Leith van Onselen

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CFMEU wage cuts are harbinger for economy

By Leith van Onselen The AFR is reporting today that Western Australia’s construction workers are facing a significant correction to wages and conditions as the once-in-a-century mining investment boom unwinds, with a new enterprise bargaining agreement from the CFMEU agreeing to reduce labour costs for employers by up to 20%: Wages and conditions rocketed in

7

Raise taxes to balance budget

By Leith van Onselen The Guardian’s Greg Jericho has written a well-reasoned article arguing that the Federal Government should seek to raise taxes in order to balance the Budget: Since the pre-election economic and fiscal outlook (Pefo) was issued, the expected level of government spending in the future has grown, while the expected level of

69

Negative gearing is being “looked at”

By Leith van Onselen SQM Research released its weekly newsletter last night, which provided more tentative confirmation that the Government is considering reforming Australia’s negative gearing rules: There was an SBS report in recent days suggested the Federal government is “looking at” this tax benefit. Macrobusiness were the first to republish it, and now so

27

Links 9 April 2014

Global Macro / Markets: Bitcoin is a bad currency. Here’s why it could change the world anyway – VOX The short guide to Capital in the 21st Century – VOX North America: Austin or Bust: America’s Biggest Cities Lose People to the Urban B-List – Bloomberg Biggest US banks forced to hold $68bn in extra

21

The rise of generation rentier

Cross-posted from the UK Conversation: In what he described as the most sweeping changes to pensions and savings since 1921, the United Kingdom’s George Osborne radically changed the rules which govern how pensioners get hold of their retirement savings. He may have just lit a fuse underneath an already heated housing market too. His decision

19

Coalition aims to slash shipping freight costs

By Leith van Onselen The Australian is today reporting that the Abbott Government is considering opening up domestic shipping routes to international competition in a bid to lower freight costs: Some of the three options canvassed in the paper would effectively scrap the cabotage rules that preserve freight routes from one Australian port to another

4

Jobs outlook improves amid rising unemployment

By Leith van Onselen Westpac has released its latest jobs index, which points to an improving labour market, although unemployment is still expected to increase to 6.5% as employment growth fails to match population growth: There are many business surveys out there and most have questions, in some shape or form, that are applicable to

3

GST lessons from across the pond

Cross-posted from The Conversation When long-time Kiwi expat John Clarke was asked why he left New Zealand, he said: “Because it was there.” Clarke at least knew what being “there” meant, in contrast to most of his new compatriots, whose interest in and knowledge of their ANZAC cobbers (or “bros”, as we would say) extends

17

Abbott pulls back on military pork

By Leith van Onselen Back in February, I noted how the Coalition had ear-marked tens-of-billions of taxpayer dollars to local defence manufacturing, including a $10 billion to $15 billion-program for 1,000 locally produced armoured vehicles, as well as locally designed and built submarines for around $40 billion. Then last month, I reported how Defence Minister, David Johnston, was

44

Chris Joye on why house prices are set for a fall

By Christopher Joye, cross-posted with permission from The AFR: I welcome perma-bear Steve Keen’s commentary on my recent analysis of the asset-class, and his apparent comfort with my conclusions. It is, however, worthwhile clearing-up some misunderstandings as to how I arrived at them. It is doubtless frustrating for folks like Dr Keen, who claimed that

30

Bloxo calls for bigger population ponzi

By Leith van Onselen HSBC Australia’s chief economist, Paul Bloxham (“Bloxo”), has produced an interesting note today outlining Australia’s demographic headwinds, and arguing for an expansion of the immigration intake to counter ageing’s impact on the economy: As the ‘baby boomers’ are starting to retire, Australia faces similar demographic challenges to other countries An aging

30

Abbott gets his Japanese gong

By Leith van Onselen The mainstream media is awash with glowing reports about the “free trade agreement” FTA with Japan, which was concluded yesterday. According to the Department of Foreign Affairs and Trade, the Japan-Australia Economic Partnership Agreement (JAEPA) will “deliver a significant boost to Australian farmers and other agricultural producers, resource exporters, service providers

67

Australian property through foreign eyes

By Catherine Cashmore, a market analyst, journalist, and policy thinker, with extensive industry experience in all aspects relating to property. Follow Catherine on Twitter or via her Blog. I had the good fortune to meet two investors from Dallas Texas last week – visiting in part, to survey the Australian real estate terrain and in

15

Links 8 April 2014

Global Macro / Markets: Falling prices put pressure on high-cost copper miners – Financial Times The impact of bank capital requirements during an upswing – VOX The future for real interest rates – Financial Times IMF sees role for monetary policy in asset price boom – The AFR Central banks need more tricks: IMF –

3

Petrol prices hit 4 month low

From CommSec: According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 5.0 cents per litre to 152.3 cents a litre in the week to April 6. The wholesale petrol price hit a 4-month low… Today, the national average wholesale (terminal gate) unleaded petrol price stands at 141.6 c/l

18

If only Bracks practiced what he now preaches

By Leith van Onselen Former Victorian Premier, Steve Bracks, has written an Op Ed in The Age today arguing for greater investment in well-targeted infrastructure, which offers the prospect of seeing Australia past the mining investment cliff, whilst also raising living standards: Infrastructure is the new black in political circles… Done right, a burst of

32

Global economy sidelines the young

Cross-posted from The Conversation: Fears for the so-called lost generation look more valid by the day. Britain’s chancellor might have the confidence to target full employment, but the problem of getting young people into work is a genuine challenge and one which we cannot afford to leave to market forces alone. The latest numbers out

13

Coalition to conclude shocker FTA with Japan

By Leith van Onselen It seems that the Abbott Government is willing to sign so-called “free trade agreements” (FTAs) at any cost, with reports emerging that it will soon announce that a sub-standard deal has been reached with Japan that provides only minimal access to Japanese agricultural markets: TOKYO — The leaders of Japan and

12

Immigration into Australia rises

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released visitor arrivals and departures data for the month of February, which registered a rebound in net long-term and permanent migration into Australia. In the year to February 2014, there were 774,710 permanent and long-term arrivals into Australia – down from the record 792,500

62

Is housing the great investment delusion?

By Leith van Onselen Capital Markets’ Roger Bootle has published an interesting article in the UK Telegraph asking whether housing is “the greatest investment delusion known to man”: The worst aspect of all this [escalating house prices] is that although particular individuals become better off as a result, people overall do not. The housing market

7

Business slams Abbott’s FTAs

From The Australian today comes a stunning rebuke of Australia’s free trade agreements (FTAs) by the Australian Chamber of Commerce and Industry (ACCI), which claims that many FTAs are so poorly drafted and complex that they are next to useless in a commercial sense: [ACCI] said that some FTAs were so poorly drafted that most

8

Auction clearances fall again

By Leith van Onselen Auction clearance rates fell again over the weekend, driven down by falls in both Sydney and Melbourne. According to RP Data, the weighted average auction clearance rate dipped to 67.3% from 68.8% the week before, driven by a 2.5% fall in Melbourne (last weekend 65.9%) and a 4.1% decline in Sydney

13

Links 7 April 2014

Global Macro / Markets: Automation Alone Isn’t Killing Jobs – New York Times The Too Big To Fail Subsidy Debate Is Over – Baseline Scenario High Frequency Trading: Threat or Menace? – HBR Transmission of Fed tapering news to emerging markets – VOX Bitcoin’s deflation problem – The Economist North America: Soaring Housing Costs Driving

3

APRA falls short on independence

By Martin North, cross-posted from the Digital Finance Analytics Blog One interesting comment in APRA’s submission to the Financial Services Inquiry is found right in the summary. And its a biggy. APRA’s independence, a critical requirement as envisaged by Wallis, has been eroded. “APRA has substantial independence from Government in most respects but, over time,

70

GST: the conversation we have to have

Cross-posted from The Conversation With eight months left on his contract, Treasury Secretary Martin Parkinson decided to jump into the GST debate on Wednesday night. In a speech to the Sydney Institute, Parkinson declared the federal budget could not return to surplus unless the tax mix became biased towards consumption taxes. That’s code for “raise

8

Dwelling construction about to break-out

The Business Day Markets Blog has posted analysis from RBS arguing that dwelling construction is about to pick-up sharply: We have been constructive on this sector and its increasing contribution to activity in the year ahead for some time. The most recent partials – lending, approvals – point to increasing momentum. While there are numerous