Cross-posted from The Conversation Real home prices across Australia have climbed 150% since 2000, while real wages have climbed by less than a third. Sydney and Melbourne rank among the most expensive cities in the world. Australia-wide, home ownership levels have fallen from 70% to 65% in the last 20 years and home equity levels have fallen from 80%
By Jesse Hermans, Policy Director at Prosper Australia, an NGO focussed on tax reform. The Thodey Review’s draft report is right to place land tax at the centre of its vision for state tax reform. Replacing stamp duty with what the Review called “the states’ best tax lever” has the potential, if enacted sensibly, to
By Stephen Saunders, cross-posted from Independent Australia AFTER COVID-19, the three main parties offer divergent economic and energy policies, but very similar population policies. Already, mass migration or “Big Australia” has been passed down through six prime ministers and looks set to resume soon. John Howard accelerated net migration in 2005-06. Figures of 200,000 and much
By Michael Bayliss, communications manager for Sustainable Population Australia and Co-founder of Population, Permaculture and Planning. THE OUTER GROWTH SUBURBS of Australian capital cities are among the most rapidly growing areas of the OECD. Many growth corridors struggle with a lack of access to infrastructure and essential services as suburban sprawl relentlessly marches outwards. While we can all
By Paul Frijters, cross-posted from Club Troppo The management of the University of Queensland, and in particular Peter Hoj and Peter Varghese, stand condemned today by the international media, by both Labor and Liberal politicians, by both left-wing and right-wing Australians, by its own students, and by the powerful pro-American lobby. That management unleashed a shit-storm
By Gareth Aird, Head of Australian Economics at CBA: Key Points: The increase in government benefit payments, which excludes JobKeeper, continues to be bigger than the fall in wages and salaries paid, albeit growth in household income has eased over the past few weeks. Fiscal stimulus is plugging the income gap from the big contraction
By Gareth Aird, Head of Australian Economics at CBA: Key Points: We expect employment to fall by 550k in April. We expect the unemployment rate to rise to 8.0%. The participation rate is forecast to drop by 1ppt to 65.0%. Introduction: The April employment report, due on Thursday 14 May, will throw up a horrible
By Gareth Aird, Head of Australian Economics at CBA Key Points: CBA credit & debit card spend indicates that spending momentum has improved over the last two weeks. Total spending is still well down on year ago levels, but the most recent data suggests that the pulse of spending has picked up across a range
By Gareth Aird, senior economist at CBA Key Points: The increase in government benefit payments over the past month has been bigger than the fall in wages and salaries paid. The shock to spending in the economy will be a lot bigger than the shock to household income. Fiscal stimulus is clearly supporting the household
By Gareth Aird, senior economist at CBA Key Points: The true deterioration in the Australian labour market as a result of the COVID‑19 pandemic is not expected to be adequately reflected in the reported change in the level of employment or the unemployment rate. We do not expect to see a double‑digit unemployment rate because
By Gareth Aird, senior economist at CBA: Key Points COVID-19 will have a material negative impact on Australian residential property prices. Momentum in the property market has plunged and new lending, turnover and prices are all forecast to fall over the next six months. We expect Sydney and Melbourne property prices to underperform against the
By Gareth Aird, senior economist at CBA: Key Points We expect the Australian economy to contract by 7.5%/qtr in Q2 20 and by 3.4% in 2020. The unemployment rate is forecast to lift sharply to 7.8% in Q2 20. We expect the Commonwealth fiscal position to deteriorate to a deficit of $A72bn in 2019/20 (3.7%
From The Conversation: The government’s retirement income review is being told our current tax and benefit treatment of retirement incomes is a mess. Much of financial planning industry is devoted to structuring affairs to maximise access to the age pension. The means test and other requirements that control access to it are a bureaucratic nightmare
By Brendan Coates, Matthew Cowgill and Will Mackey from The Grattan Institute, cross-posted from The Conversation: A key question for the government’s retirement incomes review is who ultimately pays for compulsory super contributions, especially since they are set to climb from 9.5% of wages to 12% over the next five years. Legally, they come from
By Gareth Aird, Senior Economist at CBA: Key Points: Non-mining business investment in Australia has eased. And forward looking investment intentions were downgraded in the mostrecentABS Capex Survey. We expect non-mining business investment to be sluggish in 2020. But this outcome is not locked in and there are policy levers that couldbe pulled to help
Cross-posted from Independent Australia: The future of the NBN looks grim with entrenched poor outcomes, increasing financial pressures and no solutions from the Morrison Government, writes Paul Budde. OVER THE LAST WEEK, I had an interesting discussion on the NBN with several long-term colleagues. What triggered this discussion – we have had many more of
Cross-posted from Online Opinion: Australian politicians never tire of telling the public how they are investing record amounts in infrastructure. Barely a day goes by without a minister announcing a new “congestion busting” infrastructure project designed to ease bottlenecks in Australian cities. Malcolm Turnbull said he wanted to be known as an “infrastructure prime minister”.
By Kelvin Thompson, National Media Spokesperson for Sustainable Australia Party: When the economist Leith Van Onselen was recently asked on ABC radio whether his support for a substantial cut in Australia’s migration program meant he was xenophobic, he replied that he supported a return of our migration program to the numbers we had when Gough
By Kelvin Thomson, National Media Spokesperson, Sustainable Australia Party We’ve just had another bout of breathless reporting from journalists, economists and commentators about our economic growth, accompanying the release of the Mid Year Economic and Fiscal Outlook. Remarkably, people who ought to know better continue to talk about GDP, but make no mention of GDP
Cross-posted from The Conversation: The Morrison government’s waiving of almost A$500 million in dodgy vocational education and training debts holds many lessons about the nature of education and public services being provided by for-profit enterprises. The debts were collected by about 38,000 students unwittingly locked into federal VET FEE-HELP loans by dodgy for-profit education providers.
Cross-posted from The Conversation: The Department of Home Affairs has begun taking steps to outsource its visa processing to private service providers. This move has sparked an important national debate on transparency, accountability and profiteering in the immigration system. The proposed changes will involve private service providers processing certain “low-risk” visas, rather than department staff.
By Gareth Aird, senior economist at CBA: Key Points RBA cuts to the cash rate have generated both a lift in new housing‑related lending and an acceleration in debt repayment. We expect national dwelling prices will continue to grow faster than household income in 2020 but any increase in household leverage is likely to be
By Ross Elliott, cross-posted from The Pulse: A recent decision by Brisbane City Council to restrict townhouse and similar ‘missing middle’ housing product to areas actually zoned for it has been met with hostility from some parts of the urban planning community. It has been exaggerated as a “total ban” and labelled variously as “terrible
Cross-posted from The Conversation: Asked to conduct an independent review of Australia’s retirement income system, the panel appointed by treasurer Josh Frydenberg reported on Friday that it was all tied up with the family home. At every age range, Australians have more money saved through home ownership than they do through superannuation or anything else,
By Tim Lawless, CoreLogic’s head of research: With many of Australia’s capital city housing markets posting a gain in values over the past three months, a recovery trend is looking increasingly entrenched… but how long will it take for residential property values to reach a new record high if the current rate of growth continues?
By Gareth Aird, senior economist at CBA Key Points: Economic growth has slowed in Australia and elevated spare capacity means that the economy would benefit from more stimulus. The RBA is approaching the lower bound, the Commonwealth Budget is in balance and net debt is low as a share of GDP-the case for an easing
From CoreLogic’s Tim Lawless: According to ABS housing finance data for August 2019, first home buyers comprised the largest proportion of national owner occupier mortgage activity since early 2012. The data showed first home buyers comprised 29.8% of the national market for owner occupier home loans; almost five percentage points above the decade average of
Via Independent Australia: IN A RECENT SURVEY conducted by the Australian Financial Review, every single economist who participated had the same message for the Morrison Government: the Reserve Bank should not have to rescue the economy on its own. However, despite the mounting evidence of domestic economic slowdown and the growing risk of a potential
From CBA chief economist Gareth Aird: The value of all housing‑related lending (excl. refinancing) rose by a large 5.1% in July. The value of housing loans to owner‑occupiers (excl. refinancing) was up by 5.3% while the value of loans to investors (excl. refinancing) rose by 4.7%. The lift in the flow of credit for housing
Cross-posted from Independent Australia: At the May Federal Election, Labor and the Greens overbid the already-high Coalition position on immigration and population. Post-election, Labor muffles the topic, targeting instead Home Affairs and its Minister, Peter Dutton. Is that the right play? For this year’s Federal Election, Labor offered virtually open-ended migrant-parent visas. This would have