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Housing scheme “hijacked for wealthy foreign students”

By Leith van Onselen The Age has published an article today on how the National Rental Affordability Scheme (NRAS) – a $3.2 billion scheme launched by the former Labor Government in 2007 amid claims that it would increase the supply of affordable rental housing to low and moderate income households – turned into a rort

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The secret behind the NSW Government’s Budget success

By Leith van Onselen NSW Treasurer, Dominic Perrottet, is out this morning spruiking the Government’s economic and Budget success. From The AFR: At the mid-year economic update in Sydney, Mr Perrottet unveiled a $600 million increase to the expected surplus for this financial year, rising from $2.7 billion to $3.3 billion. He said state budget

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Expect rising Budget deficits over next decade

By Leith van Onselen Stephen Anthony, chief economist at Industry Super Australia, has penned an article in The AFR today explaining why the Turnbull Government’s planned return to surplus is deluded and we should expect rising Budget deficits over the next decade: Recall that if the 2017-18 budget outlook was “adjusted” slightly to reflect the evident

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Coalition puts university funding cuts back on agenda

By Leith van Onselen After its previous university funding reforms were blocked in the Senate, the Turnbull Government is considering alternative funding cuts that can be implemented without legislation as part of its Mid-Year Economic & Fiscal Outlook (MYEFO). From The AFR: The Australian Financial Review understands the Mid-Year Economic and Fiscal Outlook (MYEFO) will

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Jobs report signals strong

Before Labour Force at 11.30, from Westpac: It is true that the October rise in employment was softer than expected, +3.7k vs market expectations of an 18k rise, but this should be put into context that October was the 13th consecutive monthly rise in total employment. This is longest stretch of positive employment prints since the

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Canadian house prices fall for third straight month

By Leith van Onselen Just weeks after Moody’s warned that Canada’s (as well as Australia’s) housing market (and banks) were at risk, Teranet has reported its results for November, which recorded its third consecutive fall in Canadian home values, let by Canada’s biggest city Toronto: In November the Teranet–National Bank National Composite House Price Index™

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NZ Labour Government pushes ahead with foreign buyer ban

By Leith van Onselen New Zealand’s recently appointed Labour-led coalition Government will today implement the first tranche of its demand-side housing reforms, introducing into parliament legislation to amend the Overseas Investment Act to ban overseas buyers from purchasing established housing. From Interest.co.nz: … the Government says its move will ensure that house prices are set

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Australia’s China meltdown turns nuclear

Via The Australian: Australia’s ambassador to China has been called into the Chinese Ministry of Foreign Affairs for a dressing down over the Turnbull government’s foreign interference laws amid accusations by Beijing that anti-China ­rhetoric is damaging the relationship. In a sign of the increasing tensions between the two governments, Jan Adams was officially summoned

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Aussie housing valuations finally retrace from peak

By Leith van Onselen The ABS on Tuesday released its property price data for the September quarter, which valued Australia’s dwelling stock owned by households at a record $6.44 trillion, whereas the total housing stock was valued at a record $6.78 trillion. As shown below, the total value of Australia’s dwelling stock owned by households

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AUSTRAC piles pain upon Sleaze Bank

Via the AFR: AUSTRAC will up the ante in its case against the Commonwealth Bank of Australia, with the transactions regulator expecting to file fresh allegations on Thursday that it breached the law 100 additional times while facilitating banking by criminal syndicates involved in money laundering and terrorist financing. Commonwealth Bank filed its defence to

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AGL, NAB: Coal dead

Via Reneweconomy: AGL says no private investor would invest in new coal plant, but says battery storage is coming and will be major game changer as costs fall – which may not be far away. Several days after formally rejecting federal government requests that it invest hundreds of millions of dollars to keep the ageing

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Links 14 December 2017

Global Macro / Markets / Investing: 5 Artificial Intelligence Predictions For 2018 – Forbes We’re witnessing the fastest decline in Arctic sea ice in at least 1,500 years – VOX Bitcoin futures suggest breakneck rise in price to slow – Reuters A new exchange rate regime for oil-exporting countries – ERF Oil hits two-and-a-half year

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Macro Afternoon

by Chris Becker The Alabama senatorial election is putting a little spice into a bland market with the USD falling slightly against the majors – Aussie dollar particularly – as the Fed begins its meeting tonight. Asian stocks were mixed across the region as commodity prices remained relatively stable. In mainland China the Shanghai Composite has

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Manufacturing lobby embraces suicidal gas benchmark

From the AIG: “The ACCC’s latest gas market update confirms that the gas crisis has shifted down a gear since early 2017 – but it also confirms Australian industry’s concerns that we are still far from affordable energy,” Australian Industry Group Chief Executive Innes Willox said today. “More supply is clearly being made available in

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Australian births at all-time high but fertility rate continues to fall

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released its Births 2016 survey, which recorded a 1.9% rise in births to a record high 311,104 in 2016, with the fertility rate falling marginally to 1.789, thus remaining below replacement: The next chart plots births across Australia, which have hit a record high: Below

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#Sardine Sydney train crash to worsen

By Leith van Onselen Yesterday I reported how Sydney’s crippling immigration-fuelled population growth had pushed the rail network to breaking point, with one early morning incident causing mayhem well into the evening across the metropolitan train system. Today, Sydney Trains boss, Howard Collins, admitted that soaring passenger demand means the train system is stretched beyond

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ASX crawls, Australian dollar leaps higher

The ASX is mounting another challenge for new highs in its unmistakably bullish ascending triangle chart: This despite the AUD being well bid: Bonds are selling too so its a generalised lift in Australians growth sentiment for no obvious reason. Fatigued bears. The ASX is firing on both cylinders, of dirt: And debt: As The

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Has Beijing handed Bennelong to Labor?

From The Australian: Malcolm Turnbull admitted today the government is “fighting to hold” Bennelong ahead of this weekend’s crucial by-election. “We’re focused on winning but the polls are very tight. We are fighting to hold that seat,” the prime minister said, before joining Liberal candidate John Alexander for another media event in the electorate. Mr

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Half of mortgagees in “dire straits” with two rate hikes

Via Domainfax: More than half of Australian homeowners with a mortgage would be in dire straits if their repayments increased by more than $100 a month, new data shows. A nationwide survey found 54 per cent of borrowers do not think they could handle a repayment rise of more than $23 a week. Worse still,

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Auckland house sales slump to 2010 lows

By Leith van Onselen The REINZ has released its house price data for November, which revealed a 0.2% seasonally adjusted monthly rise in the national median house price, with prices up 4.0% year-on-year: Outside Auckland, seasonally adjusted house prices rose by 0.8% in November, with prices up 8.8% year-on-year. Looking at the major cities, Auckland’s

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Consumer sentiment bounces

Via Westpac: • The Westpac Melbourne Institute Index of Consumer Sentiment rose 3.6% to 103.3 in December from 99.7 in November. This is a surprisingly strong result and confirms the lift we have seen in the Index over the last three months. The average reading for the Index in the December quarter is 5% above

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Australia needs more TAFE not more unis

By Leith van Onselen The Mitchell Institute’s 2017 report has been released, which shows that while funding to universities has skyrocketed over the past decade in real terms, funding for vocational education and training (VET) has plummeted to a decade low. From The Conversation: The chart below shows the trends in expenditure over an 11-year