivals

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Can India become our biggest international student market?

As it currently stands, India is Australia’s second biggest market for international students, trailing far behind first placed China. As at August 2019, there were 240,000 Chinese nationals enrolled to study in Australia, almost double the 126,000 Indian nationals enrolled (see next chart). The imbalance is even greater with respect to ‘exports’ from international students

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Links 13 December 2019

Global Macro / Markets / Investing: Morgan Stanley fined $22 million over alleged bond-market ‘pump and dump’ scheme – Business Insider “It’s About To Get Very Bad” – Repo Market Legend Predicts Market Crash In Days – Zero Hedge Gold Price Increases Ahead of Tariffs Decision on Chinese Imports – Gold Silver Bitcoin BIS Drops

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Final auction clearance rate holds above 70%

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 3.4% decline in the final national auction clearance rate to 71.1% – well above the same weekend last year (41.0%) but below last week’s 73.6%: As you can see, Sydney’s

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Australia’s housing shrinkflation worsens

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. The latest evidence comes from

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Property rebound lifts VIC stamp duty projections

It’s raining mid-year Budget Updates with Victoria’s also released today: The general government sector operating surplus is estimated to be $618 million in 2019-20, with annual operating surpluses averaging $3.3 billion a year across the forward estimates. Compared with the 2019-20 Budget, the net result from transactions has been revised down by an average of

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Net migrant arrivals surge toward 300k

The Australian Bureau of Statistics (ABS) has released visitor arrivals and departures statistics for the month of October, which reveals that the number of permanent and long-term arrivals into Australia remains turbo-charged. In the year to October 2019, there were a record 844,240 permanent and long-term arrivals into Australia, up 2% from October 2018, and

1

Stamp duty bounce saves NSW Budget

The NSW government has announced a 2019-20 budget surplus of $702 million in its mid-year economic review, down from a forecast a surplus of $1.016 billion in the June budget. The government expects surpluses to average $1.9 billion over the next four years, with stamp duty revenue being boosted by a rebound in Sydney’s housing

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A ‘Big Australia’ means more expensive everything

One of the most profound changes affecting the Australian economy and society this century has been the massive lift in Australia’s net overseas migration (NOM) and population growth under the multi-partisan Big Australia policy. This rapid population growth is projected to continue for decades to come, if current policy settings favouring high immigration continue. The

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Can auction clearance rates be trusted?

Martin North from Digital Finance Analytics talks mortgage statistics with FreshCanvas. They argue that auction clearance rates can be manipulated and of questionable reliability. My view is that CoreLogic’s series, whose sample is much more robust than Domain’s, is the best short-term indicator for house prices. And this is reflected in the strong correlation between

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Australian economy living off government teat

The best single measure of how the Australian economy is travelling is not real gross domestic product (GDP), but real domestic final demand (DFD), which is the sum of “government final consumption expenditure, household final consumption expenditure, private gross fixed capital formation and the gross fixed capital formation of public corporations and general government”. Australia’s

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FIRE parasite goes hungry as Aussies return to saving

Last week’s national accounts release for the September quarter revealed that Australia’s FIRE economy – Finance, Insurance and Rental, Hiring & Real Estate Services – has shrunk relative to the Australian economy, falling to 11.6% from a peak of 11.8%: This follows more than 30-years of explosive growth since financial markets were first deregulated in

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As Sydney’s house prices boom, rents bust

The latest quarterly dwelling price results for Sydney shows that values are rising at around 6.4%, which is equivalent to the peaks experienced during the 2015 and 2017 booms: Indeed, since bottoming in May 2019, Sydney dwelling values have surged by around 8.5%. While Sydney’s dwelling values are booming, the same cannot be said for

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Links 12 December 2019

Global Macro / Markets / Investing: ‘Everything Is Not Fine’: Nobel Economist Calls on Humanity to End Obsession With GDP – Common Dreams Fed QE4 could happen before year end, Credit Suisse says – CNBC Chevron to Take $11 Billion Writedown Amid Weak Gas Prices – Bloomberg Americas: The massive triumph of the rich, illustrated