Before the coronavirus, property market pundits were tipping their usual, regulation, 10% rise in house prices. They have been quiet in recent days. Callum Foote reports on the impact of the virus on an already weak economy, racking up the present crisis against the Global Financial Crisis (GFC). Australians are unprepared. The ratio of household debt to household disposable income is now at an all-time high, suggesting the risk to property is also at an all time high.
Since 2002, Quinn showed, the most productive Australian firms (the top 5 per cent) had not kept pace with the most productive firms globally. In fact, Australia’s ‘productivity frontier’ has slipped back by about one-third. The best of ‘Made in Australia’ hasn’t kept pace with the best of ‘Made in Germany’, ‘Made in the Netherlands’ or even ‘Made in America’.”
And then there’s the other 95 per cent. In the past two decades, their output per hour worked has barely risen. So 19 out of 20 Australian firms don’t produce much more per hour than they did when Sydney hosted the Olympics.
A Productivity Commission study has found that half the slowdown in productivity improvement in the market economy in recent years is accounted for by manufacturing. A separate survey of management practices in manufacturing firms found that Australia’s managers rank below those in Canada, Sweden, Japan, Germany and the US.
The drop we’ve experienced is “not the fault of employees: there are simply fewer good opportunities available. According to Treasury’s analysis, much of the drop in job-switching is because workers are less likely to transition from mature firms to young firms. With fewer start-up firms, it stands to reason that there are fewer start-up jobs.”
SGS Economics and Planning found that during 2018-19, the Melbourne economy alone accounted for 40 per cent of Australia’s total growth. Melbourne gross domestic product reached $369 billion compared with regional Victoria’s $76 billion.
Australian GDP expanded by 1.9 per cent but Melbourne’s own GDP lifted by 4 per cent. Sydney GDP at $461 billion grew by 2.6 per cent, its lowest rate since 2012-13, to account for a third of national growth.
The ultimate American Trumplican “Sales Pitch”(ODT)
Survey shows 56% of respondents would rather see the government fend off a downturn than deliver a surplus
the Turkish military doesn’t function without the U.S. weapons industry—and the approval of the U.S. government. Absent all the hardware bearing Made in America stickers sitting in Turkish military bases, we would probably not be fretting about what Turkey’s government was doing to the Syrian Democratic Forces.
placing American military personnel in harm’s way apparently carries less political risk than endangering the profits of munitions manufacturers, or the careers of foreign policy experts.
When he isn’t raving about how the deep state is conspiring against him, Donald Trump loves to boast about the economy, claiming to have achieved unprecedented things. As it happens, none of his claims are true. While both GDP and employment have registered solid growth, the Trump economy simply seems to have continued a long expansion that began under former president Barack Obama. In fact, someone who looked only at the past 10 years of data would never guess that an election had taken place.
Australians are carrying the 2nd most personal debt burden in the world will they now be paid to increase it? Wages are and have been stagnant for years production is up so who has profited from growth if personal debt has increased so much? Not the average Australian. Immense effort is being made to force fixed savings into the market. The banks dont lose by the way they continue to charge for their services. Debt is a good way to keep a nation’s work force obedient and compliant while income and wealth gaps grow. It’s what appears to be a respectable form of human bondage under the surface but human bondage nevertheless. (ODT)
Denmark’s third largest lender, Jyske Bank, is in effect paying home owners to borrow at the moment, with a standard mortgage of -0.5 per cent; now that’s value.
Jyske can do this by borrowing money from institutional investors at a negative rate — and there’s plenty of negative interest rate paper floating around at the moment, somewhere north of $US15 trillion ($22.37 trillion) in value — and passing it on to their customers, who then can pay back less than they borrow.
The bank clips the ticket with the usual fees and charges, but leaves the customer gruntled and still makes a tidy profit on the loan.
Despite a record three years of surging exports, Australia’s economy is the stand-out failure in the developed world. Alan Austin reports.
How to rip off peoples savings 101. What the government wants you to see a boom for you to follow in a world of debt. They want your money and you to spend spend spend until you can’t anymore.
- Cut interest rates to record low margins and drive people with savings into the stock market spend and watch it boom.
- Wait for the correction and then watch people suffer.Fake booms real busts losers and winners neither the realm of the elderly whose money is managed by others and only want to reach end of days without worry.
- Self Managed Savings advice it’s safer under the bed than with sharks. (ODT)
Australian shares are near record highs while interest rates are near record lows
Analysts say the disconnect between the two usually means that one market will be “spectacularly wrong”
However, analysts also the Australian share market is not heavily overvalued
It is inconceivable that they would choose now to pay down debt when they could borrow money at such low rates and really kick start the economy through government spending on productivity enhancing investments.
It’s not only the surplus fetish that is a problem as former head of the RBA, Bernie Fraser, points out. The government’s self-imposed cap on tax-to-GDP would also act as a restraint on the economy.
“What this dopey cap does is that it acts as a cap, not just on tax but also on expenditure, so if you have to do something you’ve created a problem for yourself,” he said.
With borrowing costs so low, an exchange rate at the bottom end of its range in recent times, surging iron ore prices boosting our terms of trade, and a nominally low level of unemployment, things should be going a lot better than they are.
But the reality is that social security payments are too low and many people are living in poverty, wages have stagnated, underemployment is rising and job security is falling.
Yet all this government can talk about is tax cuts for the wealthy and delivering a surplus.
In the past five years the population has grown by just 8%, but government spending has risen by an incredible 21%. By sheer luck the mining boom has increased revenues by 27% but windfall gains like these are not sustainable.
The Daggy Dad “please like me” tour, backed up by his affable side-kick doing slide shows of endless cherry-picked graphs, is nothing more than an advertising campaign. Their claims of strong economic management are based on unrealistic assumptions about future wage growth and consumer spending and completely ignore Australia’s spiralling household debt.
They are reliant on precarious revenue from resources and seem clueless about the importance of diversifying our economy and building new industries to take up the slack caused by technological disruption and the inevitable demise of the fossil fuel industry.
It laughs at Treasurer Josh Frydenberg’s claim in the April budget – and Scott Morrison’s claim in the election campaign – to have returned the economy to “strong growth”, which will roll on for a decade without missing a beat.
Why is the immediate outlook for the economy so weak and uncertain? Not primarily because of any great threat from abroad – though a flare-up in Donald Trump’s trade war with China could certainly make things worse – but primarily because of one big and well-known problem inside our economy: five years of weak growth in wages.
Only one-eyed Coalition supporters could construe the deteriorating state of our economy as somehow acceptable, as having nothing to do with the stewardship of the government. Instead, they will likely insist that the Coalition knows what it’s doing, has everything under control, and that we’re all doing fine. They will extract any morsel of ‘good news’ from the economic data to bolster their conclusions.
They will go on insisting that ‘The Coalition is the superior economic manager’, although the evidence inexorably leads to the conclusion: The Coalition can’t manage money.
What seems to be missing is blaggart Trump not only said he’d raise the 10% tariffs already in place but he’d add 25% on $ 200 bill goods more. This seems as much a backdown than anything else. But it is an action nevertheless he says is good for the economy. He also says it’s not a cost to Americans because the Chinese have to pay it?? The man certainly said the same about the wall didn’t he??. Americans don’t have to pay?? (ODT)
Donald Trump’s top trade advisors have accused China of reneging on promises made during recent negotiations and confirmed that the US will increase tariffs on US$200 billion ($286 billion) worth of goods this week.
When the US President tweeted about the tariff hike on Sunday, local time, many investors and analysts hoped it was a short-term negotiating tactic designed to extract a better deal from China.
Housing Crashes Stocks Boom, Stocks Crash Housing Booms, Swings and Merry-go-Rounds how to stop them taking your money (ODT)
Despite a backdrop of troubling economic signals, the nation’s benchmark S&P/ASX 200 Index rallied almost 10 per cent in the first quarter — its best-ever performance to begin a year in data going back almost three decades. Strong commodity prices and promises of easy monetary policy from central banks are working in the gauge’s favour even as Australia’s property slump deepens and its economy continues to wane.
Victorian Planning Minister Richard Wynne said people were drawn to Melbourne due to its “booming economy and lots of jobs”.
“We’re building for growth with game-changing projects like the Metro Tunnel and the Melbourne Airport Rail Link, and we’re planning for the future with the Suburban Rail Loop, as well as pouring billions into hospital upgrades and new schools,” he said.
“The Liberals did nothing but cut crucial services for four years and Matthew Guy has promised to send a million extra people into the outer suburbs.”
This is not what Malcolm Turnbull is saying in Australia. To complain according to Finance Minister Corman is just “Envy Politics” that Corporations and the rich are getting richer. (OD)
While corporations are enjoying a permanent tax cut which has mainly benefited their shareholders, small businesses also say the law has done little to even the playing field
Just a few months after President Donald Trump’s tax reform passed, small businesses are pushing back against Republican claims that the law will bolster their ability to hire new employees and give out raises to workers—as corporations reap the vast majority of the benefits of the legislation.
Large corporations made clear even before the plan was passed in December that they would use the $1.3 trillion they expect to save as a result of the law to line the pockets of their shareholders—not invest in their employees and new hires as Republicans claimed. Now, small businesses are saying that their workers aren’t benefiting much from the tax law either.
The advocacy group Businesses for Responsible Tax Reform polled entrepreneurs in Maine, Arizona, Tennessee, and Nevada and found that seven in 10 had no plans to hire new employees as a result of the tax plan, while 60 percent said their workers would not be given raises.
More than half of the owners said the law favored large businesses over small ones and did nothing to put smaller companies on a level playing field with big corporations.
When you force the ABC to take down an article that questions your logic you know something is wrong. Since when has Turnbull taken on the role of ABC editor?
On Friday, the ABC took down Alberici’s analysis, citing that it did not conform to the broadcaster’s editorial standards. Frankly, the article – which has been republished on John Menadue’s blog, is not all that different in focus from analyses by Ian Verrender published by the ABC last year, The Age’s Peter Martin and various others, including myself.
Arguing that company tax cuts may not have the impact that the beneficiaries say will result is hardly controversial.
As I noted in January, Moody’s credit rating agency said of the US company tax rate cut from 35% to 21% (compared with a reduction from 30% to 25% proposed here) that “we do not expect corporate tax cuts to lead to a meaningful boost in business investment”.
But given most people don’t get excited by business investment (or increased business profits), companies here have followed the lead of their US counterparts, and are saying a tax cut is needed to increase wages.
It’s all a bit of smoke and mirrors.
The Nobel Prize winner argues that an economy dominated by large corporations has failed the many and enriched the few.
Energy giant failed to declare donations it made to NSW major parties at a time when it was seeking development approvals for projects on state’s mid-north coast
Britain just got its first concrete sign that the British exit from the European Union, or Brexit, will crush the nation’s economy after a grim set of PMI data released by Markit on Friday morning showed a “dramatic deterioration” in the economy since the UK voted to leave the EU. Markit’s flash PMI readings for the UK’s economy showed that composite output fell to its lowest level since March 2009, during the tail end of the global financial crisis. Here is the scoreboard:
Was the previous Labor government responsible for a record deficit as Mathias Cormann suggests? ABC Fact Check runs the numbers.
They cost us a lot but have received little attention this election campaign.
ABS data show private sector business investment and company profits boomed under Labor but have collapsed under the Coalition
India recently launched a “mini space shuttle” for just $14 million. Many people commented, expressing their unhappiness at India investing in space travel while so many of their people live in poverty. The space industry is worth more than a hundred billion dollars worldwide. Most of this is dominated by just a few countries. If India can break into this industry at a lower cost, it could provide a massive stimulus to their economy.
And let’s take a look at a few of the things that were more expensive than their latest launch, shall we?
John Menadue concludes his unmasking of the claim by Malcolm Turnbull, the media and others, that conservatives are better economic managers.
Journalists sifting through thousands of documents from the leaked Panama Papers have uncovered a list of dumb idiots still paying income tax.
The list – which includes Australians – is said to be several pages long. It could be the most explosive find yet in what is believed to be the biggest data leak in history.
“We’ve learnt some pretty amazing stuff this past week, but even we were taken aback by the idea that some dumbasses were filling in tax returns and paying tax at the proper rate,” Investigative journalists Jenny McGuire said.
The tax – which is funnelled directly to central tax offices in countries across the globe – is believed to be used to fund hospitals, schools and roads.
“Some chumps are paying literally thousands of dollars in tax, every single year. That’s money that could be used to fund extra houses and yachts,” McGuire said.
More to come.
While the Chinese government’s response to Australia’s defence white paper was forcefully delivered, state media coverage was low-key.