May 24, 2018 Edition.
Two main
themes last week. One, is all of Trumps bets seem to be falling apart. Kim is
being cute and Trump has now cancelled the Summit, the Middle East is in flames and so it goes.
Two,
gradually people are seeing more and more issues in the budget that rather feel
to be a bit of sleight of hand - and we now have a slew of bye-elections on July 28!
For the
entertainment of the week we are having a new session of the Financial Services
Royal Commission which has been yet another train-wreck for some
poor witnesses.
-----
Here are a
few other things I have noticed.
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Major Issues.
- Updated May 13 2018 at 11:00 PM
Calls for delay to 'comprehensive credit reporting' amid discrimination concerns
by James
Eyers
Consumer
law groups are calling for a delay to one of the government's flagship policies
for lifting competition in the banking sector, and will tell a Senate committee
on Tuesday vulnerable customers are at risk of discrimination.
Under
the "comprehensive credit reporting" regime banks will have to report
customers who have negotiated rescheduled repayments as being late on their
repayments.
The
Financial Rights Legal Centre is preparing to launch a wave of cases at the
financial services ombudsman if the reporting of "repayment history
information" (RHI) is not pushed back until after the Attorney-General's
department confirms how hardship cases should be reported under the regime,
which exposes
the banks to big fines for non-compliance.
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Do interest rates affect business investment? Evidence from Australian company-level data
9 May 2018
Description
We
examine the distribution of borrowing rates paid by companies, and the
relationship between corporate borrowing rates and fixed capital investment,
using a unique hand-collected dataset. We find a high degree of heterogeneity
in companies’ cost of debt. Also, since the global financial crisis, the spread
between the rates paid by companies at the top and bottom of the distribution
has widened. Borrowing rates for a large portion of companies, including
smaller and riskier ones, have remained high in recent years, despite falls in
aggregate indicators of interest rates. This heterogeneity in borrowing rates
enables us to find a significant inverse relationship between the cost of debt
and corporate investment, which is generally not evident in aggregate data. We
argue that this relationship may be due to credit supply effects, as a
relaxation of lending standards leads to lower credit spreads and encourages
more investment. These findings shed new light on the link between monetary
policy and business investment in Australia.
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How we arrived at budgets we can't trust
By ROSS GITTINS
13
May 2018 — 12:16pm
After
last week’s appalling effort, the resort to misleading practices in the budget
is reaching the point where the public’s disrespect and distrust of politicians
are spreading to the formerly authoritative budget papers.
We’re
used to spin doctors with slippery words. Now it’s spin doctors with slippery
numbers. They’re not just gilding the lily, they’re creating an unreal world
where the truth is concealed.
It
gives me no joy to be telling people not to believe what they read in the
budget papers. I’d rather tell them that of course the budget figures can be
trusted, and they should heed the advice of the nation’s most senior and
respected economists.
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- Updated May 13 2018 at 8:04 PM
People are fed up with capitalism
by John
Authers
"The
facts are clear: all the evidence is that process-driven CEOs are prioritising
the bottom line and treating earnings as a key metric. That's capitalism."
These
lines are a summary of the news from the corporate sector in the past few
weeks. Yet they will read to many Americans like red rags to a bull.
As
we have been reporting,
the first quarter of this year saw a fantastic rise in corporate profits.
In the US, according to Thomson Reuters, S&P 500 companies managed to raise
their earnings by more than 26 per cent compared with a year ago. European
members of the Stoxx 600 are on course for a much more sedentary 4.1 per cent
rise.
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Why do politicians refuse to believe decades of polling and research?
By Peter Hartcher
Updated14
May 2018 — 7:11amfirst published at 12:00am
Today's poll proves
anew something that only politicians refuse to believe.
Voters
generally care more about the health of the nation than about themselves.
It's
a fact that political scientists have long known.
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- May 14 2018 at 11:15 AM
Australia should not blindly follow Trump on China's ZTE
by Angus Grigg
Donald
Trump has thrown ZTE a lifeline. The Chinese telecommunications company was
heading rapidly towards bankruptcy until the US President took to Twitter on
Sunday night.
Trump
revealed he was working with Chinese President Xi Jinping on a way for ZTE
"to get back into business, fast".
"Too
many jobs in China lost. Commerce Department has been instructed to get it
done," he tweeted.
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Science-nonfiction: Robotics author says AI will affect all children
By Danica Streader
14
May 2018 — 11:33am
A
Brisbane robotics expert who says the children of today will interact with A.I.
in some point in their lives is putting 1000 textbook guides to artificial
intelligence in classrooms around the country.
Queensland
University of Technology robotics professor Michael Milford, the author of The
Complete Guide to Artificial Intelligence for Kids, said limited
resources were available for children to learn about intelligent machines.
“The thing about artificial intelligence is we
don’t know what is going to happen, which ends up being the most exciting and
scary aspect of this industry,” he said.
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Federal budget: What’s in it for investors
- The Australian
- 12:00AM May 12, 2018
James Kirby
As the dust settles we come to realise this year’s budget key
objective was to promise a series of elongated tax cuts and to shorten the
pathway to a budget surplus. Under long-term and politically improbable plans
the Coalition would introduce a flatter tax system. As the political reality of
those objectives play out, investors might concentrate on the changes that
actually should come to pass.
One theme is the government’s decision to try to optimise the
tax-free status of the family home by adding initiatives on reverse mortgages
and at-home aged care. There is also some tweaking of the complex — but still
useful — self- managed super fund system and a grab bag of measures aimed at either
alleviating red tape or policing the system. For the investor, here’s what
really happened.
Maximise the value of your home
Your home is a tax shelter and neither the ALP nor the coalition
appears willing to challenge this reality. So Scott Morrison offered two
measures in the budget that aim to take advantage of existing home values.
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- Updated May 14 2018 at 11:00 PM
Extreme risk in $89b navy ship building plan: Auditor-General
Taxpayers
are paying billions of dollars more and face further blowouts because
of the "high to extreme" level of risk in building new ships and
submarines in Australia in the Turnbull government's rush for voter-friendly
announcements to get projects started, the Auditor-General has warned.
Demanding
the Defence Department provide an update on the cost of the $89 billion naval
shipbuilding plan, the Australian National Audit Office issued a
scathing report on Monday attacking key elements of the government's drive to
establish a local industry and shore up jobs in Adelaide and Perth.
Auditor-General
Grant Hehir's report slammed the government for approving a new fleet of
patrol boats without any firm idea of their running costs, while no
cost-benefit analysis was conducted on the decision to bring forward start
of construction to keep shipbuilding workers in jobs.
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Banking royal commission: JPMorgan fears big job losses
- The Australian
- 8:50PM May 14, 2018
Michael Roddan
There are renewed fears of economic fallout stemming from the
royal commission into the banking sector, as regulators and the government look
to overhaul the way fees are paid across the financial services sector.
A crackdown on financial advice — including killing off problematic
trailing commissions that were grandfathered in 2013 — could end a significant
money spinner for the largest banks and wealth managers as the fallout from the
royal commission continues to build.
JPMorgan analyst Sally Auld said the financial sector could face a
stunning crash in employment worse than the last financial crisis.
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- May 15 2018 at 9:10 AM
RBA's Guy Debelle flags housing risk from tighter lending standards on bank probe
by Jacob Greber
Reserve
Bank of Australia deputy governor Guy Debelle has warned a further tightening
of lending standards would primarily hit the housing market even as he
downplayed the dangers of the coming wave of resets to interest-only loans.
In
a speech that again reiterates the central
bank's forecast is for a "gradual" pickup in economic growth and
inflation, as well as fall in the jobless rate, Dr Debelle emphasised that
the official cash rate was likely to remain steady this year and into next.
"If
the economy continues to evolve as expected, higher interest rates are likely
to be appropriate at some point," he said. "Notwithstanding this, the
board does not currently see a strong case for a near-term adjustment in the
cash rate. "
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An Aussie Trump is not such a remote possibility
By Peter Hartcher
15
May 2018 — 12:00am
The
rise of the "strong man" political leader continues to gather force,
part of the trend to authoritarianism across the world.
Even
when democracy appears to be being rescued – as in Malaysia last week – the
rescuer is himself a strongman.
Mahathir
Mohamad might have defeated the ruling United Malay Nationals Organisation for
the first time since the country's independence in 1957, but Mahathir was the
most important figure in entrenching its long dominance. Until he decided to
end it now.
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Jobless rate needs to go lower for wage pressures to emerge: RBA
15
May 2018 — 10:01am
Wages
growth has troughed and there are some tentative signs of pressure emerging,
but there is a risk it may take a lower unemployment rate than currently
expected to generate a sustained move higher, the Reserve Bank of Australia
says.
Wage
growth is crawling near a record low pace of around 2 per cent annually, even
as the labour market tightens. Data out on Wednesday is likely to show wage
growth stuck at that level, half the rate enjoyed by workers during the mining
boom.
"How
much longer is wages growth going to remain at its current low rates?" RBA
deputy governor Guy Debelle said in a speech in Sydney on
Tuesday. "The experience of other countries with labour markets
closer to full capacity than Australia's is that wages growth may remain lower
than historical experience would suggest."
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Reserve Bank’s Debelle issues new warning on mortgage debt, sees no pressure to raise rates
- The Australian
- 10:46AM May 15, 2018
Michael Roddan
Australia’s heavily indebted households and the likelihood of
higher mortgage repayments remain a key risk to Australia’s economic outlook,
warns Reserve Bank deputy governor Guy Debelle.
In a speech this morning, Mr Debelle reiterated warnings about the
“large amount of mortgage debt” held by local households.
He also said although Australia’s economy was on a slowly
improving trajectory, it did not make a case for raising interest rates in the
near term.
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Australians give income tax cuts thumbs up
Consumer confidence has jumped to a 14-week high in response to
last week's federal budget which included personal income tax cuts.
Colin
Brinsden, AAP Economics Correspondent
Australian Associated Press May 15,
20183:22pm
It may only be $10 a week but the budget's tax cut has been enough
to make Australians happy.
Consumer
confidence jumped to the highest level since early February in response to
Treasurer Scott Morrison's third budget released a week ago which had personal
income tax cuts as its centrepiece.
The
three-stage tax plan kicks off with a $530 cut for the average earner and comes
at a time of slow wages growth.
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- Updated May 15 2018 at 11:00 PM
Why investors should take notice of rising bond rates
by Mark
Draper
Are
the bond market ghosts of 1994 coming back to haunt us, or is this as high as
long-term interest rates rise? That's unknowable at this stage, but investors
should ensure their portfolios can weather rising
interest rates.
Investment
strategies that worked well while interest rates fell are unlikely to be
rewarded when rates rise.
Long-term
interest rates, particularly the 10-year US bond rate (also known as the
risk-free rate of return), are important to investors as an anchor point
against which asset prices such as property and shares are measured. Generally
speaking, a higher long-term interest rate results in lower asset prices, in
the absence of earnings growth.
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'Rich whingers' not as hard done by as Morrison would have you think
By ROSS GITTINS
15
May 2018 — 2:07pm
As
a boy I was interested in magic tricks, reading lots of books and learning to
do a few. It taught me two terms that have proved invaluable to me as an
economic journalist: “prestidigitation” and “sleight of hand”.
The
trick is to draw the audience’s attention towards something else so they don’t
notice you palming the coin or grabbing the rabbit you’ll supposedly produce
from your top hat.
Politicians
and their spin doctors are always trying to divert our attention from some
embarrassing stuff-up, but it’s come to something when a treasurer produces a
budget as tricksy as Scott Morrison’s effort last week.
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Airport ID checks 'authoritarian' and won't improve safety: critics
By Patrick Hatch & Fergus Hunter
15
May 2018 — 5:19pm
New
powers allowing police to order anyone in an airport to produce
identification has been criticised as an "authoritarian" step
that will do little to improve Australia's counter-terrorism efforts.
Prime
Minister Malcolm Turnbull conceded on Tuesday that the new powers were a
significant step, but necessary for the "dangerous times" in which we
live.
Australian
Federal Police will be able to ask anyone for ID, with or without reason to
suspect them of wrongdoing, and eject them from an airport as part of a
security overhaul that will also see the introduction of advanced bag and body
scanning machines in terminals across the country.
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Three ships but only two options
By Nicholas Stuart
15
May 2018 — 4:50pm
Hold
your breath, close your eyes tight, make a supreme effort of will. Is it really
is possible to believe the dodgy assumptions and bask in the rosy glow
accompanying the budget’s out year projections? Surplus? Sure thing!
Of
course it will never happen, certainly not in the projected timeframe anyway,
but that’s not really the point, is it? Fairy tales have a greater
intersection with reality. Treasury forecasts are simply bedtime stories,
designed reassure children and put us to sleep. So let’s leave all that and worry
about something real.
Shipbuilding.
This
is where the government will splash the cash and spend your money. It also has
the prospect of making a significant and real change to the future of our
country along the way. Or not. The point is this $35 billion program will
not just construct ships: it’s emerging as a critical factor that will shape
the future of industry in this country.
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Something will have to give in financial advice
By John Collett
15
May 2018 — 3:44pm
Revelations
from the banking royal commission concerning financial advice will see changes
in the way that advice is delivered.
The
vertical integration business models of the banks, the "wealth"
managers like AMP and some of the independently owned financial planning businesses,
will likely be the focus of the royal commission's recommendations concerning
financial advice.
This
is where the financial institution makes the financial products and also
employs the advisers, or is aligned to the advisers who distribute the
products.
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'We have a lot more work to do': Facebook has disabled 583m fake accounts in 2018
Updated16
May 2018 — 6:50amfirst published at 5:36am
Facebook
revealed Tuesday that it removed more than half a billion fake accounts and
millions of pieces of violent or obscene content during the first three months
of 2018, pledging more transparency while shielding its chief executive from
new public questioning about the company's business practices.
The
findings, its first public look at internal moderation figures, illustrate the
gargantuan task Facebook faces in cleaning up the world's largest social
network, where artificial-intelligence systems and thousands of human
moderators are fighting back a wave of offensive content and abuse.
"My
top priorities this year are keeping people safe and developing new ways for
our community to participate in governance and holding us accountable,"
wrote Facebook CEO Mark Zuckerberg in a post, adding: "We have a lot more
work to do."
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Wages growth in first quarter smaller than forecast
- James Glynn
- Dow Jones
- 11:33AM May 16, 2018
Australian wages rose by a seasonally adjusted 0.5 per cent in the
first quarter from the final three months of 2017, and rose by 2.1 per cent
from a year earlier, according to the Australian Bureau of Statistics.
Wages growth remains largely flat despite strong job additions
across the economy in 2017.
Spare capacity in the job market remains elevated, with strong
increases in participation preventing a fall in the unemployment rate over
recent months.
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- Updated May 16 2018 at 8:09 AM
David Graeber's new book 'Bullshit Jobs: A Theory' calls time on your career
by Miranda
Purves
If
you voted for Bernie Sanders, have sea-punk green hair, and wear a pin
declaring "Capitalism Is the Crisis", you may already be familiar
with David
Graeber's
writings on the takeover of our lives by bullshit jobs.
Graeber,
an anthropology professor at the London School of Economics, was a mover and
shaker in the Occupy Wall Street movement and is well known for his
approachable critiques of neoliberal free market ideology. His new book, Bullshit
Jobs: A Theory (Simon & Schuster; $US27), sprang from a shorter
essay he published in 2013 in a feminist-activist magazine called Strike,
which quickly struck a nerve. (One that kept thrumming: on a Monday morning in
2015, an anonymous group plastered the London Underground with quotations from
the writings.)
"Huge
swathes of people spend their days performing jobs they secretly believe do not
really need to be performed," Graeber writes. The rise of automation has
meant that fewer humans are needed in manufacturing and farming, but instead of
this freeing up our time, we've seen those jobs replaced by "the
ballooning of the administrative sector up to and including the creation of
whole new industries like financial
services or telemarketing, or the unprecedented expansion of sectors like
corporate law, academic and health administration, human resources and public
relations."
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- Updated May 16 2018 at 11:00 PM
Labor's franking policy ignores behavioural response
Labor's
franking
credit policy will raise $550 million a year less than what Bill Shorten
anticipates because of changes in investor behaviour, claims an alliance of
shareholders, seniors and self-managed retirees.
The
grand alliance, which includes the Australian Shareholders' Association,
National Seniors Australia and SMSF Association, cites new Rice Warner analysis
that suggests revenue gains will be weaker than the $10.7
billion that Labor expects in the first two years.
"There
is going to be a strong behavioural response so I have concerns the tax revenue
projections the ALP has done may not stand up," said alliance spokeswoman
Deborah Ralston, who is chair of the SMSF Association, a non-executive director
with Mortgage Choice and a professorial fellow at Monash University.
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ASIC vows to use 'every inch' of its powers to ramp up bank scrutiny
By Clancy Yeates
17
May 2018 — 10:33am
The
corporate watchdog will ramp up its surveillance of the wealth management
arms of Australia’s major banks and AMP as it slammed the industry for failing
to act in customers' interests and manage conflicts of interest.
After
shock revelations at the royal commission in recent weeks, Australian
Securities and Investments Commission chair James Shipton said the inquiry had
highlighted “unacceptably poor” behaviour.
In
a strongly-worded speech in Sydney, Mr Shipton said the finance sector’s
failure to deal with conflicts of interest was “verging on a systemic issue,”
and this lay at the heart of many of the finance sector’s problems.
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Here's my big dangerous tax idea: let us keep our money
By Peter Martin
16
May 2018 — 9:32pm
Suddenly
we’ve wised up. As far back as any of us can remember, all the way back to the
beginning of income tax, we’ve been easy to bribe.
Here’s
how it has worked in every election and in almost every budget: “You’ve been
working hard and paying too much tax. We feel your pain. We’ve magically found
some money from somewhere. We’re pulling a tax cut out of a hat. You can thank
us later.”
That
the rabbit was our own money, taken from us in ever-increasing amounts through
an automatic process known as bracket creep, and then only partly returned, was
the trick we weren’t invited to dwell on.
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'Dangerous times, Neil': Turnbull's two-word explanation for impingement on our liberty
By Jacqueline Maley
18
May 2018 — 11:00am
It’s
safe to assume Malcolm Turnbull has never been on the wrong side of an
encounter with police.
If
a radio interview he gave on Tuesday is any indication, our Prime Minister has
a delightfully rosy understanding of police operations, in which coppers extend
to persons of interest the same sort of courtly regard you might find among
patrons of a gentleman’s club.
On
Tuesday, Turnbull and his Home Affairs Minister Peter Dutton announced new
powers allowing police to stop people at airports and demand identification.
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Ciobo makes 'symbolic' China address as businesses face difficulties
By Kirsty Needham
18
May 2018 — 4:50am
Shanghai:
Trade Minister Steven Ciobo delivered a conciliatory speech overnight on the
relationship between Australia and China, but businesses working China are
complaining that the strains were evident.
Ciobo's
address to 500 business people came as tension in the bilateral relationship
was blamed for causing
a slow-down in customs clearances for Australian products.
"When
there is tension in the relationship, there is tension at the port," said
an Australian business executive in Shanghai with several decades experience in
China.
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- May 18 2018 at 4:00 PM
RBA taps into inflation fears in the US by going back to the 1960s
by John Kehoe
In
the mid-1960s the Beatles were top of the pop charts, US President Lyndon
Johnson was fighting the Vietnam War and the world's largest economy was heading
for inflationary trouble.
Reserve
Bank of Australia deputy governor Guy
Debelle this week invoked the aforementioned era to signal some striking
economic similarities to today that pose risks.
Over
the six years to 1964, US inflation had been dormant.
Today
inflation has been persistently tame since the 2008 global financial crisis,
with only tentative signs of a recent firming.
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Morrison's tax cuts aim way above the middle
By ROSS GITTINS
18
May 2018 — 11:04pm
One
thing to be said in favour of Scott Morrison’s complex three-step, seven-year
tax plan is that his small tax cuts for the deserving middle income-earners are
more likely to actually happen than the huge tax cuts for the undeserving high
income-earners.
For
the latter to eventuate, Malcolm Turnbull will have to be re-elected at least
twice before July 2024. By contrast, the smaller cuts will start in six weeks’
time. For once it’s the rich who’re being promised pie in the sky (hopefully)
before they die.
This
means it’s wrong to simply compare the $530-a-year saving for people on middle
incomes with the $7225-a-year saving for all of us struggling to get by on more
than $200,000 a year.
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Forget fixing corporate culture: here are four ways to curb misconduct
- The Australian
- 12:00AM May 19, 2018
Adam Creighton
If I hear about culture, leadership or trust one more time I think
I’m going to tear my hair out. The royal commission into financial misconduct
has unleashed a barrage of calls for better, stronger and more resilient
leadership and culture at the nation’s major financial institutions.
The new chief of the corporate regulator, James Shipton, gave a
speech on Thursday emblematic of this trend, suggesting the “trust deficit” in
finance could be improved by “rebuilding culture from deep within”, more
“sustained engagement” and “active stewardship of assets by investors”,
alongside “more intensive and dedicated supervision”.
“It’s time for Australia’s financial services sector to remember
its purpose,” he declared, in words unlikely to ruffle a feather anywhere.
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Simple piece of technology saving lives
By Patrick Walker & Daniel D'Hotman
20
May 2018 — 12:01am
Radiology
has always been a highly skilled area of medicine; these doctors spend
thousands of hours reading scans to identify health issues that no one else can
see. However, they now have a new competitor: artificial intelligence.
Enlitic,
run by Australian data scientist Jeremy Howard, has created AI that can
diagnose lung cancer more accurately than board-certified radiologists. The
best of the best are no longer just that.
This
is only one example of the way technology is disrupting healthcare. Rapid
technological advances in medicine recently led public intellectual Aubrey De
Grey to state that the first person to live to 1000 years has already been
born.
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Is talk of Australia's 'anti-China' bias a weaponised narrative?
By Chris Zappone
20
May 2018 — 12:15am
Since
the Turnbull government flagged plans to implement new national security laws
last year, talk of Australia’s "hostility" to China and Chinese
people has risen.
Just
last month, China’s ambassador Cheng Jingye warned that trade with China could
be affected and cited worries that Chinese students in Australia had been
subjected to “irresponsible and malicious allegations” and “security and safety
incidents”.
Julie
Bishop hits back at former Australian ambassador to China, Geoff Raby, who
claimed that relations with Beijing can only improve with the foreign minister's
sacking.
-----
National Budget Issues.
Budget tax cuts the worst piece of tax policy design in recent history
By Jessica Irvine
14
May 2018 — 12:01am
Let’s
not beat around the bush. The package of income tax
cuts announced in last week’s budget is the worst piece of tax design in
recent history. It’s not tax reform. Far from it.
In
the early years, it’s a retrograde piece of policy design that adds to the
complexity of the system and produces new disincentives to work, particularly
for part-time working women (Happy Mother's Day, by the way).
In
the out years, it is the most seriously regressive assault on Australia’s
highly targeted tax and transfer system in many a decade – a fundamental
reshape of our social contract, sprung out of nowhere on an election eve.
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Morrison’s budget ‘to leave us better off’
- The Australian
- 12:00AM May 14, 2018
Simon Benson
Scott Morrison’s third budget has been strongly backed by voters,
according to the latest Newspoll, which found more people believed it would
leave them financially better off rather than worse off.
This is the first time since Peter Costello’s final budget,
delivered in 2007, that more people than not believed their own circumstances
would be improved.
However, the Turnbull government has ground to make up with its
own voter base, with retirees and pensioners declaring that they stand to be
worse off, with little in the budget for them.
-----
Compare Labor and Liberal personal tax plans
By Caitlin Fitzsimmons
12
May 2018 — 4:22pm
The
political battle lines have been drawn over tax.
You've
no doubt heard the federal budget handed down on Tuesday includes personal tax
cuts. You may also have heard Labor is backing some of it but has its own plans
as well.
So
how do the two tax policies stack up side by side?
The
Coalition has dropped plans to fund the National Disability Insurance Scheme
through a permanent increase in Medicare levy and unveiled an ambitious
schedule of tax cuts to take place in three stages over seven years.
-----
Labor’s plan to restore ‘lost’ hospital funding
- The Australian
- 11:09AM May 15, 2018
Sean Parnell
Bill Shorten’s $2.8bn public hospitals pledge does not commit a
future Labor government to alter the underlying funding formula that sparked
the Opposition’s ongoing attacks on the Coalition.
Instead, the extra money — which Labor calculates is the
difference between the Commonwealth funding 50 per cent of growth, as it once
promised, or 45 per cent as occurs now — will be set aside. It is still unclear
where that money will be spent.
As Mr Shorten visited the Logan hospital in Queensland yesterday,
Opposition health spokeswoman Catherine King would only say Labor remained
committed to activity-based funding, not that it would alter the Commonwealth’s
contribution to growth.
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Budget tax cuts not enough to boost consumer sentiment
Shane Wright, Economics Editor The West Australian Wednesday, 16 May 2018 11:17AM
Consumer confidence fell in the wake of Scott Morrison’s third
Budget, with a majority of Australians expecting it to do nothing or even hurt
their own finances.
The Westpac-Melbourne Institute measure of consumer sentiment
edged down by 0.6 per cent in May. It was its second consecutive drop in the
measure.
Respondents were asked about the expected impact of the Budget on
family finances.
Just 10 per cent said they expected their own finances to
improved, 58 per cent said it would have no impact while 19 per cent said it
would worsen their overall finances.
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Chris Bowen ‘pleads guilty’ to paying for policies following Scott Morrison’s retirees claim
- The Australian
- 9:23AM May 16, 2018
Rachel Baxendale
Labor treasury spokesman Chris Bowen says he “pleads guilty” to paying
for his policies, after Treasury and Parliamentary Budget Office estimates
suggested about a third of his party’s proposed new tax revenue will come from
scrapping dividend imputation credit refunds.
As The Australian revealed today, the
scrapping of franking credit refunds form the biggest revenue raiser in Labor’s
$30 billion short-term tax measures, prompting Treasurer Scott Morrison to
accuse the opposition of using older Australians to fund a spending splurge.
Mr Bowen, who will today outline Labor’s plan to match the
government’s early return to surplus and tackle national debt in an address to
the National Press Club, said Mr Morrison’s claims showed he was now accepting
Labor’s figures on the dividend imputation policy.
-----
Moody's just cast doubt over the Australian government's plan to deliver an earlier budget surplus
May 16,
2018, 3:37 PM
- Australia’s federal government expects to deliver a budget surplus in the 2019/20 fiscal year, 12 months earlier than previously forecast.
- Moody’s Investors Service says an earlier return to surplus is unlikely, citing concerns about the government’s expenditure and revenue projections.
- It still believes the budget underscores Australia’s fiscal strength, noting this is a key support for retaining Australia’s Aaa sovereign credit rating with a stable ratings outlook.
Treasurer
Scott Morrison delivered Australia’s
federal budget last week, including news the government now expects to
deliver a budget surplus in the 2019/20 fiscal year, 12 months earlier that
projected 12 months ago.
-----
$3 billion in lost super to be reunited in NSW and Victoria
By Eryk Bagshaw
19
May 2018 — 12:01am
In numbers
·
People impacted by fee and administration cost ban in NSW 1.64
million
·
People impacted by fee and administration cost ban in Victoria
1.25 million
·
Reduction in insurance premiums Australia-wide $3 billion
·
Number of people to have super accounts reunited in NSW and
Victoria 1.5 million
·
Amount to be reunited Australia-wide $6 billion$6 billion
More
than 1.5 million workers in NSW and Victoria will have multiple superannuation
accounts combined into one as part of a major revamp of the sector that will
force Labor to decide if it will support powerful union-backed industry funds.
-----
Health Budget Issues.
Pneumococcal vaccination: acts of omission
Authored
by Robert Menzies, Heather Gidding, Anthony Newall
ACTOR
Bob Hoskins died from pneumonia aged 71 years in 2014, as did ABC Radio
National presenter Alan Saunders (57) in 2012, actor/singer Brittany Murphy
(32) in 2009, the “godfather of soul” James Brown (73) in 2006, cricket legend
Sir Donald Bradman (92) in 2001, American cosmologist Carl Sagan (62) in 1996
and actor Fred Astaire (88) in 1987. While some of these identities had other
concurrent illnesses, others did not. Some were elderly, some were not.
Far from
“the old man’s friend”, pneumonia ends lives prematurely, even in wealthy
countries in the 21st century with access to the best health care. The most
common cause of pneumonia – Streptococcus pneumoniae or pneumococcus – is
estimated to cause around 20%
of pneumonia in Australia and more than 15 000 GP visits,
8000 hospitalisations and 2000 deaths in Australians aged 65 years and over
each year
-----
ACCC renews pursuit of Medibank over out-of-pocket charges
- The Australian
- 12:00AM May 16, 2018
Sean Parnell
The consumer watchdog will today launch a renewed bid to prosecute
health fund Medibank over changes to its coverage of in-hospital pathology and
radiology services, amid an ongoing debate over the value of insurance.
The Australian Competition & Consumer Commission has accused
Medibank of making false, misleading or deceptive representations and engaging
in unconscionable conduct by failing to adequately inform members of changes.
But Federal Court judge David O’Callaghan last year concluded
there had been no sufficient requirement for, or commitment by, Medibank to
notify members beforehand.
-----
High costs, big gaps driving Australians away from health insurance
By Esther Han
16
May 2018 — 1:46pm
In numbers
·
Australians who decided not to renew their private health
insurance 256,000
·
Those with no insurance who said it was too expensive 53%
·
Cumulative premium price hike since 2008 70%
A
quarter of a million Australians did not renew their private health insurance
in the past year, a new survey shows.
An
ongoing Roy Morgan survey involving 50,000 face-to-face interviews every year
found 256,000 Australians who had health insurance at some point in their lives
chose not to renew it in the year to March 2018.
This
won't hurt a bit: More than 250,000 Australians didn’t renew private health
insurance over the past year.
-----
Private health insurance figures look sickly
- The Australian
- 12:00AM May 18, 2018
Sean Parnell
Private hospital insurance coverage has fallen to its lowest level
since June 2011, with not even a seasonal increase in health fund members
enough to stop the ongoing decline.
According to the Australian Prudential Regulation Authority, 45.5
per cent of the population had hospital cover in the March quarter, down from a
high of 47.4 per cent three years ago, with value-for-money issues still a
major concern.
While a net increase of 10,481 members kept the decline to 0.1 per
cent, it was half the quarterly surge experienced in previous years.
-----
Autism to face cutbacks in NDIS as secret plan revealed
- The Australian
- 12:00AM May 19, 2018
Rick Morton
A secret plan to restrict the access of autistic people to the
$22 billion National Disability Insurance Scheme would prevent them from
qualifying “automatically” for taxpayer-funded support as part of a sweeping
overhaul to rein in costs.
The Weekend Australian has confirmed bureaucrats have
been working on a strategy since late last year to pare back the number of
people with autism receiving funding packages.
The agency running the NDIS accidentally published part of its
plan to restrict access for autism cases on Monday when it updated a list of
pre-qualifying conditions for the scheme. It later suggested it had
“incorrectly” posted the wrong document.
A mid-ranking National Disability Insurance Agency staff member,
without the knowledge of the deputy chief executive responsible, altered a
list of conditions for autism spectrum disorders, which was not meant to be
made public.
-----
International Issues.
https://www.smh.com.au/world/middle-east/trump-set-toughest-test-yet-for-europe-20180513-p4zezb.html
Trump set toughest test yet for Europe
By Andrew Hammond
13
May 2018 — 3:06pm
London:
Federica Mogherini, the European Union’s foreign policy chief, says Europe is
“determined to keep the Iran deal in place”, in complete contrast with US
President Donald Trump's determination to scrap it.
Germany
is ready to help its firms continue doing business in Iran, its economy
minister said on Friday, as the US envoy to Berlin called into question the
morality of such transactions.
The
clash between the United States and the EU is exacerbating transatlantic
tensions that may be difficult to manage, not least with separate
bilateral battles over trade issues in play too.
----
Donald Trump's freewheeling deals are starting to hurt the economy, say analysts
By Tim Wallace
Updated14
May 2018 — 10:10am first published at 10:00am
Donald
Trump's freewheeling policies are beginning to damage the American economy as
exuberance over tax cuts turns to fear on trade and oil prices, it is claimed.
Crude
costs are approaching $US80 per barrel, their highest level since 2014, and
analysts fear the US withdrawal from the Iran nuclear deal will make the
situation worse. "If a new Iran deal is not reached in the next six months
or Opec/Russia extend production cuts into 2019, global oil markets would
likely tighten further," said Francisco Blanch at Bank of America Merrill
Lynch.
Oxford
Economics has raised its forecast for oil prices to an average of $US72 for
2018, which it fears could have serious repercussions for the economy.
-----
Indonesian church attack family had returned from Syria: police
By Amilia Rosa
14
May 2018 — 11:47am
Jakarta:
The family suspected of the trio of church
suicide bombings in Indonesia had recently returned from Syria before
the attack, Indonesian authorities said.
Motorbikes
in a parking lot went up in flames after suicide bombers attacked churches in
Indonesia's second-largest city of Surabaya, killing at least six and wounding
more than 35 others.
Indonesia's
police chief, Tito Karnavian, said the family of six suspected in the attacks
on three Christian churches in Indonesia's Surabaya city on Sunday morning had
recently returned from the war-torn Middle Eastern nation.
-----
- Updated May 14 2018 at 5:30 AM
US secret report: China 'debt trap' on Australia's doorstep
by John Kehoe
Chinese
loans worth hundreds of billions of dollars are saddling Australia's smaller
regional neighbours with unsustainable debts and giving Beijing crucial
economic leverage to gain strategic and military power, warns a new independent
report written for the US State Department.
The
US report identifies 16 states vulnerable to China's so-called "debtbook
diplomacy" and economic coercion, including Vanuatu, the Philippines,
Cambodia, Laos, Thailand, Malaysia, Sri Lanka, Tonga and Micronesia.
The
paper, obtained by The Australian Financial Review, says Papua New Guinea
has "historically been in Australia's orbit" but there is alarm that
PNG has been "rapidly taking on Chinese loans it can't afford to pay and
offers a strategic location in addition to significant LNG and resource
deposits".
-----
- Updated May 14 2018 at 11:00 PM
China relations can only be unfrozen with Julie Bishop's sacking
by Geoff Raby
Once
again Australian foreign policy seems to be missing in action. As events unfold
at remarkable speed in our area of most strategic interest – north-east Asia –
Australia finds itself unable to engage with the key participant at the centre
of those events: namely China.
Since
Australia decided to adopt a policy of strategic mistrust towards China, any
semblance of influence has waned to the point where relations
are now in the freezer.
In
terms of Australia's geopolitical interests, the freeze
on our relationship with China could not have come at a worse time. It was
once widely understood in Canberra, but apparently no longer, that we need to
have good and close relations with China not just for trade and commercial
reasons but because China is critical to all the major international issues of
interest to Australia and none more so than peace and stability in north-east
Asia.
-----
Hillary Clinton's warning to Australia on Chinese influence
By Jenny Noyes
14
May 2018 — 9:03pm
Hillary
Clinton has issued a warning to Australia not to be complacent about foreign
interference, especially from China.
Appearing
on ABC's 7.30
on Monday night, the former US presidential candidate spoke about
the issue of Russian interference in the election she lost to Donald Trump in
2016.
Ms
Clinton was pressed by host Leigh Sales on what she would do differently, and
what advice she would give to the next Democratic presidential candidate. Her
answer: "I would not let anything go unanswered" – meaning, in
particular, the proliferation of fake news propaganda being spread via Facebook
and "paid for in roubles".
-----
Fully loaded pigeons have come home to roost
- Clive Williams
- The Australian
- 12:00AM May 15, 2018
Three church bombings in Surabaya during Sunday services, killing
at least 18 people and wounding more than 40, and the bombing of a police
station in the same city yesterday killing 10 are merely the latest
manifestations of an increase in terrorist activity in Indonesia.
Attacks on two other churches were planned for Sunday, but those
bombs failed to detonate. The church attacks apparently were carried out by
members of one family. Yesterday’s attack involved members of another family.
Churches are targeted by Indonesian extremists who oppose the
practising of other religions there. But this is the first attack on places of
worship since 2011. The worst attack on churches in the past 20 years was on
Christmas Eve 2000, when co-ordinated bombings of churches in Jakarta,
Pekanbaru, Medan, Bandung, Batam Island, Mojokerto, Mataram and Sukabumi killed
many worshippers.
-----
- Updated May 15 2018 at 8:09 AM
Italy's new coalition government sets up a 'eurozone accident waiting to happen'
by Ambrose
Evans-Pritchard
If
followers of Italy's neo-anarchist Five Star Movement, popularly known as
Grillini, had combined with anti-euro Lega nationalists two or
three years ago to form an insurgent government, it would have set off panic in
the bond markets.
At
the weekend, Luigi di Maio, head of the Five Star Movement that garnered more
than 30 per cent of the vote in Italy's March election, and Matteo Salvini,
head of the Lega,
or League, said they were working to form a coalition government.
Bow
that this twin-headed populist hydra is upon investors, risk spreads have
barely moved. Yields on two-year Italian bonds ended last week at minus 0.10
per cent.
-----
Unintended consequences: How Trump is threatening the US dollar
By Stephen Bartholomeusz
15
May 2018 — 2:38pm
The
erratic nature of policy-making in the Trump era may produce unintended
consequences.
Trump’s
fixation with America’s trade deficit and the nature of the sanctions imposed
on Russia and Iran could, for instance, aid China’s long-term ambition to erode
the status of the US dollar as the world’s reserve currency.
Today,
the US dollar is used on one side of nearly 90 per cent of all global foreign
exchange transactions and the world’s central banks hold about 63 per cent of
their reserves in US dollars. About 40 per cent of global trade is denominated
in US dollars. US trade deficits are an outcome of the world’s demand for US
dollars – the need to acquire US dollars because it is the primary global
medium of exchange.
-----
- Updated May 16 2018 at 11:45 PM
Democracies no longer have a strategy
by William
Hague
To
be Britain's foreign secretary is to live in a whirl of rushed meetings,
urgent calls, fast-moving cavalcades and waiting aircraft. You become adept at
trying to hold a calm phone conversation with one foreign counterpart while
another one sits next to you in a car lurching around with sirens blaring and
yet another presidential palace recedes in the mirror.
Eventually,
you crave discussing what matters most with people you really trust, and with
no agenda or deadline. So it was a relief to me when sometimes the foreign
ministers of Australia or Canada would say "Let's have a bottle of wine
and discuss the strategy of the Western world", which we would proceed to
do. In my time in office, which was pre-Trump, this was a discussion I could
also have with the US secretary of state. I recall Hillary Clinton, another one
who sometimes proposed the quiet chat and glass of wine, vehemently advocating
a strong lead from America to defend Western values with a unifying approach -
all with more passion and animation than the voters ever got to see in her.
-----
Anwar walks free from prison and into political limelight
By James Massola
16
May 2018 — 1:46pm
Kuala
Lumpur: Anwar Ibrahim, the man who has been a symbol of hope for
Malaysian anti-corruption and democracy campaigners for 20 years, walked free
from custody on Wednesday and vowed to support newly elected Prime Minister
Mahathir Mohamad and his own wife, Deputy Prime Minister Wan Azizah.
Anwar,
70, left a Kuala Lumpur hospital at 11.30am local time, after receiving a
long-awaited royal pardon just an hour earlier.
The
former Malaysian opposition leader had been imprisoned on politically-motivated
sodomy charges.
-----
- Updated May 18 2018 at 7:58 AM
Gina Haspel confirmed by US Senate as first woman CIA director
The
US Senate confirmed Gina Haspel to be director of the CIA, ending a
bruising confirmation fight centred on her ties to the spy agency's past use of
waterboarding and other brutal interrogation techniques.
Haspel,
who will be the first woman to lead the CIA, is a 33-year veteran at the agency
currently serving as its acting director. The tally was 54-45 in favour of her
nomination in the 100-member chamber, where a simple majority was required for
confirmation.
Six
Democrats joined President Donald Trump's fellow Republicans in voting for
Haspel, and two Republicans voted no.
-----
Truth and post-truth appear to be on brink of collision in Trump saga
By Nick O'Malley
17
May 2018 — 1:53pm
Truth
and post-truth appear to be at the brink of collision.
New
details about Alexander Downer’s accidental role in launching the Mueller
investigation into possible collusion between the Trump campaign and Vladimir
Putin have emerged at a critical time for the ongoing inquiries into the 2016
election and its aftermath.
US
President Donald Trump's attorney, Rudy Giuliani, says Special Counsel Robert
Mueller's probe into the 2016 election needs to end.
-----
Trump personally pushed postmaster general to double rates on Amazon
By Damian Paletta & Josh Dawsey
19
May 2018 — 9:14am
President
Donald Trump has personally pushed US Postmaster General Megan Brennan to
double the rate the Postal Service charges Amazon.com and other firms to ship
packages, according to three people familiar with their conversations, a
dramatic move that probably would cost these companies billions of dollars.
Brennan
has so far resisted Trump's demand, explaining in multiple conversations
occurring this year and last that these arrangements are bound by contracts and
must be reviewed by a regulatory commission, the three people said. She has
told the president that the Amazon relationship is beneficial for the Postal
Service and gave him a group of slides that showed the variety of companies, in
addition to Amazon, that also partner for deliveries.
Despite
these presentations, Trump has continued to level criticism at Amazon. And last
month, his critiques culminated in the signing of an executive order mandating
a government review of the financially strapped Postal Service that could lead
to major changes in the way it charges Amazon and others for package delivery.
-----
I
look forward to comments on all this!
-----
David.
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