Unconventional Economist


Charting the great Australian wages recession

By Leith van Onselen Yesterday’s national accounts release for the September quarter revealed more dire news for Australian workers, with average compensation per employee falling to just 1.2% growth: And average compensation per employees falling by 4.7% since March 2012 when adjusted for inflation: On Tuesday, the September quarter Business Indicators report was released by


Housing correction broadens to ‘affordable’ end of market

By Leith van Onselen CoreLogic’s dwelling values results for November reported that losses have been driven by the premium end of the market, whereas values across the most affordable 25% segment has held up well: While this is true when viewed on an annual basis, growth rates are negative and trending down across all price


Scanlon spins mass immigration backlash

By Leith van Onselen With most recent opinion polls showing the majority of Australians want immigration to be lowered, including: Australian Population Research Institute: 54% want lower immigration; Newspoll: 56% want lower immigration; Essential: 54% believe Australia’s population is growing too fast and 64% believe immigration is too high; Lowy: 54% of people think the


Links 6 December 2018

Global Macro / Markets / Investing: Dow plunges more than 600 points on confusion over status of U.S.-China trade deal – Washington Post Banks May Be Safer in a Debt Crisis, But Investors Aren’t – WSJ Recession would not be a bad thing, says CEO Jamie Dimon – CNBC OPEC works on deal to cut


Labor man Greg Combet demands 12% compulsory super lift

By Leith van Onselen It looks like Labor will persist with raising Australia’s compulsory super rate to 12%, if former energy and climate change minister in the Rudd and Gillard governments, Greg Combet, is any guide. From The Australian: Greg Combet, now one of the most powerful figures in the $2.7 trillion superannuation system, says.. the government needed


Population ponzi drives big rise in traffic congestion

By Leith van Onselen Just two months after the Grattan Institute released propaganda claiming “Australia’s urban commuters have little to fear from population growth”, that “migration has not brought cities to a standstill”, and that the impact of population growth is “benign”, the truth has been revealed yet again, with the Global Urban Mobility Index showing


Half of Australian renters are living in squalor

By Leith van Onselen The 2018 Household Income and Labour Dynamics in Australia (HILDA) survey revealed that ‘housing stress’ – defined as when “housing costs are more than 30% of income and household income places the household in the bottom 40% of the income distribution” – is particularly high for renters: Whereas the proportion of


Gladys launches $100b ponzi rail Hail Mary

By Leith van Onselen More details have emerged about the NSW Government’s proposed four routes for high speed rail (HSR) into Sydney: A high speed rail project Premier Gladys Berejiklian has committed to start work on if she wins the state election could cost $100 billion… “A reasonable figure would be $100 billion in Australian dollars


The extraordinary fiscal cost of compulsory super

By Leith van Onselen The Australian’s Adam Creighton has penned an enlightening article on the extraordinary cost of Australia’s superannuation system, which is running at around quadruple that of the Aged Pension, according to analysis provided by the peak superannuation industry, Association of Superannuation Funds Australia (ASFA): Age Pension outlays, which totalled $46.8 billion this year,


Gladys launches fake review of Sydney crush-loading

By Leith van Onselen With new NSW Labor leader, Michael Daley, vowing to make the issue of over-development a key plank of his election platform, Premier Gladys Berejiklian has ordered an urgent review into development in Ryde, where more than 13,000 extra people have been sardine packed in recent years. From The Daily Telegraph: The under-pressure Premier


How Australia’s housing correction compares with history

By Leith van Onselen With Australia’s housing correction now dragging on for 14 months, and peak-to-trough declines totalling 5.5% at the capital city level, it’s an opportune time to compare this correction to prior episodes. The below chart shows the various dwelling corrections over the past 30-plus year at the 8-city level, as measured by


Links 5 December 2018

 Global Macro / Markets / Investing: Bitcoin is close to becoming worthless – MarketWatch The Crypto Winter Is Here and We Only Have Ourselves to Blame – Coin Desk The digital-media bubble is bursting. That’s hurting a generation of promising young journalists. – Washington Post Climate change ’greatest threat’, UN told – BBC How to


Federal government is a key player in the ‘gig’ economy

By Leith van Onselen John Wilson – the managing legal director of BAL Lawyers and an accredited specialist in industrial relations and employment law – has penned an interesting article in Fairfax on the increasing spending on contractors by federal governments and agencies over recent years, which has come as the Australian Public Service (APS) has


Why high speed rail is unviable

By Leith van Onselen Rail transport should be in my DNA. My father ran Victoria’s freight railway system for many years and I grew up around trains. I even spent six months post university working in ‘the business’. Even with this background, I have never understood why politicians, ‘experts’ and commentators have an inherent bias


Australia’s current account deficit improved in Q3

By Leith van Onselen Balance of payments for the September quarter is out and Australia’s external position has improved: The current account deficit (CAD) improved by $1.4 billion in Q3 to $10.7 billion: Over the year, the CAD improved by $11.8 billion to $48.9 billion: Assuming Australia’s GDP grows by 0.6% as expected in the


Australia’s terms-of-trade rose in Q3

By Leith van Onselen Within today’s dump of balance of payments data that feeds into tomorrow’s September quarter national accounts release was the important news that Australia’s terms-of-trade rose by 0.8% in seasonally adjusted terms and by 0.4% in trends terms: Over the year, the terms-of-trade rose by 2.7% in seasonally adjusted terms and by


Are Brisbane house prices about to “take off”?

By Leith van Onselen Place Advisory residential research director, Lachlan Walker, claims that Brisbane house prices are about to take-off: BRISBANE home prices are about to take off at a time when the nation’s overall housing market is in its biggest slump since the global financial crisis. The Queensland capital was the only major state


The Kouk: Mass immigration is lowering wages

By Leith van Onselen Stephen Koukoulas (aka ‘The Kouk’) is one of the few mainstream economists in Australia with enough integrity to admit that Australia’s immigration program is overcooked. Back in April, The Kouk argued that “simple economics” says Australia should cut its immigration intake: There are a number of vital areas of societal well-being


‘Draconian’ expat CGT policy delayed to 2019

By Leith van Onselen The federal government announced in the 2017 Budget that it would remove a capital gains tax (CGT) exemption for around 100,000 expatriate Australians who sell their main residence while overseas. While the measure was projected to raise $581 million over the forward estimates, it has been condemned by tax and legal


Dodgy Scanlon Foundation survey underplays immigration backlash

By Leith van Onselen While almost all recent opinion polls show the majority of Australians want immigration to be lowered, including: Australian Population Research Institute: 54% want lower immigration; Newspoll: 56% want lower immigration; Essential: 54% believe Australia’s population is growing too fast and 64% believe immigration is too high; Lowy: 54% of people think


CoreLogic: Unsold properties stockpile in Sydney/Melbourne

CoreLogic’s weekly housing indicators continue to show broad weakness. Dwelling values have fallen heavily, led by Sydney and Melbourne: Auction clearances have crashed, again led by Sydney and Melbourne: Whereas mortgage credit is stillborn: At the same time, listings are exploding upwards to 2012 highs as unsold ‘stale’ stock accumulates across Sydney and Melbourne: The


High-rise apartment pipeline finally passes its peak

By Leith van Onselen A month ago, UBS’s George Theranou reported that there was still a huge pipeline of apartments to be constructed: “[In the June quarter there were] 229,000 dwellings under construction, including 156,000 private multi-dwellings,” UBS says. “There is still a huge supply pipeline yet to come, which was likely purchased ‘off-the-plan’ around


Commodity price index signals terms-of-trade boost

By Leith van Onselen The RBA has released its commodity price index for November, which increased 1.2% in SDR (currency weighted) terms – the key determinant of the terms-of-trade – but fell by 1.2% in Australian dollar terms: Preliminary estimates for November indicate that the index increased by 1.2 per cent (on a monthly average


Links 4 December 2018

Global Macro / Markets / Investing: Amazon’s cloud business is competing with its customers – CNBC Global retirement crisis is main threat to investment industry, warn chiefs – FT Investors Rev Up the Risk in Subprime Auto Deals – WSJ Deutsche Bank chief dismisses takeover speculation – Reuters Federal Reserve prepares to give investors murkier


Auckland’s housing shortage worsens despite booming construction

By Leith van Onselen A week ago, Interest.co.nz published an alarming report showing how the Auckland region’s undersupply of homes has blown-out by nearly 400% in just four years – from 6944 in 2014 to 34,150 in 2018 – on the back of an insane 134,000 increase in population from net overseas migration: On Friday,


Multi-factor productivity slows to five year lows

By Leith van Onselen The ABS has released Estimates of Industry Multifactor Productivity for 2017-18, which reveals that multi-factor productivity (MFP) – the driver of living standards – has slowed to five year lows: Multifactor productivity (MFP) for the Australian market sector rose 0.5 per cent in 2017-18, which was the lowest MFP growth in