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The big news this week has been that Joe Biden has chosen Kamala Harris as his running mate and is now off and running towards the November election, which is somehow being attacked, for its integrity, by Trump from all sorts of bizarre angles, like blocking postal votes and so on.
He really is a disgrace and totally unprincipled. Not a man you can trust.
The UK is trying to unlock but looks to be running into trouble. The GDP fell over 20% recently, in the most dramatic drop since records began.
In Australia the blame game has kicked off on the handling of hotel quarantine and aged care with respect to the virus. Otherwise the good news is that Victoria seems to be getting control of its second wave which is a good thing!
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Major Issues.
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A lot are going to suck': Investors brace for an ugly reporting season
By Lucy Battersby and Alex Druce
August 10, 2020 — 12.00am
The impending reporting season will be a list of ugly confessions from businesses knocked around by the COVID-19 pandemic. But the market won’t be interested in numbers, instead investors will be homing in on outlook and the prospect of a lengthy dividend drought.
With the economy forced into hibernation, analysts say investor reaction this earnings season could all boil down to the storytelling skills of management. A downbeat forecast and any hint of weakness will be punished.
Dividend chasers are also in for pain. A third of the top 100 companies have cut, postponed or cancelled payments in the first half, a depressing reminder for many investors that there is still a level of risk with equities, despite the relatively healthy state of the ASX 200 index.
The data so far suggests a fall of nearly 40 per cent in dividend payments from the ASX compared to 2018-19, which was a year of abundance as companies issued special dividends from strong profits or to beat a potential change to franking credit refund policy. With the new lockdown imposed in Victoria, there may be further revisions before ex-dates as financial officers protect cash flow.
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The most important, and meaningless, reporting season in history
Stephen Bartholomeusz
Senior business columnist
August 10, 2020 — 11.11am
As we move into the heart of the Australian corporate earnings season this may be both the most meaningless, and the most significant, reporting season in recent history.
The impact of the coronavirus will overshadow almost every result as a string of the big financials, consumer discretionary, property and utilities report. Some of its influences will be temporary; others far more long-lasting.
Within the results of companies like Commonwealth Bank, Telstra, GPT, AGL, Treasury Wine and others – a number of whom have already foreshadowed their results – we’ll start to see the shape of an environment dominated by the aftershocks of the coronavirus.
We already know that some sectors, like online retailing, supermarkets and telecommunications have benefited from the lockdowns while others, most notably retailers and their landlords, have been kept afloat only by the Federal Government’s massive spending to protect businesses and jobs.
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'Glaring design flaw': Nationals demand changes to uni funding overhaul
August 11, 2020 — 12.51pm
The Nationals have demanded changes to the Morrison government's university funding overhaul, labelling the package deficient and warning it could exacerbate rural inequality.
Following a meeting of Nationals MPs on Monday, Regional Education Minister Andrew Gee called for a suite of changes, including a halt to price rises for studies in mental health and social work.
Under changes to higher education funding announced in June, fees for some courses will soar while others will be slashed in a bid to produce graduates for high-priority employment areas.
Mr Gee, a Nationals MP, on Tuesday said the package in its current form would "further increase the mal-distribution of mental health workers in country Australia" by putting social work, behavioural science and mental health courses in the most expensive fee cluster.
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https://www.afr.com/policy/foreign-affairs/a-hard-history-lesson-in-real-time-20200813-p55ljh
A hard history lesson in real time
Andrew Clark Senior writer
Aug 15, 2020 – 12.00am
This Saturday, August 15, is VJ Day – the anniversary of the Allies’ victory in the Pacific War. It also marks America’s post-war ascendancy and the transformation of Australia from a dominion of the British Empire to a fully independent nation in the south-west Pacific.
Exactly 75 years later, the issue is whether Australia is up to making an even greater change – that is, adapt to a pandemic-afflicted region where power has shifted to China. The signals are mixed.
Veteran defence strategist Hugh White, for one, is unimpressed. He says that for a start the Morrison government “needs to acknowledge and explain to us the nature of the changes that are happening and that is something they are not doing”.
To be fair, explaining the implications of change in the Indo-Pacific is complicated by a need to work out whether a US pole-axed by the contagion and flummoxed by President Donald Trump’s incompetence can recover its regional heft.
At the same time, the Australian juggling act – our security tied up with the US while nearly half our exports go to China – is getting harder. It’s like climbing over a barbed wire fence. One slip and the consequences are extremely painful.
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A rolled gold triumph for the good and great over the absolutely evil
Peter FitzSimons
Columnist and author
August 15, 2020 — 12.04am
On the morning of August 6, 1945, three American planes cruised across the coast of Japan at about the altitude of Everest, on their way to complete what would ever after be noted as the most important mission of the war. The lead plane was piloted by one Paul Tibbets – flying Enola Gay, named for the mother who had encouraged him, against the wishes of his father, to pursue a flying career with the American armed forces. His father had wanted him to be a doctor in a hospital and save people’s lives, but that was not the way it had turned out . . . not by a long shot.
Up ahead, the city of Hiroshima, gleaming in the morning sun. It was coming time to drop the cargo in Enola Gay’s bomb bay, an atomic bomb, which they called "Little Boy", capable of delivering a blast the rough equivalent of 20,000 tons of TNT.
As Tibbets sees the curious T-shaped bridge which he knows to be the effective crosshairs of their target in downtown Hiroshima, his bombardier flicks the switch while Tibbets reminds all of the crew to quickly put on their heavy dark Polaroid goggles to shield their eyes from what was coming. No one could quite believe it, but the scientists had said this thing was going to go off with an intensity the equal of 10 suns. Lining it up, lining it up . . . lining it up and . . . now.
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Why you should 'hit it or quit it' when it comes to your bills
Jessica Irvine
Economics writer
August 15, 2020 — 11.00pm
I think Neil Sedaka sang it best:
I beg of you don't say goodbye;
Can't we give our love another try?
Come on, baby, let's start anew;
'Cause breaking up is hard to do.
When it comes to internet providers there are a mind-boggling array of plans, speeds and download limits but comparison websites are designed to help you through the process.
Ah, breakups. Some of us will go to great lengths to avoid them.
This week, I broke up with my internet service provider.
Well, technically, I'm two-timing my internet service provider, having just signed on to a new unlimited NBN Plan for $49.90 a month with a competitor (for the first six months, reverting to $59.90 after that). I'm just waiting for that to be connected before I kick my old ISP to the kerb.
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Even without the pandemic, the West’s age of deflation was starting to unwind
· The Times
Change, like age, is one of those events that passes almost unnoticed. It reveals itself with hindsight, on leafing through an old photo album or stumbling across a dusty typewriter in the attic. But every so often, change happens so quickly that it turns everything upside down.
In their new book, The Great Demographic Reversal, Charles Goodhart and Manoj Pradhan argue that the coronavirus will be such a moment, an inflection point in the global economy. The future, they say, “will be nothing like the past”.
Forces are already at work that will end the era of low inflation and low interest rates that created the benign global conditions of the 30 years before the financial crisis. The pandemic will spin those forces faster on their axis, like the sudden acceleration in Earth’s magnetic north on its journey to Siberia.
“Coronavirus, and the supply shock that it has induced, will mark the dividing line between the deflationary forces of the last 30 to 40 years, and the resurgent inflation of the next two decades,” they write. Inflation is “quite likely” to rise above 5 per cent in 2021, or even in the order of 10 per cent.
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Climate Policy
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Arctic summer ice set to vanish in 15 years
· The Times
The Arctic could have no sea ice in summer by 2035, according to scientists who studied a warm period more than 100,000 years ago.
Satellite records show that the area of Arctic covered by sea ice in September, its lowest point in the year, is shrinking by about 13 per cent a decade. Half has been lost since the 1980s.
Scientists at the British Antarctic Survey, the Met Office and the University of Cambridge have used a computer model to study high temperatures in the Arctic during the last interglacial period, about 127,000 years ago.
The modelling shows that intense sunshine in spring resulted in an ice-free Arctic. It looked at the impact of shallow pools of water that form in spring and summer on the surface of Arctic sea ice. These “melt ponds” reflect less sunlight than ice and cause the ice and ocean to absorb more of the sun’s radiation.
The team concluded that the spring sunshine created many of these ponds during the interglacial period. Observations show that similar melt ponds are being created today.
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McKinsey sees $6.6 trillion in annual GDP at risk as Asian climate warms
By Bloomberg News
August 14, 2020 — 10.29am
Lethal heatwaves, droughts, floods and typhoons will become more common in Asia-Pacific, which faces more severe potential impacts from climate change than many parts of the world, McKinsey & Co. researchers warn.
Asia is particularly at risk because it has such a high number of poor people, who tend to rely more on outdoor work, living in areas most vulnerable to extreme increases in heat and humidity, McKinsey Global Institute said in a new report published on Thursday. By 2050, the loss of that labor could cost the region as much as $US4.7 trillion ($6.6 trillion) a year in GDP, about two-thirds of the global total at risk.
The report underscores the economic risks of delaying investments that mitigate or adapt to climate change. The potential for widespread damage is similar to the region's experience during the current pandemic, according to McKinsey.
"What we have seen is that countries, cities and people can take resolute actions and if we do take these actions and sustain them, we can cooperate globally and see positive outcomes," said Oliver Tonby, McKinsey's Asia chairman, who co-authored the report.
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Coronavirus And Impacts.
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COVID-19 casts the shadow of 1930s over liberal democracy
Unless economies are reopened soon there is a danger that snake-oil political extremism will gain traction, as it did during the Great Depression.
Alexander Downer Columnist
Aug 10, 2020 – 12.00am
There’s an old cliché that business leaders don’t understand politics and politicians don’t understand business. It’s a generalisation, of course, but there’s some truth to it. Yet there’s never been a more important time than now for the CEOs of major companies to understand the domestic and broader international political environment. Their companies are going to have to depend on it.
Governments have decided to seize control of most of the levers of their countries during the COVID-19 crisis. It is critical that CEOs are able to understand why governments are making the decisions they are making. For a start, are these decisions based on science, as the politicians claim, or is it true they’re doing constant polling to establish the public mood and are as much responding to the public mood as they are to the scientists?
And if they are at least partly responding to the public mood, what is driving the public mood? Is it the interminable media coverage of the novel coronavirus? I think we all know that every time we turn on the television or the radio to listen to the news, we are inundated with disastrous stories about COVID-19. That has escalated public anxiety.
And there’s another question: what are the politicians trying to achieve? Do they want to eliminate COVID-19 altogether – and, given there is no therapeutic treatment or vaccine available, is it realistic to think that elimination can be achieved? The recent outbreak in Victoria and outbreaks in countries such as Spain and Belgium seem to demonstrate that without a vaccine it is impossible to eliminate the virus.
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https://www.afr.com/politics/federal/medicines-to-be-priority-as-post-curbs-bite-20200809-p55jyu
Medicines to be priority as Post curbs bite
Hannah Wootton, Andrew Tillett, Jenny Wiggins, Paul Smith and Nila Sweeney
Aug 9, 2020 – 8.08pm
The Morrison government has ordered Australia Post to prioritise the delivery of medicines and other urgent goods, amid growing fears the impact of Victoria's crippling lockdowns on the postal service will reverberate nationally.
As the Andrews government continued to scramble to define what was essential work just hours before the final round of restrictions was imposed on Sunday, supermarket distributor and retailer Metcash won a temporary reprieve while several major transport projects got the green light to continue.
Victoria's stage four lockdown rules require most warehouses and distribution centres – except those supplying food and medicine – to slash staff by one-third to minimise the movement of people.
Australia Post spent the weekend pressing the government for an exemption after warning last week that parcel deliveries were soaring and it risked running late on deliveries of medicines but had not received an exemption by Sunday afternoon.
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Pandemic highlights pitfalls of short-term research funding
Robert Bolton Education editor
Aug 10, 2020 – 6.06pm
Medical and health researchers say the government has relied on their work to battle COVID-19 despite putting in practically no extra money, and the process has revealed Australia's research funding system is highly dysfunctional and militates against long-term results.
A report from Research Australia, which represents the health and medical research sector, says 55 per cent of researchers, including most of those working in universities, are employed on short-term contracts and have to resubmit for finance as often as every 12 months.
By contrast, just over 5 per cent of employees in the general workforce are on short-term contracts.
For younger researchers the figure for contract work is even higher at 65.5 per cent, while a further 10 per cent get by on casual employment – even though many of them have postgraduate qualifications and are working on longitudinal studies.
Research Australia chief executive Nadia Levin said researchers are spending as much as a month every year putting together submissions to the National Health and Medical Research Council, Australian Research Council and the Medical Research Future Fund.
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https://www.ausdoc.com.au/practice/can-genomic-sequencing-reliably-track-coronavirus
Can genomic sequencing reliably track coronavirus?
Only in conjunction with other epidemiological information, say researchers who investigated July's outbreak at the Crossroads Hotel in Casula, NSW
11th August 2020
When a coronavirus case bobbed up at the Crossroads Hotel in Casula, NSW, in July, you might have quickly guessed it was linked to a traveller from Victoria.
But to confirm this, health officials turned to genomic sequencing.
The genetic confirmation informed that indeed it was and led to the decision to shut the NSW-Victoria border five days later.
The microbiologists who perform NSW’s coronavirus genomic sequencing have now published the first peer-reviewed analysis of SARS-CoV-2 genomic sequencing in Australia.
The study focuses on what happened during the initial outbreaks from January to March.
Of the first 1600 COVID-19 cases in NSW, about 200 underwent genomic sequencing in a collaboration between NSW Health and Westmead Hospital.
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https://www.afr.com/politics/federal/science-not-spared-from-the-sting-of-covid-19-20200811-p55kn2
Science not spared from the sting of COVID-19
Ronald Mizen Reporter
Aug 12, 2020 – 12.00am
For Anita Goh, tough coronavirus restrictions mean juggling two children under six while running a research project remotely and submitting grant applications to fund her important work on dementia.
Clinical neuropsychologist Anita Goh: "Before I was an employee across two organisations, but now I'm a teacher, I'm a cook, I'm a cleaner, I'm a parent and I'm a daughter."
But the Melbourne-based clinical neuropsychologist and researcher is not alone; a new survey shows 90 per cent of scientists and researchers are now home-based, with 30 per cent saying it is having an effect on their work.
The survey, undertaken by Science & Technology Australia, found scientists and researchers had not avoided the pain of the pandemic, with many reporting job losses, pay freezes, role changes and mental illness.
“Australia boasts incredible talent in scientific research, and we’ve drawn on this extensively amid COVID-19 – yet the job security and conditions of scientists and researchers are at risk," S&T president Jeremy Brownlie said.
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https://www.afr.com/policy/economy/keep-calm-and-carry-on-somehow-20200811-p55ko2
Keep calm and carry on somehow
Daniel Andrews has locked down Victoria indefinitely to get numbers down. NSW is intent on its whack-a-mole strategy to contain the virus. But other states want elimination not suppression. Business is just trying to keep breathing.
Jennifer Hewett Columnist
Aug 11, 2020 – 5.10pm
Dan Andrews is not a politician to ever sound the retreat – and certainly not on his approach to COVID-19. Victorian Liberals were desperate to use Andrews’ appearance at a parliamentary inquiry to put more pressure on him about the failures of control creating a “Made in Victoria” national emergency. The Premier was not about to be pinned down.
Andrews’ own sense of control was instead on display as he dismissed calls for ministerial resignations over the hotel quarantine fiasco and more urgent government help for 400,000 sole traders devastated by stage four restrictions.
Both premiers – unlike their counterparts in other states – still agree with the federal government the goal is suppression of the virus.
Instead, he continued to refer all questions about his government’s disastrous choice to use private security guards to a now much-delayed inquiry by a former judge. He quibbled with the level of assistance available from the Australian Defence Force and avoided detailed explanation of problems in testing and tracing. He repeatedly cited JobKeeper and the state's cash grants to thousands of Victorian businesses to help them cope with the lockdown.
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Expert wanted federal workers in aged care homes months before outbreak
By David Crowe
August 12, 2020 — 12.01am
One of Australia’s most experienced aged care experts urged the Morrison government to send federal workers to help the sector combat the coronavirus months before infections surged.
Monash University professor Joe Ibrahim, a key witness at the royal commission into aged care, advised the government in April to deploy defence personnel or other workers to make sure facilities were ready for the COVID-19 pandemic.
Professor Ibrahim made the proposal as part of a "rapid response" plan that would station people in aged care homes to assess risks and ensure they had the resources to act on guidelines from Canberra on how to deal with infections.
The federal government announced the Victorian Aged Care Response Centre on July 25, about three months after Professor Ibrahim put forward his proposal.
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Victorian outbreak hits recovery as RBA says rates steady for three years
By Shane Wright and Jennifer Duke
August 14, 2020 — 10.07am
The Victorian coronavirus outbreak will set back Australia's economic recovery, Reserve Bank governor Philip Lowe has warned, saying it is unlikely the economy will start growing until the final three months of the year.
Dr Lowe, giving evidence to the House of Representative's Economics Committee, has also revealed inflation is unlikely to get back to the RBA's target band of 2 to 3 per cent for at least three years, signalling no change in official interest rates for a similar period of time.
The government and RBA had, before the outbreak in Victoria, been expecting a lift in the September quarter after a deep fall in activity through the June quarter.
Dr Lowe said the June quarter was likely to show the economy shrinking by 7 per cent, the largest contraction in "many decades". The events in Victoria now meant it was unlikely the economy would recover sharply.
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Hundreds more university jobs to go as La Trobe, Vic Uni announce cuts
By Adam Carey
August 13, 2020 — 4.01pm
La Trobe University has opened up a second round of voluntary redundancies and Victoria University has revealed a plan to cut up to 190 jobs as the gutting of Victoria’s university workforce continues.
The measures follow the recent departure of 239 La Trobe employees in an earlier redundancy round.
La Trobe has also told staff it plans to cut its total costs by 20 per cent in the next few years, and reduce the range of academic disciplines it teaches in response to huge revenue losses caused by COVID-19.
Remaining staff will be expected to lift their productivity by 20 per cent as the number of full-time students per full-time staff member is lifted from 8.7 to 10.5.
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How COVID-19 is rewriting rules on marriage and relationships
You'll need to start reworking your finances if your family home has become a battleground.
Duncan Hughes Reporter
Aug 15, 2020 – 12.00am
A north Sydney couple prevented from separating because of financial stress and social distancing requirements are typical of new family crises being caused by COVID-19.
The couple, married for 15 years, say they are trapped in a loveless relationship because of job insecurity and fear they could lose money if they sold the family home, their biggest financial asset.
Typically both partners are legally entitled to remain in the home, regardless of whether the property is jointly owned.
“Family homes are being turned into battlegrounds by COVID-19,” says Fiona Reid, a family lawyer and managing director of Reid Family Lawyers that specialises in negotiating divorce settlements.
“Both spouses will not – or cannot – move out due to isolation restrictions. From what already is a difficult time, separations are becoming even more stressful and unpleasant for both parties,” says Reid.
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Virus won't wait for our leaders to stop playing word games
George Megalogenis
Columnist
August 15, 2020 — 12.10am
On June 15, at the peak of Australia's complacency on the coronavirus, Scott Morrison took a gentle shot at his New Zealand counterpart Jacinda Ardern. He did not mention her by name, but he wanted a share of the global adulation she was receiving at the time.
Australia, he explained, had "the balance right between our health and our economic objectives".
"Whereas other countries imposed strict lockdowns, we have been able to keep large sectors of our economy open and functioning, including construction, manufacturing, agriculture mining, as well as large parts of the retail sector," the Prime Minister told the Committee for Economic Development of Australia.
That boast seemed easy enough to make, even allowing for the risk of a second wave. The death rate in each country was just four people for every million. Australia had achieved this "enviable health outcome" with stage three restrictions; one notch below New Zealand's.
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Paying for an epidemic of stupidity
We’ve handed control of our lives to a clown car packed with idiots who have wasted billions trying to defeat this virus. They will never admit it was all for nothing.
August 15, 2020
Back in the good old days, the average person used to take pride in having a robust grasp of basic maths: enough mental arithmetic not to be overcharged at the shops, enough skill with pen and paper to make more complex calculations.
Not any more, it seems. Many of our finest minds are infected with a new innumeracy that, in today’s fevered environment, distorts our understanding of, and response to, the coronavirus threat.
In early April, as the disease was just beginning to bite, the team manning the ABC’s coronavirus news website promised to answer questions about the pandemic.
When a reader asked for help in interpreting some infection-rate statistics, it provoked a cheerful response, broadcast to the world: “This just sparked a heated newsroom discussion in which we all outed ourselves as being terrible at maths.” You don’t say.
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Coronavirus: Supercharged teams for aged-care response
5:39AM August 15, 2020
National cabinet will agree to the urgent creation of aged-care rapid response centres in all states and territories in a bid to get ahead of potential COVID-19 outbreaks in nursing homes around the nation.
The new co-ordination bodies will be similar to the Victorian Aged Care Response Centre, which brings together federal and state emergency management, the Australian Defence Force, clinical support, infection control specialists and medical experts, including geriatricians and specialist aged-care nurses.
They hope to ensure nursing homes are adequately resourced to prevent outbreaks and, if a positive case is found, to quickly co-ordinate the deployment of resources to stop further infection, including a surge workforce to cover staff required to isolate.
Scott Morrison and state and territory leaders had extensive discussions at last week’s national cabinet meeting about how lessons from the Victorian coronavirus outbreak in nursing homes could be used to protect vulnerable residents in all states.
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The party is over for dividends - but where to now?
With CBA's slashed payout heralding the end of high bank yields, professional investors outline the alternatives for income-seekers.
Sarah Turner Reporter
Aug 15, 2020 – 12.00am
The three-decade party in juicy bank dividends came to a shuddering halt this week as COVID-19 forced Commonwealth Bank to slash its payout by a third, hitting the hip pockets of the retirees who depend on the lender for income.
CBA's dividend cut brought home to investors under pressure from an intensifying yield hunt that there has been a tectonic shift in dividend investing.
Fund managers and investment advisers say some of the less-loved companies trading on the ASX, real estate, corporate bonds and offshore investments could be alternatives.
Ten years ago it was a different story, with income investors able to get a healthy return from parking money in term deposits and banks and utilities.
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The crucial questions we need answered about COVID-19
Jill Margo Health editor
Aug 14, 2020 – 12.47pm
Since Australia's first case of COVID-19 was confirmed just over 200 days ago, we have accumulated a phenomenal amount of knowledge about this disease but fundamental questions remain unanswered.
On the clinical front, we don’t know why many healthy people don’t get symptoms and some get them so badly they can be fatal.
We also don't know how to nip this disease in the bud and treat mild cases to prevent them from becoming serious.
When they are serious, we only have two drugs that can help a little. Remdesivir can shorten the duration of the disease in people who are hospitalised and the steroid dexamethasone can reduce mortality a bit in seriously ill patients who are unable to breathe unassisted.
Although there have been some tweaks, such as turning patients face down to assist with breathing, there have been no major medical breakthroughs.
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Royal Commissions And The Like.
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The disgrace of aged care is a national flaw - the failure to plan
John Hewson
Columnist and former Liberal opposition leader
August 13, 2020 — 12.00am
Since 2002 Australia has had four intergenerational reports claiming to take a 40-year view of our challenges – our rapidly ageing population included. They have come to precious little. There's been minimal impact on annual budgets. They have spurred little long-term planning to address climate change or the aged care crisis or to anticipate major hurdles. Such as a pandemic.
It was Winston Churchill who said: “Plans are of little importance, but planning is essential.”
Planning – or the lack of it – has been the great failure of successive Australian governments, including the Morrison government. The disaster that is aged care is a most instructive example of short-termism. It has been building over years of neglect and poor policy, but now it is being laid bare by both COVID-19 and the Royal Commission into Aged Care Safety and Quality.
About two-thirds of our 331 COVID deaths have been of aged Australians. From the outset it was known that the deaths would be concentrated among the aged. Indeed, Australia has one of the highest aged death rates from COVID-19 in the world.
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NSW Health made 'serious mistakes' with Ruby Princess, inquiry says
By Alexandra Smith
Updated August 14, 2020 — 5.28pmfirst published at 4.33pm
NSW Health has been held responsible for serious, inexcusable and inexplicable mistakes in the Ruby Princess cruise ship debacle, but a special commission of inquiry says the failures came from decisions made by medical experts rather than political leaders.
The report by Bret Walker, SC, from the Special Commission of Inquiry into the Ruby Princess was handed to the Berejiklian government on Friday afternoon, with sweeping criticisms of NSW Health.
On March 19, 2647 Ruby Princess passengers were allowed to disembark at Circular Quay and travel home, but within 24 hours three COVID-19 tests performed aboard had returned positive.
In the weeks that followed, 712 passengers and 202 crew tested positive and 22 people died. But only 19 people in NSW and 15 people interstate were infected by those passengers.
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National Budget Issues.
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RBA should come off sidelines and play unconventional game
RBA governor Philip Lowe should not dismiss taking the cash rate negative to help dig the economy out of the deep coronavirus hole.
Brendan Coates and Matt Cowgill
Aug 10, 2020 – 12.00am
COVID-19 has left the Australian economy in a deep hole. Governments have taken steps once considered unthinkable, spending billions to prop up the economy.
But amid the flurry of activity, one key actor sits largely on the sidelines. Reserve Bank governor Phil Lowe has been unusually quiet in recent months.
The Reserve Bank has cut the cash rate by half a percentage point since March. By comparison, it cut rates by 4.25 percentage points during the GFC, a milder crisis.
The cash rate is now close to zero, bumping up against the constraint on conventional monetary policy. But that doesn’t mean the RBA is out of options.
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https://www.afr.com/policy/economy/long-way-back-for-an-economy-mowed-down-20200809-p55k0d
Long way back for an economy mowed down
An adamant Daniel Andrews is rejecting the concerns of Victorian businesses – and the Morrison government – that too many of the state's restrictions are neither COVID-safe nor business-safe.
Jennifer Hewett Columnist
Aug 9, 2020 – 5.32pm
Jim Penman has not received any written response to his angry, open letter to Victorian Premier Dan Andrews. That’s not stopping the man behind Jim’s Mowing and several other successful franchise businesses trying to fight what he regards as irrational restrictions.
Penman argues there’s no COVID-safe logic, for example, in preventing sole operators mowing lawns or cleaning pools under Victoria’s stage four restrictions given the nature of the job means working outside and alone. Yet the ban is creating unnecessary financial devastation, he says, for individuals and families who often have no alternative source of income.
What’s more, he complains initial rules issued by the department a week ago specifically permitted such sole operators to continue working. That was until the Premier “on a whim” declared during his press conference that people could not have their lawns mowed.
“He was probably thinking of stockbrokers and lawyers and accountants who could easily do without having their lawns mowed,” Penman tells The Australian Financial Review. “But he was not thinking of all the people actually doing the work. Perhaps he has never met any of them.
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Pandemic set to savage retirement savings
By John Collett
August 11, 2020 — 11.00pm
Retirement savings are expected to take an unprecedented hit as a result of the financial consequences of the COVID-19 pandemic due to high levels of unemployment, minimal growth in wages and depressed investment returns.
Across all superannuation sectors – self-managed super funds (SMSFs), retail funds, industry funds and corporate funds – accumulation phase account balances are likely to fall by as much as 16 per cent during 2020, forecasts by financial services researcher DEXX&R show.
Over the longer term, the researcher expects the super industry will have about $2.46 trillion in funds under management by June, 2029 – 34 per cent lower than the $3.75 trillion it had been forecasting before the pandemic.
The DEXX&R research shows SMSF members would likely be hit hard by a "dividend recession" and record-low interest rates, given their high exposure to large Australian listed companies, cash and term deposits. However, the figures show the impact of the pandemic would be felt mostly by industry funds in the short term.
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Australia's economy in crosshairs as pandemic threatens global supply chains
Senior business columnist
August 12, 2020 — 11.59am
If the trade conflict between the US and China last year wasn’t by itself sufficient to reshape global supply chains, the coronavirus pandemic has almost certainly ensured that the dramatic increases in global trade that occurred over the past few decades will be to some extent unwound.
A recent McKinsey Global Institute study estimated that between 16 and 26 per cent of exports – or about a quarter of companies’ global sourcing, worth between $US2.9 trillion and $US4.6 trillion ($4.1 trillion and $6.4 trillion) in 2018 dollars - could be "in play." By that it means production of those goods could revert to domestic production or be shifted to new locations.
A Moody’s analysis this week concluded that supply chains would become more robust, more fragmented and more regionally focused, with the pandemic accelerating fundamental shifts in trade relationships.
Boston Consulting Group (BCG) produced its own analysis late last month, estimating that global trade would fall by $3 trillion this year (from $18 trillion to $15 trillion) and won’t return to 2019 levels until 2023.
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Economically, the jury is still out on lockdowns
Economics writer
August 13, 2020 — 12.00am
It is difficult to determine exactly how far back the clock has been wound on the Australian economy. But it is some time indeed.
Certainly back before international plane travel, which takes us back before 1935, when the Queensland and Northern Territory Aerial Services company carried its first fare-paying passenger overseas.
Back even, perhaps, to before the widespread use of international passenger shipping, as our nation's borders have been slammed shut.
And yet, economies can survive remarkably well, fuelled only by transactions between their own citizens. Indeed, domestic consumption makes up the larger part of economic output.
But amid creeping internal state border closures and as the nation hovers on the precipice of more lockdowns, the clock is ticking back even further.
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More than one million out of work: July unemployment data
The country has hit a worrying coronavirus milestone, with the more than one million Australians out of work for the first time.
Jade Gailberger
NCA NewsWire
August 13, 202011:48am
In a first for the nation, more than one million people were out of work, available to work and actively looking for work last month.
Labour force figures from the Australian Bureau of Statistics released Thursday showed Australia’s jobless rate had increased just under 0.1 per cent from June to 7.5 per cent.
Experts had predicted it would be close to 8 per cent.
“The number of unemployed people rose by nearly 16,000 between June and July. For the first time there were more than one million people out of work, available to work and actively looking for work,” ABS spokesman Bjorn Jarvis said.
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https://www.smh.com.au/politics/nsw/australian-tourism-suffers-11-7-billion-hit-20200813-p55ljz.html
Australian tourism suffers $11.7 billion hit
By Lisa Visentin
August 13, 2020 — 8.01pm
Australia's domestic tourism sector suffered an $11.7 billion hit between April and May, as coronavirus restrictions wreaked havoc on travel and holiday plans.
The brutal impact of COVID-19 measures on the tourism industry has been laid bare in the latest National Visitor Survey data, as more than $7 billion was wiped in April alone as Australians took 9.6 million fewer domestic overnight trips compared to April 2019.
In NSW, domestic tourism spending crashed by $3.5 billion, or 89 per cent, as visitors numbers plunged to 1.4 million across April and May, compared with more than 7 million during the same period in 2019.
Victoria was also hard hit, recording an 83 per cent collapse in visitor numbers over the same period, amounting to a $2.5 billion loss compared with 2019.
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Corporate profit reports painting a dismal picture
The impact of COVID-19 on corporate profits and the economy will be worse over the next 12 months at least, with Telstra and AGL joining CBA in issuing downbeat forecasts.
Telstra has extended the COVID-prompted delay in sacking 2000 staff from October this year under its T22 restructuring plan until February next year, but made clear the jobs will definitely go then.
It is only one company but indicative of the trend, which saw some businesses actually add staff in the early days of the lockdowns — but as they get back to business the job cuts will come in earnest.
Unless COVID is under control by then and the economy improves, the corporate profit reports paint a dismal outlook for this financial year.
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NAB boss warns economy will be weak until 2022
Updated August 14, 2020 — 3.19pmfirst published at 8.31am
National Australia Bank chief executive Ross McEwan has underlined the slow and uncertain economic recovery ahead, saying hard-hit industries such as hospitality and education may not experience a sense of normality until 2022.
As the bank on Friday delivered unaudited third-quarter cash profits of $1.55 billion, Mr McEwan said Victoria's second wave of coronavirus had inflicted more psychological than financial damage so far.
Even so, he emphasised the outlook was "highly uncertain," saying the economy faced "many challenges" in the short term, as NAB said commercial property, retail and tourism businesses were among the most likely to defer their loan repayments.
NAB expects economic conditions will start improving in 2021, with gross domestic product not returning to pre-pandemic levels until 2022.
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Health Issues.
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Nasal spray is new anti-depressant option to combat US suicide risks
By Cynthia Koons
August 10, 2020 — 6.39am
A quick-acting nasal spray to combat suicidal thoughts is being made available in the United States as doctors worldwide become increasingly concerned about the mental health effects of COVID-19.
The drug Spravato has already been used by about 6000 people for treatment-resistant depression since its approval in March 2019.
But a decision by pharmaceutical company Johnson & Johnson to study it in depressed people actively contemplating suicide bucks a trend among drugmakers who routinely exclude such patients from trials.
Part of the thinking behind the decision was that Spravato's ability to act quickly could mean it works differently than older antidepressants that can take weeks to kick in, Johnson & Johnson vice president Michelle Kramer said. In its studies, she said the company had found those who got the drug had a rapid reduction in the severity of their thinking.
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Medibank acquires stake in Sydney hospital to create a ‘sea-change’ in tackling out-of-pocket costs
Australia’s biggest health insurer Medibank has made its first foray into hospital ownership in an effort to combat spiralling out-of-pocket costs and reverse the trend of Australians ripping up their health insurance policies.
Medibank has secured a 49 per cent stake in East Sydney Private Hospital in Woolloomooloo — which was established in 2014 and specialises in orthopaedic surgery — in an $8.8m deal.
Medibank group executive healthcare and strategy, Andrew Wilson, said the investment was part of the insurer’s strategy to eliminate out-of-pocket costs, which are the bugbear of many with health insurance — even those with the highest cover.
Dr Wilson said the model was doctor-led and focused on shortening the hospital stays for patients, allowing them to recuperate in their own home, where they would receive follow-up care from a multidisciplinary team, including nurses and allied health professionals such as physiotherapists.
While hospital fees normally involve no out-of-pocket costs, given private hospitals charge rates negotiated with health insurers, the rates of doctors and their surgical teams vary considerably, as they aren’t employees of the hospital and operate their own businesses.
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Treatment for aggressive brain cancer shows promise in early trial
By Stuart Layt
August 13, 2020 — 12.01am
A new treatment for aggressive brain cancer has shown great results in an early trial, with researchers hoping it leads to more targeted therapies for the devastating disease.
QIMR Berghofer medical research institute has partnered with specialists Briz Brain & Spine to use targeted immunotherapy to treat glioblastoma multiforme (GBM), a very aggressive form of brain cancer.
People who are diagnosed with GBM are usually given just months to live and it has only a 5 per cent survival rate.
Briz Brain & Spine neurosurgeon David Walker said the current treatment for GBM was physical surgery as well as targeted radiation treatment, but for this trial they added a round of immunotherapy after those treatments.
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International Issues.
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We should stop taking our lead from the US and China
Amanda Vanstone
Former Howard government minister
August 9, 2020 — 11.52pm
When you hear someone, especially a politician, start a response with "it's complicated" you may roll your eyes and think that this is just another smartypants being evasive. Quite often you’d be right. But not always.
Life is often complicated. The world is complicated. Ditto human and international relations. That’s not to say that within any long and difficult equation there aren’t a few simple sums.
If we’re smart we will think about China and the rest of the world with this reality in mind. China and the US might be the two big kids on the block, but they are not without their own problems.
The US is going through a rough patch. Their president is held in low regard internationally, for good reason in my view, but it would be a mistake to blame him for all their problems.
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Coronavirus: Buffet warns only one thing can save the future of aeroflights sector
· The Times
Billionaire Warren Buffett has warned investors that finding a COVID-19 vaccine may be the only way to salvage the immediate future of the aerospace market.
The investor, known as the Sage of Omaha, sold his airline holdings but his Berkshire Hathaway investment vehicle was forced to take a hit of almost $US10 billion against the value of its stake in Precision Castparts (PCC), which makes aircraft components.
In a regulatory filing for its second-quarter results issued at the weekend, Berkshire Hathaway said the pandemic had produced “material declines in commercial air travel”.
It added: “Airlines responded by reducing or cancelling aircraft orders, which is resulting in significant reductions in build rates by aircraft manufacturers and significant inventory reduction initiatives being implemented by PCC’s customers.”
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Huawei data centre built to spy on PNG
Angus Grigg National affairs correspondent
Aug 11, 2020 – 12.00am
Chinese telecommunications giant Huawei built a data centre in Papua New Guinea, which exposed secret government files to being stolen, according to a report that catalogues Beijing's efforts to spy on the Pacific nation.
The report, provided to the Australian government, noted outdated encryption software was deployed by Huawei, while firewall settings were insufficient for a centre designed to store the entire data archive of the PNG government.
"It is assessed with high confidence that data flows could be easily intercepted," said the 2019 report on PNG's National Data Centre.
"Remote access would not be detected by security settings."
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https://www.afr.com/world/north-america/trump-sends-in-the-economic-quacks-20200811-p55kic
Trump sends in the economic quacks
A proposed payroll tax cut is the hydroxychloroquine of economic policy. It's a quack remedy that somehow caught Donald Trump's eye.
Paul Krugman Contributor
Aug 11, 2020 – 9.28am
As the US economy careens towards disaster, congressional talks about what to do appear to have ground to a halt. So on Saturday local time President Donald Trump – speaking at one of his golf courses, of course – announced four executive measures that, he claimed, would rescue the recovery.
Unfortunately, one of the measures was vacuous, one trivial and one unworkable. And the fourth may do substantial harm.
The vacuous measure simply calls on government agencies to "consider" helping renters facing eviction. The trivial measure waives interest and defers principal repayment on student loans.
The unworkable measure supposedly provides new aid to the unemployed, who have lost pandemic benefits because Senate Republicans don't want to provide them; but the announced program would be an administrative nightmare that might take a long time to put into effect and would require partial matching funds that strapped states don't have.
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Joe Biden has announced his running mate. It's Kamala Harris.
Jacob Greber United States correspondent
Updated Aug 12, 2020 – 8.10am, first published at 6.21am
Washington | Presumptive Democratic presidential candidate Joe Biden has chosen Kamala Harris as his running mate, a proven political battler who becomes the first Black woman in US history on a major party ticket.
Ms Harris, a 55-year-old former rival for the Democratic nomination who clashed with Mr Biden last year as the party's contest began in earnest, was announced by the former vice president on Tuesday (Wednesday AEST), ending an extended selection process that began more than four months ago.
"Big news," Mr Biden said in an emailed message to supporters. "I've chosen Kamala Harris as my running mate. Together, with you, we're going to beat Trump."
Ms Harris was an early favourite for the Democratic presidential nomination, but dropped out late last year after her campaign floundered over the northern summer when she failed to prevail over other hopefuls such as Bernie Sanders and Elizabeth Warren.
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New Zealand back in lockdown as new mystery cases emerge
By David Estcourt
August 11, 2020 — 7.49pm
New Zealand will re-enter coronavirus lockdown restrictions after four new cases of COVID-19 were discovered in Auckland.
Prime Minister Jacinda Ardern said on Tuesday night that four cases with an unknown source had been discovered in one household.
Contact tracing was under way but authorities had not been able to pinpoint the origin of the outbreak.
New Zealand’s largest city, Auckland, will undergo mass testing as residents enter level three restrictions for the next three days.
The rest of the country, which will be isolated from Auckland, will enter level two restrictions.
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America Inc will shake off COVID-19 effects quicker than we think
By Ambrose Evans-Pritchard
August 12, 2020 — 10.10am
Gold is the ultimate anti-dollar. It has rocketed by 30 per cent over the last four months largely because the dollar has been in the steepest dive for almost half a century. One is a function of the other.
You can come up with many compelling reasons for the sudden spike through $US2,000 an ounce: the Reichsbank debasement hypothesis, the fastest rise in America's M3 money supply since 1943, or the deepening plunge in negative real yields. But at this juncture it is dollar dynamics that matter.
If you are betting on a further rally in gold, you must therefore also be right that the dollar's decade of exorbitant strength is definitively over and the world's paramount reserve currency is going into a supercycle of secular decline - supposedly against an all-conquering euro.
It must be said that a weaker dollar is what the global economy needs as we limp our way out of COVID-19, but there is a high risk that it will not in fact happen.
The currency has been too strong for global comfort. The Federal Reserve's broad dollar index hit an all-time high early this year. This had the effect of draining liquidity from an international financial system that has never been more dollarised.
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Kamala Harris pick is safest road for Joe Biden and will hurt Donald Trump
Joe Biden has taken the safest road in choosing Kamala Harris as his Vice Presidential running mate and it will make Donald Trump’s task of winning the November election more difficult.
Of the roughly six females shortlisted for the job, the Californian Senator was by some distance the best qualified for the role.
Unlike the other VP contenders, Harris is a senator from a large state who has substantial legislative and law and order experience and who does not have obvious skeletons in her closet.
Although the 55-year-old Harris presents these days as a progressive, she is much more moderate than the populist lunatic fringe of the party as personified by Bernie Sanders.
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Harris on Trump: He's run America down, 'like everything he inherited'
Jacob Greber United States correspondent
Aug 13, 2020 – 8.26am
Washington | Kamala Harris, standing beside Joe Biden to launch their Democratic presidential ticket a day after Donald Trump slammed her as "nasty", wasted no time delivering her own version of a political zinger.
"He inherited the longest economic expansion in history from Barack Obama and Joe Biden," Senator Harris said of Mr Trump. "And then, like everything else he inherited, he ran it straight into the ground," she said.
At a surreal event in a school gymnasium in Wilmington, Delaware - devoid of the usual delirious supporters, balloons and confetti - Senator Harris and Mr Biden formally began their sober pitch to the American people.
Both made clear that they would seek to turn the coming campaign into a referendum on Mr Trump's handling of the coronavirus crisis.
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https://www.afr.com/world/north-america/joe-biden-and-the-riddle-of-kamala-harris-20200813-p55l8u
Joe Biden and the riddle of Kamala Harris
In the senator for California, Mr Biden has hired not just a running mate but an executive burden-sharer and — forgive the macabre note — a viable stand-in. But who is Kamala Harris really?
Janan Ganesh Contributor
Updated Aug 13, 2020 – 9.39am, first published at 9.13am
Joe Biden is not 77 in the way that Mick Jagger is 77. The Democratic candidate for the White House wears the years with a heaviness that is not lost even on his enthusiasts.
While he never rules out a second term, this avowed “bridge” to the next generation implies just the one. With its lack of travel and live events, this COVID-19 election campaign, The Campaign That Isn’t, has spared him. The grandest public office in the world will not.
Kamala Harris is, then, in line to be as much co-president as vice-president of the US. In the senator for California, Mr Biden has hired not just a running mate but an executive burden-sharer and — forgive the macabre note — a viable stand-in. Given Mr Biden’s taste for foreign affairs, she might have space to impose herself on the domestic realm in particular. Her potential influence is vast.
It is also ambiguous. Mr Biden has chosen Ms Harris, yes, but which one? Disaffected Republicans will hope for the tenacious prosecutor with the Third Way patter. “It’s not progressive to be soft on crime,” she said, running for district attorney of San Francisco in 2003.
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Biden plans to make Harris as powerful a Veep as he was
Michael Hirsh
Aug 13, 2020 – 8.58am
If she is elected along with her running mate, Joe Biden, Kamala Harris will be no ordinary vice-president – and that goes well beyond her historic selection as the first Black and South Asian American woman to back up a major party ticket.
On the contrary, Biden plans to model her role on the extraordinarily influential part he played himself for eight years as Barack Obama’s vice-president, according to a senior Biden adviser.
The terms of the relationship will plainly be somewhat different. Obama, who took office in January 2009, was a freshman senator with very little experience in foreign policy; as a consequence, the new president deferred to Biden on a wide range of foreign-policy issues.
Biden told me in a 2010 interview that, to his continuing surprise, Obama decided to “turn over big chunks” of policy to him to handle on his own. And “he doesn’t check back,” Biden added, whether it was a question of negotiating withdrawal from Iraq or overseeing the economic recovery act. Biden often used the phrase “Barack and I” without diffidence.
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Warmth, unity, then attack: Biden, Harris make first joint appearance
By Matthew Knott
August 13, 2020 — 8.14am
Washington: Presumptive Democratic nominee Joe Biden has defended his running mate Kamala Harris from attacks by President Donald Trump, accusing the president of "whining" because he has a problem with strong women.
Biden and Harris appeared together at a high school gym in Delaware on Wednesday (Thursday AEST) for their first joint appearance since Biden announced the California Senator as his vice presidential selection.
"Donald Trump has already started his attacks, calling Kamala 'nasty,' whining about how she is 'mean' to his appointees," Biden said when introducing Harris.
"It's no surprise because whining is what Donald Trump does best...Is anyone surprised Donald Trump has a problem with a strong woman or strong women across the board?"
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Trump announces historic peace agreement between Israel and UAE
Anne Gearan and Steve Hendrix
Aug 14, 2020 – 3.19am
Washington | President Donald Trump announced a peace agreement Thursday (Friday AEST) between Israel and the United Arab Emirates, a historic step that makes the Persian Gulf state only the third Arab country to open diplomatic relations with the Jewish nation.
Representatives of both countries will meet soon to begin signing agreements, a joint statement said.
"HUGE breakthrough today! Historic Peace Agreement between our two GREAT friends, Israel and the United Arab Emirates!" Trump tweeted.
Speaking in the Oval Office, the President said the United States is a party to the agreement, helping to get the two countries talking as part of the Middle East peace effort led by his adviser and son-in-law Jared Kushner.
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UAE deal gives Israel long overdue legitimacy
Dave Sharma
Member for Wentworth and a former ambassador to Israel.
August 15, 2020 — 11.25pm
The announcement that the United Arab Emirates and Israel will establish diplomatic ties and normalise relations is hugely significant for the Middle East.
The UAE becomes the third Arab state to recognise Israel, following Jordan in 1994 and Egypt in 1979. Though it has taken decades longer than it should have, Israel is finally becoming accepted as a legitimate stakeholder in the Middle East and part of the regional furniture.
The fact that it has been the UAE — the most moderate and progressive of the Gulf states — to take this step forward should come as no surprise. This move would have been co-ordinated closely with other Gulf states, including Saudi Arabia. With some luck and some patience, other Gulf states will follow the UAE's lead.
The opening between the UAE and Israel formalises a strategic realignment that has been under way in the Middle East for some time.
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I look forward to comments on all this!
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David.
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