Unconventional Economist


Business rents seekers bawl at Labor’s trust reforms

By Leith van Onselen The Australian Chamber of Commerce & Industry (ACCI) and the Council of Small Business of Australia (COSBA) has urged Labor to reconsider its proposed $17 billion reforms to the taxation of discretionary trusts, arguing that many small and family-owned businesses could be adversely affected by the policy. From The Australian: “Our


Farmers prefer migrant workers because they’re easier to exploit

By Leith van Onselen Australia’s migrant slave economy continues to be exposed. After last week labelling “outrageous” a Fair Work Commission ruling that fruit pickers should be entitled to overtime if they work excessive hours, it has now been revealed that farmers are choosing to employ migrant workers because they are easier to exploit. From 7News:


Cruel Coalition: Newstart “appropriate” and no rise necessary

By Leith van Onselen With the Budget projected to head back to surplus, and the Coalition pledging money for tax cuts and retirees, it still refuses to throw the unemployed a bone. Yesterday, social services minister, Paul Fletcher, again dismissed calls to raise Newstart, claiming the government’s current policy is “appropriate”. From The Guardian: Asked if


Greens: Make Australia a migrant retirement village

By Leith van Onselen Greens Senator, Nick McKim, has labelled “horrific” the number of years taken for migrants to bring their elderly parents to Australia under Australia’s permanent migration program. From SBS News: Migrant advocates have voiced outrage and disbelief as it emerged wait times for some Australian family reunion visas are now up to


Links 16 April 2019

Global Macro / Markets / Investing: The mountain of corporate debt will be the seed of the next financial crisis – Cadtm Regulations Needed After Cryptocurrency CEO Takes Passwords To Grave – Ponderwall Is Green Growth Possible? – Ineteconomics Selling with the enemy: Why rival retailers embrace Amazon.com – Japan Today Ethereum set a course


Gittins lashes hopeless Treasury Budget forecasts

By Leith van Onselen Ross Gittins has done a good job today destroying the Australian Treasury’s perennially heroic Budget forecasts, which forever project an imminent ‘future boom’ for the Australian economy: …the longer Treasury dwells in the land of hope-springs-eternal, the more it gives its political masters the budget numbers they crave: ones showing the


REIWA: Perth housing “at or nearing the bottom”

By Leith van Onselen You’ve gotta love the Real Estate Institute of Western Australia (REIWA). No matter what the data is showing, they are always quick to call an imminent housing rebound. In June 2015, REIWA chief David Airey claimed Perth’s housing market was set to soar: “Given the sustained period of flat market in


Jacinda Ardern breaks key election promise to cut immigration

By Leith van Onselen In 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


Four months on, Opal Tower faults remain unresolved

By Leith van Onselen Four months after cracks in Sydney’s Opal apartment tower led to residents being evacuated on Christmas Eve, around half of the complex remains unoccupied. From The ABC: Almost half of the apartments in Sydney’s troubled Opal Tower are still vacant, nearly four months after the building was first evacuated on Christmas


Dick Wakelin: Mass immigration will keep housing unaffordable

By Leith van Onselen Investor buyer’s agent, Richard Wakelin, has hosed concerns about Labor’s negative gearing policy, instead claiming that ongoing strong population growth will continue to push house prices higher. From The AFR: Put together, the overall impact on the property market of Labor’s policies is likely to be modest at worst… However, the


Centre Alliance backs franking credit grey gouge

By Leith van Onselen In 2000, former Treasurer, Peter Costello made the fateful decision to allow the conversion of franking credits into cash refunds for shareholders. This enabled tax-free (mostly wealthy) retirees to claim imputation credits even if they pay no tax. The Australia Institute explains: Some of the wealthiest people in Australia pay negative


Australian personal wealth smashed by crashing house prices

From Roy Morgan Research: In the December quarter 2018, the gross personal wealth (assets) of Australians including owner occupied homes, stood at $9,784 billion. This represents a drop of $512 billion or 5.0% from the September quarter when it was $10,296 billion and is now at the lowest level recorded throughout 2018. Net wealth (after


Migration Council chair howls “STEM shortage” as Aussies sit idle

By Leith van Onselen Last year, the chair of the Migration Council of Australia (MCA) and big business lobbyist for the Australian Industry Group (AIG), Innes Willox, penned an article in The Australian claiming that “now is not the time to cut migration” because of “skills shortages” [my emphasis]: Australia does not have a population


Shane Oliver: Labor’s negative gearing policy will boost supply

By Leith van Onselen While the property lobby and the Coalition continue to argue that Labor’s negative gearing policy will magically push up rents, AMP Capital’s chief economist, Shane Oliver, has argued the opposite: that Labor’s policy will lead to “investors piling into new buildings as opposed to old buildings”. From The Saturday Paper: The


Cruel Coalition crushes unemployed to give money to oldies

By Leith van Onselen When it comes to cruelty against the unemployed, it’s hard to top Prime Minister Scott Morrison. When asked in September about raising Australia’s paltry Newstart Allowance, Morrison argued that the Budget couldn’t afford it: [Morrison] says while financial figures released this week show the economy at its strongest point in a


More AFR negative gearing fake news

By Leith van Onselen The AFR’s shameless lobbying against Labor’s negative gearing policy hit another low over the weekend with another attack on the estimated savings from Labor’s policy: More evidence has emerged that Labor has seriously underestimated the extent of investment in newly-built housing and therefore overstated the revenue that might be raised by


Why are taxpayers subsidising international students?

By Leith van Onselen The 2019 Federal Budget included an obscure measure, entitled Destination Australia Program, promising to fund scholarships for both domestic and international students to study in regional Australia: $93.7 million from 2019-20 (and $23.7 million per year ongoing) to establish the Destination Australia Program to support domestic and international students to study


Auction market shows tentative signs of life

CoreLogic released its preliminary auction report yesterday, which reported a small bounce on rising volumes. The preliminary national auction clearance rate was 58.2%, slightly above last week’s 57.2% but still below the 61.7% final clearance rate recorded in the same weekend of last year: Auction volumes nationally were 2,268, above last year’s 1,915 auctions: Once


Links 15 April 2019

Global Macro / Markets / Investing: Research Study on Ongoing Crime Spree by Wall Street Mega Banks Gets News Blackout: Here’s Why – Blacklist News Risk of earnings recession rises, as S&P 500 profits to fall for first time in 3 years – MarketWatch The Leader of the World’s Largest Hedge Fund Says the Economic


Weekend Reading: 13-14 April 2019

Global Macro / Markets / Investing: Shadow banking is now a $52 trillion industry, posing a big risk to the financial system – CNBC World Bank President David Malpass says there is too much debt in the world – CNBC Derivatives still pose threat to the financial system – Live Mint Income Is Determined by the Scarcity of


Collapsing home ownership to smash retirement system

By Leith van Onselen The Grattan Institute warns that collapsing rates of home ownership endangers Australia’s retirement system and could send government spending on housing assistance soaring. From The Conversation: …new Grattan Institute modelling shows the share of over 65s who own their home will fall from 76% today to 57% by 2056 – and


‘Demographer’: Immigration has no impact on congestion

By Leith van Onselen I’ve read some fanciful immigration propaganda in my time, but today’s effort by Simon Kuestenmacher in The Australian is right up there in the fake news stakes. Kuestenmacher is the Director of Research at The Demographics Group and is described as “a rising star in the world of demography”. The Demographics Group is


Labor’s election mandate thwarted by Senate cross-bench

By Leith van Onselen Given the years of intense effort and the millions spent by lobbyists seeking to overturn Labor’s signature tax policies, it’s fair to say that if Labor achieves a stomping victory this federal election, then it has a strong voter mandate to implement those reforms. This will matter little to the Senate


Proof PaTH intern program is subsidised slave labour in disguise

By Leith van Onselen Back in December, the Coalition’s controversial $840 million Youth-Jobs PaTH program – to prepare, trial and ultimately hire young Australians – was ridiculed at Senate estimates for its abysmal failure to shift younger Australians from welfare into work: The new figures show the $840 million program is falling short of its


Immigration into Australia is about to surge

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released visitor arrivals and departures data for the month of February, which posted surging permanent and long-term arrivals, which broke records on both a monthly and annual basis. In the year to February 2019, there were a record 844,800 permanent and long-term arrivals into