June 22, 2017 Edition.
Internationally this week has been all about Trump and the various investigations that are running and seemingly meaning there is very little progress being made legislatively.
In Australia we suddenly seem to have had a 20% hike in our electricity and gas bills – which will impact growth and spending – while the politicians bicker over how much coal we should burn. It has gone past a joke in my view – as captured by the article below.
Labor's professed preference for policy purity is phoney
Ross Gittins
Published: June 11 2017 - 9:00PM
For the growing number of us who care more about good policy and effective governance than party loyalties, the news isn't good. With one main exception, Labor is allowing the supposed perfect to be the enemy of the good.
The exception is a good one: although the "clean [or low] emissions target" for the national electricity market recommended by the Finkel report is far from perfect as the chief means by which the Turnbull government seeks to reduce our carbon emissions in line with our Paris commitment, Bill Shorten has indicated that the opposition would be open to supporting a "well-constructed LET" in the Senate.
There aren't many issues more important than filling the policy vacuum left by Tony Abbott's abolition of the carbon tax three years ago. And, in the process, greatly assisting efforts to fix the ailing electricity market, reducing the risk of blackouts and further price rises.
Everyone bar the Coalition's crazy backbench climate-change deniers knows coal's days are numbered, which is why both sides of the electricity industry – fossil fuels and renewables – are desperate for greater certainty about how the government plans to manage the transition.
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And in more good news:
Time to plan for recession as household debt crimps spending
Consumer-oriented stocks are likely to feel a downturn first. Picture: James Croucher
- Guy Carson
- The Australian
- 12:00AM June 10, 2017
Why is the Australian consumer not shopping — and how does an ASX investor deal with it?
Back in 2007, a US economist called Edward E. Leemer published a paper entitled “Housing IS the business cycle”. In this paper he studied the causes of every US recession since World War II, of which there had been 10. What he discovered was that eight of the 10 were preceded by substantial problems in housing and consumer durables.
The only exceptions were the end of the Korean War in 1953, caused by a decline in defence spending, and the 2001 Tech Wreck. As the paper was written in 2007, we can now improve the success ratio to nine of the last 11 recessions following the 2008 recession, something that Leemer warned about.
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Here are a few other things I have noticed.
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National Budget Issues.
The truth behind the Finkel report and your power bills
Jessica Irvine
Published: June 11 2017 - 9:00PM
You'll pay the high cost of electricity distribution for some time to come.
The placards just write themselves. What do we want? "Orderly transition measures, system planning and stronger governance." When do we want it? About 10 years ago. But now will have to do.
The final report of the independent Finkel review is not a revolutionary document. It is, however, an important and long overdue acknowledgment of our need, as a nation, to do three things simultaneously: stop burning so many dirty lumps of coal, keep the lights on and keep electricity prices affordable.
At present, of course, we're failing abjectly on all three fronts, with power bills set to soar again on July 1.
Modelling by the review suggests households will save about $90 a year, or up to $1000 over the decade to 2030, by implementing its suggestion of a Clean Energy Target, compared with a business-as-usual scenario.
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Australian workers getting a record low share of GDP: report
Anna Patty
Published: June 12 2017 - 1:22PM
The share of Australian gross domestic product going into workers' pockets has hit a record low, according to a new report.
The Australia Institute analysis shows the 46.2 per cent share of GDP in the March quarter was the lowest recorded since the Australian Bureau of Statistics started collecting the data in 1959.
It comes as Australia grabbed the record for the longest run of uninterrupted growth in the developed world from the Netherlands last week, recording its 103rd straight-quarter without going into a technical recession.
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Too much tax? Most Australians happy with what they pay
Peter Martin
Published: June 12 2017 - 8:53PM
Most Australians believe high earners pay too little tax, corporations pay too little tax, and what they pay is about right.
The seventh annual Per Capita tax survey finds big support for continuing the temporary deficit repair levy on high earners (66 per cent) and little support for tax cuts for large corporations (17 per cent).
The two per cent temporary levy on that part of a high earner's income above $180,000 is due to expire at the end of this month. The Senate has withheld permission for tax cuts for businesses with turnovers in excess of $50 million due to come into effect mid next year.
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Australian Defence Force gambles billions on equipment that technology may outpace
Nicholas Stuart
Published: June 13 2017 - 12:15AM
It's only natural that the navy and air force want the best ships and aircraft. After all, it's this equipment that determines what our services do and how they go about achieving their missions. Inevitably, this limits our way of thinking. What's possible is always conceived of within the technical parameters of our equipment and explaining "why", rather than asking "why not?" Strategic thinking begins (and ends) with what vessels and aircraft are capable of.
The problem is that such thinking might no longer be enough to keep up with rapid technical change. If speculation's a crucial strategic tool, it might be one we're lacking.
Take our new submarine. No one can fault the massive ambition of this project. The issue is that, in striving for the world's best, largest, yet most invisible conventional underwater vehicle (still intended to be in service in 50 years' time), everything needs to go right. All the eggs are in the one basket. We're highly leveraged on the absolute success of this one project.
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Labor to focus on economic management
Labor is expected to target the government's economic management when parliament resumes after last week's weak growth figures.
Source:
AAP 13 Jun 2017 - 9:06 AM
The Turnbull government is likely to be taunted over its handling of the economy and ballooning debt when parliament resumes.
Labor finance spokesman Jim Chalmers expects government debt to breach $500 billion for the first time this week as MPs return for three days from Tuesday.
"Malcolm Turnbull, Scott Morrison and Mathias Cormann like to blame everyone but themselves for this mess, but this milestone exposes the depths of their failure," Dr Chalmers says.
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Coalition policy divide came with real personal bitterness
- The Australian
- 6:32AM June 14, 2017
David Crowe
The federal Coalition has put its dysfunction on display again.
Always up for a brawl on climate change, Liberals and Nationals MPs have thrown themselves into an internal row that tells Australians to look elsewhere for leadership.
In public, MPs assure voters they have a way to keep power bills down. In private they rip each other to shreds because they do not know what to do.
The policy divide at the Coalition party room meeting on Tuesday night came with real personal bitterness.
Tony Abbott interjected so often throughout the meeting that Craig Laundy, a frontbench ally of Malcolm Turnbull, called the former prime minister out and asked that he show respect to those who wanted to speak.
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RBA banking on the US Fed to do its heavy lifting
Michael Pascoe
Published: June 14 2017 - 12:15AM
On Thursday morning our time, the US Federal Reserve Board is tipped to increase its benchmark interest rate for the third time in six months – a key reason for our Reserve Bank leaving rates unchanged at its board meeting last week.
The US central bank lifting its rates by 75 points since the start of December means our monetary policy is, relatively speaking, looser despite the cash rate not moving for 10 months. The traditional gap between Australian and American rates narrows, so, other things being equal, the Aussie dollar should weaken against the greenback.
Well, that's the theory. The problem is that the theory isn't working.
Instead, we've been experiencing a de facto tightening of monetary policy as the banks happily do the Australian Prudential Regulation Authority's bidding by boosting mortgage rates for investors in general and interest-only loans in particular.
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Turbulent times for Reserve Bank, but no reason to assume crash landing
Jessica Irvine
Published: June 13 2017 - 11:00AM
For central bankers, the job of steering the economy is a bit like flying a plane.
Sitting in the cockpit, the Reserve Bank governor can see a range of speed dials, indicator lights and levers.
Some are more important than others.
Gauges showing the pace of inflation, economic growth and unemployment are perhaps the central three.
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Income inequality, the new handbrake on growth
Mark Kenny
Published: June 13 2017 - 8:42PM
The yawning gap between rich and poor in Australia should be formally tracked by the nation's prime economic review body, the Productivity Commission, according to a Labor senator who has drafted legislation to bring it about.
The proposal would ensure that any negative impacts on the poor arising from government policies are specifically measured and taken into account in program design.
Known for its market-oriented, pro-business disposition, the Productivity Commission is the government's prime, independent economic adviser.
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Federal government debt surges past half-a-trillion dollars
Eryk Bagshaw
Published: June 14 2017 - 1:03AM
The Turnbull government will break through the country's former debt ceiling this week, breaching the $500 billion mark as it doubles the credit card bill it inherited from Labor.
On Tuesday, gross Commonwealth debt reached more than $499 billion, after growing by more than $2 billion since Friday and $9 billion since early May.
The record level of debt has sparked calls from within the Turnbull government and the Senate crossbench to restore the formal debt limit abolished under a deal struck between the Coalition and the Greens in 2013.
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Finkel review: a bluffer's guide for those who haven't read it
Peter Martin
Published: June 14 2017 - 11:45PM
So much does Tony Abbott dislike the Finkel review of the electricity market that he hasn't read it. On Monday, three full days after it was released, he branded its key recommendation a "magic pudding" and a "tax on coal" while conceding that he had been guided by "reports of the report" rather than the report itself.
I understand where he is coming from. Who wants to wade through 200 pages of a report they won't like?
But I'd feel better about it if I thought that at least some of the 20 or so other backbenchers who spoke out against the Finkel Report at the Coalition party room meeting on Tuesday had taken the time to read it.
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EnergyAustralia announces 19 per cent increase to electricity prices in NSW
Lucy Cormack
Published: June 15 2017 - 5:31PM
EnergyAustralia has announced it will increase electricity prices in Sydney by 19.6 per cent - or $346 a year - from July 1.
The increase, which will add an extra $6.15 a week to the average household bill, was announced alongside price rises to gas of 6.6 per cent.
For small-to-medium-sized businesses, electricity will increase 19.9 per cent a year ($17.60 a week) and gas 10.7 per cent ($20.05 a week).
EnergyAustralia chief customer officer Kim Clarke described the hike as "bad news for families and business."
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Alan Finkel report spot on: AEMO chief Audrey Zibelman
- The Australian
- 12:00AM June 16, 2017
Matt Chambers
New Australian Energy Market Operator chief Audrey Zibelman says the Finkel blueprint for national electricity security is “spot on”, providing strong reliability measures as the costs of wind, solar and storage continue to fall rapidly.
In her first public comments on Chief Scientist Alan Finkel’s review of National Electricity Security, Ms Zibelman said the nation was at an inflection point in a “massive transition” in terms of energy. “The Finkel review, which identifies a number of changes that can and should be made on how we operate the system, is spot on,” she said yesterday.
The former head of the New York State Public Service Commission who joined AEMO in March said she was pleased to see strong recommendations in the report identifying the need for more resources to maintain system security.
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Parties to blame when the lights go out
Peter Hartcher
Published: June 17 2017 - 2:50AM
When Australia succeeds, you usually find that both sides of politics can take some credit. And where it fails, you usually find that both sides have to take some blame.
So it is that both Liberal and Labor are prepared to act to end one of the more outrageous perversions of Australian democracy – the fact that it's entirely legal for foreign interests to give money to political parties so that they can buy whatever influence they want.
Banning such donations isn't as easily done as said and it'll take some months. But this week we saw a hardening resolve in both parties as they were embarrassed by story after story of how the Chinese Communist Party has played them for chumps, exploiting politicians' greed to buy into Australia's political system.
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Ten years since the global financial crisis, world still suffers 'debt overhang'
Nassim Khadem
Published: June 17 2017 - 12:15AM
It is almost exactly 10 years since the financial world began a wobble that would swing into what we now know as the global financial crisis.
On June 22, 2007, the public downfall of New York-based global investment bank Bear Stearns began in earnest.
America's then fifth-largest investment bank was among a number of Wall Street giants exposed to bad bets on the US subprime mortgage market.
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Strong jobs growth takes interest rate cuts off table
Jessica Irvine
Published: June 17 2017 - 12:15AM
It's a jobs boom!
Despite sluggish growth in output, the Australian economy has so far created 154,000 extra jobs this year.
That's an average of 31,000 jobs a month, enough to comfortably exceed the 20,000 extra jobs needed each month just to keep up with population growth.
And it gets better.
After slumping last year, full time jobs growth has returned, accounting for two out of every three extra jobs created.
Treasury assumes 'some pass-through' of bank tax
Clancy Yeates
Published: June 16 2017 - 5:22PM
Treasury assumed banks would pass on some of the $6.2 billion bank tax to their customers when it was costing the policy, despite the government urging lenders to "absorb" the levy.
As banks hit by the tax made a last-ditch plea for changes on Friday, a response to a question on notice from the Treasury revealed the department had assumed "some pass-through of the levy to customers, as evidenced by previous behaviour by the banks".
The department had also assumed there could be "consequences for dividend payments" and therefore franking credits, though it cautioned it could not be "unequivocal" about who would ultimately pay the levy.
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Health Budget Issues.
‘No epidemic’ but mental health DSPs have risen by 50pc
- The Australian
- 12:00AM June 12, 2017
Sean Parnell
The number of working-age Australians receiving the Disability Support Pension for mental health issues increased by about 50 per cent over a 13-year period, even though prevalence of the conditions remained stable.
Researchers led by associate professor Samuel Harvey from the Black Dog Institute and the University of NSW have raised the “paradox” after studying the prevalence and impact of conditions such as depression and anxiety between 2001 and 2014.
The unexplained surge in DSP payments for people with mental health issues is likely to reignite the political debate over the rigour applied to welfare assessments. It may also inflame tensions between governments over the cost of support, including through the National Disability Insurance Scheme.
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The big five cancer killers: Australia's greatest health burden revealed in Australian Institute of Health and Welfare report
Kate Aubusson
Published: June 14 2017 - 1:00AM
Cancers are responsible for more years of life lost than any other health condition, the latest Australian Institute of Health and Welfare has confirmed.
All cancers combined have the biggest impact on health than any other disease group, according to the latest "Burden of cancer in Australia" report released on Wednesday.
Cardiovascular disease may be more common and carry a higher death toll, but cancer kills younger, resulting in more years of life lost, it found.
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Turnbull government’s $44 million plan to give sick kiddies free meds
LANAI SCARR, Senior Writer, News Corp Australia Network
June 14, 2017 10:00pm
EXCLUSIVE
SOME of Australia’s sickest kids suffering a rare medical condition known as Morquio A Syndrome will now get access to a life saving medicine for free, saving their families around $400,000 a year.
The Turnbull government will today announce it will spend $44 million over five years to list Vimizim on the Life Saving Drugs Program from 1 August.
The drug will dramatically increase life expectancy for sufferers who on average live only until the age of 25.
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International Issues.
Preet Bharara 'absolutely' sees enough evidence for case against Donald Trump
Todd Shields
Published: June 12 2017 - 5:19AM
Washington: Former New York US Attorney Preet Bharara said there's enough evidence to begin an obstruction-of-justice case against President Donald Trump over last month's dismissal of FBI Director James Comey.
"There's absolutely evidence to begin a case," Bharara, who was fired by Trump in March and has emerged as a critic of the president, said Sunday on ABC News' This Week.
"No one knows right now whether there is a provable case of obstruction," Bharara said in his first televised interview since his dismissal. He added, "based on what I see as a third party and out of government, that there's no basis to say there's no obstruction."
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Macron set for majority in assembly after first-round vote
Published: June 12 2017 - 4:40AM
President Emmanuel Macron headed for a clear majority in the National Assembly after French voters rallied behind their new head of state in the first round of legislative elections on Sunday.
Macron's year-old party, Republic on the Move, won about 33 per cent of the vote, some 13 percentage points ahead of the Republicans, according to pollsters' projections based on an early vote count.
The result could give Macron's party as many as 445 seats out of 577 in the lower house of parliament, according to projections by Elabe. The lowest estimate for his seat count was from Ipsos, which saw 390 to 430 seats.
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UK election: major political parties need to bridge the city-country divide
Brenton Prosser and Gerry Stokes
Published: June 11 2017 - 3:59PM
A little over a week before the UK general election, the improbable occurred. A poll indicated that Prime Minister Theresa May could lose the Conservative majority. The shadow of a hung parliament was cast over the UK parliament again. It was a claim credible enough to the markets for the sterling to drop. Most political analysts, however, did not take it seriously.
But these are unconventional times. There is an unlikely president in the White House. No pundit predicted Brexit. And now, a Labour Party led by an "anti-politician" in Jeremy Corbyn has delivered a hung parliament.
While May is endeavouring to form a minority government, the unlikelihood of a stable coalition means Britons may be heading back to the polls much sooner than they expected.
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UK election 2017: Anyone who offers hope and better times will come up trumps
- The Australian
- 5:30PM June 11, 2017
Graham Richardson
I am becoming increasingly perplexed about the way people around the world are voting. Nobody predicted that Donald Trump could become the President of the United States.
This is the flashy, celebrity who was behind two full years of challenging Barack Obama’s citizenship, before finally being forced into a humiliating backdown. By some quirk of fate this merely seemed to add to his celebrity cult status and paved the way for his tilt at the top job.
Then during the Presidential campaign millions upon millions of poor, white Americans accepted this brash billionaire as their standard bearer. They believed his obviously overblown rhetoric about bringing back to America all the jobs lost to the Third World over the last two decades.
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'Russia thing' refuses to come to a head - and for Donald Trump that's a problem
Paul McGeough
Published: June 12 2017 - 12:22PM
Washington: Another week in Washington - and what could possibly go wrong?
Donald Trump broke his Twitter silence early on Sunday, to renew his attacks on James Comey. He fingered the former FBI director as the source of more leaks than one which he volunteered in Senate testimony last week.
"I believe the James Comey leaks will be far more prevalent than anyone ever thought possible. Totally illegal? Very cowardly!", Trump tweeted, though many legal scholars argue that as a former government employee, Comey was within his rights in making unclassified material available to The New York Times.
The President and his surrogates have made selective use of Comey's sensational appearance before the Senate Intelligence Committee and a television audience of more than 19 million, to claim vindication; and to attack Comey's credibility.
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Corbyn and Trump are symptoms of the same malaise
- The Australian
- 12:00AM June 14, 2017
Paul Kelly
The crisis in Western democracy is more tangible, alarming and deep-seated after the British election — one of the most remarkable since 1945 — that saw Jeremy Corbyn, a radical, protest-movement ideologue, almost steal office from the ultra-establishment Tory, Theresa May. The Corbyn eruption springs from the same political furnace that generated the Donald Trump eruption last year. Don’t be fooled by the differences between Corbyn and Trump. Both men declare their political systems are broken, rigged and betray the majority of people as they pose as agents of transformation seeking to dismantle and replace the established ideas and orthodoxies.
Both men are false prophets, unfit to lead their nations, yet they have won momentum that defied almost every expectation and accepted norm. Their success, once inconceivable, is no accident or aberration. It arises from a cultural and probably a civilisational trauma revealing the sickness of our societies that nobody can yet fully understand, but leaving us with the responsibility of trying.
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Trump-Russia: Jeff Sessions refuses to disclose talks with Donald Trump
Charlie Savage, Emmarie Huetteman and Rebecca R. Ruiz
Published: June 14 2017 - 7:46AM
Washington: Attorney General Jeff Sessions engaged in highly contentious testimony before the Senate Intelligence Committee on Tuesday US time, with Democrats pressing him on his conversations with President Donald Trump related to the investigation of Russian meddling in the 2016 election.
He called any suggestion that he colluded with Russians during the election an "appalling" lie.
"Please, colleagues, hear me on this," he said.
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US 'not winning' in Afghanistan, Defense Secretary Jim Mattis tells Congress
Phil Stewart and Idrees Ali
Published: June 14 2017 - 2:42AM
Washington: The United States is "not winning" the war against Taliban insurgents in Afghanistan, US Defense Secretary Jim Mattis told Congress on Tuesday, promising to brief lawmakers on a new war strategy by mid-July that is widely expected to call for thousands more US troops.
The remarks were a blunt reminder of the gloom underscoring US military assessments of the war between the US-backed Afghan government and the Islamist militant group, classified by US commanders as a "stalemate" despite almost 16 years of fighting.
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Jeff Sessions' stonewalling creates more problems for Trump's 'Russian thing'
Paul McGeough
Published: June 14 2017 - 10:21AM
Washington: Feisty at times, US Attorney-General Jeff Sessions denied any knowledge of, or participation by, members of the Trump campaign in Russian meddling in the 2016 election, but his refusal to discuss conversations with Donald Trump sparked bouts of head-butting as he testified before a Senate committee.
Any suggested involvement by him was a "detestable lie", Sessions declared – and had he been made aware of collusion with Moscow, he would have quit his key role in the campaign.
Sessions' appearance was about defending his reputation after damaging evidence when sacked FBI director James Comey testified to the Senate Intelligence Committee last week – but the optics of his persistent rejection of questions on conversations with the President were yet another headache for a White House struggling to escape from the Russia quagmire.
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Special counsel Robert Mueller is probing Donald Trump for possible obstruction of justice
Devlin Barrett, Adam Entous, Ellen Nakashima and Sari Horwitz
Published: June 15 2017 - 9:36AM
The special counsel overseeing the investigation into Russia's role in the 2016 election is interviewing senior intelligence officials as part of a widening probe that now includes an examination of whether President Donald Trump attempted to obstruct justice, officials said.
The move by Special Counsel Robert Mueller to investigate Trump's own conduct marks a major turning point in the nearly year-old FBI investigation, which until recently focused on Russian meddling during the presidential campaign and on whether there was any coordination between the Trump campaign and the Kremlin.
Investigators have also been looking for any evidence of possible financial crimes among Trump associates, officials said.
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I look forward to comments on all this!
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David.
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