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Personal insolvencies edge higher

By Martin North, cross-posted from the Digital Finance Analytics Blog: WA experienced a 20% rise, in personal insolvencies in 2016-17, according to data released today by The Australian Financial Security Authority. On the other hand there were falls in NSW and VIC, highlighting the different economic conditions across the states. The number of personal insolvencies

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Australia’s household debt quagmire

By Martin North, cross-posted from the Digital Finance Analytics Blog: We know that household debt has never been higher in Australia, but I do not think the true impact of this, especially in a rising interest, low income growth environment is truly understood.  We have to look beyond mortgage debt. The latest RBA E2 –

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Vacancy tax good, land tax better

Cross-posted from The Conversation: Vacant housing rates are rising in our major cities. Across Australia on census night, 11.2% of housing was recorded as unoccupied – a total of 1,089,165 dwellings. With housing affordability stress also intensifying, the moment for a push on empty property taxes looks to have arrived. The 2016 Census showed empty

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Property investors lose tax breaks

By Martin North, cross-posted from the Digital Finance Analytics Blog: The Treasury has released its exposure draft for consultation on the plans announced in the budget to disallow travel expense deductions and limit depreciation for plant and equipment used in relation to residential investment property. Closing date for submissions: Thursday, 10 August 2017. As part of

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Household financial confidence trending lower

Cross-posted from Martin North. Digital Finance Analytics has today released the Household Finance Confidence index to June 2017, and the news is not good. Overall the index has dropped below the neutral setting and appears to be trending lower. The current reading is 99.8% compared with 100.6 in May. The fall is being driven by a

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CBA economist calls for per capita policy reform

By Gareth Aird, Senior Economist at CBA: Key Points: Strong population growth continues to boost Australia’s aggregate growth rates which paint a more positive picture on the economy than what most households are experiencing. Per capita measures on the economy, particularly those relating to income, suggest that there hasn’t been a lot of joy for

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Australia’s falling household income

Cross-posted from LFEconomics: An interesting article published in The New Daily by journalist Alan Austin “It’s official. Regular Australians are getting poorer” argues that household income is declining. The measure used is gross disposable household income (GDHI), an aggregate measure of income. This is an overview of the components of GDHI, taken from ABS 5216. Austin states the data

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Why a population of 15 million makes sense for Australia

Cross-posted from The Conversation: Neither of Australia’s two main political parties believes population is an issue worth discussion, and neither currently has a policy about it. The Greens think population is an issue, but can’t come at actually suggesting a target. Even those who acknowledge that numbers are relevant are often quick to say that

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What inequality looks like across Australia

Cross-posted from The Conversation: With affordable houses increasingly out of reach, wage growth slow and household debt high, Australians are certainly feeling poor. But how do they compare to their neighbours? New Census data confirms there’s a lot of variability in income. The Census breaks the country up into 349 geographic regions (named in quote

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Planning pains: Australia hostage to the Growth Machine

Cross-posted from The Conversation: Australia has the highest rate of population growth of all the medium and large OECD countries. And more than three-quarters of the growth is in four cities: Sydney, Melbourne, Brisbane and Perth. But urban planning for this growth is often inadequate. For a start, attempts to reduce infrastructure costs and save

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“Two-phased bankers”: Is Australia’s bank licensing system broken?

By Nathan Lynch, Asia-Pacific bureau chief, financial crime and risk, Thomson Reuters It’s no secret that Australians love to hate their banks. Could a “two-phased” bank licensing regime drive a new era of consumer-driven innovation in the sector? In the past decade only one genuinely new bank has been granted a deposit-taker’s licence in Australia.

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Where’s Australia’s overarching housing policy?

Cross-posted from The Conversation: Does the Australian government have the policy, organisational and conceptual capacity to handle the country’s A$6 trillion housing stock? We ask this question in a newly released research report. The answer is critically important to both household opportunity and prosperity, and to the management of our largest national asset. Australians’ wealth

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Yield curve suggests no recession on horizon

By LF Economics It is well known the yield curve is an accurate predictor of recession and financial instability. When the yield of bonds and bills with shorter-term maturities are larger than that of longer-term maturities (the yield spread inverts), it is a clear indicator economic growth will decline in the near future. The general

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Exclusive: Steve Keen on the secret source of eternal Australian growth

Exclusively from Professor Steve Keen: How to delay a recession Much was made of the fact that Australia recently replaced The Netherlands as the world record holder for the longest period without a recession (using the colloquial definition of two consecutive quarters of negative growth). The Netherlands went just under 26 years (103 quarters between

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Australia has stalled on car efficiency

Cross-posted from The Conversation: Last year, Australia’s new cars were just 1.1% less polluting than the year before, according to a report released this week by the National Transport Commission. This is the smallest improvement on record, and largely due to our growing preference for SUVs and utes. In addition, some locally manufactured cars actually

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Special Report: Gerard Minack on when debt-stuffed Aussies will puke positions

Exclusively from Gerard Minack. A housing boom prevented the 2014-15 commodity bust pushing Australia into recession.  Now, however, pressure on consumer incomes is increasing the risk that even a moderate downturn in housing could cause a recession in 2018. Australia coped well with the mining boom busting in 2014-15.  Even so, growth has run below

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Chinese influence compromises integrity of our politics

Cross-posted from The Conversation: This week’s ABC Four Corners/Fairfax expose of Chinese activities in Australia is alarming – not just for its revelations about a multi-fronted pattern of influence-seeking, but also for what it says about our political elite. Are its members – on both sides of politics – naive, stupid, or just greedy for

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Mortgage stress accelerates across Australia

By Martin North, cross-posted from the Digital Finance Analytics Blog: Digital Finance Analytics has released mortgage stress and default modelling for Australian mortgage borrowers, to end May 2017.  Across the nation, more than 794,000 households are now in mortgage stress (last month 767,000) with 30,000 of these in severe stress. This equates to 24.8% of

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How the NBN dream fell short

Cross-posted from The Conversation: Eight years into the Australian government’s National Broadband Network (NBN) project, the nation has an average internet speed – 50th in the global rankings – that lags well behind many advanced economy countries. Ongoing secrecy around the NBN, a project that’s likely to cost more than A$50 billion, makes it impossible

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Beware infrastructure financial alchemy

Cross-posted from The Conversation: No sooner is one complicated financing idea from the government batted down, than another one pops up. We can expect more of them, now that the federal budget has established a new Infrastructure and Project Financing Agency. We’ll get “innovative” financing options for everything from the massive Inland Rail project, down

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Alarm bells are ringing – finally – at APRA

By Nathan Lynch, Asia-Pacific bureau chief, financial crime and risk, Thomson Reuters It was only the devoted, the desperate or the sleep deprived who remained in the chamber last night in Canberra when Wayne Byres, APRA chairman, buckled under a sustained line of questioning. For almost two-and-a-half hours the Senate Economics Legislation Committee had been

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What driving Australia’s retail carnage?

By Gareth Aird, Senior Economist at CBA Key Points: Retail trade growth is soft primarily because demand for discretionary goods has slowed on weak household income growth. The slowdown in sales growth has been broad-based across Australia’s states and retail-related employment has declined. The fall in retail trade volumes growth suggests that disinflation in the

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How to make the retirement system sustainable

Cross-posted from The Conversation: Our current retirement system is simply not sustainable, as our population ages and life expectancy increases. Australia incentivises people to structure their finances so they are asset rich and cash poor. They are then able to claim the pension and can leave an inheritance, which is in part paid for by