Leith van Onselen


Budget pain will not be healed by a debt levy

By Leith van Onselen Following Treasury Secretary, Martin Parkinson’s, defining speech at the Sydney Institute earlier this month detailing the stiff headwinds facing the Federal Budget, which is facing decades of heavy deficits without major reforms to taxes and expenditure, as well as rising productivity, the Australian Treasury has reportedly warned that the nation is facing


RP Data weekend property market update

Click to view RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 27 April 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


Links 28 April 2014

Global Macro / Markets: Strip private banks of their power to create money – Financial Times Martin Wolf proposes the death of banking – pieria.co.uk Why The Average Investor’s Investment Return Is So Low – Forbes Low Treasury yields frustrate bond bears – Financial Times North America: Houston notches more housing starts than California –


Don’t shed a tear for the taxi cartel

By Leith van Onselen Business Day’s Michael Pascoe has written a cracking article today (worth reading in full) questioning whether the New South Wales Government will have the cojones to side with the “consumer, competition, innovation and improved productivity”, or will side with the rent-seeking taxi industry, and seek to shut-down Uber’s ride sharing operation:


WA shows leadership on tax reform

By David Collyer, cross-posted from Prosper WA Treasurer Mike Nathan has heard the call from REIWA President David Airey to end Stamp Duty and fund this by removing exemptions from State Land Tax, according to today’s West Australian newspaper. I warmly welcomed Mr Airey’s comments yesterday because they rose above the traditional selfish tax-shifting nonsense


Repairing infrastructure can fix the economy

By Leith van Onselen Larry Summers, former secretary of the Treasury for President Clinton and the director of the National Economic Council for President Obama, has written a great article arguing for a substantial expansion of public infrastructure investment across the US in a bid to boost the economy: The American economy is not performing


Taxi rent seekers hit back at Uber competition

By Leith van Onselen I wrote last week how Uber was taking the fight to Australia’s taxi cartel by expanding its offering in Australia, introducing a range of budget vehicles that will undercut traditional taxi fares, and how consumers stood to benefit from more reliable, clean and affordable transport options. As expected, the rent seeking


Hockey palms super reform to second term

By Leith van Onselen Being a Budget commentator is never dull. After expending significant effort this morning slamming the Government for failing to include Australia’s egregious superannuation concessions in its “war on entitlements”, Treasurer Joe Hockey has now flagged changes to superannuation and an increase in the preservation age, which will be taken to the


RBNZ hikes, gets hawkish

By Leith van Onselen The Reserve Bank of New Zealand (RBNZ) has once again hiked the official cash rate (OCR) by 0.25% to 3.00% on the back of growing strength in the New Zealand economy. From the Statement: New Zealand’s economic expansion has considerable momentum, with GDP estimated to have grown by 3.5 percent in


Holden, Ford subsidies to shift to tanks?

By Leith van Onselen The Abbott Government continues to take contradictory positions on industry support that risks undermining its legitimacy. After talking a tough on assistance to the car industry, and arguably hastening its demise, the Coalition has ear-marked tens-of-billions of taxpayer dollars to local defence manufacturing, including a $10 billion program for 700 locally produced


Links 24 April 2014

Global Macro / Markets: Who’s in the Bubble Basket? – sl-advisors.com North America: US housing sector slumps in March – The AFR New-Home Sales in U.S. Unexpectedly Slump to Eight-Month Low – Bloomberg For some U.S. states, budget woes are on the horizon – Fortune An unemployed aid program could help millions. Why aren’t more


Real Aussie house prices 1.8% below peak

By Leith van Onselen RP Data’s Cameron Kusher has produced an interesting post this afternoon on Australian housing values in the wake of today’s March quarter CPI release from the ABS: Over the 12 months to March 2014, combined capital city home values have increased by 10.6% however, when you adjust for inflation the rise


Roy Morgan consumer confidence bounces

By Leith van Onselen The ANZ-Roy Morgan Research (RMR) consumer confidence index has been released for the week ended 20 April, which registered its first rise in four weeks, jumping 3.4 points (+3.0%) to be above its long-term average (113.0) but well below the highs reached after last year’s Federal Election: The improvement in the


REIWA: replace stamp duty with land tax

By David Collyer, cross-posted from Prosper Yesterday REIWA president David Airey issued a call in the West Australian newspaper for the WA government to abandon Stamp Duty and fund this by removing the many wheezes from the tattered State Land Tax. Hooray! Airey says: “It’s time to recognise that stamp duty on property as a


Rents continue to decouple from population

By Leith van Onselen The March quarter consumer price index (CPI) data, released today by the Australian Bureau of Statistics (ABS), revealed a continued moderation of rental growth at the national capital city level. According to the ABS, rents nationally grew by 0.7% over the March quarter of 2013 – up slightly on the 0.6%


Australian CPI in detail

By Leith van Onselen As noted briefly by Houses & Holes, the Australian Bureau of Statistics (ABS) has released the Consumer Price Index (CPI) data for the March quarter 0f 2014, which registered a modest quarterly increase in prices, with the result also coming in well below economists’ expectations. According to the ABS, headline CPI


RBNZ slams the population ponzi

By Leith van Onselen The Reserve Bank of New Zealand’s (RBNZ) Michael Reddell has written an interesting paper questioning the merits of New Zealand’s high immigration program, which appears to have crowded-out (through higher interest rates and a high average real exchange rate) other productive investment, lowering living standards in the process: Over the last


John Hewson: End the superannuation rort

By Leith van Onselen Former federal Liberal Party Leader, John Hewson, has written a well-argued piece in The AFR today, joining the chorus to wind-back superannuation concessions granted to high income earners: It’s worth reconsidering concessions granted for super: they’re as costly as the age pension ($44.8 billion compared to $44.9 billion in age pension), but


It’s time to end pharmacy entitlements

By Leith van Onselen Following Janet Albrechtsen’s cracking article last week attacking Australia’s pharmacy racket, The AFR’s Tony Boyd has written an detailed article today outlining the rorts taking place across pharmacies, as well as some of the pressures for change: There was a time when joining Australia’s $12 billion retail pharmacy industry was a passport


Standards of living begin their fall

By Leith van Onselen The Australian has published new research by the Canberra University’s National Institute for Social and Economic Modelling (NISEM), which sows that Australian wages rose by only 0.1% over the December quarter versus a 0.7% rise in living costs, meaning that real wages and living standards are going backwards. And NISEM sees


Australia’s supply-side squeeze continues

By Leith van Onselen RP Data’s Cameron Kusher has written an interesting analysis of recent supply-side trends in the Australian housing market, which points to ongoing constipation: Across individual capital cities, the 2011 Census reported that on average; Sydney, Brisbane and Darwin had 2.7 persons per household, Melbourne, Perth and the Australian Capital Territory had


Links 23 April 2014

North America: House Prices Are Important: A Simple Explanation for Why the U.S. Middle Class Has Fared Poorly – National Review Online U.S. Emission Rules Would Far Outweigh Impact of Keystone Pipeline – New York Times How the Internet Is Taking Away America’s Religion – Technology Review 50 Years Into the War on Poverty, Hardship


ASX at the close

By Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets It has been a good return to trade for Asia with markets riding positive sentiment from US earnings and economic data. In Australia it has been all about stocks hitting fresh highs with the likes of Woolworths, Westpac and ANZ trading at record


Why are we still working so hard?

Cross-posted from The Conversation In a world of iPhones and drones, people are right to wonder why they are still working so hard. The past century saw huge technological advances and yet there hasn’t been a corresponding increase in leisure time: people are working as hard as ever. The Easter break lasts for four days;


Aussie sub-prime mortgages are back

By Leith van Onselen In a worrying development, an issuer of Australian sub-prime mortgages, Pepper Home Loans, has reportedly completed the largest issue of non-conforming (sub-prime) residential mortgage-backed securities (RMBS) since the Global Financial Crisis (GFC). From The AFR: Global yield-seeking investors showed their faith in Australian mortgages as non-bank lender Pepper raised $500 million


Mortgage war intensifies

By Leith van Onselen The Australian Finance Group (AFG) has released its Competition Index for March 2013, which revealed that major lenders continue to dominate mortgage lending, despite some recent market share gains by non-major lenders (see below tables). According to AFG:  “Competition has been partly restored in the past two years, with non-major lenders