By Elliot Clarke, Senior Economist at Westpac Overview: The significant increase in short-term wholesale interest rates and associated volatility has been a key topic of debate in markets throughout 2018. Initially linked to higher borrowing costs in the US, a further spike in only Australian rates as the June quarter drew to a close saw
By Martin North, Principal Analyst at Digital Finance Analytics: One of my clients asked me to share my thoughts on the trajectory of future home loan growth, in the light of the current market dynamics. We run a series on this in our Core Market Model, and it is updated each time we get data
Cross-posted from Independent Australia: PRIME MINISTER MALCOLM TURNBULL has a sustained and unremarkable record of achievement in office, not least of all in the top job. But let’s start with the Great Barrier Reef. First, the Turnbull Government wanted to give away a billion dollars to the Indian-owned mining company, Adani, whose Carmichael coal mine
By Gareth Aird, Senior Economist at CBA: Key Points: Stronger growth in export receipts has taken Australia’s trade balance into the black. But the current account remains in deficit because the net income deficit has widened. We expect Australia’s current account deficit to average 2½% of GDP over the next two years – lower than
Elliot Clarke, CFA Senior Economist Frances Cheung, CFA Head of Macro Strategy, Asia At the beginning of 2018, we outlined a growth view for China that would underwhelm the expectations of both the market and Chinese authorities. Against the official 2018 benchmark of 6.5% growth, we forecast 6.3% for 2018 then 6.1% in 2019. Given
Cross-posted from The Conversation: The final design document for the National Energy Guarantee (NEG), released this week, contains a range of claims about the policy’s ability to drive down both greenhouse emissions and electricity prices. But still there is precious little detail on how exactly these assertions are backed up. Specifically, two claims in the
From Bill Evans, chief economist at Westpac: The Reserve Bank Board meets next week on August 7. It is certain to keep the overnight cash rate unchanged at 1.5%. While the decision will be accompanied by the usual statement from the Governor the more interesting development for the RBA will be the release of the
Cross posted from The Conversation: by Richard Holden Professor of Economics and PLuS Alliance Fellow, UNSW The US economy grew at a startling 4.1% in the second quarter, the first time in four years it has hit the 4% mark. It was not surprising that President Donald Trump was both delighted and vocal about the figures. “Once again,
Cross-posted from Independent Australia: AUSTRALIA IS ON THE CUSP of a major demographic milestone. Our population will reach 25 million by mid-August this year. We were never expected to reach this “milestone” so soon. In 1999, then Minister for Immigration Philip Ruddock said that there was no need for a population policy as the nation was on
By Cameron Kusher, senior research analyst at CoreLogic: The Reserve Bank (RBA) has kept official interest rates sitting at 1.5% ever since August 2016 which represents the longest period of cash rate stability on record. Although official interest rates haven’t moved over this period, investors who have been an increasing source of mortgage demand over recent
By LF Economics The US sociologist and criminologist Edwin Hardin Sutherland is widely considered the founder of white-collar criminology, and was mentored by a protégé of the well-known economist and sociologist Thorstein Veblen. Although there was considerable effort on the part of journalists dedicated to investigating the crimes of the rich and powerful during the
By Dr Vino Veritas Despite an overwhelming majority of Australians opposing mass immigration we continue to engorge our nation’s population like a force-fed goose. Mass immigration is a bi-partisan strategy; both our major parties are in lock-step frog-marching the electorate down the road to Big Australia. It is the centrepiece of Australian economic dogma that
By Peter Cook, cross-posted from Peak Decisions Dr Liz Allen is a demographer at ANU and a regular commentator on population issues for the ABC. The ABC recently announced Dr Allen as one of their ‘top 5 humanities researchers‘, which apparently means she gets to work at the ABC for a few weeks and presumably
By Martin North, Principal Analyst at Digital Finance Analytics: Today we look at the current home price dynamics, as we are still seeing the property sprukiers saying that, first now that prices have fallen, it’s a great buying time and second, that prices will stay high because of the lack of supply. Neither of these
By John Adams, Chief Economist at As Good As Gold Australia Australia has truly entered the uncharted twilight zone. Last week, Chairman of the Australian Prudential Regulation Authority (APRA), Wayne Byres delivered a speech entitled ‘preparing for a rainy day’ . The Chairman, as part of this speech, outlined a range of policy initiatives that APRA
Cross-posted from The Conversation: One of the biggest transformations we have seen in advanced economies is the increased participation of women in the paid workforce. In recent Australian labour force trends, female participation is growing at nine times the rate of men’s. Women are dominating both full and part-time employment growth in Australia. Why do
By Philip Soos, an independent economist and PhD candidate investigating bank crime and mortgage control fraud. ONE OF THE MOST important economic issues in recent times has been low wage growth. Barely a day goes by without the mass media, politicians, unions, economists, industry associations and workers discussing the topic. Industry and the Coalition are
By Gareth Aird, Senior Economist at CBA Key Points: A solid lift in consumer sentiment as well as a pick-up in retail sales, job vacancies and total employee earnings suggests there are some green shoots to the outlook for consumer spending. Falling dwelling prices, however, pose a risk to the outlook but so far Australian
By Gerard Minack from Minack Advisors Australian house prices are gently falling. They are likely to fall further as credit conditions tighten. The big unknown, however, is how the fall in house prices will affect consumer saving. Recession is a risk, but not yet the investment base case. Several factors are now tightening credit conditions
By Gareth Aird, Senior Economist at CBA: Key Points: Employment growth has been much stronger for females than for males over the past year. Strong growth in the services sector, particularly health, is behind the big lift in female employment. The rise in female employment has been accompanied by a lift in participation. There are
By Nathan Lynch, Asia-Pacific bureau chief, financial crime and risk, Thomson Reuters When the HBOS Group collapsed in 2008, UK taxpayers were left to fund a £17 billion bank bail-out. It was a prudential disaster that contributed to the break-up of the FSA. In Australia, meanwhile, the bank’s “appalling lending record” was even worse than
By Nathan Lynch, Asia-Pacific bureau chief, financial crime and risk, Thomson Reuters THE Commonwealth Bank’s A$700 million settlement with AUSTRAC over 53,750 anti-money laundering and counter-terrorism financing (AML/CTF) breaches has set a new benchmark for enforcement action in Australia. Regulatory officials and lawyers said the statement of agreed facts, although light on detail in some
Cross-posted from The Conversation: Does the Coalition’s tax plan favour high earners over those with lower incomes? Depending whom you listen to, the tax cuts, unveiled in last month’s federal budget, lead to either a flatter, more regressive tax system under which low-income earners will be even worse off relative to high earners, or the
Cross-posted from The Glass Pyramid: The debate about how big the population of Australia should be and how quickly we get there would be a lot more civilised if those promoting a Big Australia were more honest about what is required to create a Big Australia and spent less time calling everyone who disagrees with
By Gareth Aird, senior economist at CBA: Key Points: A second estimate of 2018/19 spending plans of around $90bn would imply no change to investment intentions compared to the first estimate. We expect the sixth estimate of 2017/18 spending plans to come in near $118bn. Our forecast is for the actual volume of Q1 capex
By Gareth Aird, senior economist at CBA: Key Points: Australian residential property prices have fallen over the past six months. Additional declines appear likely over the next 1½ years due to a further tightening in lending standards, a continued lift in supply, potentially higher mortgage rates and more rational price expectations from would-be buyers. A
Cross-posted from The Conversation: In the federal budget, Treasurer Scott Morrison promised tax cuts to all working Australians in the form of an offset and changes to tax income thresholds. But our analysis of Treasury data shows that while the government advertised these as payments to low and middle income Australians, most of the benefits
Cross-posted from The Conversation: Treasurer Scott Morrison faces a difficult balancing act in the federal budget. He wants to cut income taxes, deliver new infrastructure spending and still reach a surplus by at least 2019. If he’s serious about maintaining the surplus, here are five ways the Treasurer could boost revenue to make the numbers
From The Conversation: As we move closer to Treasurer Scott Morrison’s third budget, what we do know is this – Australia has a revenue problem. A more global and digital economy; an ageing population with fewer taxpayers and sluggish wage growth make future predictions of revenue even more precarious. There’s never been a better time
Cross-posted from The Conversation: Sole parent families have suffered most from the Coalition government’s recent tax and welfare changes, our analysis shows. We compared the impact of taxes and welfare in the Coalition and Labor budgets on different families over eight years. The impact of Coalition tax and welfare changes on sole parent families can
