Leith van Onselen


NBN cost-benefit analysis signals end of an era

Cross-posted from The Conversation: The long-awaited cost-benefit analysis of the National Broadband Network suggests the days of politicians shooting from the hip with taxpayer dollars are numbered. As Labor’s NBN unfolds amid reviews and revelations, it’s apparent the NBN was a political move based on romantic notions of policy-making ending in Labor’s electoral defeat in


Shock horror! Super funds are gouging members

By Leith van Onselen Australian Super chief executive, Ian Silk, has bemoaned that the financial services industry is using the compulsory superannuation system to enrich themselves, rather than look after their members. From The AFR: As pressure grows on super funds to cut fees, Mr Silk on Tuesday warned there was a risk that savings


Mining unwind drags construction activity down

By Leith van Onselen The ABS has released data on the value of construction work done for the June quarter of 2014, which registered a seasonally-adjusted 1.2% fall in total construction activity over the quarter and a 0.6% decline over the year. The result disappointed analysts’ expectations for a 0.5% fall over the quarter. The


Labor’s NBN gold-plated

By Leith van Onselen The Coalition’s 196-page cost benefit review into the National Broadband Network (NBN) has been released and finds that Labor’s plan for fibre-to-the-premises (FTTP) broadband is markedly ($16 billion) inferior to the Coalition’s multi-technology mix (MTM) solution. The study compares four main scenarios: leaving things as they are with no further progress; an unsubsidised


Car industry’s job losses will be worse than forecast (members)

By Leith van Onselen The Productivity Commission has released a new report on the closure of the car industry. It concludes: Australia’s automotive manufacturing industry is undergoing significant change. Motor vehicle producers in Australia have not been able to survive in the highly competitive global and domestic automotive markets — Ford, Holden and Toyota have


Links 27 August 2014 (members)

Global Macro / Markets / Investing: 2008 Meltdown Was Worse Than Great Depression, Bernanke Says – Wall Street Journal OECD GDP growth up 0.4% in Q2 – OECD Never say never in the stock market – Brian Lund Successful investing is more about avoiding mistakes than anything else – ThinkAdvisor Pimco is going extend its active


Come along to the 123rd Henry George dinner

If you live in Melbourne, please consider attending the 123rd Henry George Commemorative dinner, hosted by Prosper Australia, on Wednesday 3 September at the Royal Society of Victoria, 8 Latrobe St, Melbourne. This year’s guest speaker is Professor John Freebairn from Melbourne University, one of Australia’s most pre-eminent economists (and my first microeconomics lecturer). With


Trade deficit to subtract 0.7% from Q2 GDP (members)

From Westpac this afternoon comes analysis of today’s preliminary June quarter estimate of Australia’s international trade balance from the ABS, with Westpac estimating a 0.7% drag on GDP growth over the quarter – a sharp turnaround from the 1.4% positive contribution made in the March quarter: Australia’s international trade balance was a deficit of $4.69bn


Coalition metadata targets innocent

By Leith van Onselen The Australian has revealed today that the Attorney General’s Department is seeking a wide array of powers in its bid to require telecommunications companies to store detailed information about the calls and internet use of its customers for two years: Confidential consultations with the companies — including Telstra, Optus and iiNet


Interest-only mortgages hit record

  By Martin North, cross-posted from the Digital Finance Analytics Blog: APRA just released their quarterly data on housing exposures of the Authorised Deposit-taking Institutions in Australia for the June 2014 quarter. As at 30 June 2014, the total of residential term loans to households held by all ADIs was $1.23 trillion. This is an


Why won’t the rationalists stand-up to privatisation?

By Leith van Onselen The Australia Institure’s Richard Denniss has produced a ripper article today in The AFR questioning why the economic rationalists of the 1980s and 1990s have gone silent on the privatisation of natural monopolies, which threaten to worsen outcomes for Australian consumers: Who could have foreseen however, that by 2014, their desire


Australia’s budding youth jobs crisis

By Leith van Onselen The Age has posted a sobering report today on the emerging youth jobs problem, which is fast approaching crisis levels: Youth unemployment has leapt to a 15-year high in Victoria… An analysis of youth unemployment data reveals that the situation has deteriorated in 12 of the state’s 17 regions in the


ANZ-RM consumer confidence rises

By Leith van Onselen The ANZ-Roy Morgan Research (RMR) consumer confidence index has risen for the second consecutive week, increasing by 1.0 point (0.9%) to 113.5, taking it just above its long-run average reading of 113.2 (see next chart). This week’s rise was driven entirely by an 11.1% bounce in household perceptions about their ‘financial


You want regressive, try bracket creep

By Leith van Onselen The Australian’s David Uren has produced some good analysis today of the growing tax burden likely to fall on lower-income Australians as bracket creep, brought about through inflation, pushes them into higher tax brackets and raises their average tax rate: ALLOWING inflation to push more personal income into higher tax brackets


Links 26 August 2014 (members)

Global Macro / Markets / Investing: Jackson Hole Theme: Labor Markets Can’t Take Higher Rates – Bloomberg The small cap cycle may be over – Crossing Wall Street Why value investors have to be both steadfast and realistic – The Brooklyn Investor Why your trading should be boring – Adam Grimes What Stage of the


WA credit rating downgraded

By Leith van Onselen From Moody’s today comes news that Western Australia’s credit rating has been downgraded to to Aa1 from Aaa and the outlook changed to stable from negative (my emphasis): The ratings downgrade reflects the state’s ongoing deficit position, the deterioration in its debt metrics, and a growing risk that this trend may


South Australia’s Uber ban doesn’t hold water

By Leith van Onselen The South Australian Government has joined the other mainland states in banning Uber’s ridesharing service on public safety grounds. From The Canberra Times: Treasurer Tom Koutsantonis says the service could put vulnerable passengers at risk. “People get into taxis and hire cars late at night, they may have had a bit


Chris Pyne fires another shot at Australia’s youth

By Leith van Onselen Education Minister, Christopher Pyne, has called on Australia’s university students to “get some perspective” on the Coalition’s planned changes to university fees and funding, claiming that the Government is “not exactly asking for their left kidney”. From The Guardian: On Thursday Pyne will introduce legislation to implement his plan to deregulate


Public servant redundancy costs hit $1 billion

By Leith van Onselen The Canberra Times is running an article today claiming that the taxpayer bill for federal public sector redundancies is likely to top $1 billion even before entitlements such as leave are paid: Analysis of 760 retrenchments across a number of Commonwealth employers since the federal election show the average redundant public


Aussie John: First home buyers are “stuffed” (members)

By Leith van Onselen Aussie Home Loans founder, John Symonds, has declared would-be first time buyers are “stuffed” due to onerous deposit requirements that are preventing them from being able to take on jumbo-sized mortgages. From News.com.au: “Certainly the great Aussie dream is becoming a distant memory, which is unfortunate because it goes right to the


New Zealand pumps first home buyers

By Leith van Onselen You can tell it’s an election year in New Zealand with the incumbent National Government announcing over the weekend that it would double first home buyer (FHB) subsidies. From Interest.co.nz: Prime Minister John Key launched National’s campaign on Sunday with a plan to double first home buyer subsidies at a extra


RP Data weekend property market update (members)

Click to view RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 24 August 2014. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity; and New


Auction clearances fall

By Leith van Onselen The national auction clearance rate fell over the weekend on the back of falls in Sydney and Melbourne. According to RP Data, the national weighted average preliminary auction clearance rate was 66.7% over the weekend, which was down 1.7% from the 68.4% preliminary clearance rate reported last weekend. Sydney’s clearance rate


How the mining boom juiced the economy (members)

By Leith van Onselen The Reserve Bank of Australia (RBA) has released a new paper attempting to estimate the impact of the mining boom on Australia’s economy. The broad impacts are best summarised in the below chart: The mining boom is estimated to raise household income through several different channels… As of 2013, the population


Links 25 August 2014 (members)

Global Macro / Markets / Investing: Twelve charts this week on the global economy – Quartz Central bankers should draw a line on the past – Financial Times The role of corporate saving in global rebalancing – VOX Nobel gurus fear globalisation is going horribly wrong (technical) – The Telegraph Why you can’t be too


PBO warns again on Budget

By Leith van Onselen The Parliamentary Budget Office (PBO) has issued another warning that that government spending would balloon to nearly $700 billion over the coming decade without reform. From The Australian: Warning of future economic shocks, the independent agency forecasts a rise in government spending from $384 billion to $682bn over the coming decade