July 29, 2021 Edition
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In Australia we are seeing a COVID outbreak being very hard to control in NSW while we are seeing SA and VIC doing much better. Talk of recession is now starting as NSW as the lockdown seems to have no end.
In the US the fires in the Northwest have become truly Biblical in extent and intensity while people in Republican dominated states are dropping like flies as they don’t want to be vaccinated. Massively stupid and deluded ratbags IMVHO.
In the UK we await to see the consequences of Freedom day! It should be clear about the time this is available!
Sadly in Asia
the virus is rampant and deaths are rising rapidly! So sad in these poor
countries. Also awfully sad is the start of the end days for Hong Kong as the population that can flees. Just awful.
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Major Issues.
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https://www.afr.com/policy/economy/post-pandemic-inflation-fears-are-overblown-20210719-p58awn
Post-pandemic inflation fears are overblown
The deflationary forces of technology and the brave new future of work are more important than the transitory price hikes coming through in current data.
Rana Foroohar Contributor
Jul 19, 2021 – 10.32am
Too much in our market system revolves around the short term. That certainly holds true for the debate about inflation.
Last week’s data showed US prices rising at their fastest pace in 13 years. That has led everyone from top investors to restaurant and hotel owners, who are now finding that they may have to pay more for previously low-wage service staff, to fret about an overheating economy.
But the hand-wringing is premature. These early signs of rising prices are more reflective of a predictable, post-lockdown surge in animal spirits than any longer-term trend.
Supply chain bottlenecks will soon ease, as they did in 2020 with, say, personal protective equipment. Purchases of cars and vacations will subside as the post-pandemic spending splurge passes.
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Building a better Australia is a road strewn with obstacles
The long pandemic has exposed an Australian economy that is too narrowly based, lacking in new ideas, and with new political fractures.
Satyajit Das Contributor
Jul 19, 2021 – 2.46pm
Fortified by chatter about ‘resilience’ and ‘pulling together’, policy makers promise to build back better. Rather than tweets and grand announcements, that will require what German historian and sociologist Max Weber called the ‘slow boring of hard boards’. Five issues, many long standing, must be addressed.
First, activities dependent on free movement of people are now problematic. Immigration, tourism and foreign students are important to Australia’s economic activity. New endeavours are now required to drive economic growth.
The pandemic exposed dependence on skilled and unskilled foreign workers. Border closures have translated into labour shortages affecting agriculture and hospitality. The latter has negated domestic tourism plans. Welcome training initiatives merely reverse years of retrenchment and will take time to yield results. Measures to facilitate greater female and aged participation in the workforce are neglected.
Former Queensland premier Joh Bjelke-Petersen’s observation of the difficulty of straddling a barbed wire fence is salutary.
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How to get your financial affairs in order
The sooner you start thinking about the kind of legacy you want to leave, the easier it will be for everyone, including yourself.
Michael Hutton Contributor
Jul 20, 2021 – 12.17pm
Being told to get your affairs in order can seem ominous, particularly if told to do so by a medical professional. But it doesn’t have to be an arduous or stressful task.
Indeed, the sooner you start thinking about the state of your financial affairs, and the kind of legacy you’d like to leave, the easier it will be for everyone, including yourself.
Anyone can benefit from having organised financial affairs, not just the dependants and partners who may outlive you. It can offer peace of mind and may even offer some present-day tax benefits at the same time.
Regardless of
what is in your Will, it may be a good idea to consider simplifying your
financial structure. For example, is your portfolio overweight illiquid
assets, such as rental properties or holiday homes? Are they being used? If
not, consider selling the properties and investing the proceeds in more liquid
assets, which will be easier to divide when the
time comes.
Such steps make
the process of getting your affairs in order much more
straightforward. Unnecessary companies and trusts might also be wound up. Keep
in mind that bequeathing assets and property doesn’t have to occur solely after
your death.
If you start passing on mementos and assets to relatives, family and friends now, you can be sure they have gone to the right people, who also get the opportunity to express their gratitude.
You could
also look to equalise benefits provided to beneficiaries, rather
than leaving it to equalisation clauses in your Will.
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https://www.afr.com/politics/spend-your-money-before-you-die-treasury-urges-retirees-20210720-p58bcs
Spend your money before you die, Treasury urges retirees
Michael Read Reporter
Jul 20, 2021 – 5.02pm
The Morrison government wants retirees to draw down their superannuation balances before they die, and has asked super funds to develop a strategy to make it easier for members to take money out of their super in retirement.
The Commonwealth Treasury released a position paper on Monday canvassing the need for superannuation trustees to develop strategies that would encourage people to draw down their full super balances in retirement.
The strategy, which would be in place from July 1, 2022, comes in response to a growing body of evidence showing retirees are dying with most of their wealth intact.
By 2060, one in every three dollars paid out of the superannuation system will be an inheritance rather than retirement income, according to the government’s retirement income review.
“Partly because they have only ever been primed to save as large a lump sum as possible, retirees struggle with the concept that superannuation is to be consumed to fund their retirement,” wrote Treasury.
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What’s spooking investment markets?
7:13PM July 20, 2021
Out of nowhere, it seems, the sharemarket took a headlong dip this week with the worst single-day drop on Wall Street since October. Europe also managed its worst day of the year so far, while the ASX dropped a modest 0.5 per cent on Tuesday.
More significantly, the bond market continues to move in the wrong direction — that is, bond prices rose and yields fell. If the global recovery is on track, that should not be happening.
What’s spooking markets? In a nutshell, the question looms: have we just seen a post-pandemic recovery? Or rather, was it a recovery into a pandemic set to be extended by new variants or ineffective vaccines?
The questions form just as a string of related concerns have accumulated to take a toll on investor confidence.
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https://www.afr.com/chanticleer/why-most-m-and-a-deals-fail-20210721-p58bpf
Why most M&A deals fail
Wizened shareholders in public companies will know takeovers often collapse. Research about the biggest ones in the past 50 years provides some explanations.
Jul 22, 2021 – 12.00am
As Australia’s mergers and acquisitions boom takes a breather because of boards pulling down the shutters on bidders, a fund manager has released timely research on why so many deals go wrong.
Aoris Investment Management examined 1000 of the largest M&A deals over the past 50 years, with transaction values ranging from $US5 billion to $US150 billion.
Using a unique combination of qualitative and quantitative criteria for measuring success and failure, it found 60 per cent of M&A deals failed.
The two main causes of failure were the size of the deals and the acquirer stepping outside their core business.
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Retirees told they can live fast and die old
Michael Read Reporter
Jul 21, 2021 – 2.49pm
Retirees can afford to take more money out of their superannuation, say experts, but critics argue generous tax concessions from the Commonwealth government are discouraging them from doing so.
Challenger’s chairman of retirement income, Jeremy Cooper, said the framing of super as a “nest egg” that should not be spent was making older Australians wary of drawing down their balances.
But this behaviour comes at a cost, according to the former ASIC deputy chairman.
Research by Challenger found that a male at the point of retirement with $1 million in superannuation owed one-third of his balance to generous tax concessions.
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https://www.afr.com/policy/economy/australia-needs-a-place-in-the-space-race-20210720-p58bd3
Australia needs a place in the space race
Australia has an appetite and market for space-based technology. But we need to boost a small, ad hoc, and unco-ordinated effort.
James Brown
Jul 21, 2021 – 4.11pm
This week an 18-year-old student, an 82-year-old pilot, a 51-year-old private equity guy, and his 57-year-old investor brother rode a commercial rocket flight into space. That may seem like an ordinary sentence to read. It’s really anything but. Fifty-two years on from the moon landing, the global space industry is at an inflection point and Australia’s space industry is just getting started.
Beyond the billionaire bragging rights of blasting beyond the atmosphere, Elon Musk, Jeff Bezos, and Richard Branson are making a calculated bet to be the prominent first movers in the fast accelerating technological and economic domain of space.
Space consulting firm Euroconsult assesses global commercial revenue from the space industry was $428 billion last year. Morgan Stanley expects that to grow to $1.4 trillion in the next two decades.
One-third of the 3500 satellites in orbit were launched in the past twelve months, with plans to launch nearly 100,000 this decade. Little wonder then that New Zealand space launch start-up Rocket Labs will shortly list on the NASDAQ at a $5.6 billion valuation and astronomers fear they soon won’t be able to survey the stars.
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https://www.afr.com/chanticleer/distrust-in-edelman-s-trust-index-20210721-p58bip
Distrust in Edelman’s trust index
Experts say there are flaws in the methodology of the widely hailed and much quoted guide that measures faith in business, government and the media.
Jul 23, 2021 – 12.00am
It’s time to blow the whistle on Edelman’s survey of community trust in government, business, non-government organisations and the media.
The decision to highlight the flaws in a survey done by Edelman, a New York public relations firm, has nothing to do with its damming findings in relation to journalists.
Its trust barometer published in February found that 64 per cent of Australia’s “mass population” believe “journalists and reporters are purposely trying to mislead people by saying things they know are false or gross exaggerations”.
The reason why it is worth questioning Edelman’s “trust barometer” is because its findings jump around like a yo-yo, its survey techniques are questionable and its landmark “trust index” is disjointed from reality.
Edelman set itself up as the oracle of trust with the publication of an annual survey of people in 15 countries about 20 years ago. This year there was a half-yearly update using a smaller sample size but with the same core methodologies.
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Coronavirus And Impacts.
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https://www.afr.com/politics/our-leaders-have-baulked-at-tough-virus-choices-20210715-p589y2
Our leaders have baulked at tough virus choices
By taking soft options on sealing the border, hard lockdowns and compulsory vaccinations, politicians are appeasing vocal minorities at the cost of the greater good.
Andrew Mohl Contributor
Jul 18, 2021 – 12.37pm
Our leadership model today increasingly gives the impression of not being fit for purpose. Our institutions are under-delivering as we face up to the complexities, risks, and trade-offs of the pandemic.
There are growing examples of our leaders baulking at the hard decisions that, as a community, we need to be taken.
Last December, I argued we should fully close our international borders, with no exemptions, as the hotel quarantine system was clearly flawed.
This would have protected the broader community from importing the virus, albeit with obvious costs to Australians stranded offshore (less than 0.2 per cent of the population).
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Business fights for supply chains
Jacob Greber Senior correspondent
Updated Jul 18, 2021 – 8.27pm, first published at 7.48pm
Alarmed business leaders have successfully pushed the NSW government to keep open western Sydney’s vital supply chain and distribution hubs, even as tougher lockdown measures threaten to derail a construction boom and induce a double-dip downturn.
As ongoing community infections over the weekend forced NSW into tough new restrictions alongside a snap shutdown in Victoria, Treasurer Josh Frydenberg warned Australians to brace for a damaging hit to economic growth and indicated that recent labour market gains could falter.
“The economic impact of the NSW and Victorian lockdowns are significant and are expected to be seen in future national account and labour force data,” Mr Frydenberg told The Australian Financial Review on Sunday.
Sunday July 18: New South Wales has recorded 105 local cases of coronavirus and one death in the last 24 hours
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https://www.afr.com/policy/economy/vaccination-is-the-only-endgame-for-lockdowns-20210718-p58anz
The end of lockdowns is near but it’s not here yet
There’s no living with a strain three times more infections than flu and 20 times as fatal. So we can’t go wobbly on the strategy that’s prevented the deaths and economic carnage that premature reopening would have entailed.
Steven Hamilton and Richard Holden
Updated Jul 18, 2021 – 1.39pm, first published at 1.31pm
The delta strain of the novel coronavirus appears not only to be more transmissible but also to have infected the brains of many public commentators.
Some are arguing, incredibly, that this new strain – twice as infectious as the original version – is reason to abandon the strategy every state and territory has successfully executed for more than a year. The one that saved tens of thousands of lives and millions of livelihoods. That made Australia the envy of the world.
We have to “learn to live with the virus”, they say, just as they were saying last year. Of course, the problem is not so much living with the virus but, rather, dying from it. “It’s just like the flu,” they say, just as they did last year.
Of course, COVID-19 today is even less like the flu than it was last year. The delta strain is three times more infectious than the 2009 pandemic flu, and is in the order of 20 times more fatal.
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AMA beats out the epidemiologists for pandemic clippings
Myriam Robin Columnist
Jul 19, 2021 – 5.00am
The Australian Medical Association operates most effectively when the interests of its members and their patients are, in the public mind, blurred.
But the AMA’s main role is to lobby for the interests of the nation’s doctors. This unavoidably informs its positions, which in recent months have included opposition to the largely doctor-less rollout of mass coronavirus vaccination centres.
This is well worth remembering, particularly when it’s as prominent as it is now, the AMA having ably stepped in to fill the media’s voracious appetite for commentary on all matters pandemic.
This calendar year, newish AMA chief and orthopaedic surgeon Omar Khorshid is by some margin the nation’s most-cited health expert (apart from those who work for a government), according to media monitoring conducted for this column by Streem. For raw, unduplicated mentions in written media (both online-only and print), he’s earned no fewer than 907 citations, putting him some way ahead of the next most-quoted expert, Deakin University’s inaugural chair in epidemiology Professor Catherine Bennett, who has had 607 mentions so far this year.
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Stronger health measures needed to contain delta
Tom Burton Government editor
Updated Jul 18, 2021 – 7.15pm, first published at 6.26pm
Ongoing density limits, capacity restrictions at big sports events, indoor mask wearing, and a focus on school safety are being promoted by experts as health authorities admit the delta variant is spreading in settings not previously considered high risk.
Epidemiologists said the spread in schools, sports stadiums, retail outlets and workplaces meant until there is extensive vaccination, the public health response is going to have be very rapid if the country is to avoid constant lockdowns.
Victoria recorded its second-highest daily caseload since its second wave, with 16 new cases reported on Sunday, but all were linked to known chains of transmission.
Sunday July 18: There have been 16 local cases of COVID-19 detected in Victoria overnight on the state's third day of lockdown.
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Sydney and Victoria lockdowns taught us a valuable lesson
Professor
July 18, 2021 — 5.00pm
We have a natural experiment happening before our eyes. Victoria going hard and early, NSW part way through slow and steady.
The outcome of Victoria’s current snap lockdown pending, modelling groups (including ours) are unanimous. Going hard and early is costly (in GDP and societal terms) per day. Yes, we get that. But such a lockdown is likely over quickly, costing less in the long run than soft or pseudo lockdowns that drag on.
The above logic is thinking about cost writ large. The cost across society. But imagine now you are the NSW Treasurer. From his perspective, the maths may be different because he (and NSW) bear disproportionately more of the cost of a hard lockdown compared to a soft lockdown. Think business subsidies.
This, I suspect, is a major cause for what ostensibly appears to be irrational NSW decision-making. We, as a country, need a unified approach so the correct cost signals (in additional to health impacts) are what are considered holistically by the decision makers.
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Partygoers celebrate England’s ‘Freedom Day’ amid warnings of a nasty hangover
By Sylvia Hui and Guy Faulconbridge
Updated July 19, 2021 — 11.40amfirst published at 7.50am
London: Sparkling wine, confetti, a midnight countdown: it was not New Year’s Eve, but it felt like it for England’s clubbers. After 17 months of empty dance floors, the country’s nightclubs have reopened with a bang.
As midnight struck on Monday, Londoners flocked to one of the first rule-free live music events since the pandemic began last year, dancing through the night as England lifted most COVID restrictions.
Britain, which has one of the world’s highest death tolls from COVID, is facing a new wave of cases, but Prime Minister Boris Johnson is lifting most restrictions in England in what some have dubbed “Freedom Day”.
“I have not been allowed to dance for what seems like forever,” said Georgia Pike, 31, at the Oval Space in Hackney, east London. “I want to dance, I want to hear live music, I want the vibe of being at a gig, of being around other people.”
But clubbers also voiced concern about a wave of new cases - more than 50,000 per day across the United Kingdom.
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The markets are more afraid of inflation than COVID
By Ambrose Evans-Pritchard
July 21, 2021 — 8.36am
Countries making up three quarters of global economic output have reached critical vaccination thresholds. Many others have largely covered the most vulnerable cohorts.
The world economy is not going back into a collective lockdown whatever the Delta variant may bring. Just as the vaccines have broken the link between cases and death, societies have broken the link between the virus and economic loss. Each wave has a diminishing impact.
The UK is the world’s laboratory for opening up. Unfortunately it has done so with breathtaking incompetence and given the process a bad name. The error is not the decision to lift curbs. It is a legitimate strategy to open up fully during the peak of summer when 70 per cent of adults have been fully vaccinated. The death rate has fallen to levels that resemble winter flu. But if you are going to do it, do it with conviction. Had the Government halted all isolation requirements for the vaccinated, the world would not be offered the spectacle of a Cabinet forced into incarceration on its own “freedom day”.
It will soon become clear to market traders across the globe whether British hospitalisations will remain manageable or whether the pandemic again approaches the catastrophism of Professor Neil Ferguson. If the latter, Monday’s rush into the safe-haven bonds - gilts, US Treasuries, Bunds - is indeed the harbinger of something serious.
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UK’s new COVID-19 strategy is dangerous
The government’s policy of standing back and letting the virus reproduce freely is an invitation to disaster.
Gabriel Scally
Jul 22, 2021 – 8.00am
I know of no episode in history where a government has willingly aided and abetted the spread of a dangerous infectious disease among its own population. History is being made.
The government of the United Kingdom seems to actually want people to catch COVID-19 in the summer, rather than in the autumn and winter.
Ministers reason that the understaffed and underfunded National Health Service will be in major trouble over the winter. To “go now” with the removal of all legal restrictions, thus producing an even higher level of infections, appears to be regarded as the right thing to do as it will reduce the inevitable problems later this year.
This extraordinary policy has been revealed to the population in small dollops via Downing Street press conferences, where Prime Minister Boris Johnson is flanked by civil servants.
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Vaccine blind spot shows limits of ‘following the health advice’
Conservative medical advice on the AstraZeneca vaccine failed to consider the broader costs and benefits, and politicians failed to override the mistake.
John Kehoe Economics editor
Jul 21, 2021 – 3.46pm
The deepening lockdown of 14 million Australians 1½ years into the pandemic exposes that the biggest public policy failure is overly cautious medical advice stopping millions of people receiving the effective and extremely low-risk AstraZeneca vaccine.
Weak-kneed democratically elected lawmakers have outsourced difficult decisions and hidden behind narrow-minded public health officials.
The flip-flopping and very conservative aged-based AstraZeneca vaccine advice from the Australian Technical Advisory Group on Immunisation (ATAGI) failed to consider the wider costs and benefits of low vaccination rates and lockdowns.
Repeated lockdowns will have devastating long-term effects on physical health, mental health, education, social wellbeing and the economy.
There will likely be hidden longer-term costs we are not yet aware of.
In February, the Therapeutic Goods Administration and ATAGI approved AstraZeneca for adults of all age groups.
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https://www.afr.com/policy/economy/atagi-misses-the-point-of-the-jab-20210720-p58bd6
ATAGI misses the point of the jab
We always encourage people to accept the health risk of vaccination for the good of society. The same should apply to the AstraZeneca vaccine to prevent harmful lockdowns.
Ashley Craig and Matthew Lilley
Jul 22, 2021 – 2.24pm
Vaccination against infectious diseases provides vast benefits to society. The most obvious is that a person who receives a vaccination reduces their own risk of becoming sick. But there are also substantial benefits to others.
Vaccination can reduce the spread of disease, and prevent others from becoming sick. Society routinely encourages us to consider benefits to others from our health decisions.
When deciding whether getting vaccinated is worth the potential risks and side effects, we are typically willing to consider benefits to other people in addition to direct benefits to ourselves.
Yet the current advice provided by the Australian Technical Advisory Group on Immunisation regarding the AstraZeneca COVID-19 vaccine completely ignores these benefits.
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https://www.afr.com/policy/economy/inarticulate-leaders-in-a-policy-muddle-20210722-p58bwk
Inarticulate leaders in a policy muddle
The vaccine shambles is an example of what happens when the ultimate authority in the government are the opinion polls.
Laura Tingle Columnist
Jul 23, 2021 – 4.41pm
Last Sunday, Australia’s Deputy Prime Minister, Barnaby Joyce, was asked a very simple question: would he support any sort of target to reach net zero greenhouse gas emissions by 2050?
As far as climate change politics is concerned, as far as the fundamental relationship between the governing Coalition parties is concerned, it is the fundamental question.
His rambling answer to Insiders host David Speers was too long to repeat here, but involved the menu in the restaurant in the hotel next to where Joyce was standing for the interview, and an immediate digression into what Labor’s policy might be.
When Speers interjected to say he wasn’t asking about Labor’s approach but the government’s, Joyce said the Nationals’ approach “is that we want to see exactly what’s involved and we want to see exactly what the cost is”.
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https://www.smh.com.au/national/scott-morrison-s-reckoning-has-arrived-20210723-p58cbm.html
Scott Morrison’s reckoning has arrived
Political and international editor
July 24, 2021 — 5.33am
It’s been a source of bafflement and frustration for Labor and Greens voters for months: How could the Morrison government make so many blunders in plague management yet still be a pretty good bet to win the next election?
For these people, there is some satisfaction across all the opinion polls in recent weeks. The reckoning has arrived.
All the published polls are showing a clear movement away from the Morrison government. On every measure of pandemic performance, the Coalition’s approval rating has fallen significantly.
And we know why. The pollster for The Sydney Morning Herald and The Age, Jim Reed, says that “the No. 1 issue for people in recent focus groups has been the vaccine rollout”.
“A year ago people were talking about strong national leadership, with Scott Morrison, Greg Hunt and Brendan Murphy updating them daily, closing the border, making more ventilators, financial supports, with four vaccines on order, proactive and innovative,” says Reed, founder of Resolve Strategic polling.
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If Pfizer is quick fix, give people what they want
7:18PM July 23, 2021
The national cabinet has made a grave error in refusing to agree to additional Pfizer vaccine doses for southwest Sydney.
NSW chief health officer Kerry Chant’s advice that mass local vaccination is necessary in the face of the floundering lockdown strategy in southwest Sydney should have been wholly supported. The national economy is haemorrhaging billions for every week that lockdowns are extended. Yet NSW is treading water with the current strategy.
It’s time to confront the fact that lockdown may be a failed strategy for the local government areas of primary spread in the quest to get case numbers back to zero.
Accounting for a significant proportion of community transmission are critical workers who simply cannot stay at home, who are spreading the virus in workplaces through no fault of their own before they know they’re infected, and then bringing the disease home to their families. These are the supermarket staff manning the checkouts and packing shelves, machinery operators, factory workers in food production. Supermarket and grocery store employment was the single biggest employer of people in the Fairfield local government area according to the last Census.
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Sydney’s Delta despair: what to do when a lockdown doesn’t work?
July 25, 2021 — 12.00am
If they hadn’t already become clear during the week, Friday’s shock-and-awe “national emergency” press conference crystallised several aspects of the COVID-19 crisis in NSW.
First, the lockdown is not working. It may have prevented exponential growth in cases, but the numbers are still going in the wrong direction and at best it’s keeping a lid on the outbreak. The sacrifices Sydneysiders are making are not yielding the anticipated outcome.
Second, the virus is circulating among essential workers and in vital retail settings. While some transmission is still occurring as a result of illegal household mixing, Chief Health Officer Kerry Chant highlighted spread in essential workplaces as a key problem.
“These workplaces are not the hairdressers or the discretionary premises, they are premises that actually put food on the table for people in Sydney,” she said.
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Climate Change.
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Reality is catching up with our freeloading, populist climate deniers
Economics Editor
July 19, 2021 — 12.00am
Don’t be taken in by the Morrison government’s outraged cries of “protectionism” against the EU plan to impose a carbon tax on our exports to Europe. It’s we who are in the wrong, failing to do what we should have to reduce emissions, in favour of politicking and populism.
What we’re seeing is just the reality of the world’s need to act to limit climate change catching up with a government and federal party which, since Tony Abbott used denialism to seize the party’s leadership from Malcolm Turnbull in 2009, decided to make global warming a party-political football: a way to beat your opponents, not a need to tackle the nation’s biggest problem.
It’s a condemnation of our business people that, when their own side of politics offered them a way to postpone the inevitable costs of adjusting to a low-carbon world, they happily embraced it.
It’s a condemnation of Australian voters that they were willing to allow their preferred party to tell them whether they cared or didn’t care about their children’s future. It should have been the other way round. “It’s all too hard; you do my thinking for me.”
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Net zero 2050 ‘impossible’ without electric vehicle policy
By Mike Foley
July 18, 2021 — 9.00pm
Australia cannot hit net zero emissions by 2050 without a policy for the transport sector, experts say, and it must be focused on driving people to buy electric vehicles.
In the first of a series of industry reports, the Grattan Institute argues strict regulations are needed to phase out petrol cars with emissions standards that tighten to zero by 2035.
It says a carbon price is the most economically efficient way to address emissions, but as that has been rejected by both of Australia’s major political parties sector-specific policies are needed to reduce greenhouse gases industry by industry.
Grattan’s report says “there are no federal government policies to reduce transport emissions at any significant scale” and it called for tax breaks on electric vehicles and swift rollout of emissions standards because the national fleet “takes more than 20 years to replace” and vehicles sold after that date could be in operation after 2050.
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https://www.afr.com/policy/energy-and-climate/two-cheers-for-carbon-tariffs-20210718-p58apt
Two cheers for carbon tariffs
Paul Krugman
Jul 18, 2021 – 3.46pm
The Democratic carbon proposal says, in general terms, that we should levy tariffs on imports from countries that don’t take sufficient steps to limit greenhouse gas emissions.
The European Union has laid out, in much greater detail, plans to impose a carbon border adjustment mechanism — which I’m afraid everyone will call a carbon tariff, even though CBAM is a great acronym. (See? Bam!)
So how should we think about carbon tariffs? From past experience, I know we’ll hear a number of voices denouncing them as a new form of protectionism and/or asserting they’re illegal under international trade law. These voices should be ignored.
First, let’s talk about priorities, people. Yes, protectionism has costs, but these costs are often exaggerated, and they’re trivial compared with the risks of runaway climate change. I mean, the Pacific Northwest – the Pacific Northwest! – of Canada and the United States has been baking under temperatures above 40 degrees Celsius, and we’re going to worry about the interpretation of Article III of the General Agreement on Tariffs and Trade?
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Getting electric cars on the road in Australia could be easier than you think
Economics Editor
July 21, 2021 — 5.30am
I have a mate who – in normal times, anyway – gives me a lift to the gym in his new all-electric Mercedes. He loves its lack of engine noise and amazingly fast acceleration when the lights change (not that I’m implying he’s a rev-head hoon the police should be watching). I’m no car lover, but it’s certainly a smooth, quiet ride.
Most of us accept that, as part of the world’s move to net-zero emissions by 2050, we’ll all be moving to electric cars. Other countries are already further down this road than us.
Just 0.7 per cent of new car sales in Australia are electric.
We’ve made big strides in shifting electricity generation to renewables, and our emissions are falling. But electricity production accounts for only a third of our total emissions. Transport, in all its forms, accounts for about 20 per cent of total emissions, so its move away from fossil fuels is another part of the transition we should get on with.
In all the years we’ve been arguing about climate change, people have tried to convince us how costly it will be. How disruptive to industry and our way of life. All the higher prices, the tax we’ll pay, the jobs we’ll lose.
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How the dynamics of a heating planet are driving extreme weather
By Peter Hannam
July 22, 2021 — 4.50pm
The heatwaves and deluges that have inflicted misery on millions of people in the northern hemisphere’s extreme summer reveal just how little is understood about how a heating planet will drive weather change.
Weeks after Canada baked in desert-like temperatures and western US records melted in multitudes, five “heat domes” have formed, spawning what the Washington Post described as an “infestation of heatwaves”. The Los Angeles Times opined about a “hell on earth” as wildfires erupted in the US.
But the intense weather hasn’t been confined to heat. Germany and neighbouring parts of Europe last week copped months’ worth of rain in a day.
Zhengzhou, a city of 10 million people in central China’s Henan province, was swamped by a year’s rain over four days to Tuesday, turning roads into raging rivers and drowning at least a dozen subway rail commuters.
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Australia avoids UNESCO downgrade of Great Barrier Reef
ROD McGUIRK
Jul 24, 2021 – 9.11am
Australia on Friday garnered enough international support to defer for two years an attempt by the United Nations’ cultural organisation to downgrade the Great Barrier Reef’s World Heritage status because of damage caused by climate change.
UNESCO had recommended that its World Heritage Committee add the world’s largest coral reef ecosystem to the World Heritage in Danger list, mainly due to rising ocean temperatures.
Australia deferred an attempt by the UN to downgrade the Great Barrier Reef’s World Heritage status because of damage.
But Australian-proposed amendments to the draft decision at a committee meeting in China on Friday deferred the “in danger” question until 2023.
In the meantime, a monitoring mission will visit the reef to determine how the impact of climate change can be managed.
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The scariest thing on TV is the Weather Channel
Remember when the weather was just a matter of small talk...Now, the scariest thing on TV is the Weather Channel.
Maureen Dowd
Jul 25, 2021 – 7.48am
Washington | Holy smokes.
It feels like we are living through the first vertiginous 15 minutes of a disaster movie, maybe one called “The Day After Tomorrow Was Yesterday.”
Heat waves are getting hotter. Forests are ablaze. Floods are obliterating. An iceberg nearly half the size of Puerto Rico broke off from Antarctica.
Florida’s fleurs du mal, algal blooms known as red tide, have become more toxic because of pollution and climate change. They are responsible for killing 600 tons of marine life, leaving beaches strewn with reeking dead fish.
It’s Mad Max apocalyptic. Crazy storms that used to hit every century now seem quotidian, overwhelming systems that cannot withstand such a battering.
The heat wave that stunned the Pacific Northwest, killing nearly 200 people, was followed by a bolt of lightning igniting the dry earth in Oregon. The Bootleg Fire has now devoured 400,000 acres, with flames so intense, they are creating their own weather pattern capable of sparking new fires. The smoke has travelled from the West to the East Coast, tainting the air.
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Royal Commissions And The Like.
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Rapid decline in financial adviser numbers sees fees rise
By John Collett
July 17, 2021 — 10.00pm
The number of financial advisers nationally is likely to fall below 17,000 by the end of the year as industry professionals continue to exit in big numbers because of tighter educational standards.
By the end of this year, more than 11,000 advisers will likely have left the industry since 2018, including the expected loss of at least 2000 more advisers who fail or do not sit a mandatory 3½-hour exam they are required to pass by year’s end.
The fall in numbers is putting upward pressure on advice fees. Earlier this year, ratings firm Adviser Ratings estimated fees had jumped more than 28 per cent in two years.
Tougher rules for advisers were introduced after a series of scandals that left thousands of Australians with their life savings wiped out or diminished after receiving inappropriate advice.
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National Budget Issues.
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Recession talk is too early, says Commonwealth Bank
2:06PM July 23, 2021
Commonwealth Bank is seeing a rise, but not a flood, of requests for home loan repayment pauses, as the economy braces for a Covid-19 hit from lockdowns plaguing three states.
CBA’s head of retail banking Angus Sullivan believes while economic output will be negatively impacted from the shutdowns, talk of another recession in Australia is premature.
“Obviously it‘s a negative, whether we go into recession or not I think it’s probably too early to tell. We need to see where the numbers go over the next week or two,” he said.
“Clearly the next couple of weeks are going to be critical and we‘re doing our best to make sure we’re prepared for either scenario, and giving as much support to customers as we can who need it.”
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Health Issues.
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No entries in this section this week.
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International Issues.
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UK health minister tests positive as curbs end and delta surges
Ronan Martin
Jul 18, 2021 – 12.00pm
London | British Prime Minister Boris Johnson and his finance minister Rishi Sunak will be limited to working from their offices and subject to daily COVID-19 testing after being identified as a contact of someone who tested positive for the virus.
Health Minister Sajid Javid on Saturday (Sunday AEST) said he had tested positive for COVID-19.
“The Prime Minister and Chancellor have been contacted by NHS Test and Trace as contacts of someone who has tested positive for COVID,” a statement from Mr Johnson’s Downing Street office said on Sunday.
Typically, anyone identified as a contact by the tracing scheme would be required by law to self isolate for 10 days.
However, the government’s two most senior ministers will instead take part in a pilot study that allows them to continue working from their offices, and only self-isolate when not working.
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Cold warriors brew China fears and phobias
New myths are now being spread by Australia’s China hawks to dismiss the idea that guileful diplomacy can provide a solution to the impasse with Beijing.
James Curran Columnist
Jul 18, 2021 – 2.50pm
Australia’s China debate resembles the shell-churned ground in no-man’s land. So cratered is the terrain between trench lines that advance looks impossible.
Seemingly there is little chance for dialogue between those championing “pushback” and those arguing that a place for guileful diplomacy remains.
The latter has become more difficult with President Xi Jinping’s consistently assertive interpretation of Chinese exceptionalism. Other countries cannot but take a firm stand against it and devise policies to reject it.
In 2017, as the most difficult period in Australia-China relations began, senior officials here believed it would be defined by “push and shove, trial and error”.
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Trade and climate are on a collision course at the WTO
The WTO and the Paris Climate Accord stand at odds. The compromise needs to be based on what nations can do now, not promise for 29 years’ time.
Gary Sampson Contributor
Jul 19, 2021 – 3.58pm
Not dealing with “carbon leakage” has plagued emission-reduction negotiations since the United Nations Framrwork Convention on Climate Change of 1994. It led to the failure of the United States to ratify the 1997 Kyoto Protocol, then of the protocol itself, and may well lead to the demise of not only the 2015 Paris Agreement but the WTO.
Carbon leakage occurs when the production of locally produced goods is transferred to countries with lower carbon taxes. Global emissions increase as a result. The proposed solution is to tax the carbon content of imports to ensure that equivalent taxes are paid in importing and exporting countries: a levelling of the playing field.
The members of the European Parliament have voted to support a “carbon border adjustment mechanism” – a carbon border tax – to place a carbon price on imports from outside the EU … to push EU partners to raise their climate ambition and reduce the risk of carbon leakage”, adding, “the measure will be designed to comply with the World Trade Organisation (WTO)“.
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Michael Wolff concludes his Trump trilogy – with the best book yet
“Landslide” is a cruel, unforgiving, muckraking, scandalous and unforgettable study of a man retreating into delusion after his election defeat.
Mick Brown
Jul 21, 2021 – 8.00am
In the days and weeks after his election defeat in November last year, Michael Wolff writes, Donald Trump was largely deserted by his aides and staff. “His hapless band of co-conspirators were too crazy or drunk, or cynical to develop a credible strategy or execute one. It was all a s--- show – ludicrous, inexplicable, cringeworthy, nutso, even for the people who felt most loyal to him.” And so, we’re off ...
This is the third book in as many years in what will come to be known as Wolff’s “Trump Trilogy”, dissecting Donald Trump’s erratic, mercurial period in the White House. Landslide focuses on the cataclysmic weeks after the election, and Trump’s vain attempts to overturn it. And it is the best yet.
Beginning with what Wolff describes as “the most cursed and hapless [election] campaign in history”, it charts the disintegration of the Trump administration, and his increasingly desperate – not to say progressively unhinged – refusal to accept defeat. It is a terrifying, albeit highly partisan, study of a man refusing to grasp reality and retreating into delusion – or, as Trump and his supporters would doubtless have it, courageously and single-handedly fighting against the most egregious attack on American democracy.
Much of this book dwells on the delicate and precarious business of being part of Trump’s inner circle, jockeying for power and humouring his belief that the election had been stolen as the votes tally rose mercilessly against him. Nobody could read his thinking, or what he would do next: “It became logically necessary to accord him a mind of Martian status. He was simply not like anyone else.”
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India’s pandemic death toll could be in the millions
By Sheikh Saaliq and Krutika Pathi
July 21, 2021 — 1.41am
New Delhi: India’s excess deaths during the pandemic could be a staggering 10 times the official COVID-19 toll, likely making it modern India’s worst human tragedy, according to the most comprehensive research yet on the ravages of the virus in the South Asian country.
Most experts believe India’s official toll of more than 414,000 dead is a vast undercount, but the government has dismissed those concerns as exaggerated and misleading.
The report released on Tuesday estimated excess deaths – the gap between those recorded and those that would have been expected – to be 3 million to 4.7 million between January 2020 and June 2021. It said an accurate figure may “prove elusive” but the true death toll “is likely to be an order of magnitude greater than the official count”.
The report was published by Arvind Subramanian, the Indian government’s former chief economic adviser, and two other researchers at the Centre for Global Development, a non-profit think tank based in Washington, and Harvard University.
It said the count could have missed deaths that occurred in overwhelmed hospitals or while health care was disrupted, particularly during the devastating virus surge earlier this year.
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Digital trade war: Biden opens new front in effort to contain China
Senior business columnist
July 21, 2021 — 12.39pm
At last week’s virtual APEC meeting China’s Xi Jinping made a veiled reference to the next front in the competition with the US to dominate the 21st century economy.
In a pre-recorded video – he didn’t attend the meeting chaired by New Zealand’s Jacinta Ardern – China’s president said it was necessary to further develop digital infrastructure, facilitate the dissemination and application of new technologies and work for a digital business environment that is “open, fair and non-discriminatory.”
That might sound anodyne but it came in the context of efforts by the US to promote a digital trade deal in the Indo-Pacific region that could include countries like Australia, Japan, South Korea, New Zealand, Singapore, Malaysia and, perhaps, India along with Canada and Chile.
At stake is the nature of the rules governing digital trade and who writes them.
It’s not surprising that China’s state media, ahead of a meeting that was attended by Joe Biden, launched a pre-emptive strike, describing discussions about a digital traded agreement as a bid to protect American hegemony and the profits of its technology companies.
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An architect of the ‘printing money’ fix turns into a QE critic
Senior business columnist
July 22, 2021 — 12.38pm
When quantitative easing was embarked on by the US, UK and Europe in response to the 2008 financial crisis it was generally described as “unconventional” monetary policy.
It’s now baked into the policy settings of most developed economies, which makes tough questioning of the policy by a panel that includes the man who launched it in the UK a challenge to central bankers who appear to see QE - effectively printing more money to use to buy government bonds - as the panacea for all financial and economic threats.
Mervyn King was the governor of the Bank of England when it followed the US Federal Board’s decision to launch QE in the US in late 2008 with its own purchases of UK Treasury bonds in 2009.
Last week, a House of Lords economics committee of which he – along with former chief adviser to the Treasury and World Bank chief economist Nicholas Stern – was a member, issued a report, after a lengthy inquiry, which concluded that the BoE had failed to justify the policy.
The UK central bank, like the Fed, the European Central Bank, the Bank of Canada, the Bank of Japan and our Reserve Bank, all stepped up their asset purchases (in the RBA’s case, started buying bonds for the first time) in response to the outbreak of the pandemic in March last year.
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https://www.afr.com/world/asia/xi-jinping-reels-in-his-tech-titans-20210722-p58bwi
Xi Jinping reels in his tech titans
Private enterprise created China’s vaunted digital economy. But Big Brother is always in charge.
Richard McGregor Columnist
Jul 23, 2021 – 10.58am
For two countries daggers drawn on everything from the South China Sea to new technologies, the US and China had an instructive meeting of minds this month.
Days after Didi Global’s US$4.4 billion listing in New York in early July, Beijing launched a national security investigation into the homegrown ride-hailing giant, instantly cratering its share price.
Within weeks, Beijing had raided the company and stationed police, intelligence, tax and cyber officers inside its offices as part of a national security review of its collection and handling of data.
Yes, you read that right. Beijing hasn’t just put regulators inside the Uber of China. It has also placed Ministry of State Security officers there, the first time a permanent intelligence presence has been stationed inside a local tech company, or at least announced so publicly.
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Airport echoes with weeping as HK exodus gathers pace
AFP
7:32PM July 23, 2021
The exodus has begun and the evidence is clear in the departure halls of Hong Kong airport.
Twice a day the usually deserted check-in area fills with the sound of tearful goodbyes as people fearful for their future under China’s increasingly authoritarian rule start a new life overseas, mostly in Britain.
The number of Hong Kongers flying out of the city each day has almost doubled in six months – from about 800 early in the year to 1500 in July.
London flights tend to leave in the afternoon and late evening. It is then that the check-in area fills with passengers wheeling as much luggage as they are allowed.
Most of those leaving pause for a final hug before passing through the departure gates, the sound of sobbing continuing long after they have disappeared from view.
Clutching his British National Overseas passport, 43-year-old media worker Hanson said he began making plans to leave when he saw footage of police beating democracy supporters during protests two years ago.
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If Biden can reel in the big fish, so can we
Economics Editor
July 23, 2021 — 11.45am
In the search for explanations of the slowdown in productivity improvement, the world’s economists are closing in on one of the significant causes: reduced competition between the businesses in an industry, giving them increased “market power” – ability to raise the prices they charge.
Research by various Treasury economists has found evidence of this happening in Australia. And this month US President Joe Biden acted to increase competition in various markets where it had been lacking.
A new study by Jonathan Hambur has added to earlier research by Treasury people finding that Australia’s private sector has shown less “dynamism” – ability to become more economically efficient over time – during the past decade or so.
Hambur has used a database of tax returns covering almost all Australian businesses to find that their “mark-ups” have increased by about 5 per cent since the mid-noughties.
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‘Perilous moment’: Global supply chains buckle as variants and disasters strike
By Jonathan Saul, Muyu Xu and Yilei Sun
July 24, 2021 — 11.30am
Beijing: A new worldwide wave of COVID-19. Natural disasters in China and Germany. A cyber attack targeting key South African ports.
Events have conspired to drive global supply chains towards breaking point, threatening the fragile flow of raw materials, parts and consumer goods, according to companies, economists and shipping specialists.
The Delta variant of the coronavirus has devastated parts of Asia and prompted many nations to cut off land access for sailors. That’s left captains unable to rotate weary crews and about 100,000 seafarers stranded at sea beyond their stints in a flashback to 2020 and the height of lockdowns.
“We’re no longer on the cusp of a second crew change crisis, we’re in one,” Guy Platten, secretary general of the International Chamber of Shipping, told Reuters.
“This is a perilous moment for global supply chains.”
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I look forward to comments on all this!
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David.
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