April 19, 2018 Edition.
The news of the week is the US, UK and France bombing Syrian chemical warfare facilities. It seems to have gone off reasonably well and all we now need to do is see if it puts an end to chemical weapons use. Time will tell as usual on how well it went and what effect it will have.
Trump also is seemingly changing his mind on trade etc. so who knows what is really going on! The TPP is off again for example!
In OZ the NEG is being discussed and the undermining of Turnbull continues apace. The pollies continue to be self-obsessed and the public frustration continues to build! Who knows where and when it will all end? As for the Royal Commission it is just scary how many corrupt people seem to be out there! Just awful!
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Here are a few other things I have noticed.
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Major Issues.
Newspoll: a miserable Coalition mob with little hope of sunlight
- The Australian
- 12:00AM April 9, 2018
Simon Benson
The Coalition partyroom is a divided cabal torn between hope and despair and rendered immobile as it convulses over its future.
This is a condition that now crosses factional lines. The myth of a conservative mutiny has been broken. The Prime Minister’s broader support base among moderate MPs is also fracturing.
There are those who are still willing Turnbull to succeed, clinging to a cogent belief that Bill Shorten is disliked, distrusted and therefore beatable. But a larger number are now resigned to a defeat, having lost confidence in Turnbull’s ability to be the one to do it. No sensible Liberal will be doing cartwheels over a one-point gain in the two-party-preferred vote to 48/52 when the primary vote is stuck at 38 per cent.
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South African farmers: industrious, English-speaking migrants fit in best
- The Australian
- 12:00AM April 9, 2018
Adam Creighton
Forget South Africans, more Croatians please?
Home Affairs Minister Peter Dutton was spot on that South African farmers, terrorised by their own government and marauding compatriots, would likely make a strong economic contribution to Australia were they given refugee visas.
Of course, Australia can’t take all the world’s 23 million refugees, so why not prioritise those who are most likely to fit in economically? That saves taxpayers money in welfare, and minimises social discord.
It turns out skilled South African and English immigrants have unemployment rates of about 2 per cent, compared to a 5.6 per cent rate nationally, according to a 2014 study by the Immigration Department of arrivals between 2001 and 2011.
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Retirement savings loom as key battleground for next federal election
ROB HARRIS, National politics reporter, Herald Sun
April 4, 2018 6:06pm
RETIREMENT savings again loom as a key battleground for the next federal election as the Turnbull government attempts to win back the trust of millions of older Australians.
Revenue Minister Kelly O’Dwyer said the government wants to give certainty to workers planning for their retirement by ruling out any further tax changes to the superannuation.
The Coalition suffered a major backlash over its changes to super prior to the 2016 election from within its own ranks and was forced to adjusted some of its policy.
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Will the bank royal commission damage house prices?
By Elizabeth Knight
9 April 2018 — 3:42pm
Cutting through the various predictions of a slump in house prices, the facts are: yes, house prices in Sydney and Melbourne are still falling but the rate of decline is also falling; and at a national level prices have now steadied.
In the biggest market, Sydney dwelling values were falling at a monthly rate of 0.9 per cent in December and January, reducing to 0.6 per cent in February and now 0.3 per cent in March, according to CoreLogic.
Even before prices began to drop, the market was already losing steam. It was apparent a year before that growth rates started to ease.
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What's the value of the Commonwealth? Nearly $4 trillion in untapped trade
By Latika Bourke
10 April 2018 — 10:15am
London: Trade between the Commonwealth nations could explode to $3.86 trillion in value by the end of next decade a British inquiry committee has said.
The predicted boost in the value of trade depended on the 53 member countries of the Commonwealth signing up to a series of proposals to lower the cost of trading goods, particularly in African nations.
The committee said they would also need to harmonise regulations to facilitate the booming services sectors seen in countries such as Australia and Singapore.
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Changing tide: three big risks the global investor should watch out for
- The Australian
- 12:00AM April 10, 2018
Don Stammer
The prevailing sentiment in equity markets has swung from optimism to a mix of gloom and extreme uncertainty. In these market conditions, investors need to stand back from the crowd and recognise the shades of grey.
Over the 18 months to the end of January, shares delivered above-average returns, bond yields climbed only modestly and investment markets displayed remarkable calm. Concerns about stretched valuations and the many geopolitical worries were overridden by the stronger-than-expected global growth and by the comfort of accommodative monetary policies.
Then investment markets were hit by the wind change in early February. Initially, bond markets weakened sharply. Sharemarkets — in the US more than elsewhere — soon turned volatile and gloomy.
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Labor’s tax policy has retirees rethinking reasons to save
- The Australian
- 12:00AM April 10, 2018
Olivia Caisley
Adam Creighton
Labor’s push to slap a minimum 30 per cent tax on dividends hasn’t only enraged tax purists by tearing up an 18-year-old tax principle, it’s incensed the nation’s million-plus army of self-funded retirees who are increasingly asking “why did we even bother saving?’’
Opposition Leader Bill Shorten’s policy to cease cash refunds for dividend franking credits should Labor win the election has potentially left up to one million self-funded retirees out of pocket.
John Bolton, a 64-year-old retired lawyer from Caloundra, in southeast Queensland, said Labor’s plan to “defraud” him of his retirement savings had made him reconsider a lifetime of hard work, describing the proposed changes as “grossly unfair”.
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Liberals will struggle for as long as they remain the issue
- The Australian
- 12:00AM April 11, 2018
Paul Kelly
This is not just about personalities. The crisis within the Liberal Party is permanent and deep-seated. As an institution it is now incapable of unity around a common agenda. It is riven by disputes about the policies it needs to succeed and what the Liberal Party represents.
The lesson from the focus on the 30th Newspoll loss for Malcolm Turnbull is that the leadership story will run until the next election — and it will keep running beyond it. Julie Bishop and Peter Dutton are seen as banner-carriers into the next political cycle of the ideological war between progressives and conservatives.
The brawl over energy policy has morphed into a dispute over core belief. With Tony Abbott calling for “strong-arming” and forcible acquisition of the AGL Liddell power station — after demanding the previous week the government build a new coal-fired power plant — the Prime Minister and Energy Minister Josh Frydenberg hit back by invoking RG Menzies and his crusade against nationalisation to chastise Abbott for breaching essential Liberal values.
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- Apr 11 2018 at 11:54 AM
The fight about AGL's Liddell power station explained
AGL Energy's Liddell coal power plant has become a flashpoint for the debate around the future of the electricity system.
Amid the flurry of claims and counter-claims, The Australian Financial Review weighs up the arguments, leaving aside the political point-scoring.
Commissioned in 1973, the generator has a 50-year life and its original 2000 megawatts of baseload capacity is no longer able to be used in full.
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- Apr 12 2018 at 7:45 AM
Volatility brings opportunities for long-term investors: Mohamed El Erian
by Mohamed El-Erian
The transition from liquidity-powered markets for risk assets to those influenced a lot more by fundamentals was never likely to be smooth, as it involved changes to drivers of investor behaviour and market flows. Yet, despite this year's unsettling spikes in high-frequency, two-way market moves, the right investment strategy is to "look through" the volatility.
Given the events in markets over the last few years, this approach has two main implications for long-term investors: On portfolio allocation, it calls for them to make either implicit or explicit calls on macroeconomic policies in the US, Europe and China; and, on specific exposures, it requires them to take a view on key emerging trends.
This year has been characterised by the kind of stock market movements that hadn't been seen for a while. As an example, Bloomberg Markets reported last week that there had already been three times as many moves of 1 per cent or more in the S&P 500 this year than there were for the whole of 2017.
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Business promise on tax cut 'a danger to economic freedom', warns leading conservatives
Eryk Bagshaw
Published: April 11 2018 - 3:45PM
A leading conservative think tank says an unprecedented pledge made to the Senate by the Business Council if company tax cuts were passed is “damaging to economic freedom,” as business chiefs prepare to face a grilling days before the May budget.
The pledge, made as part of a last-minute lobbying blitz in March by the nation's largest companies, including Qantas and BHP, committed them to reinvesting savings that resulted from tax cuts in the hope of eventually stimulating wage growth.
But conservative economists at the Centre for Independent Studies are incredulous the Business Council made such a promise, warning conditional cuts are “a step in towards central economic planning and corporatist economic management”.
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- Updated Apr 11 2018 at 11:00 PM
Why do politicians think that there are votes in coal?
by Matthew Warren
The electricity grid that supplies power to Australia's populated east coast is one of the biggest machines on earth. It is troubling that in 2018 its future risks being determined by the vagaries of political ideology.
Apparently we have to save the coal-fired power industry – by building new coal-fired power stations. Which is curious because the Australian Energy Council effectively represents this industry, and as far as we can see no one here has issued an SOS.
Coal-fired electricity generators have been the backbone of Australia's electricity supply for the past century. We still derive around 75 per cent of our power from them. Our members own them and run them. They will continue to supply electricity well into the 21st century.
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Upbeat outlook despite trade fears: report
2:26pm Apr 11, 2018
Economists expect Treasurer Scott Morrison can present a positive picture in next month's budget, despite fears of an escalating trade war between China and the US.
The stoush between the US and China has rattled financial markets and dented local confidence.
But in its quarterly economic outlook, KPMG Economics is forecasting growth of 2.9 per cent for this financial year, a marked pick-up from the modest two per cent expansion in the 2016/17 year.
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Next move is up, and it'll shock, says RBA
By Peter Martin
11 April 2018 — 6:36pm
The next move in official interest rates will almost certainly be up, it won’t come for a while, and it will “shock”, Reserve Bank Governor Philip Lowe has warned.
In what appears to be part of a campaign to prepare people for a rate hike, Governor Lowe told an audience in Perth that the last increase was more than seven years ago, meaning it would “come as a shock to some people”.
But it wouldn’t happen for some time.
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Malcolm Turnbull concedes there is 'tension' between Australia and China
By Fergus Hunter
12 April 2018 — 10:17am
Prime Minister Malcolm Turnbull concedes Australia's relationship with China is suffering from "some tension" amid fallout from the government's foreign interference laws and Beijing's growing influence in the Pacific.
Mr Turnbull blamed "misunderstandings and mischaracterisations" in Chinese media for the heightened tensions, and declined to confirm or deny a report that an angry Chinese government is denying Australian ministers visas to visit.
"There's clearly been some tension in the relationship following the introduction of our legislation about foreign interference but I'm very confident that any misunderstandings will be resolved," the Prime Minister told 3AW radio.
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Why the airport rail link barely stacks up and shouldn't happen yet
By Peter Martin
12 April 2018 — 10:12pm
Just months ago in December, Infrastructure Victoria published the most comprehensive analysis yet of Victoria’s infrastructure needs.
It examined 300 potential projects, many of them desperately needed, and pronounced the Melbourne Airport Rail Link only “supported in principle”.
And not for a long time.
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Reserve Bank still nervous about China debt risks
- James Glynn
- Dow Jones
- 11:39AM April 13, 2018
Risks of a damaging housing crunch in Australia have eased as the property market cools following a crack down on loose mortgage lending in recent years, the Reserve Bank said today.
Still, in its latest report card on the stability of the financial system, the RBA said it remains fearful of a build up of risks around corporate and housing debt in China, by far Australia’s biggest trading partner.
China’s extensive shadow banking system makes measuring the extent of the financial-sector risk difficult, the RBA added.
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- Apr 13 2018 at 12:06 PM
RBA flags dangers of $480b in interest-only loan resets over the next four years
The Reserve Bank of Australia estimates that as much as $480 billion in interest-only mortgages will convert to principle and interest loans over the next four years, ratcheting up the repayment burden on around 30 per cent of outstanding loans.
Warning that the resets are an "area of concern", the Reserve Bank expects repayments will jump by between 30 per cent and 40 per cent on those loans, even as it added that it didn't expect any increase in financial stress to be widespread.
"Most borrowers should be able to afford the step-up in mortgage repayments because many have accumulated substantial prepayments, and the serviceability assessments used to write IO loans incorporate a range of buffers," the Reserve Bank said on Friday. "Moreover, these buffers have increased in recent years.
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5 Rules to Help Avoid Investing Disaster
It's actually not that hard.
by Barry Ritholtz
February 9, 2018, 3:25 AM GMT+11 Corrected February 9, 2018, 7:20 AM GMT+11
Easy to avoid.
A basic rule of life is to avoid being a guinea pig in other people’s experiments. This is an inviolable rule of technology: consumers should always leave 1.0 of anything to the early adopters. All car fanatics know that any brand-new vehicle model will come with bugs, quirks and design issues that tend to get corrected in the second year of production. And anytime finance creates a new product -- from CDOs to ETNs to ICOs -- smart investors know to give these novel trading vehicles a wide berth until proven safe and effective in a variety of market and economic conditions.
Which brings us to the most recent shiny Wall Street toy to blow up: inverse volatility products. Consider the Credit Suisse Velocity Shares Inverse VIX ETN. The prospectus for this product has a so-called termination clause, and Credit Suisse has said it will redeem the ETN later this month. What was worth $1.5 billion last week has since declined by roughly 95 percent. The best explanation I have seen to date on the inverse volatility trade is here. See the chart below for what happened to those who played this bet:
Events such as this are opportunities to remind investors of some basic rules. So, without further delays, let’s delve into what lessons investors should have gleaned from the past week’s debacle.
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Is something more sinister at play in Australia’s low-wage story?
By Jessica Irvine
14 April 2018 — 12:05am
The annoying thing about economic turning points, is that it’s impossible to know – at the time – when one is occurring.
It is only with the benefit of hindsight, that we can declare with any confidence that a crucial turning point has been reached.
Policymakers at the most senior levels of Australian government and central banking are united in their hope that Australia’s record low wages are at a turning point.
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Scandals show ASX is sleeping at the wheel
- The Australian
- 12:00AM April 14, 2018
James Kirby
There’s a rotten development right at the heart of the Australian sharemarket as a string of scandals unfold: a motley selection of investor favourites that have been sold as “companies of the future” are instead being revealed as wealth destroyers.
“Pitched as innovative new era leaders, there is a distinct sense now that perhaps the outstanding feature of some of these companies is that they had a head start on local regulators.
For anyone in the sharemarket the delightful prospect of a bagging a big win on the ASX is always present. But the issue is whether you are gambling or investing when dealing with companies at this level?
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Housing OK but RBA warns on China, assets
- The Australian
- 12:00AM April 14, 2018
David Rogers
The risks of a damaging housing crunch had eased, with clear signs of a cooling property market following a crackdown on loose mortgage lending, the Reserve Bank said yesterday.
But in its latest report card on the stability of the financial system, the RBA warned that the accumulated risks to financial stability in the nation’s biggest trading partner — China — remain high.
It also cautioned that global markets were underpricing the risk of an economic shock.
While strong economic conditions had improved the health of the global banking system, “very low” yields on long-term government bonds were still causing “elevated asset valuations” and “search for yield activity”, so that compensation for risk was “low” for many assets, the RBA said.
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National Budget Issues.
A mongrel bunch of bastards': The small businesses being crushed by the tax office
Mark Freeman's bright business idea earned him a government grant. But the tax office disagreed and hit him with a huge bill. Seven years and $750,000 later, he is still fighting for justice.
By Adele Ferguson, Nassim Khadem & Lesley Robinson
8 April 2018
n dealing with the ATO, I’ve never come across such a mongrel bunch of bastards in my entire life.”
Mark Freeman’s troubles with the Australian Taxation Office began in mid-2011 with an audit of Blackwater Treatment Systems, a company he set up to develop technology that would turn waste into reusable water.
The company had won research and development grants from the government’s innovation arm, it was working in collaboration with the University of NSW and had third-party support from Standards Australia.
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Turnbull is wrong to give us tax cuts in the budget
By Jessica Irvine
9 April 2018 — 12:01am
There is just one month to go until the social highlight of every economics journalist’s calendar: the federal budget lock-up.
It’s the nerd equivalent of our Olympic games. Each year, on the second Tuesday in May, we gather in Canberra to be voluntarily imprisoned in a suite of committee rooms located deep in the heart of Parliament House, where – fuelled by little more than party pies and lollies – we attempt the Herculean task of combing through thousands of pages of statistics to figure out what exactly the government has done with your money.
Of course, the guessing game begins long before lock-up. In the weeks leading up to the budget, gallery journalists endure great hardship, as editors demand fresh budget leaks.
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Govts enjoy renewed mining profitability
3:31am Apr 11, 2018
The mining sector is enjoying its most profitable period since the industry's investment boom, providing a bigger tax coffer for Treasurer Scott Morrison as he puts his third budget together.
An analysis by Deloitte Access Economics for the Minerals Council of Australia found Australian mining companies paid $12.1 billion tax in 2016/17, almost four times as much as the previous financial year and the highest since the mining investment boom in 2011/12.
"This means that mining companies are estimated to have paid one in every five dollars of Australia's company tax take," the council's interim chief executive David Byers said in a statement on Wednesday.
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Extortion is no way to fix the budget
By Peter Martin
11 April 2018 — 10:07pm
In their rush to find money for next month's tax cuts, Turnbull and Morrison run the risk of making an awful mistake.
Like they did in 2016, and perhaps in 2017.
In 2016, needing to demonstrate that they could pay for their (modest) election promises, they unveiled a $2 billion fix days before the vote.
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It's time for sweetest tax of them all
By Peter Martin
Updated15 April 2018 — 1:13am first published at 12:05am
Time for a tax on sugar here?
Never before has a tax been such an instant success. I am talking about what happened in Britain last Friday. That’s when new so-called sugar tax sprung into life, with much of its work already done.
The whole idea was to cut the consumption of sugar, something we have just as much need to do here, given that our rates of obesity are on a par with those in Britain - an outrage that will prevent many of us living long lives.
Up to one third of us are obese, another third are overweight. Thirty years ago it was 10 per cent. If you don’t think that’s shortening lives, ask my colleague, Peter FitzSimons. He says everyone he sees aged over 75 is thin. Their heavier contemporaries are dead.
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Health Budget Issues.
Alcohol industry gets say on booze controls
- The Australian
- 12:00AM April 9, 2018
Ben Packham
Health Minister Greg Hunt has moved to reassert control over the development of a new national alcohol strategy, giving the industry a say on a plan that had threatened to raise the price of beer and wine for everyday drinkers.
The Ministerial Drug and Alcohol Forum was due to finalise the policy this month after a three-year process, but its final draft will now be pushed out to the second half of the year.
Mr Hunt wrote to his state counterparts last month calling for a forum with “selected stakeholders” to work “collaboratively and collectively on solutions to any residual issues”.
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The doctor who won't reveal fees - and other health cover hell tales
By Jenna Price
10 April 2018 — 12:05am
At dinner with friends, talk inevitably turns to the human condition. More
The dry eyeballs. The creaky hips. Our skin, yielded to those early decades of abuse. The pains and aches of ageing, even though, in the big scheme of things, we are not even two-thirds there.
I swore I would never be one of those people, yet here I am. And as we talk about our bodies falling apart, we also talk about money, how to pay for upkeep - those endless trips to the physio, the colonoscopies, multifocals, the fancy treatments to get rid of various skin cancers don't pay for themselves.
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Bill Shorten lashes AMA over Medicare levy rise for NDIS
- The Australian
- 2:04PM April 12, 2018
Greg Brown
Bill Shorten has accused the Australian Medical Association of being Malcolm Turnbull’s “pawn” after the peak doctors’ body urged Labor to support the government’s increase to the Medicare levy to pay for the $22 billion National Disability Insurance Scheme.
The Opposition Leader attacked the AMA, after The Australian revealed it had split with Labor on the issue and accused Mr Shorten of using the issue as a political football.
The AMA wants Labor to back the government’s 0.5 per cent increase to the Medicare levy for all taxpayers, rather than just workers earning over $87,000.
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How much booze can you drink before it starts killing you? Not much
By Liam Mannix
12 April 2018 — 6:26pm
Drinking more than six glasses of wine or cans of beer a week reduces your life expectancy, according to the one of the largest-ever studies on global alcohol consumption.
The more you drink, the higher your risk, the study says. Heavy drinkers shave years off their lifespan.
Australian health guidelines say 14 standard drinks a week – that’s about seven pints of beer, or about nine glasses of wine – is safe.
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Plan to tackle endometriosis top of list at COAG health ministers meeting
By Esther Han
12 April 2018 — 7:58pm
In numbers
· Estimated number of Australian women with endometriosis 700,000
· Federal Government's initial investment to address research priorities identified in the National Action Plan $2.5 million
· Proper diagnosis can take many years 7 to 10 years
A plan is being drawn up by federal Health Minister Greg Hunt to tackle endometriosis, a chronic, painful condition suffered by 700,000 women nationally.
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AMA blasts Shorten for calling it a pawn
- The Australian
- 12:00AM April 13, 2018
Rick Morton
The Australian Medical Association has hit back at a jibe by Labor leader Bill Shorten that it is being used as a “pawn by the government” in advocating for a Medicare levy rise to fund the National Disability Insurance Scheme, declaring it is “furious” in its independence.
The doctors’ lobby, which yesterday called for the $22 billion disability scheme to be funded in full and prioritised across party lines, was joined by grassroots group Every Australian Counts that once stood with Mr Shorten at events campaigning for the NDIS.
“We stand together with the AMA demanding bipartisan support to fully fund the NDIS via a small increase to the Medicare levy,” Every Australian Counts campaign director Kirsten Deane said. “Full funding will guarantee the future of the NDIS and assure people with disability and their families that the scheme will be there for them when they need it.
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Turnbull closer to deal with states on health funding
- The Australian
- 12:00AM April 14, 2018
Joe Kelly
Malcolm Turnbull is closer to clinching a deal with the states and territories over his health funding package after South Australia and the ACT signed up to a new five-year agreement starting in 2020.
Health Minister Greg Hunt told The Weekend Australian the outcome of yesterday’s Council of Australian Governments meeting of health ministers in Sydney represented a “real breakthrough”.
“They’ll come on board and there’s very good progress with the other states,” he said. “This is a year earlier than expected ... That means we have two Labor and two Liberal states and territories.”
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International Issues.
Trump calls Assad 'animal', blames Putin after alleged chemical attack
By Mohammed Aly Sergie
8 April 2018 — 11:56pm
Dubai: US President Donald Trump has condemned a "mindless chemical attack" in Syria that killed women and children, called Syrian President Bashar Assad an "animal" and delivered a rare personal criticism of Russian President Vladimir Putin for supporting the Damascus government.
As Washington worked to verify the claim by Syrian opposition activists and rescuers that poison gas was used, Trump said there would be a "big price to pay" for resorting to outlawed weapons of mass destruction. A top White House aide, asked about the possibility of a US missile strike in response, said, "I wouldn't take anything off the table."
The United Nations Security Council is holding an emergency meeting on Monday to discuss the attack.
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North Korea confirms it is willing to talk denuclearisation
By David Nakamura
9 April 2018 — 7:04am
Washington: North Korea has confirmed directly to the Trump administration that it is willing to negotiate with the United States over potential denuclearisation, administration officials said.
The confirmation on Sunday evening, US time, offers the administration greater assurances that North Korean leader Kim Jong-un is committed to a potential meeting with President Donald Trump by the end of next month.
"The US has confirmed that Kim Jong-un is willing to discuss the denuclearisation of the Korean Peninsula," an administration official said.
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In Syria, is Trump sowing the seeds for an Islamic State resurgence?
By Josh Rogin
9 April 2018 — 5:56am
Washington: There are a lot of good arguments for maintaining an American presence in Syria after the fall of the Islamic State, but US President Donald Trump doesn't seem persuaded by any of them.
Perhaps he would back off his urge to cut and run if he knew that the United States and its partners control almost all of the oil. And if the United States leaves, that oil will likely fall into the hands of Iran.
It's one feature of a larger US mission in Syria that is really about containing Iranian expansionism, preventing a new refugee crisis, fighting extremism and stopping Russia from exerting influence over the region. The United States has serious national security interests in making sure that Syrian President Bashar al-Assad, Russian President Vladimir Putin and Iran don't push America out of Syria and declare total victory.
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Trump has the right problem but the wrong solution
By Molly Kiniry
8 April 2018 — 10:00am
With all the grace and subtlety of a pay-per-view wrestling match, the Trump trade war has finally begun. In one corner, we have the president of the United States. In the other, we have president Xi Jinping and the Communist Party of the People's Republic of China, that newfound bastion of free trade. This isn't the show that most people signed up for, but it's the show we're going to get.
This is a dangerous game, and there has been no shortage of criticism of Donald Trump for imposing trade restrictions on China. But to his credit, the president's motives are not bad ones.
Be it a burglar stealing something from your home or a government deciding that your intellectual property no longer belongs to you or your shareholders, most people would call those activities "theft", and agree that some form of retaliation is acceptable. The Chinese have been bad actors in this area for a long time, and it's not unreasonable that the United States should respond. In fact, the US is probably the only country on Earth which can afford to challenge the Chinese government on some of its more egregious practices.
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China eyes Vanuatu military base in plan with global ramifications
By David Wroe
9 April 2018 — 8:14pm
China has approached Vanuatu about building a permanent military presence in the South Pacific in a globally significant move that could see the rising superpower sail warships on Australia’s doorstep.
Fairfax Media can reveal there have been preliminary discussions between the Chinese and Vanuatu governments about a military build-up in the island nation.
While no formal proposals have been put to Vanuatu's government, senior security officials believe Beijing’s plans could culminate in a full military base. The prospect of a Chinese military outpost so close to Australia has been discussed at the highest levels in Canberra and Washington.
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Canberra needs to get very serious, very quickly, to counter this move by a master strategist
By Peter Hartcher
10 April 2018 — 12:05am
On the global chessboard of power politics, the advent of a Chinese military base in the South Pacific would be the equivalent of Australia being placed in check.
If the government of Vanuatu were to agree to host a permanent base for an expanding Chinese military, "it would signal a pretty significant failure of Australia's long-term security policy," observes the head of ANU's National Security College, Rory Medcalf.
Ever since Japan's campaign in World War II, "it's been an unspoken objective of Australian defence and foreign policy for 70 years to ensure that no other power could project force against Australia from the South Pacific," he says.
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'Bite the bullet and get out': Trump has lost the confidence of investors
By Robert Burgess
10 April 2018 — 9:48am
President Donald Trump likes to equate the rally in stocks since the November 2016 elections with confidence in him and his policies. And yes, the S&P 500 Index has surged 22 per cent since then, but a deeper look at equities, bonds and the dollar reveals anything but trust in his stewardship.
Here's the executive summary: US companies are valued less now than before Trump was elected, despite the run-up in stocks, big corporate tax cuts, reductions in regulations and booming earnings. The cost to borrow for the US has soared relative to other governments, a sign investors are worried about America's creditworthiness. The dollar's share of global currency reserves has dropped by the most since 2002.
Investors are losing faith because Trump is turning into the type of president many always feared: unpredictable, volatile and tempestuous. Those characteristics were certainly present last year, but they were largely overlooked as his administration pushed through pro-growth, pro-business initiatives such as tax reform and regulatory cuts. Now, many highly-regarded White House staffers such as former Goldman Sachs President Gary Cohn and cabinet members such as former Exxon Mobil Chief Executive Rex Tillerson have exited and it's unclear who is left to keep Trump in check on his more radical policies such as those he is pushing through now on trade.
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- Updated Apr 10 2018 at 12:22 PM
Canberra flounders as Beijing keeps calling the shots
by Geoff Raby
If anyone had been in doubt, the past few weeks have demonstrated once again how fundamentally Australia's geopolitical and strategic environment has changed and the extent to which this has been shaped by China. It has also highlighted Australia's strategic confusion over how to respond.
President Xi Jinping was at the height of his powers and unchallenged in the exercise of his authority in the recently concluded National People's Congress. Completing his appointments of trusted advisers and supporters to senior offices, which began at last year's 19th Party Congress, he appointed Wang Qishan as Vice-President. Over the past six years, Wang has led Xi's anti-corruption campaign, which has routed most political rivals.
In another unconventional move, Xi also appointed his chief economic adviser, Liu He, to the position of Vice-Premier. Together with Li Gang, appointed to head the People's Bank of China, the top echelons of economic policy advice are now occupied by English-speaking economists educated in the US. In the 1970s and '80s, diplomats in Beijing would rue the fact that China's economic policy elite were educated in the Soviet Union. A joke is now doing the rounds in Beijing: when the elite were educated in the Soviet Union, Beijing's relations with Moscow were terrible and now it's the same with the US when the elite have been educated there.
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Trump fumes over FBI raid in Stormy Daniels affair
By John Walcott
11 April 2018 — 9:32am
Washington: President Donald Trump was fuming on Tuesday over FBI raids of his lawyer's office and home in search of details about ties between Trump and two women who say they had sex with him, aides said.
The latest turn of events in a wide-ranging probe that Trump has called a "witch hunt" has moved investigators deeper into the president's inner circle of advisers and cast a pall of uncertainty over the White House.
The raids on attorney Michael Cohen represent a dramatic escalation of a federal inquiry led by Special Counsel Robert Mueller into alleged Russian meddling in the 2016 US election and possible collusion by Trump campaign aides.
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Lend unsustainably and move quickly: the China modus operandi
By Peter Martin
10 April 2018 — 6:48pm
From Vanuatu to Papua New Guinea, from Sri Lanka to Pakistan, from the Maldives to the tiny republic of Djibouti on the Horn of Africa, Chinese ‘assistance’ follows roughly the same pattern.
It comes in the form of loans, not much cheaper than, and sometimes more expensive than loans that could have been obtained from organisations set up for the purpose such as World Bank and International Monetary Fund. But their advantage is that they are approved quickly and are often for purposes more attractive to elites than to the countries themselves.
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On the ground in Vanuatu, monuments to China's growing influence are everywhere
By David Wroe
10 April 2018 — 7:04pm
Port Vila: Michael Jiang, the managing director of the Sino-Van fish processing factory in Vanuatu's capital, has a problem.
Right now, he has no fish and no workers. The initial burst of haste that led to the plant's construction a decade ago has stalled amid land disputes and other problems.
Port Vila's massive national convention centre - also Chinese-built - is even quieter. There is not a soul around.
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Russia as 'besieged fortress' storyline roars back as US tensions rise
By Anton Troianovski
11 April 2018 — 6:01am
Moscow: In the Kremlin's telling, this is a country under siege.
The United States is considering strikes on Russian ally Bashar Assad in Syria, prompting ominous speculation among people close to the Kremlin that such a move could touch off a wider conflict. One scholar who advises the Russian Defence Ministry even raised the specter of "World War III."
At the same time, US sanctions against top Russian business executives wiped billions of dollars off Russian stock market values this week, prompting fears the country's already stagnant economy could be thrown back into recession.
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Xi Jinping promises to lower tariffs, reduce investment restrictions
By Kirsty Needham
Updated10 April 2018 — 4:54pmfirst published at 1:40pm
Boao, China: Chinese President Xi Jinping has pledged to “considerably reduce” tariffs on foreign cars sold in China this year, meeting a key demand of Donald Trump.
The olive branch was offered in a keynote speech at the Boao Forum, considered by many the Davos economic forum of Asia, after days of escalating rhetoric between the US and China over trade.
Mr Xi said China would also reduce restrictions on foreign investment in automotive and aircraft manufacturing, among a raft of market opening measures, many of which have been previously flagged.
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- Apr 11 2018 at 10:06 AM
Rivalry between the US and China will shape the 21st century
by Martin Wolf
China is an emerging superpower. The US is the incumbent. The potential for destructive clashes between the two giants seems potentially unbounded. Yet the two are also intimately intertwined. If they fail to maintain reasonably co-operative relationships they have the capacity to wreak havoc not only upon each other, but upon the entire world.
China is a rival of the US on two dimensions: power and ideology. This combination of attributes might remind one of the clash with the Axis powers during the second world war or the cold war against the Soviet Union. China is of course very different. But it is also potentially far more potent.
China's rising power, economic and political, is evident. According to the IMF, its gross domestic product per head in 2017 was 14 per cent of US levels at market prices and 28 per cent at purchasing power parity, up from 3 per cent and 8 per cent, respectively, in 2000.
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- Updated Apr 9 2018 at 11:00 PM
The collapse of the 'Chinese collapse' theory
by Richard McGregor
In Japan, they call it "the collapse of the 'Chinese collapse' theory."
The line, which harks back to more than a decade of dire predictions about China, is a joking way to describe the state of the Middle Kingdom's economy.
Far from falling in debt-laden heap, the economy is looking robust in the medium term. Many of the perennial China bears are retreating into hibernation.
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- Apr 12 2018 at 4:09 AM
Donald Trump v Vladimir Putin feud fires up in Syria
by John Kehoe
Donald Trump's warning for Russia to "get ready" for US missiles hailing on its Syrian ally and Moscow's threat to shoot them down shook financial markets and underlines sinking relations between Washington and Moscow.
The US President is usually reluctant to criticise the Russian leader by name, but the conflict in Syria has quickly morphed into a sideshow battle of Trump versus Vladimir Putin.
The resolve of the strongmen leaders will be tested, as geopolitical concerns deviate from US-China trade tensions and North Korea's nuclear weapons testing.
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- Apr 12 2018 at 2:50 AM
Paul Ryan's unexpected retirement seen as a blow to Republicans
by Richard Cowan and Susan Cornwell
US House of Representatives Speaker Paul Ryan will not seek re-election and will leave his post at the start of 2019, further unsettling a Republican Party rocked by Donald Trump's tumultuous presidency ahead of November's pivotal congressional elections.
Ryan, who has had an often-strained relationship with Trump but helped the president achieve his biggest legislative victory in the form of major tax cuts in December, made the announcement on Wednesday (Thursday AEST), portraying it as a decision to spend more time with his family after serving two decades in the House.
He is the 41st Republican legislator to say he won't be contesting re-election in November, when the Democrats are expected to pick up new seats in the mid-term elections.
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- Updated Apr 11 2018 at 11:00 PM
China's strength is also its weakness
by Daniel Moss
For the first time since the Opium Wars of the 19th century, China's borders and territory are unchallenged. No conflict frays the country's edges. This stability has allowed for rapid industrialisation, foreign investment and the rise of an urban Chinese middle class. Why would China jeopardise this in a trade spat with the US?
Hard-won political unity created the conditions in China for the reforms of the Deng Xiaoping era and the country's huge economic success. Those gains, in turn, make China confident and strengthen its hand in talks with the Trump administration that will ultimately come.
The advances are also the biggest thing China has to lose. The stronger China's position, the more it has the scope – and necessity – to offer concessions to stave off a conflict.
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Peter Costello laments ‘strained’ ties with China
- Sarah-Jane Tasker,In Hainan
- The Australian
- 4:04PM April 11, 2018
Former treasurer Peter Costello has labelled Australia’s relationship with China as “strained”, using as evidence the lack of senior government officials at the annual Boao Forum for Asia conference.
Mr Costello said in the 10 years he had attended the forum Australia had always had high level ministerial representation, which has included prime ministers, foreign ministers, finance ministers and trade ministers.
“Australia has always taken the Chinese relationship very seriously and it still does but the lack of ministerial contact does show the relationship is strained at the moment,” he told The Australian on the sidelines of the conference.
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The Putin myth: why Russia is no economic superpower
By Ambrose Evans-Pritchard
12 April 2018 — 11:10am
Russia's GDP was smaller than that of Texas even before the latest and most lethal sanctions imposed by Washington.
It has diminished further to Benelux proportions after the rouble's 10 per cent crash this week, the steepest fall since the late Nineties.
Vladimir Putin has squandered Russia's advantages.
Upon this slender economic base, Vladimir Putin's Russia is posing as a world-class superpower, the new master of the Middle East, insisting on its "droit de regard" over the old Tsarist realms as if by natural right.
What is extraordinary is than anybody should believe in such posturing.
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Donald Trump untethered to truth, James Comey says in new book
13 April 2018 — 9:05am
Washington: Former FBI director James Comey blasts US President Donald Trump as unethical and "untethered to truth" in a forthcoming book and calls his leadership of the country "ego driven and about personal loyalty".
Comey reveals new details about his interactions with Trump and his own decision-making in handling the Hillary Clinton email investigation before the 2016 election.
He casts Trump as a Mafia boss-like figure who sought to blur the line between law enforcement and politics and tried to pressure him regarding his investigation into Russian election interference.
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China-Australia tension as biggest trading partner gives us the cold shoulder
By Kirsty Needham
12 April 2018 — 3:23pm
Hainan, China: The freeze in diplomatic relations between China and Australia is on, despite official denials – and business executives are clearly despondent about it.
That was the message from the sidelines and back-room meetings at the Boao Forum in China this week.
No Australian ministers attended. In fact, no Australian ministers have stepped foot in China this year, because the usual smooth process of invitations being issued and dates being confirmed by Beijing has ground to a halt.
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Billions of words later, the anti-Trump movement has failed
By David Brooks
10 April 2018 — 1:52pm
Over the past year, those of us in the anti-Trump camp have churned out billions of words critiquing the president. The point of this work is to expose the harm President Donald Trump is doing, weaken his support and prevent him from doing worse. And by that standard, the anti-Trump movement is a failure.
We have persuaded no one. Trump's approval rating is around 40 percent, which is basically unchanged from where it's been all along.
We have not hindered him. Trump has more power than he did a year ago, not less. With more mainstream figures like H.R. McMaster, Rex Tillerson and Gary Cohn gone, the administration is growing more nationalist, not less.
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- Apr 13 2018 at 11:48 AM
Assad must go from Syria, and Iran with him
by Bret Stephens
On Saturday I took my family to have a closer look at Syria.
This was on the Golan Heights, from a roadside promontory overlooking the abandoned Syrian town of Quneitra. The border is very green at this time of year, a serene patchwork of orchards and grassland, and it was hard to impress on our kids that hell on earth was visible in the quiet distance.
But I wanted them to see it — to know that Syria is a place, not an abstraction; that the agonies of its people are near, not far; that we should not look away. Later that day, in a suburb of Damascus, Syrian forces apparently again gassed their own people.
It's fortunate for Israel that it did not bargain the Heights away during the ill-fated peace processes of the 1990s: Had it done so, ISIS, Hezbollah or Iran might in time have trained their guns on Israeli towns below. The strategy of withdrawal-for-peace has not been vindicated in recent years, whether in Iraq, Afghanistan or Gaza. It's a point Donald Trump obviously missed when he insisted last week on US withdrawal from Syria, likely encouraging the apparent chemical attack he now threatens to punish.
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- Updated Apr 13 2018 at 11:00 PM
China, security, Vanuatu and the Pacific: Time for a chill pill
by Kerry Brown
The story of the Chinese government planning to open a base in the small Pacific island nation of Vanuatu has been dismissed as rumour mongering and idle speculation, particularly by the governments of the two nations directly involved. But the anxious response, even to something as speculative as this, seems real enough. In Australia, in the US and across the Asian region, if China did move ahead and establish a naval base similar to the one it has in Djibouti in Africa, plenty of those figuring we can at last see the tangible outlines of Chinese aggressive geopolitical attention would feel vindicated.
This anxiety is a problem for everyone. In particular, it is a problem for China. The bottom line is that as the world's second largest economy, with its ambitious Belt and Road Initiative, its burgeoning regional investments, its large naval fleet, and being the major trading partner of more than 120 countries, the People's Republic has interests and assets beyond its own borders that it has a legitimate right to attempt to protect. The problem is that so little is it trusted, and so deep are the suspicions harboured towards it by many policy-making communities and regional neighbours in particular, that the slightest move to do anything beyond its borders is met with huge interest and a deluge of interpretation. A good amount of that is negative. Here finally, many of the narratives go, is a sign we are seeing a China bent on global domination and aggressive intent.
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US launches missile strikes on Syria
Updated 14 April 2018 — 11:07am first published 12 April 2018 — 11:16am
Washington: President Donald Trump announced Friday that the US, France and Britain together launched military strikes in Syria to punish President Bashar Assad for his alleged use of chemical weapons against civilians and to deter him from doing it again.
Loud explosions lit up the skies over the Syrian capital, as Trump announced the airstrikes.
In an announcement from the White House, Trump said the US is prepared to "sustain" pressure on Assad until he ends what the president called a criminal pattern of killing his own people with international banned chemical weapons.
The decision to strike, after days of deliberations, marked Trump's second order to attack Syria; he authorised a barrage of Tomahawk cruise missiles to hit a single Syrian airfield in April 2017 in retaliation for Assad's use of sarin gas against civilians.
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Trump warns of more strikes if Syria uses chemical weapons again
By Nick O’Malley
14 April 2018 — 4:29pm
US President Donald Trump has left the door open to further strikes against targets in Syria after the United States in conjunction with France and Britain targeted chemical weapons sites and military installations with a barrage of missiles.
On Saturday, he praised Western air strikes against the Syrian government on Twitter as "perfectly executed", and added "Mission Accomplished".
The attack was launched in response to the alleged use of chemical weapons against civilians and rebels by Syrian forces in the city of Douma last Saturday, in which up to 75 people - including children - are thought to have been killed.
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I look forward to comments on all this!
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David.
David
ReplyDeleteburied deep in the things you have noticed:
5 Rules to Help Avoid Investing Disaster
A basic rule of life is to avoid being a guinea pig in other people’s experiments. This is an inviolable rule of technology: consumers should always leave 1.0 of anything to the early adopters.
My Health Record is still in beta, never mind 1.0. Unfortunately most consumers will be unaware that they are part of the government's sneaky experiment, and that experiment has little to do with the health of the consumer.