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As I write we see the US unable to develop a stimulus package to help their failing economy at the same time the COVID19 crisis is running totally out of control. Trump seems to have essentially abdicated while there seems to be a cyber-security emergency loose (Russia to blame apparently.).
In the UK COVID19 seems to have mutated and we have a situation where – right now – the virus is winning.
In OZ we have a virus outbreak in Sydney which is not looking at all good while all the State borders are going up again. Christmas seems to be at real risk!
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Major Issues.
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Fighting the dragon: we’re doing it wrong
As China slowly strangles our exports to break our will, Australians have responded with a range of emotions — none of them effective.
By Alan Dupont
December 11, 2020
As China slowly strangles our exports to break our will, Australians have responded with a range of emotions from anger and denunciation to self-blame and resignation. Difficult though it may be, we cannot afford to let emotion cloud our response to Beijing’s pressure tactics. Cool heads are required and, above all, an astutely targeted strategy that shields us from irreparable damage while working to stabilise the relationship and keep the door open to some form of reconciliation, no matter how distant the prospect.
But first we need to understand better why China is punishing Australia. This means cutting through the confused reactions and misperceptions that have obscured China’s real aims and tactics. Asserting we should “keep a low profile” or avoid “irritating China” is not a strategy.
Nor are trite motherhood statements that we should “work on the relationship”. At best, they are prescriptions for inaction. At worst, they suggest studied indifference to the real job and income losses being inflicted on our farmers and primary producers through economic coercion.
It’s clear why we are being punished. By failing to comply with China’s demands we have made ourselves a target. We are being taught a lesson in the realities of hard power by grandmaster Xi Jinping, a muscular devotee.
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Viva grasps subsidy lifeline for Geelong refinery
Angela Macdonald-Smith Senior resources writer
Dec 14, 2020 – 10.15am
Oil refiner Viva Energy has seized on the federal government's fast-tracked rescue measures for the sector as a lifeline for its loss-making Geelong refinery, saying it will participate in the subsidy program to keep the plant afloat.
The "refinery production payment" of at least 1¢ a litre announced on Monday by Energy Minister Angus Taylor will contribute about $30 million to underlying earnings for the refinery for the first half of 2021, Viva said on Monday.
The payment, together with the government's other fuel security measures announced in September, "provides material support which underscores the importance of domestic refining to the country’s broader fuel security and to the local communities in which our domestic refineries operate," chief executive Scott Wyatt said.
He said Viva would work with the federal government on the details and funding mechanisms of the long-term fuel security measures "which we expect will provide the support that is necessary for Viva Energy to maintain refining operations beyond the conclusion of the interim Refining Production Payment".
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University research must prepare us for the crises of the future
Australia should use the pandemic shock to create a new institute that can focus the national research effort on real problem solving.
Jennifer Martin and Les Coleman
Dec 14, 2020 – 12.54pm
Australia university research has an uncommercial culture that is not engaged enough with solving community, industry and government problems, we argued back in October.
What's needed is a better strategy – one that might also protect Australia and its regional neighbours from crises like the one we have experienced this year.
This country’s researchers have achieved many world-class technological breakthroughs, ranging from a vaccine for cervical cancer, through to the winged keel for yachts and polymer bank notes. But their contribution has been weaker in areas of equal consequence such as applied problems and predicting future environmental, health, welfare threats.
"Closing the Gap", for instance, is a well-supported, bipartisan issue. Unfortunately, the principal objective of achieving equality in life expectancy between Indigenous and non-indigenous Australians within a generation is not on track to be met by the 2031 target.
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Australian super funds rank bottom of global rankings on transparency
By John Collett
December 15, 2020 — 7.10am
Australia ranks at the bottom of 26 global markets for investment portfolio disclosure, leaving fund members in the dark over how their retirement savings are being used.
Australia is in the "bottom" category – on its own – in the study by investment researcher Morningstar because super funds and managed funds are not compelled to reveal their investments and there is poor disclosure of environmental, social and governance issues.
"Fund investors are entitled to know how their money is being invested and to what companies they are exposed; it shouldn't be a blind date for investors,” says Grant Kennaway, Morningstar's director of manager research for Australia.
“If investors want to avoid exposure to fossil fuels, for example, they need portfolio holdings data – what stocks or bonds a fund holds – to provide more transparency,” Kennaway says.
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https://www.afr.com/politics/federal/treasurer-plots-asic-shakeout-20201215-p56nj4
Treasurer plots ASIC shakeout
John Kehoe Senior writer
Dec 16, 2020 – 12.00am
Treasurer Josh Frydenberg is working on an overhaul of the corporate watchdog's structure, ahead of a shake-up next year that is likely to include fewer full-time commissioners and help businesses understand who is in charge of regulating their activities.
A decision on the future of Australian Securities and Investments Commission chairman James Shipton is yet to be made, with an outcome expected in the new year after an investigation is handed to the Treasurer later this month.
Mr Shipton stood aside in October for an independent probe into ASIC approving payments of $118,557 for tax advice as part of a relocation package for his move from overseas to take up the top job, and a housing allowance of almost $70,000 paid to deputy chairman Daniel Crennan, who has since resigned.
Legally, Mr Frydenberg can't sack Mr Shipton and the termination power rests with the Governor-General if there is "misbehaviour, or the physical or mental incapacity" to do the job, the ASIC Act notes.
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Take note: Your super will radically change in 2021
Charlotte Grieve
Age reporter
December 15, 2020 — 10.00pm
A partner at a big-four accounting firm recently told me he planned to gift a superannuation contribution to his granddaughter for Christmas.
While such a gift might have once been met with an eye-roll, this year, things are different.
The early release super scheme under the federal government's COVID-19 induced financial hardship provisions saw more than $35.5 billion drained from the system. Since April, more than 20,000 applications have been made each day.
For a sector that is usually defined by a "set and forget" ethos, this year was a super game-changer. The early release scheme reminded people they had "real money" in super. Members were forced to find their details and navigate the system.
As a result, more people are now engaged and interested in their super than ever before.
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Whittaker's financial 'commandments': Easy rules to help you get ahead
Noel Whittaker
Money columnist
December 15, 2020 — 11.00pm
As an author of numerous books on personal finance, former owner of my own financial planning business and public speaker at conferences across the country, I have tried to bring financial literacy to the masses for more than 40 years.
During that time, like all investors, I have learnt through experience.
So, I thought I would share some of the most important concepts for setting yourself up for financial freedom – whether you are young and just starting out in the workforce or intending to stop working soon and looking to make the most of your hard-earned retirement savings.
Here's a brief summary of my "financial commandments" – the "dos" and "don'ts" of investing and personal finance.
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How WeChat is helping the CCP control Australian media outlets
December 17, 2020 — 12.00am
At least four Chinese-language media companies operating in Australia have financial links to the Chinese Communist Party and at least 17 are connected to Beijing's overseas influence arm, according to new research that also highlights the role of WeChat in controlling media outlets.
The research by the Australian Strategic Policy Institute to be released on Thursday also reveals representatives of the Chinese-language media arms of the ABC and SBS have attended media forums held by China's overseas propaganda arm, the United Front Work Department.
The report calls for the Australian government to expand Chinese-language services on the ABC and SBS and also look into the foreign interference risks faced by both of the public broadcasters.
Australia's peak intelligence agency has recently warned the federal government the CCP covertly controls sections of Chinese-language media in Australia and the new ASPI research uncovers the extent to which the sector censors content critical of the CCP when they are reproducing articles from western media outlets.
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The risks that investors should prepare for in 2021
After a liquidity-driven rally on markets, central bank largesse might not be sustainable. Investors might rue the day they ventured into asset classes far from their natural habitat that lack sufficient liquidity in a correction.
Mohamed El-Erian Contributor
Dec 17, 2020 – 10.27am
What, if anything, will happen to the great disconnect between Wall Street and Main Street? This is a key question for investors positioning their portfolios for 2021. It is also an important question for the global economy and policymakers.
Throughout this pandemic year, we have experienced a further sharp widening of an already remarkable gap between financial markets and the economy. A rapid recovery in asset prices from the March 23 lows took major US indices to record levels, even before the recent good news on COVID-19 vaccines. Combined with even more accommodative central bank policies, this enabled record debt issuance at historically low levels of compensation for creditors.
Meanwhile, the global economic situation remains uncertain. Another coronavirus wave is sending parts of Europe back into recession. That is sapping energy out of the US recovery, and limiting the extent to which better performing east Asia can be a powerful locomotive of global growth. The longer this continues, the greater the risk of “scarring” that erodes longer term growth.
An uncertain economic outlook with notable dispersion among systemically important countries is but one of the key COVID-19 legacies that markets have set aside due to sky-high faith in central banks’ ability to shield asset prices from unfavourable influences. Markets being markets, investors have readily extended the protective nature of the umbrella to asset classes that, at best, are only indirectly supported by central bank funding (such as emerging markets). It is an extremely powerful dynamic, and one that inevitably overshoots.
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Despite the sandbagging, a long, hard reckoning awaits
Phillip Coorey Political editor
Dec 17, 2020 – 6.40pm
The alarm sparked by the fresh coronavirus outbreak in NSW shows that despite the stated commitment by our federal and state leaders to live with the virus under a strategy of suppression, we really have embraced a mindset of elimination.
Regardless of the NSW government’s stellar record in containing and crushing previous outbreaks, it still does not receive the benefit of the doubt.
With just over a week before Christmas, the Premier of Western Australia has once again put out the “not welcome” sign to NSW residents, and Queensland has followed. Others are watching closely.
The episode has again underscored the volatility which can so quickly see the economy head south again.
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Millennials aren't socialists they're just poorer than their parents
Anyone who is genuinely interested in why young people are moving to the left should look at the pyramid of credit that underpins the Australian economy.
Royce Kurmelovs
Dec 18, 2020 – 9.59am
To read the Centre for Independent Studies' report on the Millennial embrace of socialism in the dying days of 2020 is to experience something of a time warp.
Published about the time Alexandria Ocasio-Cortez was beginning her run for office in 2018, the document opens with the fall of the Berlin Wall on November 9, 1989, and was clearly intended to shock.
Chock full of esoteric graphs and sweeping platitudes, the libertarian think tank attempts to boil down what 1003 people born between 1980 and 1995 told their interviewers while answering a handful of leading questions.
Participants were asked things such as, “Do you think capitalism has failed?” or “Are ordinary workers worse off today than they were 40 years ago?”; eventually the gotcha component consisted of a snap history quiz.
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The best things in the super sector in 2020 - and the worst
Chook's report card for the performance of the super fund sector in 2020 has the usual mix of good, bad and ugly results. But overall, the sector proved resilient, including providing $35.5 billion in COVID-19 emergency funding.
Dec 19, 2020 – 12.00am
As the year draws to a close it’s time for Chanticleer’s report card on superannuation – the $2.9 trillion-dollar sector that touches every Australian, feeds a booming funds industry and is the key to financial security in retirement.
For the purposes of this scorecard, your Rooster has examined the industry’s leading players and most compelling issues and then awarded points out of 10.
Senator Jane Hume – 8/10
The Assistant Superannuation Minister deserves credit for picking up the super reform baton and making further strides in relation to efficiency and choice.
She made life insurance and income protection insurance in super optional, which benefits hundreds of thousands of young Australians who were paying for protection they didn’t need.
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https://www.afr.com/wealth/personal-finance/aussie-banks-prove-indestructible-20201216-p56ny1
Aussie banks prove indestructible
APRA’s stress test of the big banks implies that their hybrid securities are unlikely to be bailed into equity.
Christopher Joye Columnist
Dec 18, 2020 – 11.37am
Australia’s ferocious banking regulator has tried its darndest to blow up our deposit-takers in the latest iteration of its ultra-aggressive stress-testing regime. The good news for savers, shareholders and creditors is that the Australian Prudential Regulation Authority has failed in this effort, despite this being its toughest-ever trial.
The stress test took place immediately after the COVID-19 shock and imposed the harshest assumptions APRA has ever dreamt up. These included a record jump in the jobless rate to almost 14 per cent, house prices plunging 30 per cent, commercial property values falling an even larger 40 per cent, and two recessions over 2020 and 2021 as the economy suffered from a widespread second COVID-19 wave followed by a more geographically limited third wave. The economic contraction in 2020 alone was assumed to account for 15 per cent of GDP, more than double what Australia actually experienced.
APRA says “the ‘severe downside’ scenario used in this [stress test] featured a much sharper and deeper macroeconomic contraction than previous stress tests, reflecting the unprecedented speed and nature of the COVID-19 pandemic”. “It also featured a less pronounced recovery, reflecting ongoing uncertainty in both health and economic outcomes domestically and internationally.”
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The return of the vanishing internet
There was no accountability in the early days of the worldwide web, and now the tech giants are making it increasingly easier to post and run again – but is that a good thing?
Sarah Manavis
Dec 18, 2020 – 9.50am
It’s easy to forget that one of the primary appeals of the early internet, beyond endless information, chatrooms and porn, was anonymity: '90s and early noughties users were drawn to the idea that they could be anyone, doing anything, shedding each new identity by simply logging off.
It was a freedom rarely afforded in real life and while it came with its down sides (ease of abuse, lack of accountability), it meant agency and control for those in need of escape. Posting, sharing, and then disappearing was the fundamental rhythm and the greatest draw for millions of users.
Of course, this capacity slowly dissolved with the arrival of mainstream social media, and the new appeal of creating a digital shop window for our in-person selves. As early as 2007, MySpace was already old news and losing to Facebook. The noughties and early 2010s were dominated by this, in retrospect, rapid lurch towards logging on and logging every digital detail, traceable back to a real person.
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Scott Morrison reveals ministerial shake-up to shape pandemic recovery
By Katina Curtis
Updated December 18, 2020 — 2.06pmfirst published at 1.03pm
Dan Tehan will take over as Trade Minister under a cabinet reshuffle announced by Prime Minister Scott Morrison on Friday.
The Prime Minister will also elevate fresh faces to his frontbench, including former SAS captain Andrew Hastie and Queenslander Amanda Stoker, to assistant ministerial roles.
Mr Tehan will take on the key trade portfolio, putting the former diplomat at the forefront of repairing Australia’s relationship with China.
Alan Tudge takes over Mr Tehan’s former portfolio of education, now combined with youth affairs to give “a clear brief of improving education outcomes and, in particular, helping younger Australians navigate challenges in a rapidly changing world”, Mr Morrison said.
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The rich, the comfortable middle and the rest: Australia’s wealth and income ladder revealed
By Matt Wade
December 17, 2020 — 11.30am
The richest tenth of households owns almost half Australia’s private wealth followed by a “comfortable middle" of 30 per cent with 38 per cent, leaving the lowest 60 per cent - who tend to be younger – with 16 per cent of household wealth.
That’s the conclusion of new research comparing the upper, middle and lower rungs of the nation’s wealth and income ladder.
The average net worth of the richest ten per cent reached $4.75 million in 2017-18, underpinned by substantial property assets and a disproportionate share of stocks and business investments. That group owns 46 per cent of household wealth.
The next wealth rung – the comfortable middle – had average household net worth of just under $1.3 million. About half of that group’s wealth is tied up in their own home although investment properties (with a net value of $104,000 on average) and superannuation also make substantial contributions.
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Don’t blame gig economy for job insecurity, that’s only half the story
Ross Gittins
Economics Editor
December 18, 2020 — 11.33am
One thing we’ve learnt from the pandemic is that, for those who rely on evidence rather than anecdotes, what we believe to be The Truth keeps changing as we learn more. Take the way the medicos changed their tune on mask-wearing as more evidence came in.
It’s the same with the truth about job insecurity. The unions have gone for years claiming that work has become less secure, and in recent years the rise of the “gig economy” – where people get bits of paid work via a digital platform such as Uber or Deliveroo – means many people have found that claim a lot easier to believe.
But the training of economists says you should base conclusions about the economy on statistical evidence, not anecdotes or even personal experience. And the trouble is, a quick look at the Australian Bureau of Statistics’ figures for the labour force shows little sign of growing job insecurity.
The bureau doesn’t measure insecurity as such. Nor, since there’s no legal definition yet, does it even measure casual employment directly. But, since casual workers aren’t paid annual and sick leave, the bureau’s figures for those workers who say they aren’t eligible for paid leave are taken to be a measure of casual employment.
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https://www.smh.com.au/national/five-big-lessons-that-australia-learnt-in-2020-20201217-p56oi7.html
Five big lessons that Australia learnt in 2020
Peter Hartcher
Political and international editor
December 19, 2020 — 12.10am
The first of the five main lessons we’ve learnt from 2020 is that Australia is a highly capable country. On the whole, it dealt with the pandemic as well or better than any country on the planet.
The effective mobilisation to confront COVID-19 exposes a very hard fact about the nation’s many persistent problems – it turns out that most long-running problems are not problems of necessity but problems of choice. One quick example. We saw homelessness just about eliminated overnight.
Our country, we can now see, had long lapsed into a state of complacency and learned helplessness. If Australia can deal so solidly with the COVID-19 crisis, notwithstanding the inevitable breakouts such as the one under way on Sydney’s northern beaches, it can deal with the others. Should it choose to do so.
Not only did Australia manage public health soundly, it also succeeded in keeping social coherence strong and economic activity solid. Not perfect, but look around the world and see the alternatives available.
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If the ABC didn’t exist, conservatives would have to invent it
Parnell Palme McGuinness
Columnist and communications adviser
December 19, 2020 — 12.10am
If the ABC didn’t exist, conservatives would have to invent it. It provides two vital functions to the right side of politics: it is the foe which unites the army, as well as a decoy which distracts progressives from the main game.
The ABC once again stands accused of bias. This is a familiar pantomime. A new incident sparks conservatives to condemn ABC bias and roll out a well-worn script insisting it is time to defund the national broadcaster. The ABC denies all charges and periodically appoints a fellow traveller to conduct a review. Naturally, the review finds the ABC to be largely impartial, to the satisfaction of the ABC management and no one else.
This is more or less how events have panned out again this time, with only slight variation: in a review of 2019 election coverage, journalist and political advisor Kerry Blackburn found there was an appreciable tilt to some episodes of panel shows The Drum and Insiders, and the ABC chair made the tactical error of displaying her reluctance to publicly release the internal review, putting the ABC on the back foot. Adding weight to claims of bias is the Australian Communications and Media Authority, which found that a Four Corners investigation into the Murray Darling Basin Plan “unduly favoured one perspective”. Communications Minister Paul Fletcher looks likely to refer a more recent episode of Four Corners, alleging bullying and harassment of parliamentary staff by Liberal ministers, to ACMA. The Coalition, however, would be wise to consider how far it should go in pressing this advantage and what the consequences would be if its efforts to change the ABC succeed.
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Follow Scrooge’s wisdom to combat the culture wars
A British Christmas is inseparable not just from a jolly fat man in a red suit but also from a grumpy, thin “squeezing, wrenching, grasping, scraping, clutching, covetous old sinner”. Charles Dickens’s novella A Christmas Carol was an instant hit. Within two months of its publication in 1843 there were 12 adaptations on the London stage. Nearly two centuries on, its anti-hero retains his hold on the popular imagination. The internet offers a dancing Scrooge, a singing Scrooge, a woke Scrooge, a Scrooge with Muppets, and a Scrooge with Freudian “daddy issues”.
By all means enjoy A Christmas Carol in this season — better read aloud to the children, in Victorian fashion, than on the screen. William Thackeray, Dickens’s contemporary and rival, described it as a “national benefit and, to every man or woman who reads it, a personal kindness”. But don’t stop there: Dickens is an inexhaustible source of pleasure and instruction all year round. He was, after Shakespeare, Britain’s most creative generator of characters, with more than a thousand listed in Wikipedia. That they are as relevant today as they were in his time is testament not only to his ability to capture essential human traits but also to the parallels between the Victorian age and ours.
So many Dickens characters summon up the peculiar spirit of 2020 that it is hard to choose between them. In Bleak House, Old Krook spontaneously combusts, which feels like a fitting end to the year. In Hard Times, Mr Gradgrind tries to “weigh and measure any parcel of human nature”, neatly encapsulating modern officialdom’s obsession with targets and algorithms. In Little Dorrit, the Barnacle family controls the business of the Circumlocution Office much as well-connected Tories enjoy the benefits of government outsourcing today. But three characters tower over their rivals as embodiments of 2020.
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Coronavirus And Impacts.
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London plunged back into harsh coronavirus restrictions, scientists find new COVID strain
December 15, 2020 — 5.44am
London: The British capital will be thrown into the highest level of coronavirus restrictions just a fortnight after being released from a nationwide lockdown as health authorities also study a new variant of COVID-19.
Health Secretary Matt Hancock said the mutation "may" be spreading faster in parts of England than the existing strain.
However, he stressed there was "nothing to suggest" the variant would cause more serious disease and said it was "highly unlikely" the strain would not respond to the vaccine being rolled out across the United Kingdom.
Experts also cast doubt on the seriousness of the development, warning variants had been observed across Europe over recent months and mutations were to be expected.
Chief medical officer Chris Whitty said the new strain had been detected in Kent and parts of London where cases were rising sharply but cautioned its impact on the rate of transmission was not clear.
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Second wave rips up Sweden's status as COVID-19 poster child
Hans van Leeuwen Europe correspondent
Dec 15, 2020 – 12.18pm
London | Sweden has shed its status as the libertarian poster-child for doing COVID-19 differently, as the country has posted its highest November death toll since the Spanish flu of 1918.
With Sweden labouring under one of the worst infection rates in Europe, Stockholm's intensive-care units are at 99 per cent capacity. The number of COVID-19 cases in hospitals nationwide hit 2406 on Monday (Tuesday AEDT), close to its April 20 record of 2412.
The country is fielding offers of assistance from health services in neighbouring Finland and Norway, as its relatively relaxed and largely voluntary restrictions wither in the face of the pandemic's second wave.
In a country where chief epidemiologist Anders Tegnell has told people not to bother wearing masks, and much of life continued as usual during the first wave, the sharp downward spiral marks the end of Sweden's seemingly successful pursuit of a more relaxed approach – one much admired by libertarians in Britain and elsewhere.
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Coronavirus: Medical chiefs failed us with light touch, says Swedish leader
· The Times
Sweden’s health experts misjudged the resurgence of the coronavirus by recommending a light-touch approach, the prime minister said.
The country, which has pursued a form of herd immunity strategy under Anders Tegnell, its chief epidemiologist, has been hit so hard by the second wave of infections that hospitals in Stockholm are struggling to cope.
Stefan Lofven, the prime minister, told the Aftenposten newspaper that his medical advisers had not seen such a wave coming. “They talked about different clusters,” he said.
Sweden’s neighbours, Finland and Norway, which adopted stricter social controls and have suffered fewer fatalities per capita, have offered medical help after Stockholm reported that 99 per cent of intensive care unit (ICU) beds were full and called for more staff.
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https://www.afr.com/policy/economy/pandemics-are-beyond-insurance-20201216-p56nue
Pandemics are beyond insurance
The global risk of pandemic is more than business continuity insurance can cover. Other solutions are needed.
Andrew Hall Contributor
Dec 16, 2020 – 2.41pm
While the world is still grappling with the long-term economic, political and social consequences of the COVID-19 pandemic, one thing is certain: it will ultimately be one of the costliest disasters we have ever experienced.
A consensus projection from the Centre for Risk Studies at the University of Cambridge’s Judge Business School estimates the hit to the global economy will be $US26.8 trillion ($35.4 trillion), or 5.3 per cent of global GDP, in the next five years. In a worst-case scenario the global economy could lose $US82 trillion.
Losses of this magnitude inevitably mean that no country will be immune from the economic fallout. Unfortunately, despite the best efforts of Australia’s governments to mitigate the economic effects, businesses and jobs have been lost.
Amid this economic upheaval, insurers and policyholders are examining whether business interruption insurance can respond to the pandemic.
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‘We have failed’: Sweden’s king delivers damning verdict on nation’s coronavirus strategy
By Bevan Shields
December 18, 2020 — 5.33am
London: Sweden’s king says his country’s coronavirus response has “failed”, as public faith in the anti-lockdown strategy’s chief architect falls and intensive care capacity is breached in Stockholm.
In a rare royal rebuke of government policy, King Carl XVI Gustaf said the number of deaths in Sweden - which has shunned a nationwide lockdown and the wearing of face masks - had been “terrible”.
“I believe we have failed,” the 74-year-old said in excerpts from a television program to air on December 21.
“We have had a large number of deaths and that is terrible. That is something that brings us all suffering.
“The people of Sweden have suffered tremendously in difficult conditions. One thinks of all the family members who have happened to be unable to say goodbye to their deceased family members.”
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https://www.afr.com/politics/federal/a-potential-pandemic-lesson-from-new-zealand-20201218-p56omp
A potential pandemic lesson from New Zealand
In the pandemic year, a comparison with the Kiwis might be more useful than with our own past recessions.
Laura Tingle Columnist
Dec 18, 2020 – 3.36pm
Nobody in politics, or public policy making, ever willingly ticks the “don’t know” box about where things are heading, even when it is actually humanly impossible to know where they are heading.
Economists, at least, are able to quantify (and/or hide behind) assumptions. Politicians are inclined to compare their actions with those of their predecessors, to show that they are actually doing more or better than it might otherwise appear.
And so the political year ends, in a period of perhaps the greatest unknowns in our lifetimes, in much the same way.
When the “mid-year” review of the budget (in fact a review just 10 weeks after the delayed annual budget) was released on Thursday, Treasurer Josh Frydenberg had every reason to be upbeat, given that the forecasts for economic growth, employment and the budget were all looking a lot healthier than anyone had expected in August, let alone earlier in the year.
But in box 2.1 of the mid-year economic and fiscal outlook are the “key assumptions” that suddenly seemed to spring to centre stage with the case numbers in the COVID-19 breakout on Sydney’s northern beaches escalating through Thursday and Friday.
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Australia 'relying too heavily on too few vaccines'
Ronald Mizen Reporter
Dec 18, 2020 – 5.47pm
Australia needs to do more to diversify COVID-19 vaccine supplies, one of the nation’s leading epidemiologists says, as a fresh outbreak of the virus forces top federal police into self-isolation.
Raina MacIntyre, head of the Kirby Institute’s biosecurity program, said the move to abandon the University of Queensland-CSL vaccine highlighted the need for more diverse vaccine supplies.
“That was a good lesson in the sense that the biggest component of our plan was the UQ vaccine and it tanked,” Professor MacIntyre said. “So, that’s a reason we should diversify because there’s still a lot of uncertainty.”
The Morrison government last week announced it had scrapped a deal to buy 51 million doses of the University of Queensland-CSL vaccine following fears false-positive HIV tests could undermine public confidence in a jab.
At the time, Health Minister Greg Hunt said Australia would buy an extra 30 million doses of the Oxford University-developed AstraZeneca vaccine and 10 million doses of the Novavax vaccine.
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Personal liberty sacrificed at the altar of Covid public safety
Never in history have so many seemed so excited about the death of old Swedes.
An uptick in deaths from or with COVID-19 in the Scandinavian nation late last month, in common with the rest of Europe, has prompted a deluge of condemnation: Sweden’s strategy to control the coronavirus has “failed”.
Yet Sweden does not stand out in terms of coronavirus deaths.
The prevailing image of disaster and catastrophe — journalist Garry Linnell says Sweden has been “ravaged” — is sensationalist rubbish, reflecting poor numeracy, poor vocabulary or perhaps a desire to promote what I call health fascism.
Globally, Sweden is 22nd in terms of COVID-19 deaths per million; in Europe it is 12th (excluding microstates).
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'Worst moment of whole epidemic': Britain says new virus strain up to 70 per cent more transmissible
By Bevan Shields
December 20, 2020 — 5.37am
London: A mutated coronavirus strain up to 70 per cent more transmissible than earlier versions is spreading rapidly across Britain, shattering the Christmas plans of tens of millions and stoking fears of a major third wave in Europe.
Epidemiologist John Edmunds, a key member of the government's scientific advisory group for emergencies, described the Sunday morning Australian-time announcement as "the worst moment of the whole epidemic".
The new strain is concentrated in London and swathes of south east England, which have now been placed into an immediate, strict lockdown to prevent households from celebrating Christmas together.
Non-essential shops have also been ordered to close in what should have been the busiest trading week of the year, and domestic and international travel is banned for people in the worst-affected areas.
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Climate Change
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The costs of tackling climate change keep on falling
Over the long term, humanity does not face a trade-off but a clear win-win.
Adair Turner Contributor
Dec 13, 2020 – 12.55pm
In 2008 the UK Climate Change Committee, which I then chaired, estimated that reducing Britain’s greenhouse gas emissions by 80 per cent below 1990 levels by 2050 would cost 1-2 per cent of gross domestic product in that year. In its latest report, it reckons a 100 per cent cut will cost just 0.5 per cent of 2050’s GDP.
Global cost estimates have also collapsed. In 2006, the Stern Review of the Economics of Climate Change foresaw a cost of 1 per cent of global GDP to reduce global fossil fuel-related emissions from 25 gigatonnes to 18 Gt by 2050, with zero emissions only achieved after 2075. A recent report from the Energy Transitions Commission suggests a cost below 1 per cent to achieve net-zero emissions globally by mid-century. This is a trivial sum to save the world from catastrophic climate change.
The estimates keep dropping because key technologies keep getting cheaper. Solar electricity costs have fallen 80 per cent in 10 years, and even more in favourable locations such as India and the Middle East. Wind costs are down around 60 per cent, and batteries are 85 per cent cheaper.
In road transport, electrification will make consumers across the world better off. In other sectors, such as steel, aviation and shipping, decarbonisation will increase costs but far less than once assumed. Ten years ago most studies did not even try to price a 100 per cent emissions reduction, since the “last 20 per cent” seemed prohibitively difficult. We now know that total decarbonisation is technically feasible at very low cost.
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1c-a-litre subsidy to keep refineries open and save jobs
By Rob Harris
December 14, 2020 — 12.01am
New taxpayer-funded subsidies for Australia's remaining oil refineries will be urgently brought forward to January 1 as international travel bans gut fuel demand and send the domestic industry spiralling towards plant closures and job losses.
The federal government will on Monday announce it will fast-track taxpayer-funded production payments of a minimum one cent for each litre of petrol, diesel, or jet fuel produced by major domestic refineries that are continuing operations in Australia.
BP have announced they will shut the 65-year-old Kwinana oil refinery in Perth and convert the site into a fuel import terminal.
To receive the payment, expected to be worth more than $2.3 billion over 10 years, refineries must agree to continue to operate for the duration of the program with support contingent on a commitment to an open book process and long-term self-help measures to further inform the development of the package.
The government argues keeping refineries open will suppress the price of fuel and modelling suggests wholesale prices would increase by almost 1¢ per litre if production ended, adding up to $4.9 billion over a decade.
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Royal Commissions And The Like.
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No aged-care sanctions in second coronavirus wave
The federal aged-care watchdog failed to issue a single sanction in Victoria during the height of the state’s deadly second wave as coronavirus infections spiralled out of control, tearing through the state’s nursing homes and killing more than 600 residents.
The Aged Care Quality and Safety Commission did not impose its harshest disciplinary action on any Victorian nursing home in the three months to the end of September, despite forcing 18 facilities to address immediate and severe risks, according to a newly published summary of the regulator’s activities.
The document shows 74.4 per cent of Victorian aged-care homes assessed during that period failed to meet one or more quality and safety standards, compared with 23 per cent in NSW and 30 per cent in Queensland.
In Victoria, 251 of the assessments were conducted “on site” and 1456 were conducted remotely. The report shows 18 homes failed five to 10 requirements and four failed 11 to 15.
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National Budget Issues.
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Beginning of the end for the ratings agencies’ dubious influence
Ross Gittins
Economics Editor
December 14, 2020 — 12.00am
Walt Secord, Labor’s Treasury spokesman in NSW, and Michael O’Brien, Liberal Opposition Leader in Victoria, should be condemned for their attempts to score cheap political points when Standard & Poor’s downgraded its AAA credit ratings of both state governments last week. Fortunately, the politicians’ unprincipled carping fell flat.
Both men wanted to have their cake and eat it. Neither was prepared to criticise their government’s big spending to alleviate the state’s pandemic-driven high unemployment – nor admit that, had their party been in power, it would have done the same – but both wanted to portray the consequent downgrade as proof positive of their political opponents’ financial incompetence.
But the deeper truth is that the financial markets and economists have stopped caring about the august pronouncements of the three big American ratings agencies.
Their decline has three causes. First was their loss of credibility following their role in the global financial crisis of 2008. Not only did these supposed paragons of financial precaution fail to foresee the looming collapse, but they actually contributed to it by selling triple-A ratings to the promoters of private-sector securities subsequently discovered to be “toxic debt”.
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https://www.afr.com/politics/federal/china-bans-australian-coal-as-trade-war-worsens-20201214-p56nfz
China bans Australian coal as trade war worsens
Andrew Tillett Political correspondent
Dec 14, 2020 – 9.41pm
The Morrison government was urgently seeking answers from China on Monday night after reports Beijing had formally banned $14 billion of Australian coal exports in its latest trade strike.
After months of an unofficial 'go slow', China's National Development Reform and Commission reportedly issued an edict on Saturday banning Australian coal, ostensibly to deal with surging coal prices.
According to state-run media outlet The Global Times, China's top economic advisory body decided to allow power stations to import coal without any clearance restrictions, with the exception of Australia. It's unclear when the ban on Australian coal will be lifted.
Russian, Mongolian and Indonesian coal producers stand to be the beneficiaries and make up the gap, according to the newspaper.
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'Generations to recover': State finances face decades-long COVID hit
By Shane Wright
December 14, 2020 — 6.04pm
Some Australian state budgets could take generations to recover from the pandemic recession, with warnings the plans of state and territory governments to rebuild their economies through record spending on infrastructure are likely to falter.
Amid predictions the Reserve Bank will pump at least another $100 billion into the economy by extending its quantitative easing program, ratings agency S&P Global said for many taxpayers the cost of the recession and their government's response to it will be an ever-present legacy.
Every state and territory bar Western Australia will this year report a budget deficit with each administration sharply increasing debt, in part to fund a sharp increase in spending on infrastructure projects such as roads and social housing.
S&P, which last week cut its rating of Victoria by two levels and reduced NSW's AAA rating for the first time, said the pandemic had delivered a $140 billion blow to the finances of every state and territory over the next three years.
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Homeless rate to spike in 2021 as JobSeeker cuts force thousands beneath the poverty line
· NCA NewsWire
Australia’s homeless rate will surge by 9 per cent next year when cuts to the JobSeeker payment’s coronavirus supplement heap more misery on those living below the poverty line, a new report predicts.
On January 1, the coronavirus supplement for JobSeeker – which rose to $550 a fortnight during the pandemic – will be slashed from $250 to $150.
During the three-month period after New Year’s Day, a single person with no children will be paid $357.85 a week.
The supplement will then scrapped altogether on March 31, leaving a single person with no children on $282.5 a week – or $40 a day.
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Reforms a gift for nation’s charities
Josh Frydenberg has struck a deal with state and territory treasurers to roll out major reform across the charities sector, cutting red tape for thousands of not-for-profits and removing strict financial reporting rules for more than 5000 charities.
With more than 57,000 registered charities contributing 8 per cent of the nation’s GDP and employing 1.3 million workers, the shake-up comes as more organisations move to online fundraising and operate across state borders.
Under the changes ratified by the Council on Federal Financial Relations, considered the “most significant” reform in decades, charities will no longer be required to obtain fundraising authorisation across multiple jurisdictions.
Financial reporting requirements for organisations classified as large charities, with annual income of more than $1m, will also be overhauled by mid-2021, allowing eligible organisations to avoid producing time-consuming audited financial statements.
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‘Solvency phase’: RBA’s Jonathan Kearns warns of new bank tests
The Reserve Bank has warned that the banking system faces a new solvency test in the pandemic crisis now that the liquidity phase has mostly passed.
In a speech to the Australasian Finance and Banking Conference on Tuesday, RBA head of stability Jonathan Kearns said the resilience of the system up until now didn’t mean that the risks had passed.
“We’ve had the largest contraction in global output since the Great Depression,” Mr Kearns said.
“And as that impairs some households’ and businesses’ ability to repay their loans, the liquidity phase of the crisis is giving way to a solvency phase.”
The economic shock, he said, was much larger than it was in the global financial crisis, and for many decades before then.
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Coal ban breaches China FTA, says PM
Dec 15, 2020 – 7.46pm
Prime Minister Scott Morrison has accused China of breaching trade obligations with its blacklisting of Australian coal, as experts warned miners will be forced to cut production because alternative markets cannot absorb the volumes of coal abandoned by China.
"What is important to note here is that if that were the case, then that would obviously be in breach of WTO rules," Mr Morrison said of the apparent extension of the ban on Australian coal.
"It would be obviously in breach of our own free trade agreement and so we would hope that is certainly not the case."
The continued blacklisting of Australian coal sparked big falls in local coal mining stocks yesterday such as Yancoal, New Hope and Whitehaven and wiped a further 7 per cent from the value of Dalrymple Bay Infrastructure, whose coal port business floated on the ASX last week.
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https://www.afr.com/markets/equity-markets/stealth-demand-for-iron-ore-drives-boom-20201216-p56o44
Stealth demand for iron ore drives boom
The reason why iron ore is at near record highs after the worst year for the global economy in a decade is: Chinese property developers. They are building 14,000 Eureka Towers per year.
James White
Dec 17, 2020 – 8.16am
The rise in the iron ore price over 2020 has been the one positive economic shock for Australia in this strangest of years. The return to 2012 levels has come with little fanfare and considerable uncertainty.
China is building 14,000 Eureka Tower's each year. Paul Rovere
How can the worst year for the global economy in a decade drive near record highs for red dirt?
There is a simple, and broadly correct, explanation for the rise in the iron ore price. It is “big numbers”; the idea that regardless of economic cycles, China requires an enormous amount of anything to accommodate its population.
The best rebar and cement example is the property sector where last year 1.7 billion square metres of property was sold.
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Our economic recovery a long and unpredictable path to tread
Australia’s economic recovery is predicated on factors outside the control of Scott Morrison and Josh Frydenberg, which is guiding the government’s cautious approach.
New COVID-19 outbreaks, the pace of Australians returning to work, a successful vaccine rollout and China’s demand for iron ore and metallurgical coal are the great unknowns confronting Treasury analysts.
With JobKeeper and JobSeeker coronavirus payments ending at the end of March, national cabinet leaders knew they had to do everything possible to get businesses back online and Australians back into jobs by Christmas.
The three-month extension of welfare payments was designed to avoid the worst of the fiscal cliff. But the Treasurer knows there is a long and unpredictable path to tread before Australia can get back to firing on all economic cylinders.
With the unemployment rate in November falling to 6.8 per cent, consumer confidence surging, the housing and property markets booming and iron ore hitting 2013 levels, there is plenty to be optimistic about.
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Population growth slumps to 15-year low as people leave Australia
By Shane Wright
December 17, 2020 — 8.52pm
Australia’s population growth has slumped to its slowest rate in almost 15 years with the nation suffering a net flow of people out of the country as the international border remains closed due to the coronavirus pandemic.
Data from the Australian Bureau of Statistics released on Thursday shows for the first time in almost six years, Victoria was not the nation’s fastest growing state or territory in what is shaping as a major economic headwind for the country.
In the June quarter the national population increased by 29,300 to 25,687,041. It was the smallest quarterly increase since June 1993 when the country was emerging from the 1990-91 recession.
Over the past 12 months, the population lifted by 321,300 but more than two-thirds of that occurred in the March and September quarters, before the advent of the coronavirus pandemic forced the virtual end of international travel and migration.
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Floating like a butterfly ... but there’s a sting in the budget update
By Shane Wright
December 17, 2020 — 3.50pm
It’s a strange day in budget hell when a deficit of “only” $197.7 billion, and a shortfall of $45.7 billion in a decade’s time, is couched as good news.
A noticeably upbeat Treasurer Josh Frydenberg bounced around a press conference with the energy of a prize fighter ahead of a title bout, talking about the economy “rebounding strongly” with people back spending and working and moving freely across the nation.
Treasurer Josh Frydenberg and Finance Minister Simon Birmingham are holding a press conference after the unemployment rate fell to 6.8 per cent.
“The updated numbers are encouraging and better than what was expected at budget just 10 weeks ago,” he said.
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Budget update shows $15.9b improvement but unemployment still a worry
By Shane Wright and Jennifer Duke
Updated December 17, 2020 — 6.16pmfirst published at 12.37pm
The Morrison government won’t start trying to repair the budget bottom line until 2024, revealing it is concerned about entrenched high unemployment despite a $15.9 billion improvement in the nation’s finances due to higher iron ore prices and a slightly stronger economy.
Unveiling the mid-year economic and fiscal outlook just 10 weeks after he handed down the 2020-21 budget, Treasurer Josh Frydenberg said the financial outlook remained largely hostage to the ongoing uncertainty around the coronavirus pandemic.
Australia's unemployment rate has fallen to 6.8 per cent with the creation of 90,000 more jobs between October and November.
On October 6, Mr Frydenberg forecast a deficit of $213.7 billion this year. On Thursday, this had improved to $197.7 billion due to better company tax collections and lower costs associated with the JobKeeper and JobSeeker program.
Next year’s expected deficit has been upgraded to $108.5 billion from $112 billion.
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Health Issues.
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Medicare needs to 'adapt and evolve' to cope with complex health needs
By Rachel Clun
December 15, 2020 — 3.54pm
The most comprehensive review of the Medicare Benefits Schedule ever conducted found the system has failed to keep pace with advances in surgical techniques, medical discoveries and new treatments.
The finding comes from the final report from the MBS taskforce. The five-year review is the largest examination of Medicare since the system was introduced in 1984.
The "fee-for-service" MBS model provided "inappropriate incentives" in some instances and can perpetuate inefficiency, the report said. While that model was still appropriate for some services, the taskforce said the public healthcare system needs to evolve as health needs continue to become more complex.
"Australians are now older, living longer, and with more complex and chronic health issues, and the fee-for-service approach of the MBS needs to adapt and evolve to meet those needs," the report said.
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Another review finds Medicare is sick. Will we ignore this one too?
By John Dwyer
December 16, 2020 — 3.16pm
Five years in the making, the latest review of Australia’s universal health insurance scheme, Medicare, has concluded that the system is no longer adequately structured to improve the health of Australians. In truth, this has been increasingly obvious for the past 20 years.
An ever-increasing number of Australians, with largely lifestyle-induced chronic medical problems, experience a diminished quality of life. Caring for the chronically ill absorbs most of our health dollars. It is hardly surprising (or new) that the most important recommendation from the review addresses the inadequacy of our attention to the prevention of disease.
Australia spends less than 1 per cent of the health budget on prevention. For many years reviews of the world’s healthcare systems have consistently criticised us for this failure and pointed out that the percentage of Australians with adequate health literacy (40 per cent) is the lowest among OECD countries. Our general practitioners' time is consumed with treating established disease.
Faced with similar problems many countries are focussed on providing the infrastructure to support a change in health culture wherein people visit their doctor for help in staying well, not just for help with a problem.
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‘The time is now’ for Australia to harness new vaccine technology
By Emma Koehn
December 18, 2020 — 11.55am
The resurgence of COVID-19 cases in Sydney is a salient reminder of how crucial a successful vaccine will be in paving a path to normality.
News of a growing cluster of cases on Sydney’s northern beaches broke one week after The Sydney Morning Herald and The Age reported the University of Queensland and CSL had shelved Australia’s home-grown vaccine project, leaving the Oxford/AstraZeneca vaccine as the only option for local production.
The federal government has also ordered doses of the Pfizer/BioNTech vaccine, which has shown efficacy of up to 95 per cent and has been the first coronavirus vaccine to launch into communities. However, there’s no chance of that vaccine being produced in Australia for the time being.
CSL has been quick to quell investor and media expectations that it can make the product onshore, citing the difficulties in preparing its facilities for the mRNA vaccine format.
The area of mRNA technology is still new and involves injecting recipients with genetic material — “messenger RNA” with the viral protein, in turn training the body to fight the virus without exposing it to the real thing.
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Junior doctors seek tens of millions in claimed unpaid wages
By Kate Aubusson
December 19, 2020 — 5.30am
Junior doctors have launched a class action to recoup tens of millions of dollars in unpaid wages from NSW Health they say were earned caring for patients under exploitative conditions.
Law firms Maurice Blackburn and Hayden Stephens & Associates lodged the class action in the Supreme Court of NSW on Thursday night on behalf of more than 10,000 junior medical officers.
At a time when healthcare workers are being hailed as heroes, lawyer Hayden Stephens said NSW’s overworked trainee doctors were asking to be treated with respect in their workplace and their hours of work acknowledged.
“The widespread underpayment of junior doctors has occurred for at least six years and most likely longer under the watch of the NSW Department of Health and many of the state’s local health districts,” Mr Stephens said.
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International Issues.
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'Lost all sense of perspective': Fears of another Wall Street bubble
By Michael Cogley and Jonathan Jones
December 14, 2020 — 11.13am
Lofty valuations for tech companies are leading the industry into bubble territory not seen since the late Nineties, experts have claimed. The warning came after Airbnb shares more than doubled in their trading debut on Thursday (US time), propelling the home rental company to about a $US100 billion ($132 billion) valuation in one of the biggest ever first-day rallies.
In the same week, food delivery company DoorDash's market debut saw its shares soar to $US189 in New York on Wednesday after being priced at just $US102 a day earlier. The surge valued the company at $US72 billion.
Meanwhile, Snowflake, a cloud storage computing firm, saw its valuation surge to $US116 billion, with its shares rising by 242 per cent since it floated.
"This speaks to a market that has clearly lost all sense of perspective," said Michael Hewson, an analyst at CMC Markets. "I am staying well clear until there is some rationality," added Richard Windsor, founder of research company Radio Free Mobile. "Valuations are being ignored and instead being supported by hype."
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Trump backers undone by US Covid crisis, election fail
At the time of writing 299,000 Americans have died from COVID-19. The next update will push that figure past the 300,000 mark, after which its only a matter of time before it cracks 350,000, then 400,000.
Where will it stop?
Soon more than one in every 1,000 American’s will have died from COVID-19 in the space of one calendar year. Extraordinary. Reflect on that as you replay Donald Trump’s regular droning on about how well he’s managed this crisis. Fake news.
Yet Trump continues to hold rallies without social distancing. He continues to encourage others not to wear masks, mocking Joe Biden for both doing so himself and wanting to impose mask wearing on others to help bring the virus under control.
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Trump’s challenge is over
The Electoral College meets Monday to cast its votes for President, officially marking Joe Biden as the election winner. President Trump’s legal challenges have run their course, and he and the rest of the Republican Party can help the country and themselves by acknowledging the result and moving on.
Mr. Trump’s last legal gasp came Friday evening when the Supreme Court declined to hear the Texas lawsuit seeking to overturn the election results in Georgia, Wisconsin, Michigan and Pennsylvania. As we predicted, the Court cited Texas’s lack of legal standing to challenge how another state manages its elections.
Some on the right claim that Justices Samuel Alito and Clarence Thomas dissented, but this is wrong. The Justices said they would have taken the Texas case as a “bill of complaint” when states sue other states.
This is a technical point that concerns the Court’s case management, and the two Justices have a long-time view that the Court should hear more of these direct state appeals. We happen to agree, but in this case the Texas claim was outside constitutional bounds. Justice Alito (joined by Justice Thomas) added that he would “not grant other relief.” This was not a dissent on the merits of the Texas claim.
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Electoral College confirms Trump's defeat and proves American democracy's strength
December 15, 2020 — 9.36am
Washington: In the end, American democracy passed its stress test.
On Tuesday (AEDT) the members of the Electoral College met in state capitals across the US to officially certify Joe Biden as the winner of the presidential election.
California's 55 electoral votes put Biden over the top, clearing the 270-vote mark that affirmed he will be the nation's next president.
When all the votes are in, Biden was expected to have 306 to 232 for Trump. Biden topped Trump by more than 7 million in the popular vote nationwide.
It's a moment that would usually be regarded as a formality and attract little attention. But this year, it took on a new symbolic power because of Donald Trump's refusal to accept defeat.
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'Scenarios of disruption': sci-fi writers asked to help guard France
By Henry Samuel
December 15, 2020 — 8.12am
Paris: Attacks from floating pirate states and hackers on soldiers with neural implants are just two scenarios dreamed up by a "Red Team" of 10 leading science fiction writers tasked with helping the French army anticipate future threats to national security.
"Astonish us, shake us up, take us out of our habits and comfort zone," Florence Parly, the French defence minister, told the writers at a Defence Innovation Forum this month.
Many of the "scenarios of disruption" that they have been asked to imagine to challenge military planners are to remain top secret to avoid giving ideas to potential enemies. They were asked to stick to potential threats between 2030 and 2060.
However, some scenarios have been made public in recent days.
In one, P-Nation, climate change has led to flooding and swamp-like conditions in many of the world's coastlines. In France, the Dunkirk and Calais area is regularly flooded.
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With little disruption, the electoral college makes it official
Lisa Lerer
Dec 15, 2020 – 5.39pm
Washington | In the end, democracy carried the day.
Wisconsin's 10 electors calmly walked into a quiet State Capitol on Monday (Tuesday AEDT), seeing more police officers than protesters. As they waited to officially cast their ballots, the socially distanced Democratic officials and activists took selfies in an ornate wood-panelled room.
When the vote finally came, one elector added hearts to the checks on the lines for the Democratic president ticket, in a rare display of emotion.
"We made it," said Governor Tony Evers, relief flooding his voice, after announcing the final tally – a unanimous vote for Joe Biden and Kamala Harris.
When the electoral college cast its ballots for Mr Biden on Monday, the moment felt both extraordinary and repetitive. After all, the President-elect and his team have been winning the election since November, emerging victorious again and again in court cases, legislative hearings and recounts.
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Why China has beaten up Australia harder than anyone else
We are a perfect example for Beijing to show other fence-sitters that they will have to make a choice.
Hugh White Contributor
Dec 16, 2020 – 12.21pm
Throughout 2020, as our relationship with China collapsed and our economic opportunities evaporated, Canberra has clung to a homely analogy. Beijing is just a schoolyard bully, and if we stand up to them they will soon slink away.
That makes it all look easy, but the analogy is dangerously misleading. This is not a schoolyard, China is not a schoolboy, it hasn’t slunk away, and nothing about our predicament is as easy as the government would like us to believe.
Instead of backing down, Beijing has week after week relentlessly escalated the pressure both diplomatically and economically, and there is no reason to expect this to stop.
We are being steadily squeezed out of the market which has powered our prosperity for decades, and which offers by far the best prospects in the years ahead. As a result our economy may never be the same again. So we need to find a better way to understand what is happening.
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https://www.afr.com/markets/debt-markets/fed-vows-to-buy-bonds-for-some-time-yet-20201217-p56o7b
Fed vows to buy bonds for some time yet
Howard Schneider, Ann Saphir and Jonnelle Marte
Dec 17, 2020 – 7.44am
Washington | The Federal Reserve promised to keep funnelling cash into financial markets further into the future to fight the recession, even as policymakers' outlook for next year improved following initial rollout of a coronavirus vaccine.
Repeating a pledge to keep its benchmark overnight interest rate near zero until an economic recovery is complete, the US central bank said it would also now tie its program of monthly government bond purchases to that same goal.
"Together, these measures will ensure that monetary policy will continue to deliver powerful support to the economy until the recovery is complete," Fed chairman Jerome Powell said in a news conference after the end of the central bank's latest policy meeting.
The bond purchases would continue "until substantial further progress has been made toward the committee's maximum employment and price stability goals", the Fed's rate-setting committee said in its unanimous policy statement.
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China might prove Trump right, forced to manipulate its currency after all
Stephen Bartholomeusz
Senior business columnist
December 15, 2020 — 3.30pm
When the US Treasury Department branded China a currency manipulator last year the declaration was made in the absence of any evidence. Sometime in the next 12 months, if not sooner, that evidence might emerge.
In recent years China’s central bank has generally only intervened in the market for its currency to support its value and head off any accusations it was manipulating the value of the yuan to boost the competitiveness of its exports.
It has generally been successful in keeping the value of the yuan below the 7:1 relationship with the US dollar that would trigger a US reaction. So, to the extent that it has “manipulated” its currency, it has been to make it stronger, not weaker.
The pressure on the People’s Bank of China to adopt a different approach and intervene to force the value of the yuan down against China’s key trading partners is mounting. A surge in the value of the currency in the past six months is eroding the competitiveness of China’s economy, threatening to make it a victim of its own successes.
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Australia to take China to the WTO over barley tariffs
By Eryk Bagshaw
Updated December 16, 2020 — 1.42pmfirst published at 12.51pm
Australia has launched its first World Trade Organisation investigation in a year-long $20 billion trade fight with China, taking an increasingly bitter dispute to the multilateral level.
Trade Minister Simon Birmingham on Wednesday said Australian officials had notified Beijing and asked the WTO in Geneva to begin the investigation into tariffs that have wiped out Australia's barley trade with China.
The step is largely symbolic and could take years to resolve. The WTO has been rendered mostly inoperable by the Trump administration, which has blocked appointments it views as unsympathetic to US trade interests, leaving only one out of seven judges on the appeals court.
But it is a significant formal escalation in Australia's ongoing stoush with China, which now covers beef, barley, wine and coal among half-a-dozen industries after a diplomatic dispute over the coronavirus inquiry, human rights and national security.
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Macron comes down with COVID, putting all European leaders at risk
Hans van Leeuwen Europe correspondent
Dec 17, 2020 – 11.16pm
London | French President Emmanuel Macron has succumbed to COVID-19 and will self-isolate until at least Christmas Eve, in a revelation that potentially puts most other European leaders at risk.
In the past week, the 42-year-old Mr Macron attended a two-day summit with the other 27 EU leaders, and met separately with the Spanish and Portuguese prime ministers as well as the Egyptian President Abdel Fattah al-Sisi.
Spanish Prime Minister Pedro Sanchez and European Council chief Charles Michel are self-isolating after both joined Mr Macron at a 60th anniversary event for the Organisation for Economic Cooperation and Development. Septuagenarian OECD boss Angel Gurria and several other national leaders are also quarantining until they get test results.
In photographs with other leaders this past week Mr Macron is diligently masked but is seldom social distancing - in fact, he is often leaning in and clutching an arm.
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Wall Street braces for a different 2021 with tech giants to take a back seat
By Jeran Wittenstein
December 18, 2020 — 8.19am
As 2021 approaches, many on Wall Street are bracing for unfamiliar territory: a year when technology companies may not be the biggest stars of the stock market.
The Nasdaq 100 Index is on track for its best year in more than a decade with a 43 per cent advance so far in 2020, led by companies with triple-digit gains and eye-watering valuations like Zoom Video Communications and DocuSign. That's raising speculation that the rally may fizzle at least for a while in 2021, when the group's earnings growth is projected to lag behind less-expensive sectors like industrials.
"It's a matter of what's the more attractive portion of the market," said Michael O'Rourke, chief market strategist at JonesTrading. "Are you going to pay 40 or 50 times sales or buy something cheaper and wait for the business to normalise?"
Over the past few months, investors have already taken a shine to the latter group as they prepare for a post-pandemic world in 2021. Value, cyclical and small-cap stocks are surging thanks in part to successful vaccine trials that have sent more economically sensitive sectors like energy and financials soaring. Despite notching a record last week, the Nasdaq 100 has done little since its previous high on September 2. Meanwhile, the S&P 500 Pure Value Index is up 16 per cent and the Russell 2000 Index of small-cap companies has gained 20 per cent over the same stretch.
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'Our cyber Pearl Harbour': US politicians alarmed by scale of attack
By Matthew Knott
December 19, 2020 — 10.12am
Washington: Senior American politicians are growing increasingly alarmed at the extent of a massive foreign hack of US government departments, with one congressman describing the breach as "our modern-day cyber Pearl Harbor".
While leading Republicans have demanded retribution for the attack, which has been widely attributed to the Russian government, US President Donald Trump remained silent about the issue.
The US National Nuclear Security Administration, which maintains the US nuclear weapons stockpile, is among the departments that have found evidence of hacking.
The Treasury Department, Homeland Security Department, Defence Department and National Institutes of Health are also believed to have been hacked, alongside private firms such as cable giant Cox Communications.
The hackers have been monitoring government networks since March after compromising the widely-used software made by IT company SolarWinds Corp.
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Joe Biden starts to thaw America’s deepest freeze
The first snowfall of winter has painted Washington white, a reminder that at least the seasons are acting as they should in the nation’s capital.
The same cannot be said for America’s President. As Donald Trump approaches his final Christmas in the White House, he continues to fume and stew over an election he says was stolen from him.
It has now been six weeks since it became clear that Joe Biden won the November 3 poll, a victory made official this week when the electoral college cast its votes for him, by 306 to 232.
The formal vote of electoral college members was seen by many as the likely end to Trump’s fight to overturn the result, simply because it is now impossible to reverse the outcome.
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Trump downplays Russia hack, clashes with Pompeo
By David MIllward
December 20, 2020 — 7.00am
Washington: Donald Trump is at odds with one of his closest allies, Secretary of State Mike Pompeo, over who was responsible for the massive cyber-attack on the US government.
While Mr Pompeo fell into line with the consensus that Russia orchestrated the hack, Mr Trump suggested without evidence that China may have been the culprit, and that it may have also helped rig the election in favour of Joe Biden.
Playing down the severity of the attack, the US President wrote: "The Cyber Hack is far greater in the Fake News Media than in actuality.
"I have been fully briefed and everything is well under control. Russia, Russia, Russia is the priority chant when anything happens because Lamestream is, for mostly financial reasons, petrified of discussing the possibility that it may be China (it may!).
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Chinese military expansion into Pacific ‘poses greatest threat to America and allies’
· The Times
China represents the most “comprehensive, long-term” threat to the US and its allies of any world power, the US military has claimed.
The warning comes amid fears about the true purpose of a $200 million fishing complex Beijing is building close to Australia’s waters.
American maritime force chiefs said that China’s naval and ballistic power risked “undermining the existing world order”.
In a joint report, the chiefs of the Navy, Marine Corps and Coast Guard singled China out as the gravest threat. They argued that the increase in its naval power, warship-building and proliferation of long-range precision missiles meant that the US could no longer presume “unfettered access to the world’s oceans in times of conflict”.
The report also identified Russia as a serious though lesser threat.
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I look forward to comments on all this!
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David.
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