Unconventional Economist


Universities’ chief lobbyist defends international student scam

The CEO of the International Education Association of Australia, Phil Honeywood, ran a infomercial yesterday on the purported enormous benefits accruing to Australia from our universities’ enormous dependence on international students: Last week, in Nine Entertainment newspapers, ­respected political editor Chris Uhlmann decided to weigh into the media tsunami that had been building up about


Links 5 September 2019

Global Macro / Markets / Investing: Rich people are hoarding cash, and wealth managers are getting frustrated – FT Pension Funds Are Going To Be Destroyed In The Next Recession – Cassandra Capital U.S. Stock Futures Point Sharply Lower – Stock Market News SoftBank is more than $600 million underwater on its Uber investment as


Josh Frydenberg spins Australia’s GDP shocker

Westpac senior economist, Andrew Hanlan, has responded to today’s GDP shocker with the below sombre (but accurate) analysis: The economy lost considerable momentum from mid-2018, led by the turning down of the housing sector and by the consumer. These are challenging times. The Australian economy is navigating a period of cyclical weakness, centred on construction


Morrison Government kowtows to university rent-seekers

Despite the massive ramp-up in domestic student university enrolments over the past decade: Education Minister, Dan Teehan, has directed universities to grow their student numbers: Universities have been told by federal Education Minister Dan Tehan to increase their student numbers to cope with the coming demographic bulge in school-leavers and says he will push his


ACTU wokester fiddles while migrant wage theft burns

ACTU secretary Sally McManus has outlined a range of proposed workplace reform measures in a four-page letter to Industrial Relations Minister Christian Porter. Amongst other things, McManus has called for action to combat wage theft, an overhaul of the annual minimum wage review, the winding back of penalty rate cuts and allowing unions to undertake


Melbourne’s suburban rail loop the next monster white elephant

More details have emerged about the Victorian Government’s signature $50 billion, 90 kilometre suburban rail loop, which is scheduled to start construction in 2022: Premier Daniel Andrews confirmed the preferred route for the much anticipated 90km rail loop would run from Cheltenham to Werribee and connect every metropolitan train line in-between. New underground stations will


Property listings begin to lift

SQM Research has released its stock on market report for August, which posted a 2.9% rise in listings over the month but a 2.1% decrease in listings over the year: Listings rose across all markets over August, reflecting in part seasonality, whereas over the year the decline in for sale listings was driven overwhelmingly by


Businesses cry “skills shortage” as graduates sit idle

Another bogus report has emerged claiming that 60% of NSW businesses are experiencing “skills shortages”: THE NSW Business Chamber says its latest workforce skills survey has revealed a substantial increase in the number of jobs being left unfilled because of a lack of applicants skilled enough to undertake the work. While the chamber says some


SQM: Melbourne housing still 27% overvalued

SQM Research’s managing director, Louis Christopher, released a report claiming that Sydney’s housing market remained 21% overvalued when measured against GDP. This week Christopher has returned with a similar report on Melbourne, which claims property values remain 27% overvalued: Last week we posted our preferred measurements of housing market valuation – House prices to Nominal


Gulf between profits and wages widens to grand canyon

Monday’s June quarter Business Indicators release from the ABS, which feeds into today’s national accounts, showed that wages & salaries remain wildly divergent from business profits. As shown in the next chart, real business gross operating profits continued to boom in the year to June: Whereas, there remained a huge gulf between wages & salaries:


The ‘Golden Visa’ migration rort must be shut down

Andrew Martin – managing director of asset management at Moelis Australia, which helps wealthy Chinese to obtain an Australian passport through the Significant Investor Visa (SIV) program – has defended the SIV scheme, sighting its “massive success” amid calls for it to be abolished: Immigration Minister David Coleman recently flagged a review of the business


Brace for the Chinese international student bust

Chinese international students are by far the biggest contributor to Australia’s education export industry. As at June 2019, there were 204,000 Chinese students enrolled in Australian educational institutions, comprising 29% of total international student enrolments. The number of Chinese international students studying in Australia is also roughly double second placed India (104,000) and quadruple Nepal


Links 4 September 2019

Global Macro / Markets / Investing: UBS chairman: Climate change occurring at ‘astonishing’ speed – Yahoo Wall Street’s Latest Love Affair With Risky Repackaged Debt – NY Times These Are the Major Foreign Holders of U.S. Treasury Securities – Learn Bonds Recession Signals Flashed by The Bond Market May Have Been Exaggerated – Stock Market


A little property doom amid the boom

Amid the media glee surrounding Australia’s rebounding property market, spare a thought for Townsville, whose market crashed in 2008 and has yet to recover. From The ABC: The saying “as safe as houses” is a lie, according to Townsville resident Heather White, who is about to lose almost $100,000 on the resale of her home


Immigration ponzi sends NSW Government broke

The Committee for Sydney has called on the NSW Government to provide more transport networks. Committee CEO, Gabriel Metcalf, believes Sydney has grown to the point that it needs a mass transport system like London’s, but that the Government does not have the money required to fund more infrastructure projects. It suggests the Government should


Australia’s terms-of-trade enjoys one last hurrah

Within today’s dump of balance of payments data that feeds into tomorrow’s June quarter national accounts release was the important news that Australia’s terms-of-trade rose another 1.5% in seasonally adjusted terms and by 2.2% in trends terms: Over the year, the terms-of-trade rose by 8.9% in seasonally adjusted terms and by 8.8% in trend terms.


Australian retail sales take a dive

The Australian Bureau of Statistics (ABS) has released retail sales figures for the month of July, which recorded a 0.1% fall in retail sales over the month in seasonally-adjusted terms, with annual sales growth slowing to just 2.4%: In trend terms, annual retail sales growth also slowed to 2.4%. The below chart maps out nominal


SMH Population Summit hijacked by ‘Big Australia’ mafia

On 23 September, The SMH will hold a Population Summit to discuss “where key decision-makers and thought-leaders in government, transport, property, planning, banking, finance, architecture, economics and the law will come together to discuss how we successfully plan for a growing Sydney”. The topics for discussion are: Towards a coordinated population policy Congestion costs and


Apartments shunned as flamable cladding, faults proliferate

The floor has sunken under Melbourne’s off-the-plan apartment market, with buyer concerns about flammable cladding and building faults leading many to drop out of purchases and shun the sector. From Domain: A recent Four Corners episode highlighted build quality, citing academic research that found 74 per cent of Victorian apartment buildings examined had at least


Aussie workers worse off now than GFC

The June quarter Business Indicators report was released by the ABS, which includes aggregate wages & salaries data, namely “gross earnings before taxation and other deductions” and “includes provisions for employee entitlements”. In order to get a better sense of how Australian workers are faring, I have deflated this aggregate nominal wages & salaries data


Commodity price index takes a dive

The RBA has released its commodity price index for August, which dived by 6.5% in SDR (currency weighted) terms – the key determinant of the terms-of-trade – and by 4.2% in Australian dollar terms: Preliminary estimates for August indicate that the index decreased by 6.5 per cent (on a monthly average basis) in SDR terms,


How can house prices rebound while mortgage growth crashes?

Friday’s mortgage credit data from the Reserve Bank of Australia (RBA) revealed record low mortgage growth on both a quarterly and annual basis (see below charts). Following this post, several readers questioned how house prices can reportedly be rising when mortgage growth is crashing. Below is a sample of these comments: AngryMan How can house


International students ripped off by Australian universities

It is fair to say that Australian universities’ international student boom could not have been achieved without dramatically lowering English-language standards, as well as restructuring assessments into group assignments to ensure non-English speaking background (NESB) international students pass. As shown in the next chart, the three largest and fastest growing sources for international student enrolments


Australia’s visa system overrun by Malaysian scammers

Two month ago, former High Court justice, Ian Callinan, warned that Australia’s Administrative Appeals Tribunal (AAT) was being overloaded with bogus asylum seeker applications from migrants attempting to scam Australia’s visa system: [Former High Court justice Ian Callinan] said “almost everyone” with migration law experience had told him there were applic­ants and representatives who “game


Links 3 September 2019

Global Macro / Markets / Investing: America-first trade policy is crushing the global economy – CNN The Big, Dangerous Bubble in Corporate Debt – NY Times What Lower GDP Means For You And Me? – Yuv News The Real “Helicopter Money” – Zero Hedge Americas: Trump is raising your taxes today – Yahoo Parts of


Canberra’s apartment boom “plagued with defects”

The ABS’ latest data shows that the ACT experienced a monumental boom in high-rise apartment approvals before crashing 48%: And developer Geocon has driven the high-rise boom across Canberra: While many developers across the country, facing lacklustre demand for apartments during the housing downturn, have scaled back their construction pipeline, Geocon is continuing full steam


Labor’s superannuation lies fail evidence test

Labor’s Shadow Assistant Treasurer and Shadow Minister for Financial Services, Stephen Jones, has launched another attack against the “dirty dozen” group of Coalition MPs seeking to freeze the superannuation guarantee (compulsory superannuation) at 9.5%: Jones said the “primary target” of the ‘dirty dozen’ – referring to the 1967 movie – MPs is the legislated increase