Unconventional Economist

3

ACCI contradicts itself on Aussie labour market

You have got to love the contradictory statements coming from the Australian Chamber of Commerce and Industry (ACCI), which continues to talk with a forked tongue on the labour market. The ACCI recently sent a submission to the Morrison Government’s migration program review whereby it demanded easier access to foreign workers to ameliorate purported crippling

16

‘Terrifying’ creaking haunts Melbourne high-rise residents

Seriously, who would want to own a high-rise apartment? Over recent years, hundreds of buildings have been forced to remove dangerous flammable cladding at the cost of millions. Multiple apartment towers have also been plagued by building faults, costing owners thousands in rectification costs. In 2019, Four Corners aired a segment entitled Cracking Up, where

10

CoreLogic: Risky mortgage lending on the rise

CoreLogic has released new data showing the increasing risk profile of Australian mortgage lending as investors have flooded back into the market. While the percentage of high loan-to-value ratio (LVR) lending fell over the March quarter to 10.4% from 11.3% – likely reflecting the reduction in first home buyers active in the market: The percentage

22

Australia’s fake education ‘exports’ exposed again

MB has comprehensively debunked Australia’s claimed $40 billion of education exports, which are wildly exaggerated. In a nutshell, the majority of education ‘exports’ comes in the form of expenditure on goods and services in Australia, as explicitly acknowledged in a recent Mitchell Institute report: The majority of the $20 billion loss of economic value is

21

Links 11 June 2021

Global Macro / Markets / Investing: In a world first, El Salvador makes bitcoin legal tender – Reuters Hot inflation may have become scorching in May and is expected to hit a 28-year high – CNBC Controlling Rates Is More Complicated Than You Think – St. Louis Fed Fed’s reverse repo volume hits all-time high

5

Melbourne shutdown delivers year’s weakest auction result

CoreLogic released its final auction report for last weekend, with the final clearance rate falling to 70.6% from 73.5% the prior weekend. It was the lowest final auction clearance rate recorded in 2021. As usual, Sydney led the market recording a final clearance rate of 75.6% (down slightly from 76.0%), whereas Melbourne’s final clearance rate

36

Memo to hospitality industry: it’s a “labour market”

For months we have witnessed Australia’s hospitality industry whine over labour shortages and lobby the federal government to give it easier access to foreign workers. At the same time the hospitality industry contradictorily called for an extension of JobKeeper and has lobbied to freeze the minimum wage. We are seeing the same shenanigans over the

10

Morrison Government must incentivise state tax reform

NSW has recently flagged plans to replace stamp duty with an annual land tax. But NSW Treasurer Dominic Perrottet contends it will be “tough fiscally” to pursue stamp duty and broader GST reform without the help of the federal government: “It makes sense for them to support [it]. Things can be politically challenging but they don’t

6

NSW Government: Rebooting immigration will cause housing shortages

Last week, the NSW Productivity Commission (PC) released a White Paper explicitly stating that Sydney’s housing shortage was caused by an unexpected boom in Sydney’s population when the federal government threw open the immigration floodgates in 2005: Much evidence suggests that our State, and Sydney in particular, has not delivered enough housing over many years.

5

VIC lockdown extends ALP’s election lead

Victoria’s fourth hard lockdown has extended the Australian Labor Party’s two-party preferred poll lead, according to Roy Morgan. During the Victorian lockdown in early June, support for the ALP is 51% on a two-party preferred basis, up 0.5% points since March 2021 and increasing their lead over the L-NP on 49% (down 0.5% points) despite

28

Negative gearing is yesterday’s problem

The AFR reported that the proportion of landlords negatively gearing rental properties fell to 58.6% in 2018-19, according to the latest Australian Taxation Office (ATO) statistics. This was the lowest level on record and well down on the peak of 69.6% in 2007-08. There were also 19,113 fewer negatively-geared landlords than in 2017-18, representing the

25

Links 10 June 2021

Global Macro / Markets / Investing: Bitcoin slides 8% after U.S. seizes most of Colonial Pipeline ransom – CNBC AI-Powered Stock Market Algorithm Shows Accuracy Up to 90% for the Major US Indexes – Market Watch The Billionaire Class Is a Threat to Democracy – Jacobin Mag Americas: Warren Buffett defends himself after ProPublica says

0

Australian job postings soften

Indeed economist Callam Pickering has updated his job postings data to 4 June 2021, which have softened from recent highs: Victorian job postings have softened in recent weeks and are a bit weaker than the national average, up 38.7% on their pre-COVID level. Job postings across the rest of the nation are also down from

5

Labour shortage drives productivity-lifting automation

A recent report from the National Agricultural Labour Advisory Committee admitted that Australian farmers’ extreme reliance on cheap migrant labour is having detrimental productivity impacts by preventing farms from adopting new methods and investing in automation: In many ways, Australia is at a crossroads. Either its enterprises go all out to modernise by learning and

0

Lockdown plunges Melbourne CBD movements below 20%

Roy Morgan Research has released new data on CBD people movements, which reveals that all CBDs across the Australia are experiencing significantly lower traffic levels than pre-COVID: Not surprisingly, Melbourne’s CBD has been hit hardest following four lockdowns, with the current lockdown pushing people movements to only 19% of ‘normal’ pre-COVID levels. My view is

1

Small business payroll jobs fail to launch

The ABS has released its Weekly Payroll Jobs and Wages in Australia data for the week ending 22 May 2021, which reported that payroll jobs are now tracking 2.6% above their pre-Covid level, whereas total wages are tracking 3.1% higher: The next table shows the breakdown across jurisdictions, which shows all states & territories reporting

29

Mortgage stress numbers seem implausible

Another month has gone by and mortgage stress continues to grow, according to Digital Finance Analytics as reported in The AFR: “Many households in stress have less hours worked than they want, and no income growth. Bigger mortgages by first time buyers and equity drawdowns are lifting repayments as lending standards ease and more interest-only

16

COVID achieves what urban planners could not

Policy makers and urban planners have for generations attempted and failed to diversify Australia’s economic activity and settlement away from the cities. These same central planners also regularly touted so-called ’20-minute cities’ where people can live, work and socialise, only for commute times to grow as workers shunted into the CBD on crowded trains and

73

Should we fret the household debt?

Judo Bank CEO Joseph Healy yesterday expressed concern about the “almost uncontrollable rise in household debt” across Australia. This was 180% of disposable income at the end of 2020, according to data from the Reserve Bank. Healy is particularly concerned about the growth in mortgage lending, arguing that it is “foolhardy” to assume that interest

5

Links 9 June 2021

Global Macro / Markets . Investing: Deutsche Bank warns of global ‘time bomb’ coming due to rising inflation – CNBC European stocks slightly higher as U.S. inflation data dominates week ahead – CNBC The Big Question: Does the Welfare State Make Countries Richer? – Bloomberg The Inflation Red Herring by Joseph E. Stiglitz – Project