May 30, 2019 Edition.
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We are still recovering from the upset win of the Coalition in the election. New Government now sworn in and Hunt back in Health. This week there is a lot of excellent reading on the topic for those interested. What were to top 10 factors in how it came out are pretty tricky to discern. Albo has taken over Labor but 3 years is a long time! Amazing back room deal making in evidence.
Trump is in Japan over last weekend and then back home to cause more trouble with Iran, NK etc.! Mueller has spoken and made it clear that Trump was not exonerated or cleared. Neither was Russia - big time!
Theresa May resigns June 7 and the fight is on for who will replace her. Busy time in the UK!
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Major Issues.
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Investors set sights on market rally after the polls
May 19, 2019 — 5.23pm
Billions of dollars in franking credits sitting idle on company balance sheets should still be distributed, investors agree, even though the ability to claim cash refunds against those credits is no longer imperiled, following the Coalition's surprise victory.
Shares of dividend favourites such as Telstra, the big four banks, real estate investment trusts and listed investment companies looked set to bounce on Monday with the potential overhang of franking reform under a Labor government neutralised as the Coalition prepares to retain government.
While futures indicate the Australian sharemarket will open flat to higher, with a gain of 5 points or 0.08 per cent, that contract settled before the outcome of the federal election was broadly known. The Australian dollar last traded at US68.68¢ on Saturday, and the 10-year government bond yield closed at a record low 1.64 per cent on Friday.
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First promise broken? Tax cuts face delay
May 21, 2019 — 9.25am
Low and middle income earners face a longer wait than promised for their income tax cuts, after Scott Morrison conceded he will have to break his pledge to recall Parliament in June and legislate the cuts before the end of the financial year.
Because of the late date of the election, the time needed to finalise the seat count and then issue the writs, Mr Morrison said on Monday night it was highly unlikely Parliament will be recalled in June.
The tax cuts could still be paid once the legalisation was passed because they are end-end of year rebates, known as the Low and Middle Income Tax Offset, or LMITO.
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Tax cuts for 10 million workers in doubt as Morrison concedes delay to Parliament
By David Crowe
May 21, 2019 — 8.54am
Prime Minister Scott Morrison has been told it is "very unlikely" he can convene Parliament before June 30 in a danger sign for his ability to legislate income tax cuts for millions of workers due to take effect on July 1.
The delay has forced the government to look at retrospective action to ensure ten million workers receive a tax offset in their tax returns worth up to $1080 a year and promised in the April 2 budget.
One option is to pay a "supplementary" offset to workers after the law is changed in the new financial year to account for the tax relief promised to them for this financial year.
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Customers set to be able to borrow more as APRA moves to scrap key mortgage rule
By Clancy Yeates
May 21, 2019 — 10.09am
The banking regulator has proposed scrapping a rule that has meant all new mortgage customers are assessed on their ability to manage repayments with 7.25 per cent interest rates, saying the policy may have reached its use-by date.
In a move that is likely to increase the maximum amount a new customer can borrow, at a time when mortgage growth has been sagging, the Australian Prudential Regulation Authority (APRA) has put its 7 per cent interest rate "floor" under review.
The floor was introduced in late 2014 in an attempt to contain soaring house prices and surging housing investor loan growth. It has required banks to test prospective borrowers against the higher of either an interest rate of 7 per cent, or a 2 per cent "buffer" over the loan's actual interest rate.
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Morrison faces Senate clash on tax mandate
By David Crowe
May 20, 2019 — 11.45pm
The Morrison government is facing a clash in the Senate over its sweeping income tax cuts, as crossbenchers warn the Coalition has no mandate for the changes even as it inches towards a majority in Parliament.
Key powerbrokers in the new Senate, including Centre Alliance and Pauline Hanson's One Nation, are holding out against the full $158 billion tax relief package despite arguments from other crossbenchers that the plan has been endorsed by voters.
A leadership contest within the Labor Party has also stalled decisions over its stance on the income tax cuts and its own election policies, with Anthony Albanese the only confirmed candidate while Chris Bowen and Jim Chalmers consider standing.
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Buyers get fresh leg-up from APRA
May 21, 2019 — 1.56pm
First home buyers have been given a leg-up into the property market after the prudential regulator signalled the end of lending requirement that saw all borrowers assessed against their ability to repay a loan at 7.25 per cent.
The Australian Prudential Regulation Authority wrote tobanks Tuesday proposing a relaxation of serviceability measures that would effectively relax the serviceability requirements by up to 100 basis points, potentially ushering in a whole new cohort of buyers into the market.
APRA chairman Wayne Byres said the proposed changes were not intended to weaken lending standards but recognised that the regulator’s floor of 7 per cent was not useful in the low interest rate environment. Mr Byres has suggested a buffer of 250 basis points be applied instead.
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RBA signals June rate cut
May 21, 2019 — 1.10pm
Reserve Bank of Australia governor Philip Lowe has given his clearest signal yet that interest rates will be cut next month, suggesting that a recent rise in the unemployment rate was enough to prevent inflation targets from being met.
"A lower cash rate would support employment growth and bring forward the time when inflation is consistent with the target," Dr Lowe told the Economic Society of Australia in Brisbane on Tuesday.
"Given this assessment, at our meeting in two weeks’ time, we will consider the case for lower interest rates," Dr Lowe said.
Dr Lowe said that if the unemployment rate did not move lower with current policy settings, there were options.
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RBA's call for help
Philip Lowe says he does not want to give the government advice but laid out a blueprint for higher economic growth using levers only available to Scott Morrison.
May 22, 2019 — 12.00am
Reserve Bank governor Philip Lowe’s disarming personality and low key verbal delivery often tends to blunt his searing analysis of the flaws in the Australian economy.
It happened again yesterday when he followed up his speech to the Economic Society of Australia in Brisbane with a question and answer session full of not so subtle messages for the Prime Minister Scott Morrison.
Chanticleer detected a simmering and wholly warranted frustration in Lowe’s remarks about the lack of progress on structural reform of the economy. This was especially true when he talked about the need for “structural policies that promote firms hiring people, investing and being innovative and expanding”.
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How good is that? RBA decides it's time for some real policies
By Shane Wright
May 21, 2019 — 7.45pm
Four days after a federal election, Philip Lowe decided to give his most political of speeches.
The Reserve Bank governor, having stayed on the sidelines through the past 5 weeks - including most contentiously during the board's most recent meeting - delivered some big home truths to the freshly re-elected Morrison government.
Reserve Bank governor Philip Lowe, in a speech in Brisbane, says the RBA will "consider the case for lower interest rates" when it meets in June.
A cut in interest rates, most likely next month, was not the biggest surprise of his speech in Brisbane on Tuesday.
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How Trump has accidentally helped Australian miner Lynas
By Elizabeth Knight
May 22, 2019 — 12.00am
US President Donald Trump has emerged as a key player in the future of Australia’s small and controversial rare earths company, Lynas, adding yet another dimension to the circus around its operations and ownership.
Rare earths metals have emerged as the latest salvo in the tense trade war between the global superpowers, and Lynas is the only large producer of these metals outside China - which dominates the sector.
Thus Lynas has accidentally become enormously strategic on the world geopolitical stage - a development that no one could have predicted but one that has played perfectly into the company’s hands.
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How to avoid a 'technology Iron Curtain' in a new Cold War
By David Wroe
May 22, 2019 — 12.00am
Australia last year in effect banned the use of Chinese telco Huawei's equipment in the nation's 5G mobile network, which will power data-hungry new technologies such as self-driving cars, artificial intelligence and smart cities.
It was a decision made on clearly spelt out national security grounds. A company that is based in China and subject to laws there that would enable Beijing in a future strategic confrontation to direct the firm to carry out hostile actions such as shutting the network down, is too great a risk.
But beneath and beyond the 5G decision is a bigger issue. Through intellectual property theft, subsidies to state champion companies and the compulsion for foreign firms in China to hand over their secrets, China stands accused of playing unfairly to get ahead.
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It's good the PM has God on his side, he may need all the assistance he can get
By Ross Gittins
May 21, 2019 — 4.00pm
It’s always nice for the country to be led by someone who’s obviously got God on his side. When he prays for a miracle, he gets it. And the challenges facing the economy are such that Scott Morrison may need all the divine assistance he can summon.
The Coalition – and their dispirited opponents - should remember the fate of the last chap who won an unwinnable federal election: Paul Keating in 1993. By the time the next election arrived, voters were, in Queensland Labor premier Wayne Goss’s words, “sitting on their verandas with baseball bats”.
The Prime Minister says the Coalition's win is a miracle and a victory for the quiet Australians.
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Scott Morrison to get some bad economic news
After it was revealed the PM would be unable to keep an election tax cut promise to 10 million Aussies, he is set to get some bad economic news today.
Fasten your financial seatbelts as incoming Prime Minister Scott Morrison gets the bad economic news today from the Reserve Bank at a summit in Sydney.
Your wages and taxes are at the centre of economic deliberations.
It is the long standing post-election practice that the economic family of the public service briefs the winner on the shape of the economy.
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ScoMo does have an agenda
Scott Morrison's agenda is one of the first truly libertarian programs that we have seen in a long time, writes Chris Joye.
May 22, 2019 — 10.52am
The widespread media consensus that Prime Minister Scott Morrison has "no agenda" is crap. Most critics do not see the agenda because they are projecting their own political prejudices.
ScoMo's agenda is about empowering individual exertion, aspiration and productivity through lower taxes, smaller government, balanced budgets and investments in infrastructure, education, health and national security that create equality of opportunity while fostering individual and collective success.
Any more ambitious reforms beyond this require substantial political currency that ScoMo has yet to accumulate – they will have to be developed and sold in subsequent terms.
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The Coalition still needs to offset revenue loss from franking credits: KPMG
- 2:11PM May 20, 2019
The Morrison government will need to consider cuts to spending or increasing the GST or other consumption taxes to offset the increasing revenue loss from the continuation of excess franking credit refunds, according to KPMG tax specialist Damian Ryan.
Following Labor’s failure to win office, blamed in part to hostility to its planned clampdown on tax concessions, Mr Ryan said the revenue issue that was “trying to be addressed” by the opposition’s plan to ban excess refundable franking credits still remains a problem.
“As the Australian population ages, and as more shares are held by retired Australian individuals and superannuation funds with a significant proportion of members in pension phase, a significant part of the corporate tax base is refunded, thereby putting a strain on the country’s tax base,” Mr Ryan said.
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Why no-grounds rental evictions are bad for tenants and landlords
Good long-term tenants are what most responsible owners want. You look after them and they’ll look after your property.
May 22, 2019 — 10.14am
When the NSW government brought in its raft of changes to tenancy laws at the end of last year, the headline-grabbing issues were new provisions to protect the victims of domestic violence and limit rent rises in “periodic” or rolling leases to one a year.
In Victoria, the main story around the last tenancy law changes was protection for tenants with pets.
Renters are often reluctant to demand their rights in case it triggers a thought process that leads to them receiving a notice to quit.
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Australian polling is broken: here's how to fix it
The polling industry has been completely discredited. How can one firm working for a major party also present itself as an impartial observer?
John Utting
May 22, 2019 — 11.00pm
Discredited, distrusted, even despised, after last Saturday's election the polling industry in Australia has reached its nadir. It would be hard to imagine how things could get worse. The reason I write is to ensure this doesn't happen again and suggest a series of initiatives to clean up and rehabilitate our industry and the health of our democracy.
First, we should not underestimate the importance of polling in the functioning of our democracy. It's acknowledged the media is the fourth estate. Polling is the fifth. It’s the process in modern democracies that provides the public and the voters with a feedback mechanism to have their say. If this process isn't working properly – and what's been reported back is not a true reflection of community opinion – we as a democracy are in serious trouble.
Most of the commentary about the election polling has focused on the overestimation of the Labor vote throughout the campaign, reporting a swing to the ALP of at least a 2 to 3 per cent.
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Morrison to keep extended Cabinet to avoid disharmony
May 22, 2019 — 4.44pm
Scott Morrison is set to retain an expanded cabinet of 22 ministers as part of a modest reshuffle designed to minimise upheaval while reflecting his new-found authority.
Alan Tudge, a junior minister responsible for population is almost certain to enter cabinet, possibly at the expense of fellow Victorian, Communications Minister Mitch Fifield.
Former minister Arthur Sinodinos, who had a break due to ill-health, and Sussan Ley, the former health minister who was stood down several years ago over suspect travel claims, are also tipped to make a return.
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'They just got it wrong': Why the RBA is doing a U-turn on interest rates
By Shane Wright
May 22, 2019 — 11.45pm
In his final public words of 2018, Reserve Bank of Australia governor Philip Lowe made clear where he thought the economy - and interest rates - were headed.
The bank had just released fresh forecasts predicting the economy to expand by 3.6 per cent through 2018 with stronger growth to come, inflation to move back into the RBA's target band and household spending to lift.
"The economy is moving in the right direction and further progress is expected in lowering unemployment and having inflation consistent with the target," he said in a speech entitled Trust and Prosperity.
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How will the new government reach the magic number of 39 in the Senate?
Conservatives, centrists and a wildcard – who's who on the new upper house crossbench and what will it mean for the government?
By David Wroe
May 23, 2019
The re-elected Morrison government’s legislative fortunes may hang on a final undecided Senate seat in Queensland.
On current counting, the Coalition can rely on having 34 seats in the 76-seat upper house. It might win 35 – there is a fair prospect it will get one additional seat in the Sunshine State.
But it will still need 39 seats to get laws passed – 39 being the magic number for a majority in the upper house. At most, it will end up with 35 seats and so to have a majority, it will need to rely on the support of four or five crossbenchers, depending on the outcome of that final seat in Queensland.
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Albanese to become Labor leader as Chalmers pulls out of race
By Eryk Bagshaw
May 23, 2019 — 12.26pm
Anthony Albanese will become the Labor Party's next leader, after the only remaining contender, Jim Chalmers, pulled out of the race on Thursday.
Dr Chalmers, the Queensland-based finance spokesman, called Mr Albanese to offer his "enthusiastic support" before lunch. He had been making calls to supporters throughout the morning to see if he had the numbers to get through what would have been a five-week leadership ballot involving all party members.
"I have been genuinely surprised by the magnitude of their support and encouragement and I hope I haven’t let them down in making this decision," Dr Chalmers said in a statement.
"There were good reasons to run. But in the end I couldn’t be assured of winning, and if I did win the extra responsibilities of leadership would make it much harder to do my bit at home while the youngest of our three little kids is only five months old."
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ASIC warns traders to 'lift their game'
May 23, 2019 — 12.04pm
The corporate regulator has warned fixed income and foreign exchange traders to "lift their game", revealing it has installed supervisors in 16 investment banks and stockbrokers as part of its intensified market supervision in the wake of the Hayne royal commission.
The Australian Securities and Investments Commission's head of market supervision Greg Yanco also indicated the regulator will restrict the sale of 'contracts for difference' and 'binary options' to retail investors given excessive risks, which could be the first application of its new product intervention powers.
After the prudential regulator lashed financial services company boards for holes in self-assessments of non-financial risks, Mr Yanco told a room of stockbrokers at their annual conference in Sydney they too must benchmark themselves against standards set down in APRA's prudential inquiry into Commonwealth Bank.
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Former NZ PM has a warning for Scott Morrison
May 23, 2019 — 12.01pm
Former New Zealand prime minister Bill English has warned that an escalating US-China trade war and falling property prices may lead to "stagflation" – a period of high inflation and unemployment, and low growth – in Australia.
He said one possible outlook for 2030 was a return to the recessions of the 1970s, but that few Australians today could imagine unemployment climbing to 8 per cent.
"Just look back through history and see how often it happens. It happens. And it will happen again," he said.
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Banks 'bluffing' on NZ lending threats: former PM
May 23, 2019 — 2.40pm
Former New Zealand prime minister Bill English says threats by Australian banks to reduce lending in New Zealand if its central bank demands higher capital levels are a “bluff” given the returns they make across the Tasman.
However, Mr English also raised concerns about the Reserve Bank of New Zealand's plan to ramp up bank equity to protect its economy in a crisis, suggesting this could create moral hazard by dulling major banks’ management of risk.
He also revealed the extent of New Zealand's displeasure with the Australian government during the global financial crisis when Australia announced it would guarantee bank deposits.
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Complacency rules as trade war threatens
May 23, 2019 — 2.23pm
The Federal Reserve’s decision in January to put an end to its rate-hiking plans has re-established that familiar sense of complacency that comes with the promise of a central bank bailout if things get really bad for financial markets.
How else to explain the demonstrable lack of concern on Wall Street about the sharp deterioration in trade relations between the world's two biggest economic powers?
Global trade growth collapsed through 2018. Citigroup Research
Read through equity strategy notes and you will usually find something along the lines of, “We are hopeful of some kind of US-China trade deal in the coming months”.
Some hope.
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What drug dealers have taught us about e-commerce on the dark web
Silk Road may have sold illegal drugs but great customer service was its hallmark. Since it was shut down the businesses that have sprung up in its place have fewer scruples.
Eileen Ormsby
May 24, 2019 — 9.46am
Australians are some of the highest users of recreational drugs anywhere in the world. Traditionally, friend-of-a-friend networks were the most popular way of procuring marijuana, ecstasy, cocaine or LSD. There was scant opportunity to shop around. Buyers got what they were given, with little idea of what their pill or powder had been diluted with by the time it had reached the end user, or whether another product had been substituted entirely. Complaints could be met with, at best, a shrug or, at worst, a weapon. Drugs were expensive and low-quality, but the appetite to procure and ingest them never waned.
Sellers had their own sets of problems. They had to rely on word-of-mouth for business, and every new customer had the potential to be undercover law enforcement. Dealing only in cash meant they were a prime target for robbery, and would then have to answer to someone higher up the chain if they lost product or money. Violence was inevitable in a drug dealer’s lifetime, and a prison term was probable. Such high stakes meant they needed healthy profits to make the job worthwhile.
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Labor's defeat leaves Australia on a 'slow-burning tax platform'
May 23, 2019 — 5.47pm
With Labor's ambitious negative gearing and franking credit plans stopped in their tracks, Scott Morrison is facing calls for effective tax reform in his new term.
Mr Morrison said low- and middle-income earners could face a longer wait for promised income tax cuts, but a survey of experts has found bleak warnings about the tax system and calls for the Coalition to consider some Labor proposals.
The Tax Institute warned delays on the Low and Middle Income Tax Offset could cause administrative nightmares for taxpayers, accountants and the ATO.
“There are three possible remedies here: taxpayers who lodge their 2019 returns prior to the legislation being passed will have to lodge amended returns once the legislation is passed after June 30; the tax commissioner could grant an extension to all taxpayers to lodge after October 31, 2019, to allow time for the legislation to be passed; or the government could defer the start date of the measure for a year,” senior tax counsel Bob Deutsch said.
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Cometh the hour, cometh the Albo
Anthony Albanese cut his political teeth as a political firebrand. Now he is Labor's next statesmen - and he's even talking about economic growth.
May 23, 2019 — 11.00pm
If there was a moment when Anthony Albanese made the leap from factional powerbroker to popular consciousness, a Saturday afternoon in late summer in Sydney in 2012 was it.
The Labor Party was in turmoil with Kevin Rudd resigning as foreign minister to try to reclaim the prime ministership from Julia Gillard.
Albanese, as leader of the house, had the crucial job of preserving the parliamentary survival of Gillard's minority government but declared his intention to vote for Rudd and his belief caucus had erred rolling him 18 months earlier.
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Australia 10-year yield forecast cut by BofAML
May 24, 2019 — 3.47am
Bank of America Merrill Lynch has lowered its year-end forecast for the yield on Australia's 10-year note to 1.9 per cent from 2.25 per cent.
The revision comes after the Reserve Bank of Australia signalled this week that recent labour market data lends support to the argument that easier monetary policy would now be appropriate.
"Slower growth and weak inflationary pressures in the near-term" have already added to this case, BofAML said in a note about global rates titled 'marking to misery'.
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The inflation beast is tamed. Can the Reserve Bank stir it again?
By Stephen Bartholomeusz
May 23, 2019 — 5.00pm
Thirty years after central banks began successfully targeting inflation, they are becoming increasingly bemused that despite their best efforts, they now appear incapable of hitting their targets.
In 1989, when New Zealand’s central bank became the first to formally target inflation, the ambition was to lock in relatively low levels of price increases.
Other central banks followed its lead, with our Reserve Bank starting to focus more on inflation in the early 1990s, although it took until 1996 before a new Treasurer, Peter Costello, formally wrote it into the RBA’s mandate.
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Westpac’s Bill Evans forecasts three rate cuts in 2019
- May 24, 2019
Westpac chief economist Bill Evans is now predicting the Reserve Bank will cut the official cash rate three times in 2019 to a new record low of 0.75 per cent.
As recently as Tuesday, Mr Evans said rates would not go below one per cent.
“Our central forecast for the terminal cash rate in this cycle is 0.75 per cent with risks to the downside, although we would certainly see 0.5 per cent as the floor for the cash rate, with QE a more effective policy tool thereafter,” he said in a report today.
Earlier this week RBA Governor Philip Lowe indicated two rate cuts would be needed to stop unemployment rising and get inflation back up to its target band, and hinted at a rate cut on June 4.
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Retirement incomes face review
May 24, 2019 — 11.39pm
Key Points
- The Treasurer wants to adopt the Productivity Commission's call for a retirement income system review.
- Prime Minister Scott Morrison ruled out changes to taxing superannuation.
- The government will seek to reduce the influence of union and employer groups on the boards of industry super funds.
Treasurer Josh Frydenberg will commission a review of the retirement income system, including the interaction of superannuation, government pensions and, potentially, taxation.
In an interview with AFR Weekend, Mr Frydenberg said he would consult with cabinet colleagues and Treasury to act on the Productivity Commission's recommendation to conduct a review of retirement incomes.
"My intention would be to establish that review," Mr Frydenberg said.
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Just a jump to the left, and then a step to the right: the challenges facing Anthony Albanese
By Michael Koziol
May 24, 2019 — 11.45pm
When Anthony Albanese became became assistant secretary of NSW Labor in 1989, factional bosses from the right were so displeased they waited for him to go on holiday and kicked him out of his corner office, reassembling it in the middle of the floor. Albanese and a crew of manufacturing union members had to drag everything back to its place when he returned.
Today, the once-towering NSW right faction has swung what remains of its weight behind the 56-year-old left-winger to salvage their party from the despair of a bruising, humiliating defeat the party did not see coming.
Frontbenchers who thought they'd be in Canberra next week to select the artwork for their ministerial offices will instead shuffle into the opposition's meeting room – the same one they've known for six years – to confirm Albanese as their new leader and pick his deputy.
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The numbers on Adani simply don't add up
By David Fickling
May 24, 2019 — 10.35am
Is the world's most bitterly contested coal mine finally getting the go-ahead?
After Labor suffered heavy losses in coal-mining regions in Saturday's Australian federal elections, the Carmichael project looks to be getting closer than ever to approval. In the view of the government's resources minister Matt Canavan, the pit being developed by Adani, a unit of Indian billionaire Gautam Adani's business empire, is all systems go.
There's a rarely discussed problem with this, though: The numbers on Carmichael don't stack up – and haven't for most of the past decade, despite the mine becoming a high-profile proxy for broader fights over fossil fuels among politicians, lobbyists and environmentalists. (An Adani spokeswoman said our assumptions were incorrect, but didn't dispute any specific figures or provide alternative ones. 'The Carmichael Project economics are strong and are projected to remain strong,' she wrote.)
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Labor needs more than just Albo to return to relevance
- 12:00AM May 25, 2019
With Bill Shorten having lost his bid to sit on the iron throne of power, attention in Labor circles now switches to the iron throne that doesn’t matter nearly as much: that of new opposition leader. Anthony Albanese is all but certain to assume what is often described as the hardest job in politics, made even more difficult after a devastating election defeat.
Shorten has replaced John Hewson as the man who lost the unlosable election. But Labor supporters shouldn’t lose hope. History tells us that if Labor makes the right moves during the next three years, winning the next election is a real possibility.
When Hewson lost in 1993, the Coalition came roaring back in 1996, winning a thumping majority under John Howard’s leadership after dumping its long-term pledge to abolish Medicare. Will modern Labor be prepared to dump its equivalent ideological obsessions to help it appeal to the mainstream?
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In sport and politics, play the ball not the man
May 26, 2019 — 12.00am
The parallels between sport and politics are so numerous it borders on the cliche. The contests are billed as winner-takes-all, supporters show blind loyalty to their teams almost at the expense of reason, while those who break the rules can be sent to the sin bin or ejected from Parliament. There is even an arguably unhealthy amount of wagering.
In both of late there have been examples of vitriol and general incivility which have left participants wondering whether it is worth taking part.
On the football pitch, as The Sun-Herald reports today, between a quarter and a third of young referees are being churned through one league and others experience difficulty retaining them through to senior levels.
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Home borrowers set to receive $100,000 lending boost
By Jessica Irvine and Kate Burke
May 26, 2019 — 12.00am
Home buyers are set to receive a borrowing boost in the order of $100,000 because of a combination of looming changes to lending standards and interest rate cuts, new modelling shows.
A single borrower with an annual income of $80,000, no other debts and average - or below - living expenses could today expect to be approved for a maximum loan amount of $512,000.
This would increase to $567,000 under the proposed relaxation of loan serviceability rules flagged by the banking regulator last week, according to modelling by Independent Mortgage Planners.
It would increase again, to $598,000, if the Reserve Bank also delivers anticipated interest rate cuts of half a percentage point in coming months, by enabling borrowers to service higher debts off a given income.
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We’re stuck fighting today’s issues with yesterday’s economics
- 12:00AM May 25, 2019
This week the Governor of the Reserve Bank, Philip Lowe, made it known that the rate of interest on overnight loans between banks is about to be lowered by means of his minions intervening in the market, something they may have forgotten how to do, it’s been so long.
The gamblers who comprise the futures market had arrived at that conclusion a while ago, so futures contracts are currently priced for at least two, perhaps three, rate cuts of 25 basis points each in the months ahead.
APRA has joined in the anxiety-fest by freeing banks to use reality in assessing their customers’ ability to repay, as opposed to a fictitious 7 per cent deemed mortgage rate.
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Federal Election.
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Time to stop polling and start listening: why we got election so wrong
By Rebecca Huntley
May 19, 2019 — 11.15am
Even Burt the Psychic crocodile got it wrong. And so it's been asked a million times since Saturday night – can we ever again trust opinion polls?
It probably doesn't matter to people who were hoping for a Labor victory that once all the votes are counted the final two-party preferred numbers will not be far off many of the published national polls; the polling, once you move to a state and seat level, becomes unreliable, moving well beyond the margin of error.
The Labor Party was ahead in the polls and expected to win the election. Now they've lost their leader and the campaign dissection has begun.
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Key challenges for the re-elected Coalition government: our experts respond
Our experts take a closer look at what’s in store for the country in five key policy areas: health, tax, education, infrastructure and the environment. Getty
The Coalition has won the federal election. So what will this mean for key policy areas?
Our experts take a closer look at what’s in store for health, taxes, the environment, education and infrastructure – five of the most closely watched policy areas in the election campaign.
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Wrong polls blindsided nation, but 'Shorten knew all along'
12:56pm May 19, 2019
As Scott Morrison charged to victory yesterday, seemingly defying all odds, Australians were left scratching their heads about how the polls could have got it so wrong.
In the past two years leading up to last night’s election, the Coalition did not win a single Newspoll.
Even as late as Friday night, Newspoll, YouGov/Galaxy, Ipsos and ReachTEL polls had Labor ahead 51-49 on the two-party preferred vote.
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Steggall says 'clearly a mandate' for Coalition, optimistic about climate collaboration
By Fergus Hunter
May 19, 2019 — 5.14pm
The new independent MP for Warringah, Zali Steggall, says the Coalition has been given a clear mandate to govern and expressed optimism about a shared "starting point" with Prime Minister Scott Morrison on climate change policy.
Ms Steggall, who trounced former prime minister Tony Abbott in the historically blue-ribbon seat in Sydney's north, said on Sunday the Coalition would have at best a slim majority in Parliament and would need to keep crossbench MPs onside.
The barrister and Olympian, who campaigned on a small l-liberal platform with a heavy focus on global warming, also endorsed Labor deputy leader Tanya Plibersek as a promising option to take over from Bill Shorten.
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'Two words, retiree tax': The policy that helped Labor lose the election
By Eryk Bagshaw and Mathew Dunckley
May 19, 2019 — 4.41pm
Labor is facing a rising internal revolt to dump its signature $14 billion franking credit policy in the wake of its stunning election loss to the Coalition.
Liberal MPs are astounded at the success of their 'retiree tax' campaign - led by Victorian MP Tim Wilson - which has killed off the threat of Labor's franking credit policy and won the Coalition key seats up the east coast.
The Labor policy, which affected only 5 per cent of Australians, mostly retired shareholders, was harnessed by the Coalition to gain the votes of their children and grandchildren. The policy would have stripped tax refunds from retired investors who had not paid tax.
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It's ScoMo's show, all he needs is an agenda
Labor's campaign was anti-aspirational and people who wanted to vote Labor because of climate change or because the Coalition was a rabble, had to do so at the expense of their economic circumstances.
May 20, 2019 — 12.01am
At the start of the election campaign, the Coalition set itself a simple task. Minimise the losses in Victoria to two, maybe three, seats, pinch a handful of seats from Labor in the other states, and the rest would look after itself.
And that's what happened. Victoria, the state that swang so heavily towards state Labor in November, was a disaster for Bill Shorten.
Labor won just two seats there – Corangamite and Dunkley – and they were already classified as Labor seats before the campaign started, due to the electoral redistribution.
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Geoff Wilson's franking fight was personal
Chanticleer is Australia's pre-eminent business column.
May 20, 2019 — 12.15am
Geoff Wilson is going to Canberra on Monday, and he’s probably going to get a hero’s welcome.
Geoff Wilson says being dragged into politics of franking credits was "brutal".
Not from the Liberal Party, although a phone call of appreciation from Scott Morrison wouldn’t be unjustified given Wilson’s long and hard campaign against Labor’s policy to end franking credit refunds appears to have helped the Coalition pull off an almost unthinkable victory in the federal election.
(And no, Wilson says the PM hasn’t been in contact yet.)
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Why ScoMo won
May 20, 2019 — 12.00am
During the week I advised my investors, media colleagues and friends that it would not be surprising if Scott Morrison won the election comfortably.
For months this column argued that the betting markets and political pundits were wrong in assuming ScoMo had no chance. Indeed, it posited that he possessed impressive "prime ministerial material" in May 2018 and warned in January that Labor risked a John Hewson-redux.
These insights were not predicated on any political inside information. The belief ScoMo could win was premised on pure first principles logic. In fact, he intuitively felt like a good trade – a massively mispriced asset.
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The election's uncomfortable truths
Australians are more cautious and conservative than city elites realise.
May 20, 2019 — 12.00am
Scott Morrison's victory did more than secure his place in political history.
The upset demonstrated an uncomfortable truth for many in the Australian elite about the nature of their society.
The distinct options given to voters, and the definitive choice they made, revealed the innate conservatism of the Australian middle and working classes.
The election result has demonstrated that Australia is not a society that desires big, interventionist government in the same manner as Sweden, France or even Britain. The national mood desires lower taxes, a smaller state and strong borders.
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https://www.afr.com/news/politics/national/labor-misread-franking-revolt-says-wilson-20190519-p51oxo
Labor misread franking revolt, says Wilson
May 20, 2019 — 12.06am
Fund manager Geoff Wilson, who led a vocal campaign against Labor’s plan to eliminate franking credit refunds, says Bill Shorten’s team badly underestimated the “ripple effect” the
Mr Wilson is the founder of Wilson Asset Management, which has 80,000 mainly self-funded retiree investors. He pointed to figures showing that the biggest swings against Labor came from voters aged over 65 as evidence of the impact of the franking credit proposal on the election result.
“It was an inequitable and illogical policy that should never have been taken to the Australian people,” he told The Australian Financial Review on Sunday. “And it appears it has been a significant part of their downfall.”
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Quiet Australians turn up the volume
May 19, 2019 — 7.24pm
Scott Morrison’s “quiet” Australians shouted their opinion loud and clear. NO to Labor. NO to its leader. NO to its agenda. That resounding electoral slap has stunned Labor, costing Bill Shorten the prize he had anticipated his entire life and seemed on the cusp of finally claiming.
Instead, the Liberal leader derided by Labor for being stuck in the past now owns the political future. It’s a shell-shocked Labor that's left trying to figure out its future direction.
In the large function room in Melbourne’s Essendon Fields, initial jubilation about the expected result quickly turned to unease then gradually to horror as the numbers started to add up – mostly in the wrong column.
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Pollsters 95 per cent unsure how they got it wrong
By Shane Wright
May 20, 2019 — 12.00am
The nation's pollsters are facing calls for greater transparency and an overhaul of their number-crunching after spectacularly missing the result of the federal election.
None of the major national pollsters accurately forecast the result, with all putting Labor in a winning position. Combined, Newspoll, Ipsos, Essential and Morgan had Labor 51.7 to 48.3 in front on a two-party preferred basis.
The pollsters' biggest misses were the Coalition's primary vote, which all underestimated by about 3 points, and the 2.9 per cent swing to the Liberal National Party of Queensland. Its commanding 57-43 per cent result compared to pollsters' predictions of 51-49.
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Labor lost on a crusade for fairness - what does that say about us?
By David Crowe
May 19, 2019 — 11.45pm
Bill Shorten began the election campaign in full confidence that his crusade on fairness would win over Australian voters, only to be blindsided by the appeal of a more conservative message.
The brutal rebuff forces Labor to consider whether it misread the electorate or bungled its campaign by trying to redistribute wealth with a progressive policy agenda.
The Labor Party was ahead in the polls and expected to win the election. Now they've lost their leader and the campaign dissection has begun.
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Saturday night's election loss was a raw, hard moment for Labor
By Bill Shorten
May 19, 2019 — 11.55pm
Along with my family, the Labor Party and the labour movement is my life and it's been the greatest honour of my life to lead Labor for the past five and a half years.
I've treasured this job, I've loved the chance to get around the country, to meet great people and to advocate on behalf of the millions of Australians who count on Labor governments.
I was so ambitious for what a new Labor government could achieve, I was so determined for us to win but I fully respect and accept the wishes of the Australian people and I understand that my time as Labor leader is over.
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How the Coalition pulled off a miracle as Labor's momentum fell apart - and why no one noticed
By Michael Koziol
May 20, 2019 — 12.00am
Days after Scott Morrison became Prime Minister, Liberal MP Tim Wilson called up with an idea. He wanted to be put in charge of the lower house economics committee – but on one condition: he would run a no-holds-barred inquiry into Labor's franking credits policy.
The recently dispatched Malcolm Turnbull had already branded it a "retiree tax" that would rob people of their savings after a lifetime of work. But the rhetoric had not cut through.
Along with colleagues Jason Falinski and Trevor Evans, Wilson wrote a proposal to smash Labor on the policy: to highlight human stories and link it to a wider narrative about Labor's fiscal management. It eventually became part of the Coalition's core message: "Labor can't manage money so they'll come after yours."
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Relieved SMSFs spared Labor’s changes
- 12:00AM May 20, 2019
The $730 billion self-managed super industry is breathing a sigh of relief today as it no longer has to deal with a raft of changes to superannuation proposed by a Shorten-led Labor government.
SMSFs and retirees with investments in Australian shares no longer face the prospect of being hit with a change to the dividend imputation system, which would have cost them $5bn a year in refunds under a Labor government.
“Many SMSF trustees will be relieved that Labor’s proposed banning of franking credit refunds is no longer a threat to their retirement plans,” the chief executive of the Self Managed Superannuation Fund Association, John Maroney, said yesterday.
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If you’re going to increase taxes, lie
- 6:28AM May 20, 2019
Not for the first time, my friend and mentor Bob Gottliebsen was right and I was wrong.
We both thought the election would come down to climate change versus the “retiree tax” (the abolition of franking credit cash refunds). I thought climate change would win because there are more people worried about global warming than are retirees getting franking credits cash.
What Bob picked up on, and I didn’t, is that it’s not just about those directly affected, but also those looking on and wondering if they’re next. Also the group who are directly affected includes children and grandchildren — not that they would be bullied into voting against Labor by their parents, but because they sympathise with their parents’ plight and also might have to make up the cash.
As Bob wrote in the final days of the campaign, on the issue of climate change the Coalition should have been thrashed in this election, as it was in 2007. But he went on to write: “If the election is close it will be because Australians are horrified at the ALP’s savage attack on the elderly who are not rich, plus all the other taxes.”.
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Inside the team that lost it for Labor
Bill Shorten and his campaign team had been riding high right to election night. How did it all fall apart? Pamela Williams investigates.
Pamela Williams
May 21, 2019 — 12.00am
At a stark airport hotel in Essendon, a shell-shocked Bill Shorten stared into a stunned, sometimes-weeping crowd and a bristling wall of cameras to announce that he had failed. His was an inspirational concession, showing the best side of himself. But he would not be prime minister and Labor had not won government. They had launched a thousand policies. They had flown close to the sun. And they had fallen.
Shorten had watched the votes come through in the hours before, in a room at the Hyatt in Melbourne together with his family and closest advisers: chief of staff Ryan Liddell, speechwriter James Newton and advisers Sharon McCrohan and Peter Barron (a veteran of the great Hawke days). They were shattered. If there was a moment when the water turned to ice, it was now.
Shorten had made it clear that very afternoon that he hoped to form government. He had showed a breezy confidence. But every seat they thought was lineball had gone against them. When the truth could no longer be held back, Shorten phoned Scott Morrison to concede, then took a car to the airport venue where tired Labor supporters waited. He would consign his imagined prime ministership – and Labor’s hopes for power – to the dustbin of eternity.
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https://www.afr.com/news/world/oceania/australia-s-pm-should-push-for-deeper-reforms-20190521-p51ph4
Australia’s PM should push for deeper reforms, says FT
The FT Editorial Board
Updated May 21, 2019 — 9.27am, first published at 9.23am
After it trailed in most opinion polls for over two years, Australia’s ruling conservative coalition victory has been painted by supporters as a “miracle”. The truth is more mundane. The Liberal-National coalition, led by new prime minister Scott Morrison, relied on the Labor opposition’s unpopular policies while advancing few of its own.
Mr Morrison’s showing brings welcome stability to Australia. Now, however, the prime minister should move beyond the slick campaigning which won him this election. Mr Morrison should be willing to commit to difficult but sweeping reforms which will benefit Australia in the long term.
Mr Morrison’s campaign was decidedly light on policies, focusing on tax cuts, infrastructure spending and job creation. By contrast, Labor’s highly ambitious manifesto planned to tackle income inequality, remove tax breaks from mid-to-high earners and commit Australia to more stringent action on climate change.
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Pollsters accused of fudging survey results
May 20, 2019 — 11.00pm
The high level of agreement among opinion polls that the Labor Party would win the federal election was so statistically unlikely that polling companies must have been fudging their own results, statisticians said.
Peter Ellis, a director at management consulting firm Nous Group, said the odds of the past 20 polls all showing that the Labor Party was consistently ahead were 500-1.
"What you would expect to see from the sampling distribution is more variation in the published estimates," Mr Ellis said. "It basically suggests there is some kind of smoothing going on in the polling companies."
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How Shorten's misfiring media strategy played straight into Morrison's hands
By John McDuling
May 21, 2019 — 12.01am
Bill Shorten's strategy to bypass conservative media during the election campaign always looked risky - and it ultimately failed. But not because of Rupert Murdoch or Alan Jones.
The outgoing Labor leader and his advisers audaciously bet they could ignore (and in some cases directly challenge) media outlets deemed hostile, and still get their message directly to voters through social media channels. The problem for the ALP was, the Coalition was planning a digital push of its own, and it ended up being vastly more effective with it.
Shorten did not appear on Alan Jones top rating breakfast radio program in Sydney during the campaign. He also boycotted other shock jocks including 2GB's Ray Hadley and 3AW's Melbourne based presenter Neil Mitchell, who is considered more moderate than his Sydney counterparts.
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How people power put Labor’s franking credits policy to rest
- 1:04AM May 21, 2019
No one realised it at the time, but in Sydney on October 30 last year the ALP election loss was being planned by a remarkable group.
They were people who had come together as a result of Chris Bowen’s plan to end cash franking credits.
I was invited to speak and join the discussions. In that room was the community power that would play a huge role in preventing Bill Shorten being prime minister.
We are used to community power being exercised in the street with protests, or via massive media campaigns. Retirees don’t march in the street but they belong to connected organisations which enable them to become a massive political force if they are aroused.
When Chris Bowen devised the scheme to end cash franking credits, he convinced his leader Bill Shorten that this was an attack on the rich. My first reaction was that the rich would not be affected and that the ALP would therefore not raise the money it was projecting.
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'Drowning in hubris': Labor's lavish last supper before crushing loss
By Eryk Bagshaw
May 20, 2019 — 11.45pm
Queensland king prawns, salted caramel espresso martinis, massages at their desk - the Labor high command were in a mood for celebrating on election eve.
Twenty-four hours later they would be crushed by a stunning loss to an opponent that had spent the final day racing through three electorates and two states in a last minute sprint to snatch victory from an almost certain defeat.
The blame-game inside Labor is now in full swing, with many pointing squarely at its national HQ in Sydney's Parramatta.
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Labor's franking credits blamed for huge swings in booths with older residents
By Eryk Bagshaw
May 21, 2019 — 12.00am
Labor was hit with swings as high as 15 per cent against it in polling booths where people aged over 60 made up more than 15 per cent of the population, new figures show, revealing the impact of the party's controversial tax policies.
Labor MP Mike Kelly has urged the party to consider dumping its franking credits policy, saying it should be "grandfathered or include relief for low income earners" in the wake of the election result. "I heard it loud and clear," he said.
The policy helped lose Bill Shorten the election on Saturday - as retirees down the east coast protested the $6 billion-a-year move to strip them and their families of tax refunds.
Labor also had a policy to scrap negative gearing for investment properties purchased after January 1 next year.
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A brutally effective campaign ruthlessly exploited Labor's mistakes
By Chris Uhlmann
May 21, 2019 — 1.05pm
For the last three years federal politics has been consumed by government chaos and the opposition prospered in the role of ringside commentator. But during the past five weeks Labor agreed with the Coalition that it should instead talk about itself.
In another piece of unexpected generosity it also readily conceded the Coalition’s main talking points, with only minor caveats. Yes we are planning radical reform (but we do know what is best for you). Yes we are going to pay for that by raising billions in new taxes (but only on the “top end of town”, i.e. anyone earning more than $180,000 a year). And yes, alas, we do have an unpopular leader (but he leads a nice team).
Chris Bowen will challenge Anthony Albanese for the position of Labor leader.
While Bill Shorten will bear the brunt of Labor’s public humiliation, internally the guns have turned on his handpicked national secretary Noah Carroll for running what is now being described as the worst campaign in living memory.
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ScoMo wins the 'Trump Australians'
May 21, 2019 — 1.55pm
Scott Morrison's shock win in the federal election may have been delivered by the "battlers" - non-university educated voters in lower income brackets - and Christians.
ANU professor Ben Phillips found that electorates with a lower percentage of persons with bachelor degrees and income greater than $100,000, and a higher percentage of persons identifying as Christian, positively correlated with a swing to the Coalition.
Overall two-party-preferred swing to the Coalition was modest at less than 1 per cent since 2016. Falling primary votes for both major parties suggest that preference flow from minor parties like One Nation significantly contributed to the swing.
The results, which reveal the swing was driven by electorates that share the demographic profile of John Howard's "battlers" and voters who elevated Donald Trump to the US presidency, holds at least three surprising factors.
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Dirty tricks and the dark side of the campaign
Labor underestimated Scott Morrison's skills as an ad man, writes Pamela Williams in the second article in her series on the inside story of Labor's doomed campaign.
Pamela Williams
May 22, 2019 — 12.00am
It was May 5 and Bill Shorten was at a different altitude to mortal man, flying through clouds on the RAAF jet assigned to the Opposition Leader for the election campaign. It had less of the gorgeous finishes adorning the Prime Minister’s VIP, but it had a private compartment for meetings at the front of the plane.
Shorten and shadow treasurer Chris Bowen had gathered to go over the marginal seats travel schedule as well as Bowen’s debate with Treasurer Josh Frydenberg the next day. Shorten still had the second leaders' debate, two days earlier, on his mind. In the media, this had turned momentum his way.
On top of a small stack of books on the Opposition Leader’s galley table was the third in a trilogy of British history: Peter Ackroyd’s Civil War, a sweeping saga of the doomed Stuart dynasty; beneath it, the award-winning 1835 – The Founding of Melbourne & the Conquest of Australia by James Boyce.
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Investors risk missing dividend wake-up call after election win
Investors facing Labor franking changes would have been forced to lessen their reliance on dividend-paying shares. Advisers say that would have been a good thing.
May 22, 2019 — 12.00am
The Coalition's win on Saturday may be a boon to those receiving franking credit refunds but it could see investors returning to a complacent style of investing, chasing only high-yielding Australian stocks.
While a Labor victory was set to leave many shareholders with less money in their back pockets, experts had suggested it could encourage investors to build more diversified portfolios and engage in better investing strategies.
Advisors had suggested alternatives to the blue-chip dividend payers heavily favoured by income-chasing investors including bond proxies, corporate bonds, income trusts and overseas shares.
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'Very tight, very deliberate': Internal Liberal polling showed Coalition was on track to win
By Latika Bourke
May 22, 2019 — 12.00am
The Liberals' internal polling consistently showed the Coalition could win a third term, and that its fortunes turned around immediately after the budget with its promise of a surplus to give it a "pathway" to election day.
The internal polling will add to calls for the nation's pollsters to face greater transparency and overhaul their number-crunching. None of the major national pollsters accurately forecast Saturday's result, with all putting Labor in a winning position. Combined, Newspoll, Ipsos, Essential and Morgan had Labor 51.7 to 48.3 in front on a two-party preferred basis.
But the federal director of the Liberal Party, Andrew Hirst, said its internal polling had shown for weeks a "pathway" to victory, albeit a "precarious and narrow one".
The Coalition's track polling of 20 marginal seats - 15 of them Coalition-held - showed Prime Minister Scott Morrison was poised to win right up until the final survey, which landed in Mr Hirst's inbox last Friday morning.
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Moment of Labor’s downfall
Earlier this year, I bet on the Coalition to win the election. Colleagues laughed ... but I knew it was the beginning of the end for Labor.
May 22, 2019
In February I bet on the Coalition winning the election (four figures, since you ask).
Colleagues laughed, but Labor’s sudden assault on the government’s biggest success — deterring boat arrivals — seemed political madness. Describing the defeat over the so-called medevac bill as a historic loss was laughable. It was the beginning of the end for Labor.
The economy has done even better than me out of Scott Morrison’s historic win, though, avoiding the economic equivalent of a punch in the face.
Not one of Labor’s policies would have helped lift sagging productivity growth, which is what underpins living standards. A slew of income tax increases (in an already heavily taxed economy) and wasteful spending would have been a double whammy, deterring economic activity on the revenue side while wasting the additional revenue on the expenditure side.
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Who's to blame? Knives out for wounded Labor
Flaws in the campaign started fingers pointing at dysfunction in headquarters, writes Pamela Williams in the final article in her series on the inside story of Labor's defeat.
Pamela Williams
May 23, 2019 — 12.00am
Bill Shorten’s campaign bus and plane were the headquarters for the show on the road. Members of his frontbench, the party president Wayne Swan, and sometimes journalists, might join him to zoom across country roads and into traffic squalls, to fly from seat to seat.
The national secretary Noah Carroll and the research and advertising teams kept their own wheels spinning at campaign headquarters (CHQ) in Parramatta – unless there was a reason for a briefing with the boss.
They assiduously avoided the prying eyes of the press. Carroll’s office in Parramatta was a world away – a study in austerity, a high-rise window offering just a glimpse of autumn colours deepening outside. On his desk a computer, a documents tray and a couple of photos. A poster of Shorten was tacked on the wall. It conveyed an impression of intensity, no wasted time and no small talk. The meeting room at Labor’s headquarters had a blank and empty feel as though no one lived there. Only the front doors to the Labor machine, festooned with placards and posters, indicated that a big political operation churned inside.
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GetUp's aggressive, progressive tactics may have backfired
May 23, 2019 — 12.00am
GetUp's bands of orange-shirted campaign volunteers were feared by conservatives, celebrated by social activists and feted by aspiring politicians.
But a crucial group of men and women working day, night and weekends to remove the Coalition government regarded them as pests: Labor candidates.
The aggressive tactics of the progressive pressure group, which says it deployed 9433 volunteers in the election, may have backfired by alienating wavering voters through an obsessive focus on climate change policy.
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A Labor elder statesman's verdict on the mistakes that brought defeat
By Bob Carr
May 23, 2019 — 12.00am
Buoyed by Labor's near-win in 2016 and encouraged by resilient opinion polls, Bill Shorten and his team made the fiscally responsible decision.
They would fully fund election promises. When Labor’s costings were released on May 10, the air was not rent with howling arguments over how this opposition was going to pay for its promises.
But another face of the Rubik’s Cube failed to line up. The fears unleashed over taxing franking credits outweighed any political gain offered by the policies it would fund.
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Labor weighed shift to capping franking credits
By Eryk Bagshaw
May 22, 2019 — 11.45pm
Labor considered altering its franking credits policy to cap the amount retirees were able to claim but decided against it because the changes would have robbed billions of dollars in revenue from the controversial reforms.
The signature policy is now set to be scrapped, with Labor leadership frontrunner Anthony Albanese signalling it will be capped or grandfathered under any government he leads, which will substantially reduce the amount of revenue the party can use to fund other promises at the next election.
The changes proposed by Bill Shorten and shadow treasurer Chris Bowen would have delivered $58.2 billion in extra revenue over the next decade.
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Labor looking for love in all the wrong places
The constant eruption of the Coalition's internal conflicts has long obscured similar divisions in Labor. That's now on full show.
May 23, 2019 — 4.45pm
So much for Bill Shorten’s proud claim of leading a united Labor team over six years rather than the Coalition's "chaos". That illusion has imploded along with the election loss ensuring it is no longer possible to politely ignore Labor’s policy contradictions and political divisions.
Suddenly, all that angry rhetoric about “the big end of town” doesn’t sound so persuasive. Suddenly promoting the details of a big taxing agenda in order to fund a big spending agenda no longer seems such smart politics. Suddenly the need for “real action” on climate change has given way to the need for “real action” rather than equivocation on the Adani thermal coal mine in Queensland.
Queensland Premier Anastasia Palaszczuk immediately conceded the impact of Labor’s electoral disaster, as she performed a double pike with twist on her own government’s persistent blocking of the mine on spurious environmental grounds.
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Why the economy (and Bill Shorten) gave Morrison victory
May 24, 2019 — 12.00am
The Morrison government's election victory was driven by its economic narrative, a clearer campaign message and a more popular leader, according to comprehensive new research into Saturday's shock result.
A post-election survey of 1000 voters conducted by JWS Research shows those who voted for the victor did so predominantly on the issues of economic management (25 per cent), tax (23 per cent), health (12 per cent) and franking credits (11 per cent).
Those who voted for the loser, Labor, were motivated predominantly by climate change (30 per cent), health (29 per cent), education (22 per cent) and the environment (12 per cent).
The research involved asking the participants how they voted and why, as well as surveying their attitudes towards the respective campaigns.
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How did we all get Labor's loss so wrong?
The expectation of a Bill Shorten victory marked a failure of elite opinion and created a false political narrative that embarrassed an entire industry.
May 23, 2019 — 11.00pm
In hindsight, the reasons for Labor's election loss were obvious. An unpopular leader wanted to raise taxes, increase union power and restrict business.
The expectation of a Bill Shorten victory marked a failure of elite opinion and created a false political narrative that embarrassed an entire industry.
Political reporters weren't the only people misled by opinion polls that had apparently been fudged. Political analysts, business leaders, lobbyists and bureaucrats believed there would be a change in government, a view reinforced through their common professional and social circles.
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Investor Geoff Wilson says franking credits, Bob Brown cost Labor the election
By Colin Kruger
May 24, 2019 — 12.05am
"You might have thought we were a bit extreme 6 months ago when we had the placards," fund manager Geoff Wilson told his Sydney investors on Thursday of the moment his battle against Labor's franking credits policy went very high profile.
But he credits the franking credits battle, and Bob Brown's anti-Adani campaign, for delivering the fatal blow to Labor's election hopes over the weekend.
"It was franking credits and in Queensland it was the fact that Bob Brown came up with his caravan, they were the 2 main factors," he said citing feedback from the Geoff Wilson Asset Management investor roadshow which hit Brisbane earlier this week.
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Why we're pressing pause on political polling at the Herald and the Age
By Tory Maguire
May 23, 2019 — 7.30pm
In the wash-up from last Saturday's federal election questions are rightly being asked about how all the major public polling companies failed to predict the Morrison government's victory.
The Herald/Age's pollster Ipsos consistently predicted a Labor win – with the final poll published last Friday showing a national two party vote of 51-49 in favour of Labor.
Ipsos's biggest competitor Newspoll also consistently called it for Labor, with its final poll carrying a greater margin of 51.5-48.5.
In Ipsos' defence, the company had long been ringing alarm bells for Bill Shorten by predicting a worryingly low primary vote - the final poll had Labor gaining just 33 per cent of first preferences. These warnings were criticised by rival media outlets or, in the case of the Labor campaign team, ignored. As of Thursday afternoon, the AEC count has the Labor primary vote from Saturday at 33.72 per cent.
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'Quiet Australians' are disaffected and divided
May 24, 2019 — 3.57pm
It was meant to be a victory for the "quiet Australians" - a wholesome, aspirational, and unassuming majority who had finally stood up.
This was the unifying message of Scott Morrison as he claimed the Coalition's shock win in the federal election: "Tonight is about every single Australian who depends on their government to put them first."
But away from the jubilation at the Liberal's victory party at the Wentworth Sofitel in Sydney, a disaffected country was divided along new and shifting fissures of class, education, and religion, according to experts who have studied the data from this and past elections.
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How the Liberals got inside voters' heads
With voters still undecided in key seats in the campaign's final days, the Liberal Party's machine men knew it was time to ram their message home hard.
Pamela Williams
May 24, 2019 — 8.00pm
Scott Morrison had his laptop open on the Australian Electoral Commission website, a phone beeping text messages in front of him, and pages of notes and lists on a low coffee table. He was gathered with his campaign director Andrew Hirst, John and Janette Howard, chief of staff John Kunkel and principal private secretary Yaron Finkelstein, and media head Andrew Carswell. They were all at the Sofitel in Sydney and there was a small party for 30 or 40 staff and their partners. Morrison was waiting for a phone call.
He had crossed the sparkling Sydney Harbour Bridge – and the psychological break-point of the night – at 10.30pm as he left Kirribilli House to head for the city. A huge Liberal Party celebration in the Sofitel ballroom was under way, building to the point of delirium as TV monitors spun through lists of seats. Morrison and his advisers, with his family and close friends, had watched the early returns come through from the AEC and from Liberal scrutineers phoning Kirribilli. Just after 9.30pm, the ABC had declared a Coalition victory. Now, in a green room upstairs in the Sofitel, there was only one formal move to come. But they would have to wait.
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The party we hate least (by a small margin) wins government
By Peter Hartcher
May 25, 2019 — 12.00am
We're told that the federal election results were shocking, unprecedented, and even Australia's "Trump moment". It's true that they were a shock. Because the entire country was expecting the opposite result. Why? Because the opinion polls signalled it. And a poll-obsessed political and media class bought it.
That tells us something about the polls. It tells us a lot about the politico-media complex and how we use polling. Or, rather, how we've been misusing it.
But the results are certainly not unprecedented. In fact, in the big picture of Australian elections, the results are very ordinary.
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Let's be frank, tax plan shouldn't be credited with Labor's demise
By Ross Gittins
May 25, 2019 — 12.00am
It’s been a week since the election so, naturally, by now a great many of the people who work in the House with the Flag on Top – politicians, staffers, journalists – know exactly why Labor lost and the Coalition won: those hugely controversial dividend franking credits.
There were other reasons, of course, but franking credits is the big one. How do I know they know? Because this is what happens after every election.
If elected, Labor will remove the cash refund part of the franking credit system – but what is franking credits and how does it work.
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'We have two Australias': Election results show a growing divide within the nation
By Matt Wade
May 25, 2019 — 12.00am
The pollsters and the punters said it would be Bill Shorten’s election night.
However it was Scott Morrison who delivered the victory speech. His first few words grabbed the headlines - “I’ve always believed in miracles” - but the newly minted Liberal legend closed with an intriguing pledge on behalf of the government.
Most important, the keyed up Prime Minister told supporters at Sydney’s Sofitel Wentworth hotel will be policies “that will keep Australians together.”
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The tough road to win a nation
Long, hard days and meticulous planning set up Scott Morrison’s triumph. This is the inside story of the campaign you didn’t see.
By SIMON BENSON
May 25, 2019
The Liberal Party faithful were already gathering at Sydney’s Sofitel Wentworth as television screens across the nation began the call of the board.
Scott Morrison remained behind closed doors in the unadorned study of Kirribilli House with a couple of mates, including one-time Liberal candidate David Gazard.
It was shortly before 7pm on Saturday, May 18. He was calm, as he had been for most of the campaign. The only clue to a possible inner restlessness was a constant need to refresh the page on his iPad as it updated the count on the Australian Electoral Commission’s official tally room.
He had refused to watch any of the televised election night panels being broadcast that night.
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Labor lost its heartland
- 12:00AM May 25, 2019
Last weekend’s election result was, at its core, about the loss of Labor’s traditional support base of working families (and I emphasise the word families) and a return to the Coalition fold of the quiet men and women of faith to a political leader they clearly respected.
It was also a rejection of shrill hectoring from goat-cheese-circle bullies who are incapable of understanding how an economy actually works in the real world.
Even on election night, as statistical signposts to defeat were being planted in plain view for Labor, screen commentators from the party’s Left refused to acknowledge their failed campaign, descending instead into rants about how evil some minor parties were and how the voters just didn’t understand the sophistication of the detailed package put forward by the ALP, the ACTU and the progressive inner-city Left.
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Tale of two elections: Sunshine state v others
- 12:00AM May 25, 2019
We have just been witness to one of the most extraordinary exercises of collective cognitive dissonance that I have seen in nearly 50 years of journalism.
Last Saturday we actually had two elections.
One was in Queensland where the Coalition crushed Labor, winning 23 seats to 6.
The other was in the rest of Australia, where 20 million of us and 80 per cent of voters live. Here Labor actually won 61 seats to the Coalition’s 55. If you take the numbers of Queensland-like Western Australia out, the Labor “victory” was even more emphatic at 56 to 44.
There’s also a further five left-leaning Green/independents ex-Queensland. This makes the rejection of the Coalition government outside Queensland — and even more notably the endorsement of Bill Shorten’s Labor — even more emphatic: either 66-55 seats for Australia ex-Queensland or 61-44 seats for Australia ex-Queensland and WA.
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How the Liberals beat Labor at its own game
By Latika Bourke
Prime Minister Scott Morrison's victory appeared to come from nowhere but in reality had been months in the making.
From the critical budget reset, to the creation of policy war rooms, watertight WhatsApp groups and Games of Thrones-themed memes, the Liberals outgunned Labor, especially in the left's native online habitat.
The Sydney Morning Herald and The Age have spoken to multiple sources, including those at the highest levels of Coalition Campaign Headquarters, or CCHQ, to learn how the Liberals pulled off last week's unexpected win.
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Alt-right Facebook memes pushed anti-Labor message
By Nigel Gladstone and Max Koslowski
May 26, 2019 — 12.05am
A coalition of alt-right Facebook groups working with Fraser Anning's staff and associates of the United Australia Party produced fake news, racist memes and messages against voting for Labor or the Greens, which were liked or shared more than a million times during the election campaign.
Ten of the most-popular alt-right Facebook pages had more than a million reactions to their content and were shared 940,575 times in the seven weeks from April 1 until the election, a Sun Herald and Sunday Age investigation has found.
Ex-Queensland senator Fraser Anning's social media manager confirmed he asked several Facebook pages to share the senator's content to boost Anning's social media following.
"From the beginning, we did deliberately do that," Radomir Kobryn-Coletti, who has been on both Fraser Anning's and Clive Palmer's social media team, said.
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Religious seats punish ALP for loss of freedom
- 12:00AM May 25, 2019
Australia’s heartland of the faithful punished Labor at the polls, raising new questions about the wisdom of the opposition’s partisan tactics on religious freedom.
“What religious people seem to have done is … see Labor as hostile to the principles of religious freedom,” said Jeremy Sammut, a senior research fellow at the Centre for Independent Studies.
All but two of the nation’s 10 most religious seats, chiefly Labor strongholds in western Sydney, recorded two-party-preferred swings to the Coalition at last weekend’s election.
The Grattan Institute’s Danielle Wood said there was a strong positive correlation between those swings and seats with a large share of voters declaring a religious belief. “I suspect you get a bit of a double whammy — those electorates that are both more religious and less economically secure are more likely to reject (Labor’s) major economic policy change.”
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'Hindsight is a wonderful thing': how GetUp's election campaign fell flat
In the wake of the Coalition’s shock victory, the tactics of the progressive activist group have come under scrutiny
Sun 26 May 2019 08.10 AEST Last modified on Sun 26 May 2019 08.24 AEST
After polls closed last Saturday night, volunteers from the activist group GetUp gathered at a bar on Brisbane’s southside and watched the election results roll in.
For months, an army of some 1,500 volunteers had been engaged in a bitter and expensive campaign to unseat the home affairs minister, Peter Dutton, from the marginal Queensland seat of Dickson on the city’s northside.
But as the ABC’s Antony Green sifted through the early numbers on a big screen, the volunteers, many of them still decked out in the orange shirts they had worn throughout a months-long campaign, quickly realised it was not going to be the night they had hoped for.
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Royal Commissions And Similar.
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Aged care residents are “stateless” and deserve better
Authored by Nicole MacKee
AT the Royal Commission into Aged Care Quality and Safety last Thursday, Professor Joseph Ibrahim laid it on the line.
“[Aged care residents] know they’re going to die. We know they’re going to die,” he told the Commission. “What currently happens is most of us sit around waiting for them to die, and if they die quickly, then it’s a good job done. Everyone thinks that’s a good thing, and it’s clearly not.”
Senior Australians living in residential aged care facilities (RACFs) were “stateless”, he said.
“The parliament does not care about people in residential aged care. If they truly care they would do something or at least say something. They don’t say anything. They don’t act.”
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Aged care: let’s put people before profit and cost-cutting
Authored by Stephen Dick
This article is part of a monthly series from members of the GPs Down Under (GPDU) Facebook group, a not-for-profit GP community-led group with over 6000 members, that is based on GP-led learning, peer support and GP advocacy.
THE Royal Commission into Aged Care Quality and Safety will undoubtedly unearth shocking and unacceptable individual outcomes for residents of aged care facilities. I suspect, sadly, that they will come as no revelation to GPs who visit or have visited their patients in residential aged care facilities (RACFs).
It must be recognised that these individual outcomes are the by-product of a system that, in its current form, incentivises profit and cost-cutting above people. Too often, elderly Australians are not given the care that everybody deserves as they enter their golden years.
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Estia Health slashes earnings as royal commission bites
May 24, 2019 — 10.27am
Estia Health said the aged care royal commission currently under way will cost it $2.3 million this fiscal year, and the bad press and flu has hit occupancy rates forcing it to lower its full-year earnings expectations.
Despite an additional government funding boost of $9.7 million to $10.2 million this financial year, Estia said it expects earnings before interest, tax, depreciation and amortisation (EBITDA) to be in the range of $92 million and $94 million. The figures take into account royal commission costs and impacts associated with the opening and closing of new homes.
While this is an increase of 2 per cent to 4 per cent compared with the prior financial year, it is lower than previously anticipated with occupancy at its homes impacted by continuing bad publicity in the sector, and influenza in South Australia, Estia said in a statement to the Australian stock exchange.
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National Budget Issues.
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https://www.afr.com/chanticleer/economic-double-shot-could-keep-scomo-s-luck-running-20190520-p51p6m
Economic double-shot could keep ScoMo’s luck running
Prime Minister Scott Morrison's new government might be able to keep ahead of a global economic slowdown with two key changes in the next few months.
May 20, 2019 — 11.05am
Amid the shock triumph of the Coalition’s victory, the potential for Prime Minister Scott Morrison to find himself in the midst of a serious economic slowdown has largely been forgotten.
But HSBC chief economist Paul Bloxham believes ScoMo's first win as Prime Minister could mean the economy will receive at least two, and possibly three, near-term boosts to insulate it from a global slowdown.
Speaking at the Australian Shareholders Association’s annual conference on Monday, in front of an audience of some 400, Bloxham spoke of a broad global growth slowdown as US gross domestic product gently retreats towards trend (from about 3 per cent in 2018 to 2.4 per cent in 2019, and a projected 1.8 per cent in 2020, on HSBC’s numbers), the last round of central bank stimulus fades and trade tensions remain elevated.
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Morrison's miracle election may turn out to be the easy bit
By Ross Gittins
May 19, 2019 — 11.45pm
The great risk from Scott Morrison’s miraculous victory is that it will lead politicians on both sides to draw conclusions that worsen our politics and our policies. Bill Shorten offered us a chance to change the government and change the nation, and was answered with a firm No Thanks.
Scott Morrison has lead the Coalition into a third term in government.
It’s a great win for the Coalition, but a loss for economic policy. The voters’ "revealed preference" is for more personality, less debate of the tough choices we must make to secure our future in a threatening world.
The first lesson the pollies will learn is that disunity doesn’t have to be death. Almost six years of fighting like Kilkenny cats can be forgotten during the eternity of a five-week election campaign, provided you put all the focus on the latest guy, and his predecessors are kept hidden.
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https://www.afr.com/news/politics/national/scomo-s-first-job-dealing-with-a-downturn-20190520-p51p5u
ScoMo's first job: dealing with a downturn
The government has a mandate to keep the current inefficient tax system in place, but raising revenue will be made harder by a slowing economy.
Craig Emerson
May 20, 2019 — 11.00pm
By now, Treasury officials will be making their way to meet the Treasurer, carrying their blue book – the incoming government brief. It will contain Treasury’s economic and fiscal forecasts. If Treasury is doing its job, those forecasts will be more downbeat than the numbers in the April budget and in Treasury’s pre-election economic and fiscal outlook published only a few weeks ago. They will confirm a slowing economy and a deteriorating budget bottom line, making it challenging for the government to keep all its election promises.
The 2019 budget forecasts always looked optimistic. No lesser authority than the Reserve Bank has effectively confirmed that view. Its statement on monetary policy, released just over a week before the election, downgraded its own forecast for growth in consumer spending for the coming financial year to just 2 per cent, compared with a budget prediction of 2.75 per cent.
Combined with recently released figures showing flat wages growth and zero inflation, weak consumer spending means less government revenue and slower overall economic activity. The Prime Minister’s campaign statement that the government “brought the budget back to surplus next year” might still eventuate, but it will rely on a stream – if not a river – of gold flowing from China.
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New PM must reconcile Australia's widening economic divide
Morrison’s endearingly old style of campaigning has secured him the prime ministership at a time when a new kind of government is needed.
May 20, 2019 — 11.00pm
Scott Morrison and the Liberals can bask in their "miraculous" victory, but is the Coalition any better prepared than Labor to deal with the divisions in the electorate that produced Saturday’s result?
While Queensland's regional voters swung to the Coalition, Victorians leaned towards Labor, and voters in one of Sydney's most blue-ribbon Liberal seats ejected a former Liberal prime minister in the knowledge that their decision could hand victory to Labor.
A major cause of that division is climate policy. The cost of cutting greenhouse emissions effects regional Queensland and the securely well-to-do electorates of Sydney and Melbourne very differently.
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Health Issues.
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'Just a female doctor': women surgeons battle 'worthless' biases
By Kate Aubusson
May 20, 2019 — 12.00am
Women surgeons are being dismissed as 'just female doctors' or 'pretty faces', 'off having babies' amid a constant barrage of gender discrimination and harassment.
The female medicos have described the litany of gender biases that disparage motherhood, erode their credibility, objectify their bodies and shoehorn them into stereotypical “empathetic” roles (and high heels).
Forty-eight women fellows and trainees of the Royal Australasian College of Surgeons took part in a series of in-depth interviews for a study led by research fellow Dr Katrina Hutchison at Macquarie University’s Department of Philosophy.
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Demolish, rebuild: How I'd fix our health system
Professor Leeder is an emeritus professor of public health and community medicine at the Menzies Centre for Health Policy and School of Public Health, University of Sydney.
20th May 2019
We now have a health system resembling an old cottage, with so many renovations and add-ons, especially in relation to payment, that it would be reasonable to ask whether we should demolish and rebuild.
The multiplication of bureaucratic complexity and endless tinkering with fees and reimbursements may provide employment for those who enjoy that sort of thing.
And it is time that compromises can be found that work for a bit. But it is a stupendous waste of resources.
To contemplate a complete rebuild of our health system is frightening, I admit.
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Lack of investment in preventive health slows life expectancy growth
Authored by Cate Swannell
A LACK of investment in preventive health measures may be hampering Australia’s growth in life expectancy, says Professor Adrian Bauman.
Professor Bauman, a public health expert from the University of Sydney wrote in an editorial in the MJA that:
“Despite decades of strategic plans for reducing the omnipresent overweight/obesity problem in Australia, and the lack of marked change in the levels of physical activity among adults, no bold and coordinated national responses have been implemented in response to these major health risks, and their contributions to mortality will probably continue to rise.”
Professor Bauman’s editorial was in response to research, also published in the MJA, which found that, after 20 years of rapid increases in life expectancy at birth, the rate of growth in life expectancy in Australia is now falling behind other high income nations.
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Funding reforms in health unlikely
- 12:00AM May 21, 2019
The lack of any ambitious election promises from the Coalition may give the Morrison government the upper hand when it comes to negotiating major funding agreements for public hospitals, pharmacy and public dental services this term.
Having emphasised the need for a strong budget and responsible health expenditure, the Coalition went to the election unencumbered by big-spending policies or publicly tested reform proposals.
The government could claim a mandate for continued restraint.
Scott Morrison last week flagged an intention to keep Greg Hunt in the health portfolio. Already the longest serving Coalition health minister since Tony Abbott, that would make Mr Hunt the Coalition’s first re-elected health minister since Michael Wooldridge.
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'Our goose is nearly cooked': MBS review chief says rorts plaguing system
The chair of the MBS Review Taskforce says if doctors don't fix the system, then governments will do it for them
22nd May 2019
The Medicare “goose” will be “cooked” thanks to a small number of doctors ripping off the system unless they are made to change their ways, the head of the MBS Review Taskforce says.
Professor Bruce Robinson has revealed that the MBS review was his own idea, inspired by a conviction that clinicians needed to take responsibility for making it harder to game the system.
In a candid speech on Saturday, the former medical dean at the University of Sydney argued that the Medicare schedule was vague and out-of-date, allowing up to 10% of doctors to make inappropriate claims.
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Doctors warn Australia's private health sector is heading towards a US-style system
By political reporter Stephanie Dalzell
24 May, 2019
"Have you got insurance?"
Key points:
- AMA president Dr Tony Bartone said increasing corporatisation of private health has given insurers unprecedented power
- Consequences of a shift towards a US-style system could include increased complications, delayed care, delayed pain relief, and longer hospital stays
- Australia's mental health system and aged care services will also be examined at the AMA conference
It is one of the first questions any patient is asked when they walk into an emergency room in the United States, no matter how sick they are.
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AMA president calls for more funding for 'unacceptable' public hospitals
By Stuart Layt
May 24, 2019 — 4.20pm
The president of the Australian Medical Association has called the state of the country’s public health system “unacceptable” and urged the newly re-elected federal government to increase funding for public hospitals.
Delivering the opening address to the annual AMA Conference in Brisbane on Friday, Tony Bartone said the recent election “was an opportunity for a genuine contest between the parties to show their commitment to better support our vitally important public hospitals.”
“Let me be clear. Public hospital capacity is determined by funding,” Dr Bartone said.
“We can’t have a hospital system that is stretched so tight that scheduled elective surgery is cancelled because ward beds are needed by seriously ill patients who unexpectedly present in emergency.
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'Enough is enough': The push to protect doctors from mental illness
By Stuart Layt
May 25, 2019 — 4.22pm
More needs to be done to save medical professionals from the stigma of mental illness and allow them to get help if they need it, an annual gathering of the country's top doctors has been told.
The first item on the agenda for the Australian Medical Association's national conference in Brisbane was the ongoing process to remove the stigma around mental health issues in the profession.
Evidence suggests doctors and other medical professionals suffer mental health issues at a higher rate than the general population, with heavy workloads, long working hours and workplace bullying among the issues pointed to as factors.
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International Issues.
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Trump threatens Iran 'with official end' if it provokes war with US
May 20, 2019 — 8.17am
Washington | President Donald Trump has threatened Iran in a tweet, raising concerns about a potential US-Iran conflict at a time when tensions between Washington and Tehran have risen.
"If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again," Trump said in a tweet on Sunday.
Trump has tightened economic sanctions against Iran, and his administration says it has built up the US military presence in the region. It accuses Iran of threats to US troops and interests.
The US hastened the deployment of an aircraft carrier to the Gulf and withdrew some diplomatic personnel from Iraq in recent weeks after saying intelligence showed a growing threat toward US forces or commercial shipping by Iran or its proxy forces in the Mideast.
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Monday, 20 May 2019 05:37
Google cuts off Huawei access to Android updates, collaboration
Google has suspended some of its business with Chinese telecommunications equipment vendor Huawei Technologies in the wake of the US Government decision to put the Chinese company on a list which means it has to obtain permission in order to buy American components. Among other things, the move means Huawei has been cut off from access to future updates of Google's Android and Google Playstore.
Reuters reported on Monday morning that Google would stop supplying hardware and software to Huawei apart from products covered by open-source licences. That means Huawei would not have access to technical support and collaboration from Google and updates to the Android operating system.
iTWire contacted Google on Sunday evening, asking whether it would prevent Huawei from using the Android operating system, but the company did not respond.
Huawei uses Google's Android mobile operating system in its smartphones. Some parts of Android, like the kernel, which is a modified version of Linux, are under open-source licences.
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China's provocative currency move is nudging another flashpoint with Trump
By Stephen Bartholomeusz
May 21, 2019 — 12.00am
It has passed without much notice that China’s currency, the renminbi, has been weakening this month to the point where it is again nudging a critical threshold that would provide another flashpoint in its tense relationship with the United States.
The renminbi traded at Rmb6.917 to the US dollar on Friday, just short of the seven renminbi to the dollar level seen as, not just an important psychological level, but as the point that would provoke a hostile response from the Trump administration, which has warned China not to use currency depreciation to offset the impact of its tariffs on China’s exports to the US.
In the past month China’s currency has fallen 3.2 per cent against the dollar. Since the start of this year the depreciation has been more than 6 per cent.
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Jokowi easily wins a second term as Prabowo refuses to concede
By Karuni Rompies
May 21, 2019 — 10.46am
Jakarta: Joko Widodo has won his second five-year term as Indonesian President with an overwhelming mandate of 55.5 per cent of total valid votes against rival Prabowo Subianto.
But Prabowo, a businessman and former military general, has vowed not the accept the result, forcing tens of thousands of police and soldiers onto the streets of Jakarta to resist his threatened "people power" movement.
Official results from Indonesia's General Elections Commission, released at midnight on Tuesday, local time, showed more than 85 million voters supported Joko, a former furniture maker, compared to 68 million for Prabowo. Joko's margin of victory at 11 per cent was almost double the lead he secured in 2014 against the same opponent.
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US sanctions on Huawei bite but who really gets hurt?
May 21, 2019 — 10.23am
Washington: Trump administration sanctions against Huawei have begun to bite even though their dimensions remain unclear. US companies that supply the Chinese tech powerhouse with computer chips saw their stock prices slump on Monday, and Huawei faces decimated smartphone sales with the anticipated loss of Google's popular software and services.
The US move escalates trade-war tensions with Beijing, but also risks making China more self-sufficient over time.
Here's a look at what's behind the dispute and what it means.
What's this about?
Last week, the US Commerce Department said it would place Huawei on the so-called Entity List, effectively barring US firms from selling it technology without government approval.
Google said it would continue to support existing Huawei smartphones but future devices will not have its flagship apps and services, including maps, Gmail and search. Only basic services would be available, making Huawei phones less desirable. Separately, Huawei is the world's leading provider of networking equipment, but it relies on US components including computer chips. About a third of Huawei's suppliers are American.
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Want to know how Trump's trade war ends? Look back to events in 1812
By Shawn Donnan
May 22, 2019 — 10.24am
President Donald Trump's escalating trade war against China has drawn plenty of historical parallels.
The Chinese like to invoke the 19th-century Opium Wars and the national humiliation that followed. In the US, the comparison is increasingly to the Cold War against the Soviet Union, or the 1980s trade wars against Japan.
Ask Douglas Irwin, author of "Clashing Over Commerce: A History of US Trade Policy," however, and he argues the most accurate comparison from an American perspective is the War of 1812.
That conflict was born out of a trade war (a British embargo of France) and fought at least partly as a trade war (a British blockade of America). It also yielded another trade war.
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Treasury official warns on US-China 'war of technology'
By David Wroe
May 22, 2019 — 12.00am
A top Treasury official has warned of a possible "war of technology" between the United States and China that could divide the world and harm growth in countries such as Australia.
Underscoring the precarious international environment the re-elected Morrison government faces, Treasury deputy secretary Meghan Quinn said Australia needed to voice its concerns about the increasing fractiousness around technology by promoting international institutions to deal with disputes.
Technology rivalry is central to the trade war between Washington and Beijing, as seen in the series of blows the US has delivered to Chinese tech giant Huawei in the past fortnight.
Addressing a forum at the Australian National University this week, Ms Quinn said whatever happened in the current trade war, competition between the US and China would continue, technology was central to the dispute and this was "very concerning".
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A dangerous game is being played out in the Persian Gulf
Gerald F. Seib
- The Wall Street Journal
- 12:00AM May 22, 2019
Whatever other assets and liabilities he brings to the table, Donald Trump certainly offers this: he is a master at sowing uncertainty, so neither friend nor foe really knows what he’s up to.
And so it is right now with Iran, where the US President and his aides have in the past two weeks alternately raised and lowered fears about armed conflict. American warships moved toward Iran amid intelligence reports on pending Iranian attacks on US targets in the Middle East. Then, Trump lowered the temperature, telling aides he didn’t want a fight and tweeting: “I’m sure that Iran will want to talk soon.”
On Sunday, he ramped the heat back up, tweeting: “If Iran wants to fight, that will be the official end of Iran.” Then he backed it down again, saying in a Fox News interview: “No, I don’t want to fight.”
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Ukraine’s new leader Zelensky makes peace a priority
- By Georgi Kantchev
- The Wall Street Journal
- 12:00AM May 22, 2019
Ukraine’s new leader launched his presidency with a vow to end a five-year conflict with Russia-backed separatists on Ukraine’s terms and a move to dissolve parliament that could set the stage for elections that expand his mandate.
In his inaugural address, President Volodymyr Zelensky said he was committed to ending the grinding, economy-depleting conflict — and pledged to win back territories seized by Russia and the forces it supports.
“We didn’t start this war, but it’s up to us to finish it,” he said after taking the oath of office.
He immediately announced he would dissolve parliament in order to call early elections, originally scheduled for October. “People must come to power who will serve the public,” Ukraine’s sixth President said, after wrangling with hostile parliamentarians whom he called “petty crooks”.
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Theresa May's downfall nears as Tories grind their axes
Updated May 23, 2019 — 5.50am, first published at 2.57am
London | The end looks nigh for British Prime Minister Theresa May's leadership, with the last vestiges of her authority draining away as her own party bitterly rounded on her latest Brexit gambit and agitated openly for her removal.
Late on Wednesday (Thursday morning AEST) Mrs May was rocked by the resignation of one of her most senior cabinet ministers: Commons Leader Andrea Leadsom, an ardent Brexiteer who harbours prime ministerial ambitions.
"I no longer believe that our approach will deliver the referendum result," she wrote to Mrs May in a letter released on Twitter. "I do now urge you to make the right decisions in the interests of the country, the government and our party."
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Apple earnings could drop almost 30pc from China ban, says Goldman
Kit Rees
May 23, 2019 — 8.14am
London | Apple's earnings would take a 29 per cent hit if China were to retaliate against the US with a ban on sales of the iPhone maker's products, Goldman Sachs has estimated.
Although Goldman takes no view on the likelihood of a potential ban, such a restriction would represent 100 per cent of estimated Apple earnings exposure to both mainland China and Hong Kong, assuming some offsetting impact from cost savings in sales and marketing, analysts including Rod Hall wrote in a note. The stock fell 0.5 per cent in US pre-market trading.
Worries over the wider impact of the trade war have intensified after the US blacklisted Huawei Technologies last week, which places a question mark over the Chinese company's partnerships with US chipmakers, software and component suppliers.
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Fed minutes: Patience to last 'for some time'
Howard Schneider and Jason Lange
May 23, 2019 — 4.27am
Washington | US Federal Reserve officials at their last meeting agreed that their current patient approach to setting monetary policy could remain in place "for some time", a further sign policymakers see little need to change rates in either direction.
According to minutes of the Fed's April 30-May 1 meeting, officials also delved deep into the mechanics of how they could best structure their holdings of several trillion dollars of securities to battle a future economic downturn.
Consistent with Fed chairman Jerome Powell's press conference after the meeting, participants observed "at least part of the recent softness in inflation could be attributed to idiosyncratic factors". Bloomberg
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China pokes US pressure point
May 22, 2019 — 11.59pm
Chinese President Xi Jinping's public visit to a Jiangxi rare earths plant is a deliberately subtle message to Washington that China has the power to retaliate against the US's ban on Chinese telco Huawei, a prominent investment banker says.
While the highly publicised photo opportunity has been downplayed by some, Credit Suisse's vice chairman of greater China, Dong Tao, saw the gesture as playing off the subtext of the escalating US-China trade war.
"I think the gesture there is, 'We know some options we have that could be counted as retaliation measures'," Dr Tao said.
The US depends on China for 80 per cent of its rare earths supply, which is used to make phones, electric cars, medical equipment, satellites and in oil refining.
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No going back: The US-China trade war will change things forever
By Mohamed A. El-Erian
May 23, 2019 — 8.08am
The impact of the US-China trade spat is no longer limited to just the two countries.
The Trump administration's latest move – seeking to limit access to American suppliers for the Chinese telecom manufacturer Huawei – may force many businesses worldwide to reconsider their own dependence on supply chains that go through China, and consumers their reliance on Chinese phones.
The more they try to insulate themselves from similar future actions, the more global this trade conflict will become and the greater the likelihood it will end up re-aligning global economic relationships.
It remains an open question whether the dueling tariffs will be a permanent feature of a more fragmented and protectionist global system or, instead, just part of a journey to still-free but fairer trade. What's clear already is that there's limited likelihood of going back to the way things were.
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On Huawei, all Trump has to lose is America's credibility
By Hal Brands
May 23, 2019 — 5.52am
Washington: When the history of the unfolding rivalry between America and China is written, the events of the past week will probably figure prominently.
On May 15, the Commerce Department effectively banned US companies from providing technology and components to Huawei, the Chinese telecommunications behemoth, and blocked the use of Huawei telecommunications equipment domestically.
The initial justification was that Huawei evaded US sanctions on Iran. But make no mistake: There is a bigger strategic move underway.
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Narendra Modi sweeps back into power in Indian elections
Archana Chaudhary and Iain Marlow
May 23, 2019 — 11.11pm
New Delhi | If anyone had any doubts about Narendra Modi's popularity, India's masses just put them to rest.
His Bharatiya Janata Party swept to another single-party majority on Thursday, a margin that surprised political watchers who expected him to return with a weakened mandate. A combination of economic populism, Hindu nationalism and air strikes against arch-rival Pakistan earlier this year proved unbeatable.
"This is a stunning reaffirmation of Modi and the BJP and, conversely, a sharp rebuke of the opposition," said Milan Vaishnav, director of the South Asia program at the Carnegie Endowment for International Peace. "The BJP will have wide latitude to redraw the boundaries between religion and politics in a way that favors the Hindu majority."
Investors pushed India's benchmark stock indexes to new highs on Thursday before the rally faded late in the session. The prospect of a coalition government, which was previously the norm for decades in India, had sparked concerns that the nation would see a return to the policy gridlock that led to Modi's first big win five years ago.
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Pelosi questions Trump's fitness for office, suggests 'intervention'
By Laurie Kellman
May 24, 2019 — 7.06am
Washington: US House Speaker Nancy Pelosi openly questioned President Donald Trump's fitness for office on Thursday, suggesting a family or staff "intervention" after a dramatic blow-up at a White House meeting the previous day.
Pelosi said Trump has established a pattern of unpredictability and at one point even joked about the 25th Amendment, the Constitution's provision laying out the procedure for replacing a president.
"I wish that his family or his administration or his staff would have an intervention for the good of the country," Pelosi said at her weekly news conference, adding again that she prays for him and the nation.
"Maybe he wants to take a leave of absence," she said. Asked whether she's concerned about Trump's well-being, she replied, "I am."
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British PM May confirms June exit
William James, Kylie MacLellan and Elizabeth Piper
May 24, 2019 — 7.31pm
London | British Prime Minister Theresa May on Friday said she would quit, triggering a contest that will bring a new leader to power who is likely to push for a more decisive Brexit divorce deal.
Mrs May set out a timetable for her departure: She will resign as Conservative Party leader on June 7 with a leadership contest in the following week.
"I will resign as leader of the Conservative and Unionist party on Friday, 7 June so that a successor can be chosen," Mrs May said outside 10 Downing Street.
She said it would always be a deep regret that she was unable to pass a Brexit deal after multiple attempts to get a deal past Parliament. The UK remains deadlocked and divided on the topic.
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Boris Johnson would be a big gamble as PM
THE ECONOMIST
- 12:00AM May 24, 2019
Britain’s Conservative Party has a long history of making big bets on mavericks whenever it thinks that its back is against the wall. Before they won the party leadership, three of the greatest Tory prime ministers were cordially loathed by their party. Margaret Thatcher was regarded as a polarising ideologue who lacked the ability to connect with voters or command parliament. Winston Churchill was a pompous boozer and serial bungler, launching the Dardanelles campaign and clinging to the gold standard. Benjamin Disraeli was a flashy outsider who had no achievements to his name other than undermining Robert Peel over the Corn Laws. The Tories punted on all three and won big.
It looks as if the party is about to gamble again on Boris Johnson. The former foreign secretary is the overwhelming favourite among party members, who elect the leader. His only obstacle is persuading enough of his fellow Conservative MPs to put him on the shortlist of two. So far they have been sceptical. The charge sheet against Johnson is a long one: a chaotic private life, a habit of bending facts, a lack of focus and discipline, and being a “gold-plated egomaniac”.
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I look forward to comments on all this!
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David.
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