Unconventional Economist


Retail sales surged in November

From the ABS comes preliminary retail sales data for November: Key statistics The seasonally adjusted estimate rose 7.0% ($2,071.6m) from October 2020 to November 2020. In seasonally adjusted terms, Australian turnover rose 13.2% in November 2020 compared with November 2019. Victoria (21%) led the rises, with November seeing the first full month of trade following the easing of coronavirus restrictions in


Productivity growth not population key to smart economy

Former foreign minister Bob Carr claims that the pandemic is an opportunity to challenge the view held by government and business that the only approach to population growth is “more”. Carr contends that Australia’s economic growth has been all about lifting population growth, rather than boosting productivity. He notes that population targets are set in


NSW records 8 new COVID-19 cases

NSW recorded 8 new local cases overnight, 7 of which were related to the Avalon cluster and 1 which is a health worker whose source is under investigation. Victoria also recorded one interstate acquired case from Sydney’s northern beaches. Australia now has 95 active locally acquired cases. All of these are from NSW, 90 of


More dud trade deals to offset ‘unfair’ China

The trade spat with China is being used by the Coalition as an excuse to launch a bunch of dud ‘free trade’ agreements (FTAs): Australia will pursue trade agreements with Israel, Switzerland, Norway, Middle East and Latin American nations next year to open up new markets amid China’s “unfair, unjust and unwarranted” targeting of exporters…


How worrying is the new British COVID strain?

Reuters has posted a good explainer on the new COVID strain sweeping through Britain, which has prompted some neighbouring European nations to shut trade links to prevent transmission. The Cliff Notes summary is that this strain is far more infectious than other strains, but not more lethal. Vaccines are also thought to protect against this


Frydenberg launches fake crackdown on illegal foreign property sales

In December 2018, a parliamentary committee into Managing Compliance with Foreign Investment Obligations for Residential Real Estate slammed the Australian Tax Office (ATO) for failing to enforce rules precluding foreign nationals from purchasing established Australian homes: Despite at least 877 breaches of the country’s foreign ownership laws being uncovered in Victoria, the Australian Taxation Office


It’s official: immigration has turned negative

The Federal Budget forecast net overseas migration (NOM) to turn negative for the first time since the Second World War, recording declines of -71,600 in 2020-21 and -21,600 in 2021-22, before recovering to 95,900 in 2022-23 and 201,100 in 2023-24: The ABS’ quarterly population data provided the first evidence of this immigration collapse with NOM


NSW stamp duty receipts rebound hard

NSW stamp duty receipts continue to rebound strongly from their COVID-19 funk. Annual stamp duty receipts rose for seven consecutive months to November and have now risen 4.2% above the previous April peak: It’s a similar story for property transfers, which have also risen for seven consecutive months and are 5.0% above their April peak:


Links 22 December 2020

Global Macro / Markets / Investing: Will there be runaway inflation next year? Not if wages don’t rise – The Guardian Peak Oil Is Already Here – Bloomberg Top charts of 2020: The economic fallout of COVID-19 – EPI From restaurants to retailers, virus transformed economies – AP News Pandemic fallout is about to overwhelm


The state of stamp duty for Australian property

From CoreLogic’s head of research, Eliza Owen: In 2020, COVID-19 mildly impacted Australian housing prices, but created volatility in transaction activity. These factors have drawn renewed scrutiny of stamp duty on residential property, and may have influenced some of the timely reform and discounting in stamp duties over the year. What’s wrong with stamp duty?


Collapsed immigration supporting Aussie labour market

Following Thursday’s ABS labour market release, CBA’s head of Australian economics, Gareth Aird, noted that border closures are helping to support Australia’s labour market recovery: In recent years the Australian economy has needed to generate growth in employment of around 18ka month to keep the unemployment rate from rising. A decent rate of jobs growth


Nobody responsible for Victoria’s hotel quarantine debacle

As expected, the Final Report of Victoria’s Hotel Quarantine Inquiry has failed to identify who was responsible for making the decision to contract-out enforcement to untrained private security. Below are key extracts from the Executive Summary: Victoria’s Hotel Quarantine Program ran for three months from 29 March–30 June 2020. In this time, a total of 21,821


High-income tax cuts are ‘trickle-down’ nonsense

International research suggests that the next stage of the federal government’s tax reform agenda may increase income inequality and do little to boost productivity. From mid-2024, the government proposes to introduce a flat income tax rate of 30 per cent for people earning between $45,000 and $200,000. Researchers Enrico Rubolino and Daniel Waldenstrom examined previous


Sydney’s COVID infections surge to 87

NSW Health has reported another 15 COVID-19 cases overnight linked to the Avalon cluster: All 15 locally acquired cases are linked to the Avalon cluster. Investigations continue into the source of this cluster, which now numbers 83. — NSW Health (@NSWHealth) December 21, 2020 There are now 83 cases linked to this cluster, with NSW’s


Nobody wants affordable housing

Former ABC Melbourne presenter Jon Faine has called on governments to act on housing affordability: Do we really want to make housing more affordable? Do we really want to house the homeless? There is no doubt that governments could achieve both – but we are not prepared to make the reforms needed. Scott Morrison and


You cannot be serious: abattoir workers handed skilled visas

As we know, Australia’s entire ‘skilled’ visa system is a sham that is actually delivering the nation low paid and underutilised workers. The evidence is standing in plain sight in the Department of Home Affairs’ Continuous Survey of Migrants: As shown above, migrants have significantly worse labour market outcomes than the general population. Specifically: The


Governments subsidise foreigners to buy Aussie homes

During the Global Financial Crisis (GFC), the Rudd Government relaxed foreign ownership rules to make it easier for overseas buyers to purchase Australian property. This measure, which was the antithesis of a housing affordability policy, was justified on the grounds that it would support the property market and prevent a downturn. We are experiencing similar


Report: Victoria’s people servicing strategy delivers dumb growth

Regular readers will know that I am a harsh sceptic of Victoria’s economic model, penning dozens of articles over the years criticising the state’s over-dependence on mass immigration and population growth to drive the economy, rather than productivity and export driven growth (read my most recent report here). Bob Birrell and Ernest Healy from the


Sydney COVID outbreak ridicules call to bring back international students

Two week’s sure is a long time in the world of COVID. Less than a fortnight ago, NSW Premier Gladys Berejiklian lodged a plan with the federal government to use one third of the state’s 3,000 hotel quarantine places to import international students. The education lobby quickly jumped on the announcement, once again demanding Australia


Auction market ends 2020 on a strong note

CoreLogic has ceased releasing its auction results until next year. However, Domain’s preliminary results were strong, with around three quarters of homes that went under hammer in Sydney and Melbourne selling over the weekend: AMP chief economist, Shane Oliver, noted the following on Twitter: “A solid end to yr. Low rates, incentives, “escape from the


Links 21 December 2020

Global Macro / Markets / Investing: Study of 50 Years of Tax Cuts For Rich Confirms ‘Trickle Down’ Theory Is an Absolute Sham – Common Dreams Zoom Under Probe From US Regulators – The Techee Pandemic fallout is about to overwhelm the bankruptcy system and hit small businesses hardest – Fortune Deutsche Bank: The Fiat


Weekend Reading: 19-20 December 2020

Global Macro / Markets / Investing: Five powerful forces will affect the world in 2025: Martin Wolf – Nikkei Joe Biden’s financial team could create a giant stock bubble – CNN Health and Economic Impacts of Lockdown Policies: See Where Your Country Stands – Lifescite Oil prices climb to nine-month high after inventory draw –


2020 post-Christmas sales to bounce

Roy Morgan Research projects strong post-Christmas sales across Australia, with the exception of Victoria: Roy Morgan’s annual post-Christmas retail sales forecasts conducted in conjunction with the Australian Retailers Association (ARA) project Australians are set to spend $19.46 billion across retail stores during the post-Christmas trading period, an increase of 3.9% from a year ago. The


The leaning towers of Mascot

In June 2019, Sydney’s 132-apartment Mascot Tower was evacuated after large cracks were discovered. Fresh cracks appeared in February, prompting authorities to close shops and set up an exclusion zone around the building. Then in April it was revealed that apartment owners are face a repair bill of $53 million, or $405,300 per apartment. Thus,


Australia now a nation of optimists

From Roy Morgan Research: Of all Australians 59% now think 2021 will be ‘better’ than 2020 – the highest positive view on the year ahead since 2009 following the Global Financial Crisis, a special Roy Morgan web survey conducted in November finds. A further 17% say 2021 will be ‘the same’, an all-time record low


Inner-Melbourne apartments are cruising for a bruising

CoreLogic’s Best of the Best Report paints a dire picture for the inner-city apartment market: Inner-city Melbourne markets are at greater risk through 2021. Strict restrictions on international borders have particularly affected rental demand in the SA4 ‘Melbourne – Inner’ region, which had the highest net overseas migration of any region in Australia in the


Calls for Royal Commission into corrupt universities

Academics from three WA universities are calling for a royal commission into higher education. They argue that an obsession with university rankings and publishing research has overtaken universities’ fundamental mission: to deliver quality education to Australian students. From The SMH: West Australian universities are on a dangerous path, according to WA academics who say the


Coalition green-lights money laundering visas

The Morrison Government has tightened some business and investment visas, but curiously left the ‘golden ticket’ Significant Investor Visa (SIV) commonly used for money laundering untouched: Business migrants will face tougher requirements under changes to investment visas that have so far drawn in at least $12 billion from mostly Chinese nationals. The existing nine different


Youth unemployment still rising

Yesterday’s ABS labour force release for November revealed that Australia’s youth unemployment rate – i.e. for those aged 15 to 24 years old – continued to rise despite solid growth in jobs. The headline youth unemployment rate rose 0.1% to 15.6% and remains three times higher than the rest of the labour market (5.2%): However,