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In India, while the is spread in the countryside, we are seeing the COVID picture slowly improve.
In the US there seems to have been some success in the Israel / Palestine war with a cease fire in place while domestically we see Biden’s popularity at about 60%. So far so good you would think.
In the UK we have the lock-down’s relaxing as we worry about some variant strains that seem to be emerging.
In OZ the vaccination roll out is slowly picking up and the buzz re The Budget passes. Stupid move of the week is planning to build a gas fired power station in the Hunter while amazement is rife on the National win in the Upper Hunter bye-election!
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Major Issues.
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https://www.afr.com/world/north-america/the-new-inflation-paradigm-for-investors-20210516-p57scx
The new inflation paradigm for investors
Colby Smith and Tommy Stubbington
May 16, 2021 – 1.14pm
After three decades as a bond investor, Jim Leaviss has witnessed plenty of false alarms over the return of one of the biggest debt market nemeses: inflation. But as his screen flashed with Wednesday’s US consumer price index figures – showing a 4.2 per cent annual rise – he felt the stirrings of a new era in financial markets.
“It’s always been right to be sceptical when someone says ‘this is the year that inflation comes back’. But for the first time you can say this time is different,” says Leaviss. “The pandemic might be the systemic earthquake that changes the inflation outlook we have been used to for the past 30 years.”
A burst of inflation in the northern hemisphere summer was always inevitable once lockdown measures began to ease. A year ago the spread of COVID-19 had crushed economies around the world, sending commodity prices plummeting and even pushing the cost of a barrel of oil in the US below zero.
Central bankers – particularly at the US Federal Reserve – have been at pains to insist the current bout of price rises is temporary, and will not push them to an early unwinding of the massive monetary stimulus actions they launched last year to combat the fallout from the pandemic.
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Western pressure on Iran best strategy for Middle East peace
Instead of the so-called nuclear deal, the Biden administration should maintain the sanctions on the autocratic theocracy to make it clear that promoting conflict throughout the region is unacceptable.
Alexander Downer Columnist
May 16, 2021 – 12.38pm
All international conflicts have one thing in common: politics. So let’s have a look at what is now happening between the Israelis and the Palestinians.
Many observers and governments are simply partisans on this issue: no matter what the Palestinians do, they are victims, and so it is justified. But it helps to understand the politics behind this crisis. After all, the Israelis and the Palestinians are not two football teams competing in a benign contest.
In Israel there have been four elections over the past two years, the most recent of which was in March. None of these elections has produced a conclusive result.
That Prime Minister Benjamin Netanyahu has held on at all is a miracle of political acrobatics, but until last week it looked as if his run might be coming to an end. So obviously the internal political situation in Israel is unstable.
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https://www.afr.com/policy/economy/what-s-on-the-other-side-of-the-economic-boom-20210513-p57rrt
What’s on the other side of the economic boom?
As the stimulus fades and vaccines are rolled out, Australia faces the prospect of subdued growth.
John Kehoe Economics editor
May 14, 2021 – 3.09pm
The stimulus-fuelled economy is poised to boom this year, propelled by strong jobs growth and consumer spending, this week’s federal budget outlines.
The Reserve Bank of Australia and market economists broadly agree on a rosy economic outlook for the next 12 months.
Indeed, the latest monthly employment report from job website Seek this week showed new job ads increased 12 per cent in April – the second consecutive record-breaking month of job ads in Seek’s 23-year history.
The “miracle” recovery will likely roll on until at least the next federal election.
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https://www.afr.com/politics/federal/how-australia-got-badly-out-in-front-on-china-20210428-p57n8x
How Australia got badly out in front on China
Since 2016, Australia has embarked on a policy U-turn, adopting a strategy to push back, call out and be out in front in needling and confronting China.
Max Suich
May 17, 2021 – 12.01am
Seventy years ago when The Australian Financial Review launched, Australian armed forces were embroiled in the Korean War and were still, in a minor way, part of the armed forces that occupied Japan.
Australia, deeply traumatised by the Pacific war, was painfully negotiating an unsatisfyingly limited security assurance to protect us from Japanese resurgence. That became the ANZUS treaty. The paper’s modest voice reflected those uneasy times.
Sixteen years later, in 1967, when I arrived in Tokyo, as the AFR correspondent, the paper, now a daily, was ahead of its time: a confident advocate of an economic and cultural transformation in Australia that welcomed the end of White Australia and Japan as a vital new trading partner, and urged profound changes in Australian attitudes to race and the Asian neighbourhood.
Nevertheless, the paper was apprehensive of China.
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In Asia, our diplomatic failures risk repeating themselves
Max Suich
May 16, 2021 – 10.30pm
It was in Tokyo in the 1970s that I saw the stubborn, visceral hostility of the Australian policy machine to responding to a powerful new Asian power.
In this case it was about providing even a totally disarmed Japan with certainty for its resources stream from Australia.
Towards the end of my four years in Japan, I filed to The Australian Financial Review a series on Japan’s “resources diplomacy” that caused an absurd consternation in Canberra’s Trade and Foreign Affairs departments: the shocking news was that Japan was conducting, in co-ordination with its big business leaders, a multi-ministry and carefully implemented “smile” diplomacy towards Australia, seeking to dramatically expand official, personal, trade, investment and cultural ties to underpin the contractual arrangements for the import of iron ore, coal, wool and agricultural products.
This diplomacy of Japan might reasonably be compared with the overt accommodating diplomacy of China, at least until 2016, although according to our intelligence services, it provided cover for the attempted penetration of our politics and intimidation of students and the Australian Chinese community.
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https://www.afr.com/policy/economy/refineries-get-2b-handout-to-stay-open-20210516-p57sf3
Refineries get $2b handout to stay open
Phillip Coorey Political editor
May 16, 2021 – 10.30pm
Gladstone | The taxpayer will pay the country’s two remaining oil refineries up to $2.3 billion to stop them closing down, a move that would have cost 1250 jobs, increased the cost of petrol, and left Australia entirely reliant on imported petrol and diesel at a time of growing regional tension.
Prime Minister Scott Morrison, who has made Queensland the first stop on his post-budget tour, will announce the payments at Ampol’s Lytton refinery in Brisbane on Monday, saying it was a matter of economic and national security.
The money, to be shared between the two refiners, consists of a $2 billion subsidy to manufacture petrol and diesel over the course of this decade and $302 million to help upgrade their facilities. It comes after the refiners rejected an initial proposal by Energy Minister Angus Taylor for a 1c-per-litre subsidy.
Mr Morrison said the decision was effectively a choice between paying the money or losing the 1250 jobs and paying another 1c per litre for fuel.
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https://www.afr.com/world/asia/why-business-blames-canberra-for-the-china-mess-20210514-p57rus
Why business blames Canberra for the China mess
Australians doing business with China are frustrated with Beijing’s trade coercion and terrified at the prospect of war, but many blame Scott Morrison and not Xi Jinping for the disintegration in relations.
Michael Smith China correspondent
Updated May 16, 2021 – 5.34pm, first published at 5.19pm
Business leaders are frustrated about the disintegration of Australia’s relationship with China. They hope things will miraculously return to normal soon even though the evidence points to relations getting worse before they will get better.
Significantly, many executives doing business with China privately blame Prime Minister Scott Morrison rather than an increasingly assertive Beijing for the collapse of diplomacy, which has now moved on from trade tariffs to talk of war.
I was invited last week to speak to a group of Australians running companies doing business in China. The breadth and scope of their experience was impressive.
Some had been travelling to China since the 1980s and had stories of dining with senior leaders, bugged hotel rooms and a close encounter with President Xi Jinping.
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https://www.afr.com/companies/telecommunications/the-big-disconnect-my-telco-trauma-20210517-p57smq
The big disconnect: My telco trauma
Moving house translates into a telco ordeal, courtesy of Telstra and NBN Co. No end in sight. How is this still happening?
Jennifer Hewett Columnist
May 17, 2021 – 6.05pm
To my surprise, I am almost beyond anger. Call it exhaustion by Telstra. By Monday, my SMS messages to the Telstra team have a vaguely pathetic tone. “Please call. I no longer have NBN or Foxtel service.” I feel rejected, dejected, defeated.
I have regularly heard Andy Penn’s rationale for this syndrome. It’s the same as generations of Telstra chief executives before him. He explains that Telstra has so many millions of customers that although only a small percentage have problems, it still adds up to a lot of individuals.
So why does almost every person I know have a similar Telstra story of frustration? Maybe I have a weird circle of acquaintances but that common level of complaint doesn’t seem to add up to only a small percentage of irritated customers. They seem to be the rule rather than the exception.
Then add in the general confusion over the lines of responsibility between NBN Co and Telstra over customer service. I am clearly not alone in becoming lost in the telco disconnect.
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Australian universities are dying and no one is coming to save them
Columnist and academic
May 18, 2021 — 5.30am
The university system in this country is dying. The government used the pandemic to destroy the places for critical conversations; and university management mostly rolled over. Mass redundancies, both voluntary and forced across the sector, have left big gaps in teaching staff. In some places that led to decisions to close down subjects, courses, departments. Right now, nearly every university is considering merging faculties.
It is hard to pin down exactly why this government decided to sacrifice public universities (all excluded from JobKeeper unlike private universities). I can only guess, it must be because the concept of critical thinking is anathema to the Coalition, which resents criticism of any kind. But it became clear in last Tuesday’s budget that universities were not going to be saved, not by this government, not any time soon and maybe never.
The National Tertiary Education Union’s president Alison Barnes says funding for the sector in the budget was reduced by nearly 10 per cent; and of course that sugar hit of a billion dollars to save research, the pandemic panacea issued last year, will not be extended. No hope either of the return of international students. Borders still clamped shut. We won’t let Indian students in and it’s unlikely Chinese students will be encouraged to return to disrespectful Australia.
Barnes says the sector is devastated. The Centre for Future Work’s Dan Nahum calculates 35,000 jobs lost in education to November 2020 and estimates most were in the tertiary sector. And ANU’s professor in the practice of higher education policy Andrew Norton says the impacts of the lack of international students will only multiply: the ones who never came as well as the ones completing who will never be replaced.
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Senator Jim Molan backs tank plan as deterrent
Liberal senator and former army commander Jim Molan has emphatically backed Defence’s purchase of 75 new Abrams tanks, hitting back at The Australian’s foreign editor Greg Sheridan who branded the procurement “sheer idiocy”.
The tanks are part of a $2.17bn armoured vehicle purchase recently approved by the US government, which includes a further 53 Abrams tanks fitted out as bulldozers, assault bridges and recovery vehicles.
In an opinion article for The Australian today, Senator Molan said tanks “not only win the battles and save lives, but they deter enemies”.
The retired major-general and former head of operations in Iraq said he argued — unsuccessfully — for Australia to deploy tanks in Afghanistan.
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Tank talk is all about real warfare, not vague ideas
It was disappointing to turn to my favourite journalist and good friend, Greg Sheridan, and see an attack on the recent announcement that Australia will purchase US tanks (“Thanks but no tanks for our defence, please”, 13/5). I had privately predicted that after the attacks on the F-35 and the Attack-class submarines, popular criticism would soon turn to armoured vehicles, unless we as a government and the leadership of the ADF started publicly justifying them.
Sheridan’s criticism is misplaced. He says Australia has not used tanks in anger since the Vietnam War. Quite true, but perhaps that reflects the nature of our warfare since Vietnam, not the utility of tanks. Let’s face it, we have not committed to any serious land combat since Vietnam, and that has meant we did not have to deploy artillery or tanks.
In Afghanistan, where we engaged in the heaviest combat since Vietnam, the fighting was done almost entirely by the special forces. The question is still being avoided as to whether that was the right force to deploy — and overuse.
I argued at the time for a larger, balanced force involving tanks, if we were to be serious about our commitment.
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Rise in global inflation is temporary: RBA
Ronald Mizen Reporter
May 18, 2021 – 3.30pm
The Reserve Bank says strong demand for steel in China and supply chain disruptions will increase global inflation in the near term, but the central bank expects domestic price growth to remain subdued.
Minutes from the RBA’s board meeting in May show the bank believes high commodity prices will put temporary upward pressure on inflation, and supply chain disruptions caused by COVID-19 could linger.
“The upswing in commodity prices would boost inflation readings in the near term, and that it was possible that supply bottlenecks for some goods would be more persistent than generally assumed,” the minutes state.
“In some cases, the rebound in global goods trade had outstripped the ability of global supply chains to cope, which had contributed to delays and upward price pressures for key components.”
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Chinese students told to avoid Australia
Julie Hare Education editor
May 19, 2021 – 12.01am
The Australian international student market is losing its historical advantage in China with education agents advising clients that the combination of closed borders, xenophobia and safety concerns make it an unwise choice, a report says.
Australia’s handling of the pandemic did not unduly influence agents’ attitudes to Australia, with it being rated alongside the United States as an attractive study destination due to its public health response.
The report from Navitas found that while students from China were still interested in studying in Australia, some agents were “insisting” that students apply to another country. Many agents had done away with their Australia-only desks and departments.
The report follows anecdotal evidence in February that agents outside the major cities had been instructed by the government to direct students away from Australia. The survey of 900 agents in 73 countries was conducted in March before China announced the suspension of the Australia-China Strategic Economic Dialogue.
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PM encouraging anxiety over potential for China conflict: ALP
Andrew Tillett Political correspondent
May 19, 2021 – 12.00am
The Morrison government is “deliberately encouraging anxiety” about war with China for domestic political gain, Opposition foreign affairs spokeswoman Penny Wong will claim in a stinging denunciation of the Prime Minister’s handling of foreign policy.
Senator Wong will also accuse Defence Minister Peter Dutton and Home Affairs Secretary Michael Pezzullo of playing into the Chinese Communist Party’s narrative and providing Beijing with leverage by creating a sense of inevitability of conflict.
“The first job of national leaders is the safety of their citizens. Our leaders do not make us safe by beating the drums of war with China,” Senator Wong will say, according to speech notes for the launch of journalist Peter Hartcher’s book on China on Wednesday.
Senator Wong will say the Morrison government is “sprinting ahead” of the Biden administration over America’s long-standing position of “strategic ambiguity” of defending Taiwan.
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How the smart phone has changed everything
The use of mobile phone apps has surged in recent years, and helped a new generation into investing; desktop computers, though, remain a favourite of traders.
James Dunn
May 19, 2021 – 12.01am
Australia has rarely seen a phenomenon like the smartphone, which launched in this country in 2007 with Telstra’s offer of the Nokia N95. But with all due respect to the Finnish group, it was the advent of Apple’s iPhone 3G in 2008 that changed everything – essentially defining the capability that Australians expected from their mobile.
The smartphone certainly changed online stockbroking.
Stockbroking had already been revolutionised by the internet, which had democratised access to the sharemarket and made mincemeat of “traditional” cost and middleman structures.
But with the smartphone, people held in their hands the trading capability that only an institution would have had 20 years earlier. They could look at the buy and sell orders in a stock, place their order, and instantly see what it went for, while sitting on a bus.
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US-Australia alliance on China shows it’s best to go early, go hard
Not since the Pacific war has Australia been so completely in the hands of Washington, particularly on the issue of how far to confront China.
Max Suich
May 19, 2021 – 12.01am
In November last year as the presidential race in the United States entered its final weeks, there was a tremor of nerves in the more hawkish of the foreign policy, defence and intelligence community in Canberra. Slight it has to be admitted.
There was sympathy for Donald Trump whose last two years had seen a palpable hardening of American military, technology, investment and trade policy towards China. This included at the end of 2017 a decision to name China a “strategic competitor”.
Australia had thrown the dice in 2017-18, publicly preceding the Trump administration’s confrontation with China by almost a year. Sympathy for Trump’s approach was shared by senior cabinet ministers including Prime Minister Scott Morrison and Minister for Home Affairs Peter Dutton, ministerial advisers, Coalition backbench members as well as the intelligence agencies.
Yet Trump’s contempt for allies prompted concerns. The greater concern, however, was a possible Biden administration that might appoint “Obama doves” on China. The fear of an Obama reversion underlines the gamble we have taken.
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https://www.afr.com/politics/federal/china-confrontation-what-were-we-thinking-20210429-p57njs
China confrontation: what were we thinking?
Australia’s policy U-turn on China came after the intelligence community identified alarming Chinese designs on corrupting our political system. But were they the right responses?
Max Suich
May 18, 2021 – 12.01am
Australia did not come to its U-turn on relations with China in 2017-20 by the traditional path, as the first article in this series explained on Monday. Our new approach did not define some new relationship to pursue with China or any new strategy – other than bureaucratic shorthand phrases that became transformed into slogans: “push back”, “call out” and “out in front”.
This U-turn came in response to our intelligence community identifying alarming Chinese objectives: they were aiming to corrupt and capture our politicians and political system and damage our defence relationship with the US, hack secret private and public databases and displace the US in east Asia.
In late 2016 and through 2017 the Turnbull government at the urging of our intelligence agencies and their supporters in the ministry, the parliamentary backbench and the bureaucracy, began to “push back” against and then “call out” China’s authoritarianism at home and its expansive claims in the South China Sea, and its intrusions in Australia.
In late 2017 Malcolm Turnbull increased the momentum when he went out in front – without any co-ordinated regional or even allied supporting chorus: he explicitly referred to China as the target for his planned anti- subversion legislation and in 2018 offered a public example to other democracies in banning Huawei from our telecommunications system – decisions we hoped would show the Chinese we could not be intimidated and which we later urged the rest of the world to emulate.
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Migration slump to make Australia older and the economy smaller: Treasury boss
By Matt Wade and Jennifer Duke
May 18, 2021 — 10.30pm
The slump in migration caused by pandemic border closures will leave the economy smaller and the population older than would otherwise have been the case, the federal government’s top economic adviser says.
Treasury secretary Steven Kennedy said Australia had experienced “one of the largest changes” compared to other advanced economies due to lower net overseas migration caused by COVID-19 disruptions.
“It will leave us smaller and demographically slightly older,” he said during a briefing on last week’s federal budget in Sydney on Tuesday. Although he added slower population growth will not necessarily reduce economic output when measured on a per capita basis.
Dr Kennedy’s remarks add to debate about the economic and social damage caused by Australia’s international isolation after the budget assumed borders will remain closed until the middle of next year.
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The two extremes of the inflation debate have markets on edge
Senior business columnist
May 19, 2021 — 11.57am
The two extremes of the debate about the outlook for inflation and interest rates have been on show over the past week, highlighting how polarised and uncertain the economic outlook is as the developed world economies bounce back strongly from last year’s pandemic-induced recessions.
That uncertainty is reflected in financial markets, which have been trading nervously sideways in the past fortnight as investors try to digest some contradictory and disturbing economic data.
In the US, and elsewhere, unemployment remains above pre-pandemic levels but employers are reporting a shortage of labour. In the US, and elsewhere, inflation has spiked well beyond forecasts that had taken into account the “base” effects caused by comparisons with the COVID-depressed data a year ago.
Are these influences “transitory,” as the US Federal Reserve Board has argued, or could the aggressive monetary policies embraced by central banks to respond to the pandemic be combining with real economy changes, driven by the experiences of the past year, to create a new post-pandemic normal?
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Modern takes on ancient memories
An ancient Aboriginal technique for memorisation might help optimise recall of a large volume of facts, figures and lists required in occupations such as medicine.
In a 2018 study led by Monash University School of Rural Health’s David Reser and Tyson Yunkaporta, from Deakin University’s NIKERI Institute and just published in PLOS One, 76 first-year medical students attempted to memorise 20 common butterfly names.
After an initial test in which they read the names and then wrote down as many as they could recall, they were divided into three groups.
One group received no memory training, one was taught the famous “memory palace” technique of imagining their childhood home and mentally assigning names to various rooms and a third was introduced to the Aboriginal technique by Dr Yunkaporta, walking through a large, footprint-shaped rock garden while weaving the names into a story.
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Overseas student spending tumbles
Australia has lost nearly 100,000 international students since March last year and, of those still enrolled, more than 110,000 are studying from outside Australia.
New federal government figures show 450,000 students were enrolled in March this year, 17 per cent fewer than in March last year.
The plunge in student numbers has cut international student spending in Australia dramatically. New data from the Australian Bureau of Statistics shows spending fell to $29.9bn in the 12 months to March, 26 per cent less than the $40.3bn spent by foreign students in 2019.
However, the ABS revealed that the economic damage was eased by $3.3bn in tuition fees paid to educational institutions in Australia last year by the growing number of international students studying offshore.
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https://www.afr.com/policy/economy/there-are-reasons-to-worry-about-us-inflation-20210519-p57t51
There are reasons to worry about US inflation
The FT’s Martin Wolf says expansionary fiscal and monetary conditions, pent-up savings and pandemic politics could work together to drive up prices over the longer term.
Martin Wolf Columnist
May 19, 2021 – 9.40am
The jump in US annual consumer price inflation to 4.2 per cent reported last week was a shock. But was it a good reason to panic? Not obviously, since special factors can explain it.
It was ever thus: when inflation starts to rise, special factors can always explain it. But in truth the big reasons for concern are not what is happening right now, but rather the political forces at work.
Naturally, economic forces shape those political choices. And these forces are currently rather confusing. The unexpectedly big jump in consumer prices followed an unexpectedly weak employment report: last month, the US added just 266,000 jobs, while the unemployment rate edged up to 6.1 per cent.
The obvious explanation is that this is a recovery from an unprecedented recession, driven not by tightening demand but by shutdown of supply.
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Why the government is unwilling to support universities
By Katy Barnett
May 20, 2021 — 5.10am
In my first year of university, I took a class where it swiftly became evident the lecturer followed a particular brand of left-wing thought. If anyone expressed a conflicting view, he’d sneer, and sarcastically demolish the student in front of the whole class. I barely spoke and learned little. I did not do well in the essay for that class, partly because I was inexperienced, but also because I didn’t adhere to his views.
He was the exception, not the rule, but the stereotype embodied by that lecturer has put all our universities at risk, with the federal Coalition government clearly reluctant to help universities out of the financial difficulty brought about by COVID-19.
I want my students to learn to think for themselves: this is what “critical thinking” means. I’m happy for them to disagree with me on every point, as long as they provide reasoning and evidence for their views. Most academics are like me, but some disciplines must beware of being taken over by people like my old lecturer. Intolerance of different viewpoints is the opposite of critical thinking, regardless of the politics involved.
I have a wide circle of friends, of various political stripes. When I asked those on the right of politics what they thought of academia, they did not hold back: ‘intolerant ideologues’, they declared, ‘unscientific nonsense’, ‘biased’, ‘engaged in elite overproduction’.
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https://www.smh.com.au/politics/federal/the-big-threat-to-the-budget-inflation-20210519-p57t6p.html
The big threat to the budget - inflation
John Hewson
Columnist and former Liberal opposition leader
May 20, 2021 — 5.00am
The greatest economic uncertainty facing Australia and the world is price inflation. A blowout in inflation forecasts is a principal risk to the Morrison government’s budget outlook, especially if it spurs the Reserve Bank of Australia to raise interest rates much earlier than anticipated. That would have significant consequences for confidence and for household, business and national debt – thereby seriously threatening the economic recovery.
To confound the matter, some of our old assumptions about inflation are outdated.
The budget forecasts a sizeable turnaround in inflation – from 0.3 per cent in 2019-20 to 3.5 per cent in 2021-22, then dropping back to 1.75 per cent and 2.25 per cent over the following two years. Treasury explains the 3+ per cent in the June quarter as due to “higher oil prices and the unwinding of policy measures in areas such as childcare compared to the depths of the pandemic”.
Recent data and inflation forecasts in the US, Europe and China – as here – also see a pick-up in the near term, although there is some debate as to whether this is transitory. That is, to what extent is it a blip that will work its way through the system as economies “normalise” post-COVID? This seems to be the forecast of our Treasury.
Whether it is transitory is a very important question. Bond and stock markets have reacted adversely a couple of times in recent months, reflecting concern about the possibility of mounting inflationary pressures.
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https://www.smh.com.au/politics/federal/more-strategy-less-politics-on-china-20210519-p57tb7.html
More strategy, less politics on China
Penny Wong
Senator
May 19, 2021 — 6.45pm
There have been years of breathless headlines about China – first hopeful, then panicked. But all the blazing heat has produced only the dimmest light. Too much of the discussion on China is frenzied, afraid and lacking context.
It’s strange to me to watch all this as an Australian born in Asia, and as someone schooled in Labor’s tradition of engagement with Asia. Asia is in Labor’s DNA – in my case, literally.
The fact is, the China the world is experiencing under Xi Jinping is demonstrably different from that which we have all seen in our lifetimes. In pressing its interests, China is more assertive. All great powers will come to assert their interests. But assertion has often transmuted into aggression:
- The militarisation of disputed features of the South China Sea, flouting international law and the “cabbage leaf” and “swarming” actions there that sought to intimidate Indonesia, the Philippines and Vietnam – all part of Beijing’s grey zone tactics.
- The imposition of national security laws undermining the One Country, Two Systems arrangement for Hong Kong, to which Beijing had committed itself by treaty.
- Economic coercion – a tactic before Xi’s leadership but escalating since – against France, Japan, Norway, the Philippines, the UK, Taiwan, Mongolia, South Korea, Palau, Canada and, of course, Australia.
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Unreality: Australia’s dangerous new home
How are we going to make a living? How will we provide for our own security? Three things make me worry about those questions. One is the cultural transformation of all Western electoral politics. Another is the way this has been exacerbated by COVID. And the third is the budget.
Over the past decade, political parties in Western societies have changed places. The centre right parties now represent low-income earners, tradies, manual workers, those without a university degree. The centre left parties represent high income earners, graduates and those who sit atop the services sector.
You may have missed the astonishing by-election victory of Boris Johnson’s Conservative Party in Hartlepool in the UK. This seat, in England’s north, has never before been Conservative. For a government to win a seat from the opposition at a by-election is extraordinary. Here is the greatest argument to demonstrate the intellectual corruption of contemporary university education. If just the votes of university graduates had been counted, the far-left Jeremy Corbyn would now be prime minister of Britain.
Similarly, the poorest states now always vote Republican in US presidential elections. In Australia, Scott Morrison is Prime Minister because low-income Queensland electorates preferred coalmines to “green gestures” and working-class Tasmanians didn’t trust Labor.
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https://www.smh.com.au/national/outrage-nation-the-rapid-decay-of-discourse-20210520-p57thj.html
Outrage nation: The rapid decay of discourse
Columnist, co-host of Ten's The Project and academic
May 21, 2021 — 5.30am
Have you ever found yourself reading the outrage-inducing news story of the day, fully expecting to have the offending details hit you in the face, only to reach the end and wonder what all the fuss is meant to be about?
That’s exactly what happened to me this week as I read the now infamous comments of Virgin CEO Jayne Hrdlicka. So bemused was I when I was done that it made me worry either for my own sanity, or for the state of our public conversation. I hope the problem is with me, because the alternative is much more concerning.
The headlines have Hrdlicka urging us to accelerate opening our international border, even though that would mean “some people may die”. To follow the reaction, you’d think that was all she said. “No one wants to die to save Virgin” roared one headline. The Prime Minister found it “very difficult to have any truck with what was said”.
Greens Senator Jordon Steele-John deemed Hrdlicka’s remarks “extraordinarily offensive” because of disabled people’s unique vulnerability to COVID-19, demanding Hrdlicka declare “how many disabled people she believes is acceptable to have die”. #BoycottVirgin began trending on Twitter.
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China could have ordered Huawei to shut down Australia’s 5G
May 21, 2021 — 5.00am
The federal government’s cyber spies advised Australia would have had to put 300 separate security measures on Huawei’s equipment to make it safe for the nation’s 5G system but the network could still have been shut down on Beijing’s orders.
The Australian Signals Directorate spent more than eight months trying to find a way to make the Chinese company’s telecommunications equipment acceptably safe but ultimately told the Turnbull government the risk could not be contained satisfactorily.
Australia was the first country to ban Huawei from its 5G system in 2018, a decision many more have followed. The government of Chinese President Xi Jinping continues to demand that Canberra reverse the veto. It is number two on a list of 14 demands released by the Chinese embassy in Canberra in November as a prerequisite to improving relations. Number one on the list calls for China’s foreign investment to be unrestricted.
A senior Australian spy said the main risk was not Chinese spying but that Beijing could order Huawei to disconnect the Australian 5G network altogether.
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Revealed: China’s plan to wean itself off Australian iron ore
For a China determined to punish Australia, the windfall gains delivered to Canberra from surging iron ore prices are intolerable.
Richard McGregor and Peter Cai
May 22, 2021 – 12.00am
To call it ironic doesn’t quite capture the moment. Just as Beijing is punishing Australia with trade sanctions, sales of the one commodity the Chinese can’t target, iron ore, are delivering billions in windfall gains to miners, their shareholders and the government in Canberra.
Iron ore exports have broken records for volumes and prices in recent months, largely because of the strong rebound in the Chinese economy and the lack of alternative suppliers for the country’s steel makers.
The Treasury based its budget forecasts on a price of $US55 a tonne, for this financial year and the next. In recent weeks, prices have topped $US230 a tonne. This has turbocharged mining profits, which flow straight to the budget bottom line through company taxes and to the states in royalties.
“Every $US10 a tonne above $US55 is worth over $2 billion a year in federal taxes,” says Chris Richardson, of Deloitte Access Economics.
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China’s five-year plan to slash Australian iron ore imports
Michael Smith China correspondent
May 22, 2021 – 12.00am
The Chinese government has drafted a five-year plan to slash its reliance on iron ore from Australia and other countries by almost half by investing in new mines offshore and seeking alternative supplies from Russia, Myanmar, Kazakhstan and Mongolia.
Documents discovered by the Lowy Institute have revealed a detailed proposal by China’s Ministry of Industry and Information Technology (MIIT), which also focuses on boosting domestic iron ore production.
The 15-page plan set a target of 45 per cent iron ore “self-sufficiency” by 2025. It says this would be achieved by greater use of scrap metal, more efficient mines, and by investing Chinese equity into iron ore mining operations overseas.
The plan, which was published early this year but went unnoticed in the media until now, will add to rising concerns for Australian miners about China’s long-term goal to wean itself off Australia’s top export.
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The high cost of life in our gilded cage, Australia
Political and international editor
May 22, 2021 — 5.30am
It’s how you have an emergency without much urgency. The national border is shut for all but the most extraordinary cases. More than 30,000 Australians who have asked to come home are still stuck abroad. Some of them are dying of COVID-19 while they wait. Witness the news from India. Many more Australians have family overseas who they cannot visit and who cannot visit here.
Pre-pandemic, the No.1 complaint of Australian businesses was that they couldn’t find enough skilled workers. Now, after a pandemic-driven pause of a year or so, it is again their biggest complaint. But this time, the border is shut and there is no ready recourse to find workers in the outside world. Like foreign tourists and students, trips overseas are a fading memory.
But Scott Morrison doesn’t seem too worried. “Australia is in no hurry to open those borders, I can assure you,” he said last month. In fact, he must be enjoying it. The federal budget is based on the assumption that the border remains closed till the middle of next year.
And the government seems to be moving in no haste at all on the two obvious solutions. For Australia to live safely with a COVID-infested world – and the multiple viral variants to follow – the solutions are an established system of rapid vaccinations and a rigorous quarantine system.
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Risk v reward: Why Morrison may go to the polls early
By David Crowe
May 22, 2021
National anxiety over the next phase of the pandemic has reached a point where some Australians believe an early election is the best way to settle the politics, give federal leaders a mandate and steer the nation out of crisis.
“We would love to see an early election,” says one business leader who is frustrated at the way populism rules the debate over the policies needed this year and beyond.
Fear of the coronavirus seems stronger than ever despite the country’s extraordinary success against COVID-19. That fear has the power to decide the next election. So much power, in fact, that no political leader will take the risk of swimming against the tide.
Those who have to deal with political leaders have to be careful about what they say, but they know they will be forced to wait until after the election before they find out when the federal government will open the international border. The sooner the election, the sooner everyone knows the answer.
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Scott Morrison’s in a race to get re-elected before he has to do the one thing he’s stubbornly avoided
Columnist
May 22, 2021 — 5.30am
Scott Morrison is racing against the future. He’s trying to thread the needle of re-election before Australia is forced to do the one thing his government has been studiously, stubbornly, avoiding since the pandemic reset the global order: take climate change seriously.
The Prime Minister understands that American President Joe Biden and British Prime Minister Boris Johnson are growing weary of his domestic excuses. But he is gambling that our allies won’t want to make an example of him, either at the G7 meeting in Cornwall next month or at the United Nations climate change summit in Glasgow in November.
No Australian leader since Billy Hughes at Versailles has been this brazen before, demanding special treatment for our privileged people while the US and Britain try to build a new international order. Johnson was on the phone again on Friday, May 15, to press the case for an active Australian contribution at the G7 next month. According to Downing Street’s version of the conversation, Johnson “emphasised the importance of all countries setting ambitious targets to cut carbon emissions, and encouraged Australia to commit to reaching net zero by 2050 which will deliver clean jobs and economic growth”.
A good-faith ally would not have quibbled with these words. But Morrison’s office wanted Australians to believe that the call proceeded on his ambivalent terms: “They discussed efforts to address climate change and pathways towards net zero, including reducing emissions through technology.”
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Struggling universities hit out at payroll tax blow
By Adam Carey, Cara Waters and Sumeyya Ilanbey
May 21, 2021 — 8.17pm
Victoria’s universities have asked the state government to urgently explain why they are being asked to contribute to a $2.9 billion payroll tax increase to fund mental health services.
University of Melbourne Vice-Chancellor Duncan Maskell said the sector, which is still reeling from the loss of hundreds of millions of dollars in international student fees, was blindsided by the announcement in Thursday’s budget.
“Victorian vice-chancellors were surprised to learn that the payroll tax levy will apply to local universities given our charitable status and given we already spend a great deal of money doing so much work in mental health,” said Professor Maskell, who chairs the state’s vice-chancellors’ committee.
“We are seeking an urgent conversation with government to understand the rationale for this and to ensure that all relevant information is with the government prior to this policy being put before Parliament.”
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G7 agrees to stop international funding for coal
Markus Wacket and Elizabeth Piper
May 22, 2021 – 5.00am
Berlin | The world’s seven largest advanced economies agreed on Friday (Saturday AEST) to stop international financing of coal projects that emit carbon by the end of this year, and phase out such support for all fossil fuels, to meet globally agreed climate change targets.
Stopping fossil fuel funding is seen as a major step the world can make to limit the rise in global temperatures to 1.5 degrees Celsius above pre-industrial times, which scientists say would avoid the most devastating impacts of climate change.
Getting Japan on board to end international financing of coal projects in such a short timeframe means those countries, such as China, which still back coal are increasingly isolated and could face more pressure to stop.
In a communique, which Reuters saw and reported on earlier, the Group of Seven nations - the United States, Britain, Canada, France, Germany, Italy and Japan - plus the European Union said “international investments in unabated coal must stop now”.
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https://www.afr.com/chanticleer/culture-splits-good-stocks-from-bad-20210521-p57tzb
Culture splits good stocks from bad
Culture is regarded by many investors as a nebulous concept less important than hard-core financial analysis. But a leading fund manager says understanding culture is the key to investment success.
May 21, 2021 – 7.22pm
Corporate disasters of mammoth proportions at Swiss investment bank Credit Suisse and jet aircraft maker Boeing over the past year have cost shareholders in these companies $US7.4 billion ($9.5 billion).
There were clear failures in risk management. But if you scratch below the surface, it is apparent there were flaws in the cultures of both companies.
Credit Suisse incurred a $US4.9 billion charge in the first quarter after the US hedge fund it was funding, Archegos, failed to meet margin calls on stock held as collateral by the bank. Credit Suisse also incurred losses on its exposure to Greensill Capital.
Boeing incurred a $US2.5 billion charge in January to resolve a US Department of Justice investigation into Boeing’s conduct regarding the evaluation of the Boeing 737 MAX aircraft by the Federal Aviation Administration.
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Daily update ‘to warn of surprise attacks’
With strategic threats likely to escalate rapidly, Australia needs a senior intelligence officer to assess daily the possibility of a surprise attack, two of the nation’s most highly respected military thinkers have warned.
Paul Dibb and Richard Brabin-Smith, both former senior Defence officials, say possible threats range from coercion and “grey zone” unconventional attacks with little or no warning through to a sustained, high-intensity military conflict testing Australia’s sovereignty and security, for which there should be some warning indicators.
They say there may little or no warning of cyberattacks able to disable key elements of society, such as the internet, electricity generation, water supply, air transport and the financial sector.
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Woke is a genius brand, and a threat to our way of life
I’ve been building brands for 20 years and I’ve never seen anything like woke. It’s a mistake to think of this dangerous ideology as just a bunch of disorganised radical students virtue signalling wherever the woke wind takes them. It’s better to think of it as a highly sophisticated lifestyle brand.
Let’s run through the elements needed to create a brand. First, you need to know your market. A strong, loyal and plentiful customer base is essential. The 2008 financial crisis gave birth to a generation with no faith in capitalist ideals, nor any hope of owning a home. That along with the death of religion, particularly on the left, saw swathes of the population simultaneously want to violently rail against the system and find something to believe in.
You need a brand promise. Customers of woke are offered a sense of moral superiority, a group identity, and are freed from personal responsibility, thanks to a victim mentality. Sounds good.
You need a brand personality that people can identify with. Woke is ostensibly empathetic and virtuous. Even better.
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https://www.afr.com/world/asia/japan-australia-to-hold-2-plus-2-talks-20210522-p57u6e
Japan, Australia to hold 2-plus-2 talks
May 22, 2021 – 9.29am
Tokyo | The Japanese and Australian governments have decided to hold a virtual 2-plus-2 meeting between their foreign and defence ministers as early as the end of the month, according to government sources.
The two governments are expected to discuss how best to realise a “free and open Indo-Pacific” while keeping in mind China’s increasingly hegemonic actions.
Tokyo and Canberra have been conducting negotiations to finalise a pact to facilitate joint exercises between Japan’s Self-Defence Forces and the Australian military. AP
The 2-plus-2 meeting will be attended by Foreign Minister Toshimitsu Motegi and Defence Minister Nobuo Kishi, and their Australian counterparts Marise Payne and Peter Dutton.
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Coronavirus And Impacts.
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We must use caution to break out of Fortress Australia
By Brendan Crabb and Mike Toole
May 16, 2021 — 1.32pm
COVID Zero is precious. We are now experiencing a quality of life that approximates pre-pandemic days and most Australians want to keep it that way. But while the objective of zero COVID-19 community transmission will be with us for some time, it should not mean Fortress Australia.
Reopening our international borders will have enormous benefits. Not only will Australians be able to reunite with overseas family and friends but we will again welcome skilled migrants, international students and tourists – all essential for full economic recovery.
We need to be ambitious about opening a pathway that lets people move freely into and out of Australia. But for the foreseeable future – most likely years – we can’t think of our borders as steel doors that are either shut or open. A reopening of the border should be cautious and based on evolving circumstances, evidence and an agreed public health strategy.
Australia faces three substantial uncertainties when it comes to this endeavour: how much of our population has to be vaccinated to protect against severe disease and widespread circulation of the virus; how effective vaccines will be against emerging variants; and how long vaccine protection lasts.
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Singapore looks to tear up its vaccine playbook amid new virus surge
May 17, 2021 — 12.44am
Singapore: In near lockdown less than three weeks after being named the best place in the world to be during COVID-19, Singapore is considering a significant shake-up of its vaccine strategy, including increasing the time between shots.
The city state, which is home to more than 20,000 Australians, recorded 38 new cases of community transmission on Sunday, its highest number in more than a year. Eighteen of those cases were unlinked.
It swiftly announced further tightening of restrictions, including the closure of most schools.
Singapore’s Health Minister Ong Ye Kung also revealed the fresh outbreak had convinced the government to weigh up a significant change in its approach to vaccination.
A quarter of the country’s 5.5 million people have been fully vaccinated and one-third have received at least one dose, he said. That makes the rollout in Singapore comfortably the fastest in south-east Asia in terms of an average of the population.
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Entire families wiped out by COVID as virus races through rural India
By Sudhi Ranjan Sen, Bibhudatta Pradhan, Shruti Srivastava and Ruth Pollard
May 18, 2021 — 6.50pm
After devastating India’s biggest cities, the latest COVID wave is now ravaging rural areas across the world’s second-most populous country. And most villages have no way to fight the virus.
In Basi, about ninety minutes from the capital New Delhi, about three-quarters of the village’s 5,400 people are sick and more than 30 have died in the past three weeks. It has no health-care facilities, no doctors and no oxygen canisters. And unlike India’s social-media literate urban population, residents can’t appeal on Twitter to an army of strangers willing to help.
“Most deaths in the village have been caused because there was no oxygen available,” said Sanjeev Kumar, the newly elected head of the farming community. “The sick are being rushed to the district headquarters and those extremely sick patients have to travel about four hours,” he said, adding that many don’t make it in time.
It’s a scenario playing out all over India. In interviews with representatives from more than 18 towns and villages in different parts of the country, officials outlined the scale of the carnage — from entire families wiped out to bloated bodies floating down the Ganges River to farmland left untended due to a lack of workers.
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As official toll mounts, true Covid death figure elusive
· AFP
While the official number of deaths from Covid-19 has topped 3.4 million globally, experts say this is undoubtedly an underestimate.
But by how much? And how can we know the true death toll of the pandemic?
The World Health Organization (WHO) said on Friday that an estimated 6-8 million people were likely to have died due to Covid-19.
The IHME calculated that the United States had seen 912,000 Covid-19 deaths, as opposed to the official toll of around 578,000.
According to the study, Mexico had seen 621,000 Covid-19 deaths, Brazil 616,000, and Russia 600,000 -- a toll far higher than the official figure of 111,000 deaths.
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https://www.afr.com/politics/federal/the-government-has-developed-strategy-hesitancy-20210520-p57tlp
The government has developed strategy hesitancy
The government went on the front foot in the early days of the pandemic but if the public has vaccine hesitancy, Scott Morrison has strategy hesitancy.
Laura Tingle Columnist
May 21, 2021 – 1.38pm
The Coalition government has never been shy to spend a bit of taxpayer dosh on advertising campaigns promoting what it is doing and how good it is. And, of course, the government is led by a Prime Minister, who is sometimes – unkindly – referred to as “Scotty from Marketing”.
So it is a little odd that the week ends with a hot debate about the quality of the government’s advertising campaign for the national vaccination rollout.
And it is more than just depressing that the said advertising campaign is being asked to at least partly reverse the damage done to the vaccination message by the government.
The Prime Minister told us this week that there was $40 million allocated to the advertising campaign for the year ending June 30 and that, apparently, “the program rolls with the sequencing of who’s getting vaccinated right now”.
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Climate Change.
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https://www.afr.com/companies/energy/refining-hubs-primed-for-greener-future-20210517-p57sk8
Refining hubs primed for greener future
Ampol’s Lytton site in Brisbane and Viva’s Geelong venture look to have secured an opportunity to move with the times.
Angela Macdonald-Smith Senior resources writer
May 17, 2021 – 5.54pm
The federal government’s $2.4 billion support package for the oil refining sector heralds a new age of co-operation between oil refiners and government for the management of their ageing plants and for future investments in clean energy.
It certainly goes far beyond shoring up the immediate future of the country’s two remaining refineries and addressing Canberra’s heightened awareness about the need to preserve critical manufacturing.
Viva has been working for at least 12 months on a planned low-carbon energy “hub” at its refinery site at Geelong.
The approach for refining has parallels with the trend in coal power generation where governments – most recently Victoria’s deal with EnergyAustralia for Yallourn – are teaming with generators in deals that secure a limited future of declining plants. That allows them to be smoothly and safely managed into history, leaving plenty of opportunity and notice for replacement investment in cleaner supplies.
The “co-investment” with the refiners in upgrades to plants to meet stricter fuel standards also recalls EnergyAustralia’s new gas power plant in NSW where governments are tipping in amounts to equip it with the ability to burn hydrogen,
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Taxpayers cop $600m gas power plant in Hunter Valley
Phillip Coorey Political editor
May 18, 2021 – 10.30pm
The Morrison government dismissed energy industry protests and will build a 660MW gas-fired power station in the NSW Hunter Valley.
Energy Minister Angus Taylor, who will give the go-ahead for the $600 million project on Wednesday, said the extra generation capacity was required to force down prices.
The move comes after the federal government promised on Monday to give $2.3 billion in subsidies to Ampol and Viva Energy to keep their oil refineries open for another six years to manufacture petrol and diesel.
As revealed by The Australian Financial Review, the federal budget contained provision for the power station to be built at Kurri Kurri by government-owned corporation Snowy Hydro Limited. The project will be in addition to plans by Energy Australia to build a 316-megawatt, $300 million Tallawarra B project in the Illawarra.
Both projects will fill what the government says will be a 1000MW gap in generation capacity when the Liddell coal-fired power station closes in April 2023.
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International Energy Agency calls last drinks on fossil fuels
May 18, 2021 — 3.00pm
In its newest report the International Energy Agency, a body specifically created to ensure the world’s supply of fossil fuels remained copious and cheap, has in effect called last drinks on fossil fuels.
Should the world meet the Paris target of keeping warming as close to 1.5 degrees as possible, renewable energy uptake would continue to surge so quickly that vast swathes of Australia’s energy infrastructure would be rendered obsolete in the immediate future.
Under this scenario, comprehensively modelled and outlined in detail by the world’s leading energy authority, no new mines are needed and no new coal plants would be built from the end of the year. Gas and oil would follow.
“No new natural gas fields are needed in the [net zero by 2050 scenario] beyond those already under development. Also not needed are many of the liquefied natural gas liquefaction facilities currently under construction or at the planning stage,” said the report, commissioned by Boris Johnson’s conservative UK government as it prepares to host United Nations climate talks in Glasgow in November.
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Coalition’s energy policy rooted in communist-style state control
Australia’s calamitous energy and climate policy is going from bad to worse with the government decision to build a $600m gas-fired power plant that will deter private investment.
John Kehoe Economics editor
May 19, 2021 – 1.09pm
For a Morrison government so alarmed about the Chinese Communist Party, it is deeply ironic that its energy policy is rooted in communist state-controlled values.
The decision to build a 660-megawatt gas-fired power station in the NSW Hunter Valley is more evidence this government prefers state control than markets to address challenges in energy and climate change.
Australia’s calamitous energy and climate policy is going from bad to worse.
The $600 million government project to be built at Kurri Kurri by government-owned corporation Snowy Hydro Limited will further deter much-needed private sector investment in the energy grid.
EnergyAustralia has already committed to building a large gas plant in NSW – the 316-megawatt, $300 million Tallawarra B project in the Illawarra, albeit with a $5 million of federal government support.
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Angus Taylor out on a limb with by-election pork-barrelling
Federal Energy Minister Angus Taylor has clearly lost the plot, taking centre stage to claim credit for spending $600m on a 660MW gas peaking plant in the Hunter Valley which according to his industry regulator is surplus to capacity.
Snowy Hydro boss Paul Broad has played Taylor for a sucker almost as well as he did Malcolm Turnbull when he as prime minister agreed to spend untold billions under the Snowy 2.0 project.
A smart politician would have left it to Broad to talk about his Hunter Valley plans, except of course there is a by-election in the area this weekend.
The timing of his announcement on the eve of a NSW by-election tells you all you need to know about the cynicism on display from a minister who is frankly intellectually better than that.
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The bell has tolled for the fossil age: Why net zero makes us all richer
By Ambrose Evans-Pritchard
May 21, 2021 — 5.40am
The International Energy Agency has switched sides. It has carpet-bombed the fossil incumbency that it once defended so doggedly. The shibboleths of the last decade suddenly fall away. The economics of climate change turns upside down. The future headache becomes the risk of failed petro-states with collapsing revenue streams.
Slashing CO2 emissions and switching to renewable energy is not a “cost” or a constraint on rising affluence: it lifts global GDP growth by 0.4 per cent a year over the course of this decade. World output is 4 per cent bigger in real terms by 2030.
That is the verdict of the IEA (with the International Monetary Fund) in its roadmap on global energy on the way to a 1.5 degree world. Net Zero by 2050 is the closest thing we have to catechism. The report is the bell that tolls for the fossil age. Not even natural gas escapes the cull.
“We have never seen anything like this before in the history of the IEA. There’s been a universal thumbs up from the climate community,” said Dave Jones from the anti-coal group Ember.
Net zero does not cost jobs: it replaces 5 million lost in oil, gas and coal with eight times as many jobs for engineers, electrical experts, offshore operators, solar technicians or lithium miners, whether directly or indirectly.
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Royal Commissions And The Like.
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https://www.lexology.com/library/detail.aspx?g=55ecb17f-7739-4478-90a8-222ee22a0974
Federal Budget 2021-22: aged care
Corrs Chambers Westgarth - Jonathan Farrer and Anna Ross
Australia May 14 2021
Aged care was one of the centrepieces of the 2020-21 Federal Budget, with the Federal Government promising that the Budget would be ’responding in full’ to the findings of the Royal Commission into Aged Care Quality and Safety.
The Royal Commission’s final report was released in March 2021 and contained 148 recommendations to overhaul Australia’s aged care system. The Royal Commission found that a ’profound shift is required in which the people receiving care are placed at the centre of a new aged care system’ and that our current aged care system ’does not need renovations, it needs a rebuild’.
While the Budget stated that the government will deploy a record $17.7 billion to address a number of systemic problems identified by the Royal Commission, there will be debate about whether the government’s plans will be an expensive renovation to the existing system or whether it will be the complete rebuild that the Royal Commission had been looking for.
As part of its budget announcements, the government also released details about the extent to which the government’s announced reforms addressed each of the specific recommendations in the Royal Commission’s final report.
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National Budget Issues.
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‘Dry’ advice on deficit, debt needed again
It’s not quite the same situation as in the 1980s, says one of the original economic Dries. But once again, backbench MPs need to stick their necks out against the big-spending political budget.
John Hyde
May 16, 2021 – 2.06pm
There are similarities and some differences today with the situation in 1983 when the timid and weak Fraser government lost to the Hawke Labor Party. From these, lessons might be drawn.
The most obvious similarity is concentration on re-election to the exclusion of attention to the immediate and more distant future. Some, but not all, elements of the need to look to the future are also similar.
Like Malcolm Fraser in 1982, Scott Morrison has allowed the coming election to influence the budget. To what extent is not an easy judgment for one who does not have access to Treasury and Reserve Bank advice.
Nevertheless, I am confident that the opportunity to reduce government debt and forestall inflation has been to some extent squandered on short-term popularity – a circumstance seen before.
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Budget shock: Morrison government hit over the head by a paradigm
Economics Editor
May 16, 2021 — 8.42pm
The media missed the big story in last week’s budget. They were present to observe a rare event – a shift in the economic management paradigm – but all they saw was just another big-spending, vote-buying pre-election budget.
Since the post-World War II Golden Age ended in the ignominy of stagflation in the mid-1970s, the first rule of politics has been that most of it’s economics. Economies don’t run themselves, and managing them is the chief job of national governments. Bad economic management is the chief reason governments get thrown out.
(This is the story of my career as a journalist. I arrived as a dissatisfied chartered accountant looking for a career change just as the nation’s editors were getting that message. When the editor asked me what I wanted to do in journalism, I said “write about politics”. He told me that if I wanted to get ahead, I should pretend to be an economist. Advice taken.)
But that message seems to have been lost. Today’s political journalists can see the politics in everything, but not the economics. It doesn’t help that, after decades of media management, they never get to speak to the Canberra econocrats.
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Budget ‘guard rails’ must eventually return: Ken Henry
John Kehoe Economics editor
May 17, 2021 – 4.36pm
Future governments face a “hell of a challenge” to repair the nation’s finances and will eventually need to return to “guard rails” that target a balanced budget, former federal Treasury boss Ken Henry says.
Following almost $300 billion in fiscal stimulus in response to COVID-19 and more big permanent spending in last week’s federal budget, Dr Henry said the traditional medium-term goal of balancing the budget over the economic cycle had been “suspended”.
“I think the times demand something different – the medium-term fiscal framework is not appropriate in the present circumstances,” he said at an Institute of Public Administration Australia event in Canberra on Monday.
Dr Henry said it made “short-term sense” for the government to do more heavy lifting to help the Reserve Bank of Australia reduce unemployment, generate wages growth and lift inflation, because the official interest rate was constrained at 0.1 per cent.
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Don’t believe what lightweights tell you about Josh Frydenberg’s spending spree
Economics Editor
May 19, 2021 — 5.30am
If you’ve gained the impression that in their pre-election budget Scott Morrison and Josh Frydenberg have gone on a wild, vote-buying cash splash spending spree, leaving us – not to mention our grandchildren – with a string of bigger budget deficits and much increased government debt, you’ve been misled.
Some of it’s simply not true, much of it’s exaggerated and the rest has been misunderstood by people who didn’t do economics at high school. They’re people who are led by their emotions and, when they hear frightening words like “deficit” and “debt”, don’t need to be told we’re all in deep doodoo. They don’t stop to read the details.
Let me give you some of those details, with help from the independent economist Saul Eslake and his first-rate budget analysis.
What would you think if you asked me my salary and I gave you a figure I’d first multiplied by four? You’d think I was big-noting. The politicians do this every budget time to make them sound more generous than they are.
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Unemployment falls 0.2 per cent in April to 5.5 per cent
Australia’s unemployment rate has dipped again despite the end of the business-saving JobKeeper wage subsidy.
James Hall and Jade Gailberger
NCA NewsWire
May 20, 202111:52am
The end of the federal government’s JobKeeper wage subsidy in March was expected to create a cliff that would plunge thousands of workers onto welfare.
But the number of Australians in work fell only marginally by almost 30,600 between March and April, to remain just over 13 million.
The jobless rate fell by 0.2 percentage points to 5.5 per cent, according to Australian Bureau of Statistics (ABS) data released on Thursday.
The figures are 0.9 percentage points lower than April last year, when the rate was 6.4 per cent and Australia was at the peak of lockdown restrictions to combat the COVID-19 pandemic.
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Health Issues.
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‘People are dying in ambulances’: Health ministers say nation gripped by health crisis, call for NDIS fix
By Paul Sakkal
May 16, 2021 — 12.01am
State health ministers say their systems are being overrun due to unforeseen ill health arising from the pandemic, as the Australian Medical Association warns patients are dying in clogged emergency departments and ambulances spending hours ramped outside hospitals.
The ministers, united across the political divide, say Canberra must step in as a matter of urgency to increase funding to public hospitals and fix the National Disability Insurance Scheme (NDIS) and aged care systems, where assessment delays are locking up hundreds of hospital beds.
In interviews with The Sunday Age and Sun-Herald, ministers from the five mainland states called for more cash to deal with record demand that they admit they did not expect post-2020 when GP visits dropped 10 per cent and screenings were missed.
The ministers detailed how hundreds of beds in each of their states were occupied by patients who no longer needed hospital care staying for up to four months because NDIS and aged care assessment delays meant they had nowhere to go. They said these lags, in the federal government’s domain, were a key factor in overcrowding.
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Inflammation linked to depression, study infers
· The Times
Low-grade inflammation plays a “core role” in depression and reducing it through drugs, diet and exercise could potentially help people for whom antidepressants do not work, the largest study of its kind has suggested.
Researchers from King’s College London analysed data from more than 86,000 people. They looked at information on mental health and a compound in the blood that signals inflammation, as well as lifestyle, behaviour, physical health and genetic links to specific diseases.
They found people with depression had higher levels of inflammation than those without depression, regardless of socioeconomic background, health or habits. The effect was reduced but remained significant when factors known to be related to inflammation such as smoking and high body mass index were taken into account. From this and other analysis, the researchers contend that low-grade inflammation is often a “core biological feature of depression”.
The findings suggest inflammation “underpins the (development) of depression”, said Carmine Pariante, KCL biological psychiatry professor and study author.
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Syphilis epidemic in Melbourne suburbs: scientists use genomic sequencing to track STD
May 17, 2021 — 5.30am
Scientists will use genomic sequencing for the first time to track fast-moving syphilis outbreaks infiltrating Melbourne’s outer suburbs, as doctors warn immediate intervention is needed to contain an evolving epidemic of the sexually transmitted disease.
Doctors at the Royal Victorian Eye and Ear Hospital are also reporting a 20-fold increase in people presenting with syphilis-related eye infections.
There has been a rise in syphilis cases in Victoria.
A rising number of Victorians are also being admitted to the hospital with delayed diagnosis of ocular syphilis and some are being left with permanent vision loss.
Worrying clusters of the disease are spreading unchecked in Melbourne’s outer western and south-eastern suburbs, with hotspots emerging in the local government areas of Brimbank, Melton and Casey.
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‘Cascade’ of mistakes laid bare as full report on Aishwarya’s death revealed
By Gary Adshead
May 17, 2021 — 2.14pm
A litany of mistakes from staff treating seven-year-old Aishwarya Aswath at Perth Children’s Hospital on Easter Saturday have been laid bare in a comprehensive report into her death.
The state government gave Aishwarya’s parents the internal hospital report after tabling its recommendations in Parliament. Nine News Perth and WAtoday have now obtained a copy of the full report.
Within 20 minutes of arriving at emergency, Aishwarya’s temperature had climbed to 38.8 degrees. Her eyes were “discoloured”. Her respiratory rate was too high at 44 breaths per minute and her heart was racing at 150 beats per minute.
She had a blood pressure reading of 114/103, indicating hypertension stage two.
The seven-year-old became “quiet”, “clingy”, “floppy” and was “grunting in pain”.
About 5.45pm her father, Aswath Chavittupara, asked a clerk “how much longer it would be before a doctor could see his child because she was getting worse.”
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https://www.health.gov.au/news/the-science-of-immunisation-your-questions-answered
The science of immunisation: your questions answered
The Science of Immunisation: Questions and Answers guide has been updated. The guide looks at the benefits and safety of vaccines, what is in vaccines and what the future holds for vaccination.
Date published: 19 May 2021
Type: News
Intended audience: General public
The Australian Government has partnered with the Australian Academy of Science to update The Science of Immunisation: Questions and Answers guide. The guide reflects the most up-to-date evidence and science behind immunisation. A new video about the benefits of COVID-19 vaccines supports the guide.
A working group of leading scientists, doctors, science communicators and experts in language and social sciences oversaw the update of the guide.
The publication and a series of short videos and in-depth articles answer 5 key questions:
- What is immunisation?
- What is in a vaccine?
- Who benefits from vaccines?
- Are vaccines safe?
- What does the future hold for vaccination?
The Science of Immunisation: Questions and Answers publication, videos and articles are available from the Australian Academy of Science.
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Horrifying stories from regional hospitals reveal system’s failure
The Herald's View
May 23, 2021 — 4.52am
It is hard to imagine a Sydney hospital where the cooks have to care for the patients, the tea ladies check on the newborns and critically ill people are left to die without a single doctor on site. Yet this is the standard of care that people in rural and regional NSW have to put up with.
The stories told at the NSW parliamentary inquiry into rural and regional health last week paint a picture of a health system that is failing both patients and the medical workers who care for them in our country towns.
The inquiry, which held its first hearings in March, was brought about as a result of investigations by the Herald’s Carrie Fellner into the deaths of three residents in western NSW, including a baby whose test results went unchecked.
Witness after witness has spoken of hospitals struggling with not enough staff, not enough supplies, excessively long wait times for transfers to larger hospitals, and dysfunctional administration.
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International Issues.
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China’s not winning its trade war with Australia
Senior business columnist
May 17, 2021 — 11.55am
It must be a source of increasing frustration for China’s bureaucrats that its own economic successes are overwhelming their efforts to sanction Australia for our less than diplomatic commentary on the origins of the pandemic and China’s treatment of the Uighurs in the Xinjiang region.
While the sanctions on barley, wine, lobsters, coal and other products have bitten, they have been far more than offset by China’s insatiable demand for iron ore and LNG and the spiking prices – in iron ore’s case, soaring prices – of both.
If this is a trade war, Australia is winning its first phase quite handsomely.
The iron ore price is above $US200 a tonne and LNG prices have rebounded from the pandemic to levels last seen two years ago.
In coal, the Australian producers have responded to China’s bans by shifting their exports elsewhere, particularly to India. While the producers might not be getting the same prices as before, China is being forced to buy lower quality coal at higher prices while its competitors benefit from the windfall of high quality Australian coal at lower prices.
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Netanyahu’s master plan for Israel and Palestine has failed
A successful effort to cling on to power would demonstrate that the Israeli PM remains a master political tactician. But the upsurge of violence this week has undermined his claim to be a statesman.
Gideon Rachman Columnist
May 18, 2021 – 9.07am
Until about a week ago, it looked like Benjamin Netanyahu had a good chance of disproving the adage that “all political careers end in failure”. His grip on power in Israel was weakening. But even if he lost office, Netanyahu would still leave politics as Israel’s longest serving prime minister ever — and one of its most consequential.
Last year, Netanyahu secured a historic breakthrough in the Jewish state’s relations with the Arab world. The Abraham Accords normalised relations between Israel and the United Arab Emirates and Bahrain.
Israel under Netanyahu was at peace, prosperous and breaking out of its international isolation. The long and often bloody struggle with the Palestinians was out of the headlines.
A world-beating COVID-19 vaccination program had further burnished the country’s image. There was just the small matter of avoiding conviction in a corruption trial and a possible jail sentence — and his legacy would be secure.
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China could be the first country to get old before it gets rich and the implications are profound
Political and international editor
May 18, 2021 — 5.30am
Demography, it’s said, is destiny. Now that China has published its first national census in a decade, what’s its destiny to be? It’s a bit awkward, actually, for President Xi Jinping’s vaunted “China Dream”. Because he has promised “the great rejuvenation of the Chinese nation” when the official statistics show it is on the way to becoming one of the fastest ageing countries on earth.
We already knew that China was heading for a population collapse. That’s why Xi dumped the One Child Policy in 2015. The advent of the Two Child Policy did have the desired effect. The number of births surged. But only for one year.
The number of babies born in China then went into steep decline. Last year, there were only 12 million newborns. That’s the fewest recorded in any year since the shocking famine of the so-called Great Leap Forward of 1958-1962.
It’s now down by 33 per cent compared with the number born in 2016. Abandoning the One Child Policy evidently was too little, too late. “Too many people” ran the popular saying in support of the government’s One Child Policy. Remarkably, the country is now gripped by the opposite problem: “Too few people.” Time elapsed between the two – just 36 years.
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Trump Organisation now under New York state criminal investigation
Michael Sisak
May 19, 2021 – 1.52pm
New York | The New York attorney-general’s office said on Tuesday (Wednesday AEST) that it was conducting a criminal investigation into former president Donald Trump’s business empire, expanding what had previously been a civil probe.
“We have informed the Trump Organisation that our investigation into the company is no longer purely civil in nature,” Fabien Levy, a spokesman for Attorney-General Letitia James, said in a statement.
“We are now actively investigating the Trump Organisation in a criminal capacity, along with the Manhattan DA,” Mr Levy said.
Ms James’ investigators are working with the Manhattan district attorney’s office, which has been conducting a criminal investigation into Trump and his company for two years. Ms James and District Attorney Cyrus Vance jnr are both Democrats.
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https://www.afr.com/world/europe/can-blair-s-medicine-revive-the-labour-zombie-20210518-p57srr
Can Tony Blair’s medicine revive the progressive left?
Keir Starmer and Anthony Albanese must somehow restitch the coalition of white and blue collars, lest their parties become ‘too weak to win, too strong to die’.
Hans van Leeuwen Europe correspondent
May 19, 2021 – 1.00pm
The first time I came across Tony Blair was in late 1993. A young Labour activist I was a bit keen on told me the shadow home secretary, as Blair then was, would be speaking at my Oxford college that evening. He was the future, she told me excitedly – did I want to come along and see?
I was a bit sceptical. Labour leader Neil Kinnock’s unexpected and shattering 1992 election defeat had left many people wondering if the party had any future at all. As an Australian, I couldn’t see what stopped Labour from emulating the decisive revamp of the left engineered by Bob Hawke and Paul Keating, which had yielded five straight election victories.
But I went along. I remember not a word of what Blair said but he oozed charisma and radiated confidence. The general consensus among the students emerging from the room afterwards? Yes, this guy was the real deal.
Less than a year later, he was Labour leader. And in 1997 he became one of only two Labour leaders to have won a British election in my five-decade lifetime, with the biggest majority that either side of politics has scored since the Second World War. In poaching two more elections and presiding over a decade-long economic boom, he can justifiably claim to be the most successful helmsman in the party’s 121-year history.
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Crisis in Israel ends Joe Biden’s White House honeymoon
May 20, 2021 — 11.49am
The Biden White House is being forced to confront its first major foreign policy crisis with the week-long violence in Israel and Palestine. The conflict has cost over 230 lives, the vast majority in Palestine.
Biden came into office without any grand plans to reshape the Middle East. His main focus has been on strategic competition with China, rebuilding America’s alliances in Europe and mobilising international action on climate change.
The consensus in Washington is that - with Hamas dominant in Gaza and Benjamin Netanyahu struggling to hold on to power in Israel - there is next to no hope of achieving meaningful progress towards a two-state solution anytime soon and it would be foolish to waste political capital on the issue.
But presidents do not get to choose which events they must respond to.
During his career as a centrist Democrat in the Senate, Biden was a fierce defender of Israel.
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Israel and Hamas agree Gaza truce
Nidal al-Mughrabi and Dan Williams
May 21, 2021 – 7.02am
Israel and Hamas have ceased fire across the Gaza Strip border as of Friday, bringing a potentially tenuous halt to the fiercest fighting in years.
Israeli Prime Minister Benjamin Netanyahu’s office said his security cabinet had voted unanimously in favour of a “mutual and unconditional” Gaza truce proposed by Egypt, but added that the hour of implementation had yet to be agreed.
Hamas and Egypt said the truce would begin at 2am (9am AEST on Friday), after 11 days of Israeli-Palestinian hostilities.
Earlier, in a televised address, US President Joe Biden said both sides agreed the truce would begin “in less than two hours”.
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Federal Reserve will issue report on US digital currency
Craig Torres
May 21, 2021 – 5.32am
Federal Reserve chairman Jerome Powell said the central bank will launch a centrepiece research paper this [Northern Hemisphere] summer on digital currency and seek public input, as he and his colleagues weigh how to proceed in this area.
“We are committed at the Federal Reserve to hearing a wide range of voices on this important issue before making any decision on whether and how to move forward with a US CBDC,” he said in a statement on Thursday (Friday AEST), referring to central bank digital currencies.
The announcement, during a week of intense volatility in cryptocurrencies, marks a shift in momentum on the CBDC topic at the Fed, which until now has mostly been a technological research project at its regional branch in Boston.
Powell said he wants the Fed to play “a leading role” in the development of international standards. Central banks around the world -- most notably the People’s Bank of China -- are moving ahead with digital currencies which could give them a head-start in how standards develop.
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No explanation for those UFO sightings: Obama
· The Times
Barack Obama has said there is no explanation for some recent UFO sightings as America waits for the release of a declassified report on the matter by the Pentagon.
The former president, 59, said officials were still trying to “figure out” the movements of unidentified aircraft captured on film by the US military. Referred to as Unidentified Aerial Phenomena, several videos have been made public by the military. It has been given until June 25 by the Senate intelligence committee to publish a report on the phenomenon.
“When it comes to aliens, there are some things I just can’t tell you on air,” Obama joked when asked on The Late Late Showwith James Corden, on CBS, if he had a theory about UFOs. “But what is true — and I’m actually being serious here — is that there’s footage and records of objects in the skies that we don’t know exactly what they are. We can’t explain how they moved, their trajectory. They did not have an easily explainable pattern.
“So I think that people still take seriously trying to investigate and figure out what that is. But I have nothing to report to you today.”
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https://www.afr.com/world/north-america/this-is-how-wokeness-will-end-20210521-p57tvw
This is how wokeness will end
Woke jargon has become a passport to the top of society. But it is also being turned from protest to product.
David Brooks Contributor
May 21, 2021 – 10.45am
My friend Rod Dreher recently had a blog post for The American Conservative called “Why Are Conservatives in Despair?” He explained that conservatives are in despair because a hostile ideology – wokeness or social justice or critical race theory – is sweeping across America the way Bolshevism swept across the Russian Empire before the October Revolution in 1917.
This ideology is creating a “soft totalitarianism” across wide swaths of American society, he writes. In the view of not just Dreher but also many others, it divides the world into good and evil based on crude racial categories. It has no faith in persuasion or open discourse, but it shames and cancels anybody who challenges the official catechism.
It produces fringe absurdities like “ethnomathematics”, which proponents say seeks to challenge the ways that, as one guide for teachers puts it, “math is used to uphold capitalist, imperialist and racist views” by dismissing old standards like “getting the ‘right’ answer”.
I’m less alarmed by all of this because I have more confidence than Dreher and many other conservatives in the American establishment’s ability to co-opt and water down every radical progressive ideology. In the 1960s, left-wing radicals wanted to overthrow capitalism. We ended up with Whole Foods. The co-option of wokeness seems to be happening right now.
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Cycle of violence doesn’t stop here
The fighting lasted less than two weeks, but there was no shortage of explosions.
By the end, Palestinian militant group Hamas had fired 4000 rockets at Israel. Most were intercepted by Israel’s missile defences. Israel responded with hundreds of airstrikes on Gaza, which had no shield. More than 200 people were killed, all but 12 of them Palestinian.
The battle began to wind down on Thursday; after nightfall Israel and Hamas agreed to a ceasefire. Assuming that calm returns, who knows how long it will last?
Fighting between Israel and Hamas has become almost routine. Since the Islamist group grabbed control of Gaza in 2007, the two sides have fought four wars and several smaller battles, costing thousands of lives (again, mostly Palestinian). The spark for the latest outbreak came in Jerusalem — but were it not Jerusalem, it would have been some other cause. Israel and Hamas are stuck in a perpetual crisis, trapped by the logic of war, which dictates that they keep going through the same motions.
Start with Hamas, which sees fighting “the Zionist invaders” as its raison d’etre. Its campaign of suicide-bombings in the 1990s and 2000s bears much responsibility for destroying the Oslo peace accords. Because of its incessant attacks, Israel withdrew from Gaza in 2005. The group expelled Fatah, its Palestinian rival, two years later.
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Why you must learn to live with low population growth
You need to think about policy differently in a flat-population economy than you did in the days when maturing Baby Boomers were rapidly swelling the workforce.
Paul Krugman
May 19, 2021 – 6.07am
Last week the US Bureau of Labour Statistics reported much higher inflation than almost anyone predicted, and inflationistas – people who always predict runaway price rises, and have always been wrong – seized on the news as proof that this time the wolf is real.
Financial markets, however, took it in stride. Stocks fell on the report, but they soon made up most of the losses.
US population growth is the lowest since the 1930s, while Japan’s working-age population has been declining since the mid-’90s and the euro area has been on the downslide since 2009.
Bond yields rose only slightly on the news, then ended the week right where they started – namely, extremely low.
Why so little reaction to the inflation news? Part of the answer, presumably, was that once investors had time to digest the details they realised there was little sign of a rise in underlying inflation; this was a blip reflecting what were probably one-time rises in the prices of used cars and hotel rooms.
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I look forward to comments on all this!
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David.
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