December 16 2021 Edition
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On the global stage we are getting an increasing feeling that the old world order that resulted from the 2nd World War is breaking down with China and Russia both stirring up trouble. It all seems to be spinning out of control! – Climate Change also seems to be out of control with crazy weather all over! Tornadoes in the US a current example!
Elsewhere the COVID seems to be coming back with a vengeance in the UK, Europe and the US – and Asia also getting worse. Christmas looks to be under threat a little.
In OZ we are into the pre-Christmas slow down but with frenzied pre-election positioning. We have months more of this to endure!
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Major Issues.
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NSW council elections paint possible federal battlegrounds
Finbar O'Mallon Reporter
Dec 5, 2021 – 4.34pm
Independent Sydney lord mayor Clover Moore has survived another strong tilt at her position during NSW’s council elections while Labor and the Greens have enjoyed major swings in areas that could become key battlegrounds at the next federal election.
Ms Moore took 43.58 per cent of the first preference vote in Saturday’s race, with the closest second being Yvonne Weldon who received 16.08 per cent of first preference votes.
“We are going to continue with strong, independent, progressive leadership for the city,” Ms Moore said on Saturday night.
But Ms Moore saw a 14.2 per cent swing against her with a 16.1 per cent swing for Ms Weldon, a Wiradjuri woman and the first Aboriginal to run for Sydney mayor.
In Sydney’s west, likely to be a part of a big federal election battleground, independent ticket Our Local Community saw a 12.8 per cent swing towards it at the Parramatta council while Labor saw a 9.3 per cent swing to it and took nearly half of the first preference vote after the Liberals didn’t endorse a candidate.
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Choked supply chains may exist ‘for a very long time’
Emma Connors South-east Asia correspondent
Dec 5, 2021 – 1.30pm
Singapore | From his vantage point in Singapore, Toll Group managing director Thomas Knudsen has some bad news for anyone hoping for relief from sky-high international freight charges.
Toll Group is back in the black after a tumultuous few years and is refocused on Asia, where increased automation is revolutionising freight and supply chain management from factory floors through smart warehouses and all the way to hospital cabinets.
Toll’s forwarding business has benefited from greater cargo demand. But while the pandemic-induced switch in consumer spending from services to goods – particularly in the United States – may be abating, other factors were still choking supply chains, Mr Knudsen said.
Spot shipping charges have plateaued in recent weeks, but only at the very top end. “I see no scenario that could bring any material improvement in the next five to six months. There’s also clearly scenarios where these conditions continue for a very long time,” he said.
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Trusts that will cut tax and keep wealth in the family
Testamentary discretionary trusts are a good way to transfer wealth between generations in a tax-effective way and protect assets from relationship breakdowns.
Michael Hutton Contributor
Dec 6, 2021 – 5.00am
As Benjamin Franklin famously said, “nothing is certain except death and taxes”. While there’s not much that can be done about death, with some careful estate planning it is possible to reduce the tax burden for beneficiaries.
Even though there is no official “death duty” in Australia, tax certainly pervades many aspects of the distribution of an estate. The way distributions to beneficiaries are structured is of paramount importance.
The first step in good estate planning is to make sure all documentation (such as a will, superannuation nomination, etc) accurately records who assets should go to.
The second step is to set this up in a tax-efficient manner. An increasingly popular approach is to use a testamentary discretionary trust as part of an estate plan.
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The 10 rules for being a grandparent in 2021
From manners and treats to how much to interfere, here’s how to be a modern grandmother or grandfather in ways you might not know, but definitely should.
Fanny Blake
Dec 7, 2021 – 8.00am
The first time I was left alone with my months-old granddaughter, I was completely at sea. My three sons had survived my parenting, but I’d forgotten what to do, and, besides, today’s parents live in a different world with new routines and advice.
When she started crying, I nervously rocked her and, to my astonishment, she quietened down. I could do it. This wasn’t going to be a battle of wills. The old instincts came flooding back and with them an outpouring of love for this tiny being. They say the great thing about being a granny is that you can give them back – and it is true, of course.
I’m still a learner in this role, with a four-year-old granddaughter, an eighteen-month grandson and another on the way, so I am hardly an expert in this new territory. It wasn’t a role I had particularly imagined myself in but as soon as I saw my grandchildren as newborns I loved them and wanted a role in their lives.
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Inflation is here to stay, and rates can only go one way
Massive stimulus after the global financial crisis did not spill over into inflation. But this time it’s quite different.
Adrian Blundell-Wignall Columnist
Dec 6, 2021 – 11.59pm
US Fed chairman Jerome Powell thinks it’s time to drop the term “transitory” when referring to inflation and to begin tapering quantitative easing bond purchases.
Inflation is up strongly in the US and proving to be persistent, showing – if nothing else – that the Fed forecasters have no better insights than others.
It’s time all right, but not because QE has had anything to do with the sudden arrival of inflation.
Fed liabilities sat steadily in the range of 5 to 6 per cent of GDP between 1980 and 2007, some 27 years through several inflation cycles. Then, QE1 took this ratio to 15 per cent following the global financial crisis, and QE2 and QE3 raised it to 25 per cent by late 2014 (and to 36 per cent of GDP now).
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https://www.afr.com/policy/economy/inflation-to-edge-higher-in-coming-months-20211206-p59f3s
Inflation to edge higher in coming months
Ronald Mizen Economics correspondent
Dec 6, 2021 – 4.09pm
Inflation will edge further into the Reserve Bank of Australia’s target band in coming months, according to the Melbourne Institute’s monthly inflation gauge, as global price pressures persist longer than expected.
Headline inflation stabilised above 3 per cent in November, according to the gauge, while underlying inflation – the RBA’s preferred measure – also stabilised in the top half of the bank’s 2-3 per cent target range.
“The gauge has been a good lead-in, and it would suggest there are still inflationary pressures out there,” IMF chief economist Alex Joiner said.
“With the latest upside surprise in the Australian Bureau of Statistics’ measure of [underlying] inflation, it did give a bit of a heads-up.”
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https://www.afr.com/policy/economy/baby-boomers-to-pass-on-224b-a-year-by-2050-20211206-p59f7d
Baby Boomers to pass on $224b a year by 2050
Aleks Vickovich Wealth editor
Dec 7, 2021 – 12.15am
Baby Boomers will pass on an estimated $224 billion each year in inheritances by 2050 as record housing and super wealth, and fewer heirs, create a $3.5 trillion bonanza for younger generations, including the poorest Australians.
In the first-ever official study of wealth transfers in Australia, the Productivity Commission has projected a fourfold increase in the value of inheritances over the next 30 years.
The $224 billion estimate is based on the finding that $1.5 trillion was transferred between Australian generations between 2002 and 2018, 90 per cent of which was made up of inheritance payments and the remainder of gifts to mostly younger adult children.
It is also based on assumptions by the Productivity Commission about housing and sharemarket returns, along with expectations that older people will hold a growing share of total wealth and have fewer children to bequeath to because of lower fertility rates.
But contrary to the conventional wisdom about inheritances being drivers of financial inequality, popularised by critics such as French economist Thomas Piketty, the report found inheritance was a major contributor to a reduction in wealth inequality from a relative perspective. That’s because even moderate gifts and inheritances can make a big difference for poorer people.
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‘Heartbreaking’ report shows worsening rates of Indigenous children in care
December 9, 2021 — 5.00am
The number of Indigenous children entering the child protection system could increase by more than 50 per cent over the next decade without wide-ranging structural reform despite new Closing the Gap commitments, according to Australia’s peak advocacy body for First Nations children.
The Family Matters Report, released by SNAICC , has found that a “staggering” 21,563 Indigenous children were in out-of-home care at the end of the last financial year - representing around one in 15 First Nations children in Australia.
The report also said current trends are “deeply concerning”, despite last year’s historic National Agreement on Closing the Gap, which included a commitment by all jurisdictions to reduce the rate of children in care by 45 per cent in the next decade.
“The number of our children living in out-of-home care is projected to increase by 54 per cent over the next decade if the current trajectory is not interrupted by profound and wholesale change to legislation, policy and practice,” the report said.
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COVID to have ‘life-long impact on population’ as fertility crashes to record low
By Shane Wright
December 8, 2021 — 4.15pm
Uncertainty caused by the COVID-19 pandemic has contributed to Australia’s fertility rate falling to its lowest level on record with warnings it may never recover, leaving the nation with a recession-sized hole in its population make-up.
Through 2020, 294,369 births were registered across the country, a 3.7 per cent or 11,500 fall on 2019. The fertility rate dropped almost 5 per cent to an all-time low of 1.58 births per woman, a fall larger than Australia experienced during the darkest years of the Great Depression.
It was the lowest number of births registered in the country since 2007 and down by 6.6 per cent on the peak number of births recorded in 2018.
The Australian Bureau of Statistics reported that the biggest falls were in Victoria, where there were 3846 fewer births, a 4.9 per cent drop, and in South Australia where births also fell by 4.9 per cent or 952.
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AdBlue crisis to trigger dramas on food supply, emissions
December 9, 2021
Once we are through the Christmas festivities, the big non-Covid Australian drama will be the shortage of the so called AdBlue – a crucial diesel exhaust fluid that is already in short supply and likely to run out around February.
Once it runs out, it will cripple a large portion of the Australian truck fleet.
In turn, this will lead to shortages of food in supermarkets, severely-restricted menus in restaurants, higher prices and a severe slowing of the Australian economy.
Unless action is taken this month, supermarkets will consider introducing rationing in January which will be much more severe than the toilet roll curbs we saw in the Covid crisis.
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Court decides Australian is bitcoin creator
By David Charter
The Times
December 9, 2021
An Australian computer scientist has won a court case over a $AU69.82 billion bitcoin fortune after he claimed to be the sole creator of the cryptocurrency.
The case in Miami marked the first legal recognition that Craig Wright, 51, is the man behind the pseudonym Satoshi Nakamoto, its originator.
Wright, who lives in London, said that he was “relieved” and “vindicated” at the rejection of a former business partner’s claim to share the 1.1 million bitcoin trove, the focus of the dispute.
He has yet to demonstrate control over the hoard, however, which would go a long way to proving to his many detractors that he is the creator. The cache, untouched since the early days of bitcoin, would make him the world’s 25th richest person at present values.
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The shameless pork-barrellers have normalised political graft
Chief political correspondent
December 10, 2021 — 5.00am
There is nothing like the prospect of an election to encourage politicians to throw out old standards about the handling of public money. And there is nothing like a tough fight for a prize seat to encourage them to shrug their shoulders at old ideas about honour and integrity.
Both forces have been at work this week in the effort to persuade Gladys Berejiklian to run for the federal seat of Warringah, restore the Liberals to their former political jewel on Sydney’s northern beaches and help keep the party in power in Canberra.
But the twin forces are about much more than the former NSW premier and the intense effort by Prime Minister Scott Morrison to recruit her to his side when she is under investigation by the state’s Independent Commission Against Corruption. They are also about the normalisation of political graft and the casual handling of billions of dollars in public funds, just when next week’s budget update will confirm the country’s record deficits.
Berejiklian will not be running. The brief flirtation with the idea ended when the risks were weighed up with the rewards. She is still waiting to see the submissions from counsel assisting the commission, due by December 20, and has to assume ICAC would continue its inquiries well into next year.
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How badly is Australia missing international students?
By Peter Hurley
December 10, 2021 — 10.00am
A series of recent announcements about Australia’s borders reopening mean there is hope of an end to the crisis in our international education sector.
But there is still a long way to go. More than 150,000 international student visa holders are stuck overseas. It is still unclear when and how these students may be able to enter Australia.
Even if they do arrive in time for the start of the 2022 academic year, this won’t overcome the issue of the “pipeline” effect. Disruptions to the flow of new students over the past two years will have a long-term impact.
International students normally study for two to four years. It can take some time for enrolments to return to previous levels as missed or reduced intakes work their way through the system.
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Why the government is rushing to regulate digital money
Co-Director of the e61 Institute for Economic Research
December 10, 2021 — 5.00am
Almost a third of young Gen Z Australians own cryptocurrency. One in five coffees in Starbucks in the United States is bought without cash or even a card transaction. Facebook is moving closer to releasing its private digital currency DIEM. Tesla is talking about selling cars for bitcoin.
What we currently call “money” will soon be augmented by new digital currencies that will change our lives in ways we are only starting to grapple with. That is why the government this week rushed to introduce a raft of new proposals to regulate digital money.
So what is digital money? How will it change our lives? And why are governments so scared of it?
When most people think of digital money, they think of bitcoin. But digital money is actually much broader than cryptocurrencies. While crypto is reaching cult status among a certain demographic of young people, and gets a huge amount of media attention, it won’t be the main game in digital money. That’s because crypto is not very useful in transactions.
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Don’t let any politician convince you your taxes will be going down
Economics Editor
December 10, 2021 — 11.35am
Whenever an election approaches, we can expect the bulldust count to soar on claims about the prospects for the economy and, particularly, about how well the budget’s being managed.
Election campaigns inhabit a financial fantasyland, with both sides promising lower taxes, higher government spending and improved budget balances.
Scott Morrison will be repeating the winning formula he used last time at the federal election: the Liberals are the party of lower taxes, whereas Labor is the big-spending, big-taxing party. Credit:Alex Ellinghausen
Our politicians have spent decades training voters to believe that, when it comes to the budget, we can have our cake and eat it.
It’s now pretty clear that, whether the federal election is held in March or May, Scott Morrison will be repeating the winning formula he used last time: the Liberals are the party of lower taxes, whereas Labor is the big-spending, big-taxing party.
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Tooheys, XXXX owner Lion cuts production over pallets shortage while Carlton & United Breweries places purchase limits on Corona
December 10, 2021
Beer is being rationed across BWS bottle shops as Australia’s two largest brewers face delivery delays and shortages coming into Christmas.
Lion and Carlton & United Breweries have both issued warnings to customers and sales reps about pending ‘stock challenges’ with limits in place at BWS shops for beers such as VB, Pure Blonde and Carlton Draught as the national liquor chain tries to secure supplies for the festive season.
And one of the country’s most popular beers — Corona — which is imported from Mexico by CUB is suffering such ‘massive’ supply issues stores are restricted to order a maximum of 20 cartons each per week.
It comes as the nation’s second largest brewer, Lion, is running out of timber pallets used to transport its beer across Australia, forcing it to shut down production of some lines.
Certain packs of its Tooheys long necks, Hahn and Iron Jack cans, will be completely depleted and without crucial supplies of pallets, a long list of beer products won’t be made again until the new year.
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Shipping logjams hit Saudi lifeline in diesel fluid crisis
Dec 10, 2021 – 5.39pm
A potential lifeline from Saudi Arabia to help ease the shortage of a diesel exhaust fluid that is running low in Australia and threatens to cripple the broader trucking network in six weeks is stranded on the docks in the Middle East because of the global shipping logjam.
About 500,000 trucks, buses and heavy machinery in Australia rely on the diesel fluid known as AdBlue, which is made from high-grade urea and deionised water and injected from a small tank in vehicles into an exhaust system to help reduce emissions.
A federal government taskforce was announced on Thursday to try to resolve the problem and ensure more supplies.
The shipping logjams which have disrupted movements of goods in major ports around the world in the pandemic are stopping vital supplies of high-grade urea used to make the diesel exhaust fluid AdBlue.
One of the larger makers of AdBlue, Marchem Australasia, which has a factory at Brooklyn in Melbourne, is trying to speed up a shipment of granular urea – the main component of AdBlue – coming from Saudi Arabia.
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Housing affordability crisis leading to fewer babies
Ronald Mizen Economics correspondent
Dec 11, 2021 – 12.01am
Affordability for first home buyers continued to deteriorate last financial year, which demographers and social researchers believe is contributing to couples having smaller families and taking longer to start them.
Across Australia, 50 per cent of available houses are now affordable to just the top 20 per cent of first home buyers by income, while for the bottom 40 per cent fewer than one in five houses is affordable.
That’s a marked deterioration on just 18 months ago, according to the latest affordability analysis from the National Housing Finance and Investment Corporation (NHFIC).
Social trends researcher Rebecca Huntley labelled the situation chronic unaffordability and said it was having far broader ramifications than people may expect.
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Fertile time to deliver Baby Bonus 2.0?
10:13PM December 10, 2021
Australia should consider a Baby Bonus 2.0 if it wants to bolster its fast-flagging fertility, a leading economic and social researcher says.
The Melbourne Institute’s Mark Wooden said the original Baby Bonus payment, introduced in 2004, helped revive the nation’s birth rate from about 1.7 births per woman to over two in 2008, and a modernised version might again do the trick.
“The Baby Bonus showed us that government policy could shift the dial,” Professor Wooden said. “I can’t see why a new version wouldn’t do the same.”
As new Australian Bureau of Statistics figures released this week revealed Australia’s birth rate plummeting to a record low of 1.58 births per woman in 2020, debate has turned to why, whether it matters and what can be done about it.
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Laid up by saboteurs and COVID: Barnaby Joyce in Washington
Political and international editor
December 11, 2021 — 5.00am
Barnaby Joyce left the country with a clear mission in mind but now finds himself isolating in an American hotel room for 10 days. In some ways the Deputy Prime Minister’s situation is a metaphor for Australia’s.
He’s fully vaccinated yet still frustrated. Some overseas travel is possible yet it’s unreliable. You can book an air ticket any time you like, but you might never leave. False starts abound. Other countries close borders abruptly. And apply quarantine to international arrivals like Joyce.
And when you get back to Australia, you “may only enter and travel between NSW, Victoria and the ACT without quarantining”, as the Department of Home Affairs explains.
Joyce made it to London but seems to have picked up a case of COVID on the way to the United States. He’s restricted to his Washington DC hotel room till after Christmas as a result. As he summarised his situation, “vaxxed up and locked up”.
He has the consolation of staying in the Jefferson Hotel, not DC’s shabbiest. He thinks it’s misnamed. “It should be called the West Australian – perfectly safe but locked up.”
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Supply chain chaos: What it will take to make the world’s ships run on time
By James Stavridis
December 11, 2021 — 11.11am
I spent nearly 10 years on the deep ocean — entirely out of sight of land. During the long voyages, I would track the massive civilian cargo ships and oil tankers sailing near my warships. An exquisite system keeps them running essentially 24/7, hustling cargoes among a network of global megaports. Those of us at sea watched with respect for their size and scale, mingled with a sense that they were so often on the edge of trouble. Shippers’ margins on time and cost are thin, and their crews are incredibly small, often not adequately trained or sufficiently compensated.
All of these factors are playing into the current delays with raw materials and consumer goods in the global supply chain. Naturally, these delays aren’t entirely dependent on ocean transportation. But given that more than 90 per cent of internationally traded goods move through what the 19th-century naval strategist Rear Admiral Alfred Thayer Mahan called the “sea lanes of communication,” it is a good place to focus more attention. The huge ports are part of the maritime infrastructure as well, and some of them have become structural choke points, much as we think of critical geographic choke points like the Suez or Panama canals or the straits of Hormuz or Malacca.
At the moment, serious backups and delays continue to be the norm at ports around the world. The largest American complex is in Southern California, the ports of Los Angeles and Long Beach. For weeks, dozens of vessels have been waiting at anchor offshore. Thousands of empty containers still need to be sent to other ports. And as is the case at many other key ports worldwide, cargo infrastructure is overwhelmed.
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Top Australian and Chinese executives to meet for first talks in years
By Eryk Bagshaw
December 10, 2021 — 5.08pm
Singapore: Top Chinese executives will meet with their Australian counterparts for the first time in years as business leaders attempt to find a way through a hostile diplomatic environment that has hit Australia with $20 billion in trade strikes.
The high-level private meeting between half-a-dozen Chinese representatives from state-owned energy and resources firms including Sinosteel, the China National Petroleum Corporation, Chinalco and their Australian counterparts in BHP, Fortescue and Rio Tinto on Monday is the first sign that Beijing has authorised its representatives to re-engage with major Australian firms.
The virtual meeting has been negotiated for months by the Australia China Business Council and the China Council for the Promotion of International Trade but was hit by fears that Australia’s diplomatic boycott of the Beijing Winter Olympics this week could derail its progress.
“We’ve been on tenterhooks ourselves,” said Australia China Business Council president David Olsson. “It’s been through multiple layers and approval processes really trying to tick all the boxes.”
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Will our universities miss out on the digital revolution?
Universities must ensure they train students for the future.
By Ryan Craig
11:00PM December 9, 2021
When the world paused for Covid, there was a sense of stasis or loss in higher education as the remote experience failed to replicate or replace the immersive on-campus experience. But while higher education paused, the rest of the world didn’t stop. In fact, digital transformation of the economy accelerated.
Back in May last year, Massachusetts Institute of Technology economics professor David Autor referred to the pandemic as an “automation-forcing event”, an idea that has proved prescient as companies increase their focus on digital transformation to engage with all stakeholders – customers, suppliers, shareholders, lenders and employees – remotely.
So as students returned to campus in the US and campus leaders tout a return to some kind of (masked) normalcy, it’s natural to want to throw Frisbee discs around the quad and put all the digital, remote stuff behind us. But given the digital transformation we’ve seen, this is the calm on campus before the storm.
Colleges and universities must urgently figure out how to provide students with digital platform skills and get them relevant work experience. Institutions that do so will position themselves at the forefront of higher education in the post-pandemic era.
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‘Preposterous’: AUKUS creates more problems than solutions
The timelines for Australia’s transition from ageing Collins-class to its first nuclear-powered sub just don’t add up. There is hardly a single strategist in the country who believes it will happen.
From Inquirer
December 10, 2021
Now that Australia has finally weathered the diplomatic fallout caused by the creation of the three-nation AUKUS pact, it is time to work out exactly what it means for the nation’s security.
The Morrison government faces a series of critical multi-billion dollar decisions in the coming year that will set the course of Australia’s maritime defence for the next half a century.
These will require Canberra to test the limits of its alliance with both the US and the UK to ensure they make good on their AUKUS promise to share their sensitive nuclear know-how to help Australia acquire a nuclear-powered submarine fleet.
As the dust finally settles after the initial shock of the AUKUS announcement, several things are becoming clearer. Firstly, the good news is that the AUKUS arrangement has been largely accepted by countries in the Indo-Pacific, with the obvious exception of China which was never going to welcome a strategic partnership that is aligned against it. The Association of South-East Nations has refused to take a public stance against AUKUS despite being urged to do so by Beijing. This was no small thing. Elsewhere in the world, with the obvious exception of France which lost its $90bn submarine contract, the reaction to AUKUS has been largely benign.
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COVID 19 Information
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South Africa notes rise in ‘incidental’, mild COVID-19
Jill Margo Health editor
Updated Dec 5, 2021 – 7.04pm, first published at 6.06pm
A new trend of incidental COVID-19 is emerging in South Africa, with people arriving at hospital for other medical, surgical or obstetric reasons and being found positive for the virus during routine screening on admission.
Some have no symptoms, and those with mild symptoms generally have upper respiratory tract infections and do not need oxygen.
A report late on Friday (Saturday AEDT) by the reputable South African Medical Research Council shows most patients admitted were unvaccinated and on average younger than seen in previous waves.
It also found a much shorter average length of stay of 2.8 days for positive patients admitted to the COVID-19 wards over the past two weeks compared to an average length of stay of 8.5 days for the past 18 months.
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Omicron brings storm clouds for risk assets
Tom Richardson Markets reporter and commentator
Dec 5, 2021 – 5.06pm
Investors face another whipsaw week of uncertainty as the omicron variant of coronavirus and the US Federal Reserve’s hawkish pivot spreads risk aversion across financial markets.
US investors dumped risk assets on Friday, with the tech-heavy Nasdaq 100 Index down 1.9 per cent and the blue-chip S&P 500 off 0.95 per cent. US government bonds climbed as the yield on benchmark risk-free US 10-year treasuries dropped 9 basis points to 1.36 per cent.
Safe-haven asset gold added 1.2 per cent to $US1784 an ounce, while the omicron-rattled Australian dollar fell to its lowest level since November 2020 against the greenback to buy US70.01¢ at the close.
Australian sharemarket futures point to a 0.15 per cent rise for the S&P/ASX 200 Index at the opening bell on Monday, after US equities pared even heavier losses over the last hour of Friday’s roller-coaster trading session.
Australia’s benchmark index has posted four consecutive weeks of losses and fell 0.5 per cent last week, as investors dumped growth companies in the technology, healthcare, and consumer staples sectors.
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In omicron Britain, all my friends are getting COVID-19. Again
Although the delta data has been high, it has been steady - but it sure doesn’t feel like that. Britain is set for a big COVID-19 Christmas.
Hans van Leeuwen Europe correspondent
Dec 10, 2021 – 12.42pm
London | “With the current uncertainty over the emergence of the latest COVID-19 variant in the UK, we have reluctantly decided to cancel the drinks reception with our chief executive,” read an email from Rio Tinto earlier this week.
In a way, it was a relief to have the decision on whether to go to Rio’s Christmas bash taken out of my hands. I was keen, but COVID-19 is just so rife in my neighbourhood that I was starting to worry about the risk of becoming a spreader.
The COVID-tastic experience we’re having in south London sits strangely at odds with the relative stability of the national virus data, and the relative looseness, even now, of the government’s “Plan B” restrictions.
The official stats mostly evoke a never-ebbing delta tide, rather than the big breaker I’m seeing all around me.
After subsiding gently during October, the nationwide daily number of infections is back at the level of late September – when I wrote a postcard for AFR Weekend headed “In vaccinated Britain, all my friends are getting COVID-19”.
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https://www.afr.com/world/europe/england-could-face-75-000-virus-deaths-this-winter-20211212-p59gtb
England could face 75,000 virus deaths this winter
Jacqueline Poh
Dec 12, 2021 – 7.36am
The omicron variant has the potential to cause a wave of COVID-19 infections in England and fuel almost 75,000 deaths this winter, if the government doesn’t impose additional precautionary control measures, according to a research report by the London School of Hygiene & Tropical Medicine.
Under the government’s ‘Plan B’ rules imposed last week in response to omicron, the most optimistic scenario for England indicates about 175,000 hospital admissions and 24,700 deaths for the five-month period from December to April. The worst-case projection is for 74,800 deaths.
That is more than half the 127,154 fatalities registered in England since the start of the pandemic.
England accounts for more than two thirds of almost 172,000 deaths in all of the United Kingdom, which includes Scotland, Wales and Northern Ireland. The research is not yet peer reviewed, LSHTM said on its website.
“The team used the latest experimental data on the antibody-evading characteristics of the omicron variant to explore plausible scenarios for the immune escape of omicron,” LSHTM said on its website.
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Climate Change.
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Labor delivers a liberal plan for climate action
Labor’s climate policy slakes the thirst of economic rationalists hanging out for someone – anyone – to deliver a rational response to the climate challenge.
Steven Hamilton Contributor
Dec 5, 2021 – 1.15pm
When you’re provoking outrage by both the left and right, it’s a good sign you’re doing something right. And so it is with Labor’s climate policy finally announced on Friday, which happens to slake the thirst of we economic rationalists hanging out for someone – anyone – to deliver a rational response to the climate challenge.
Given Labor’s bruised history on climate policy, and the government’s clear signalling it’s ready to unleash a “sneaky carbon tax” scare campaign, it ought to be received by readers of The Australian Financial Review as a kind of Christmas miracle. Like Atlas, condemned by Zeus to holding up half the sky on his shoulders, Labor is the one major party willing to take up the mantle of sensible, rational, market-based climate policy.
Exactly eight weeks ago on these pages, I pointed to the Safeguard Mechanism as the right approach for the party of free markets. No sooner had I done so than Angus Taylor had branded such an approach a “sneaky carbon tax”. One shudders to think of what John Howard – and the architect of his own sneaky carbon tax, Peter Shergold – thinks of what has become of his once-great party of private enterprise.
Against all odds, Labor went ahead and did what the Liberals refused to. They plan to rely on the Safeguard Mechanism to drive down net emissions in industry, making up around half of their additional reductions to 2030. The Business Council of Australia and Ai Group have endorsed the move, recognising what business has been saying for a while: climate action is a co-ordination problem, and all businesses really want is certainty.
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Voluntary climate action won’t reach net zero
‘Technology not taxes’ is not enough. A price on carbon is needed to make more expensive lower-emissions innovations the cheaper option.
Ross Garnaut Contributor
Dec 5, 2021 – 1.31pm
The Commonwealth government says it will reach zero net emissions by 2050 through voluntary action and technology, not mandates or taxes. This is a false dichotomy. Emissions reductions in line with our international obligations require mandatory measures. Voluntary action supplements and extends mandatory measures – as it has done over the past decade.
Prime Minister Scott Morrison in Glasgow was right to say that Australia has reduced emissions since 2005 by as much as many and more than some other developed countries. The reductions are concentrated in two sectors in which mandatory action has been dominant and voluntary action helpful.
One is land use change. Bans on land clearing greatly reduced emissions. This has been modestly augmented by the Emissions Reduction Fund – where the main action has been funded from revenues from carbon pricing from 2012 to 2014. Voluntary contributions to the conservation and restoration of forests and woodlands have further reduced land use emissions.
The other is the replacement of coal by renewable energy in electricity generation. The mandatory Renewable Energy Target (RET), with grid-scale and rooftop components, has been the main driver for change.
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Industry, investors bank on no coal power by 2043, market operator says
By Mike Foley
December 10, 2021 — 12.01am
The equivalent of NSW and Victoria’s combined fleet of coal-fired power plants will shut in the next 10 years according to the latest plans from the Australian Energy Market Operator, which show 60 per cent of fossil fuel power generation closing by 2030.
AEMO manages the electricity system across the country and has spent the past 18 months consulting 1500 stakeholders on what the energy grid will look like out to 2050.
It presented four plausible scenarios to the energy industry and investors and said the outcome selected by a “strong consensus” assumed 14 gigawatts of coal power would exit the National Electricity Market by 2030 – a scenario dubbed the “step change” model – with a complete exit of coal by 2043.
Fourteen gigawatts represents the combined capacity of NSW’s five plants and Victoria’s three plants and that exit is much faster than the plans coal plant operators have lodged with AEMO, which has been officially notified these companies will shut just five gigawatts of capacity by 2030.
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Death toll rises in Kentucky as tornadoes hit several states
By Cheney Orr
Updated December 12, 2021 — 9.23amfirst published December 11, 2021 — 5.22pm
Mayfield, Kentucky: At least 100 people were feared dead in Kentucky after a swarm of tornadoes tore a 322-kilometre path through the US midwest and south, demolishing homes, levelling businesses and setting off a scramble to find survivors beneath the rubble, officials said.
The powerful twisters, which weather forecasters say are unusual in cooler months, destroyed a candle factory and the fire and police stations in a small town in Kentucky, ripped through a nursing home in neighbouring Missouri, and killed at least two workers at an Amazon warehouse in Illinois.
Kentucky Governor Andy Beshear said the collection of tornadoes was the most destructive in the state’s history. He said about 40 workers had been rescued at the candle factory in the city of Mayfield, which had about 110 people inside when it was reduced to a pile of rubble. It would be a “miracle” to find anyone else alive under the debris, Beshear said.
“The devastation is unlike anything I have seen in my life and I have trouble putting it into words,” Beshear said at a press conference. “It’s very likely going to be over 100 people lost here in Kentucky.”
Kentucky State Police Trooper Sarah Burgess said search and rescue teams were going through the rubble Saturday but didn’t yet have a number for how many have died.
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Royal Commissions And The Like.
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Aged care spending will need to increase even more: Actuaries warn
By Shane Wright
December 6, 2021 — 12.01am
Federal spending on aged care will double by the end of the decade and put even more pressure on the budget, shows new research that warns older Australians may have to draw on their savings to help them into their later years.
Work by the Actuaries Institute to be released on Monday shows despite a sharp lift in federal government funding to deal with issues across aged care, it will not be enough as demand grows and the population ages.
By the end of this decade, spending on aged care could reach $72 billion — more than what is spent on the age pension.
The government is ramping up expenditure on aged care after the royal commission into the sector which, among its 148 recommendations, found the industry was “under-staffed and the workforce underpaid and under-trained”.
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National Budget Issues.
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https://www.afr.com/politics/federal/budget-fix-needed-after-the-election-birmingham-20211205-p59ewe
Budget fix needed after the election: Birmingham
Phillip Coorey Political editor
Dec 5, 2021 – 10.00pm
The Morrison government says fiscal strategy will move to budget repair after the election and trying to pay down debt and deficit while keeping the economy growing will be akin to walking a tightrope.
Keen to frame the election as who is best to manage the post-COVID-19 economic recovery, Finance Minister Simon Birmingham will allege Labor does not have the discipline required to walk the tightrope and would increase taxes, jeopardise growth, risk the AAA credit rating and induce a “vicious spiral of higher debt costs”.
“To meet the nation’s essential future spending priorities and move into the next phase of debt control will require both a disciplined approach to spending and a not-negotiable focus on maximising economic growth,” he will tell The Australian Financial Review CFO Live summit on Monday.
“Following the lifesaving investments made to get us through COVID, the fiscal path that Australia will tread in the years to come is nothing short of a tightrope.”
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What RBA’s ‘real’ rate policy means for investors
Investors need to understand the real reasons for the RBA’s interest rate settings so they can forecast when rates will rise and set their portfolios appropriately.
John Abernethy Contributor
Dec 6, 2021 – 5.00am
The Reserve Bank of Australia has been successful in convincing market economists that the cash rate setting of 0.10 per cent is appropriate. With inflation exceeding 3 per cent (on any measure) over the past six months, the cash rate setting is clearly being set on some basis other than inflation.
Economic logic and social fairness both suggest that the RBA is not telling the truth when it suggests inflation must be sustained above 2 per cent before it adjusts cash rates higher. Today’s cash rate is at least 3 per cent below inflation. Savers and retirees are being torched by these rates. Yet the RBA says rates are stuck here for at least another year.
Investors need to understand the real reasons for the RBA’s interest rate settings so they can forecast when rates will rise and set their portfolios appropriately.
It is my view the RBA is merely a follower when setting cash rates against the power of the US Federal Reserve, the European Central Bank and the Japanese Central Bank. Australia’s cash rate is being dictated by rates across the major Western economies being set at zero and well below inflation.
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https://www.afr.com/policy/tax-and-super/personal-tax-take-second-highest-in-oecd-20211206-p59f3y
Personal tax take second highest in OECD
John Kehoe Economics editor
Updated Dec 7, 2021 – 7.58am, first published at Dec 6, 2021 – 9.00pm
Australians are paying more personal income tax as a share of government revenue than any other advanced economy, except for the high-taxing Scandinavian welfare state of Denmark, according to an international report that renews pressure on the Coalition and Labor to reform the tax system.
Governments in Australia also raised almost double the amount of revenue from taxes on property compared to other wealthy nations, chiefly due to state-based stamp duty on real estate purchases, the Organisation for Economic Co-operation and Development report said.
Personal income tax revenue rose to 42 per cent of total tax collected by federal and state governments in 2019, nearly twice as much as the OECD average of 23.5 per cent.
The dependence on personal income tax has gradually grown by almost 5 percentage points since 2000, when the GST was introduced by the Howard government in return for personal income tax cuts.
Despite the Morrison government and Labor committing to personal income tax cuts over the next four years, the reductions in tax rates and increase in thresholds will ultimately be wiped out by “bracket creep” – where taxpayers pay more as wages rise.
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https://www.rba.gov.au/media-releases/2021/mr-21-29.html
Statement by Philip Lowe, Governor: Monetary Policy Decision
Number 2021-29
Date 7 December 2021
At its meeting today, the Board decided to:
- maintain the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances at zero per cent
- continue to purchase government securities at the rate of $4 billion a week until at least mid February 2022.
The Australian economy is recovering from the setback caused by the Delta outbreak. High rates of vaccination and substantial policy support are underpinning this recovery. Household consumption is rebounding strongly and the outlook for business investment has improved. The emergence of the Omicron strain is a new source of uncertainty, but it is not expected to derail the recovery. The economy is expected to return to its pre-Delta path in the first half of 2022.
Leading indicators point to a strong recovery in the labour market. Job advertisements are at an historically high level and there are reports of firms finding it difficult to hire workers. Wages growth has picked up but, at the aggregate level, has only returned to the relatively low rates prevailing before the pandemic. A further pick-up in wages growth is expected as the labour market tightens. This pick-up is expected to be only gradual, although there is uncertainty about the behaviour of wages as the unemployment rate declines to historically low levels.
Inflation has increased, but, in underlying terms, is still low, at 2.1 per cent. The headline CPI inflation rate is 3 per cent and is being affected by higher petrol prices, higher prices for newly constructed homes and the disruptions in global supply chains. A further, but only gradual, pick-up in underlying inflation is expected. The central forecast is for underlying inflation to reach 2½ per cent over 2023.
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From crypto to Afterpay, government plans consumer and business change
By Shane Wright and Clancy Yeates
December 7, 2021 — 9.30pm
Everything from the way Australians buy goods and services to their investment in cryptocurrencies will be overhauled over the next 12 months in the biggest change to the nation’s payment system since the heyday of the chequebook.
Treasurer Josh Frydenberg will on Wednesday reveal a string of regulatory and tax proposals covering digital wallets, the buy now, pay later sector and even a possible central bank digital currency that he says will put Australia at the front of the growing fintech economy.
As consumers embrace new digital payment methods, the reforms will give the federal government greater powers to intervene in response to new entrants such as Apple and advances in technology.
Mr Frydenberg will use a speech to the Australia-Israel Chamber of Commerce to argue the changes will help the nation’s consumers and investors.
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Central digital currency weighed as Josh Frydenberg reforms payments systems
8:30PM December 7, 2021
The Reserve Bank and Treasury are considering the feasibility of a central digital currency, under reforms aimed at establishing a regulated onshore cryptocurrency industry and driving competition across “buy now, pay later” and digital-wallet payment systems.
Josh Frydenberg on Wednesday will announce the biggest shake-up of the nation’s payments systems since the 1990s, including new intervention powers allowing the Treasurer to update Australia’s one-size-fits-all regulatory framework in real-time.
The Morrison government will land on its financial system reforms within 12 months, implementing new protections for consumers and workable regulations to tap into the $2 trillion cryptocurrency global market and drive domestic crypto trading.
The reform package, responding to all 41 recommendations made by three government and parliamentary reviews into Australia’s out-of-date payments system regulatory framework, was sparked by a massive surge in the use of new payment systems and cryptocurrency.
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RBA considers an eAUD for the retail market: Lowe
James Eyers Senior Reporter
Dec 9, 2021 – 9.32am
Reserve Bank governor Philip Lowe said the fast evolution of technology could see the central bank support ‘central bank digital currency’ in the retail market, as consumers look to pay for things using ‘tokens’ held in digital smartphone wallets instead of money in bank accounts.
In a significant speech pointing to the battle for control of money between central banks and private technology companies, Dr Lowe pointed to a shift in the Reserve Bank’s historical scepticism towards developing a retail ‘central bank digital currency’ (CBDC).
As big technology platforms like Apple and Google enter the payments space and thousands of volatile cryptocurrencies are created on the back of the bitcoin boom, Dr Lowe said the RBA may support the issuance of ‘tokens’ to create an “eAUD” and is in discussions with global central banks about the risks of such a response, including impacts on commercial banking deposits.
An eAUD would be a digital version of cash. It would be a liability of the central bank, different to digital money held in commercial bank deposits.
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https://www.afr.com/wealth/tax/tax-boomer-wealth-more-and-younger-workers-less-20211206-p59f5n
Tax Boomer wealth more, and younger workers less
Workers will pay a larger share of tax to subsidise wealthy Baby Boomers unless the nation gets serious about shaking up who pays tax and at what stage of their lives.
John Kehoe Economics editor
Dec 8, 2021 – 1.02pm
Australia’s intergenerational tax time bomb has been exposed by no less than three new reports on the heavy tax burden on workers, the surging cost of aged care and the unfolding inheritance “tsunami”.
More than $120 billion was passed on in 2018, the Productivity Commission’s report on wealth transfer says.
Inheritances and gifts have more than doubled since 2002, and inheritances could rise four-fold in real terms between now and 2050 as household wealth grows and the population ages.
Asset price growth, particularly for housing, has worsened wealth inequality and Baby Boomers have done “particularly well”, the commission notes.
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Health Issues.
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The moral bankruptcy of the pharmacy owners
Woolworths and Wesfarmers’ bids for API are an opportunity to break a system that favours a small group of well-off pharmacists.
Aaron Patrick Senior correspondent
Dec 6, 2021 – 5.00am
If you’d like to open or move a pharmacy in Australia, you’ll have to get through Toni Riley first.
Riley is part of an organisation that administers what could be described as a (lawful) protection racket that may discriminate against young pharmacists, charge too much for medicine and deliver big paydays for favoured insiders.
When I contacted the pharmacist-turned-consultant on Friday, Riley initially denied she was involved in the regulation of pharmacies and demanded I not quote her.
She relented when I pointed out a government website lists her as the chairman of the Australian Community Pharmacy Authority, a statutory body with powers that sound like they come from the post-World War II central planning era, which they do.
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CSL to appeal after losing challenge to Mexican donor ban
By Emma Koehn
December 6, 2021 — 12.11pm
Biotech giant CSL plans to appeal its loss in a court challenge to overturn rules imposed by the US Customs and Border Protection (CBP) that block Mexican nationals from entering the United States to donate plasma.
The collection of blood plasma is central to the creation of CSL’s specialist medicines, which account for 85 per cent of the company’s earnings, and donors from Mexico have long been a valuable slice of its collections in centres along the US/Mexico border.
CSL and rival blood plasma giant Grifols took the extraordinary step of lodging US court action against the Office of Customs and Border Protection earlier this year after new regulations emerged preventing Mexican citizens from crossing the border to donate plasma.
CSL and Grifols warned the Mexican plasma ban could cause irreparable harm to patients and make it even harder for the sector to recover from a drop in donations that has been seen throughout the pandemic.
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Doctors call for private health insurance watchdog amid gaps in coverage
By Dana Daniel
December 7, 2021 — 6.00am
Australians with private health insurance are still facing “bill shock” due to wildly different levels of coverage among insurers and across hospitals, prompting calls for an independent regulator.
The Australian Medical Association’s latest private health insurance report card, to be released on Tuesday, details how benefits paid by different insurers for the same procedure can vary by as much as 46 per cent or between the top insurer and the one paying the lowest benefit.
“It’s very hard to know what value you get,” the president of the Australian Medical Association, Omar Khorshid, said.
“If the insurer’s rebate is low, the out-of-pocket cost to their customer can be high. And these out-of-pocket costs can vary by thousands of dollars.”
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Australia last in queue for medical firsts
5:54AM December 7, 2021
Australia is at the “back of the queue” for access to new medicines and medical devices, with an approvals process mired in red tape and outdated methodologies.
That’s the view of one of the world’s biggest pharmaceutical companies, Johnson & Johnson, which is calling for an overhaul of Australia’s systems for approving new drugs and medical technology.
Australia ranks 17th out of 20 OECD countries for access to new medicines, the author of a new report on the issue said.
“I think we’re at a point where there’s a number of questions about how Australia values medicines and vaccines and medical devices and assess to those,” said Brendan Shaw, a former CEO of Medicines Australia. “Those problems are becoming more pronounced and I think the pandemic has shone a spotlight on some of these issues as well.
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Health funds ‘squeezed by costs’, plead for premiums hike
10:11PM December 9, 2021
Private health insurers say they are struggling to keep premium rises as low as possible for the coming year, blaming a backlog of elective surgery, the cost of medical devices and rising salaries for putting “upward pressure” on premiums.
Health funds have put their submissions to the government for the premium rises they hope to institute, but the suggestion that there is upward pressure on premiums has provoked a furious response from the medical technology industry.
It cites record profits and money set aside from premium collection while claims were low due to Covid-19 as reasons that premium rises should be kept low in 2022.
Private Healthcare Australia chief executive Rachel David said: “Several things will have been factored in by the health funds. One is the catch-up that they’re expecting in elective surgery now that the lockdowns are ended.
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New Monash IVF pre-pregnancy test for 400 genetic conditions can be taken at home
News Corp Australia Network
4:00AM December 12, 2021
Exclusive: A new at home screening test can tell couples planning a pregnancy whether they are likely to pass on serious genetic conditions to their child.
Monash IVF’s Genetic Carrier Screening test uses a saliva swab to check for the three most common childhood genetic conditions – cystic fibrosis, spinal muscular atrophy and fragile X syndrome.
In addition, it analyses whether parents are carrying genes for more than 400 other rare conditions which collectively account for about half of the genetic conditions facing children in paediatric hospitals.
The test costs $695 for one person and $1250 for a couple and includes a telehealth session with a Monash IVF genetic counsellor if the couple is identified as having an increased chance of having a child with a genetic condition.
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International Issues.
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Panicking financial markets could stuff up another global recovery
Economics Editor
December 6, 2021 — 5.00am
In economics, there’s not much new under the sun. When I became a journalist in the mid-1970s, the big debate was about which mattered more: inflation or unemployment. You may not realise it, but that’s the great cause of contention today.
With prices having risen surprisingly rapidly this year in the US and Britain – but few other advanced economies – we’re witnessing a battle between people in the financial markets, who fear inflation is back with a vengeance and want interest rates up to get it back under control, and the central banks.
The central bankers see the higher prices as a transitory consequence of the supply and energy disruptions arising from the pandemic. They fear that, once their economies have rebounded from the government-ordered lockdowns and fear-induced reluctance to venture forth, their economies will soon fall back to into the “secular stagnation” or weak-growth trap that gripped the advanced economies for more than a decade following the 2008 global financial crisis until the arrival of the pandemic early last year.
The decade of weak growth involved high rates of saving but low rates of business investment, record low interest rates, weak rates of improvement in the productivity of labour, low wage growth and, not surprisingly, inflation running below the central banks’ target rates. All that spelt adequate supply capacity, but chronically weak demand.
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‘We will win’: Violence flares at French far-right candidate’s campaign rally
By Sylvie Corbet
December 6, 2021 — 6.43am
Villepinte: Anti-racism activists were beaten up as far-right former French TV pundit Eric Zemmour held his first presidential campaign rally near Paris, a few days after he formally declared his candidacy in a video highlighting his anti-migrant and anti-Islam views.
Zemmour has drawn comparisons in France to former US President Donald Trump because of his rabble-rousing populism and ambitions of making the jump from the small screen to national leadership in France’s presidential election in April.
On Sunday night (Monday AEDT), the 63-year-old with multiple hate-speech convictions unveiled his campaign’s slogan: “Impossible is not French,” a quote attributed to Napoleon.
“What’s at stake is huge,” Zemmour said. “If I win that election, it won’t be one more (political) changeover, but the beginning of the reconquest of the most beautiful country in the world.”
Supporters at the rally sang France’s national anthem, shouted “Zemmour, president!” and “We will win!” while brandishing the tricolor French flag.
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https://www.smh.com.au/world/europe/why-would-putin-want-to-invade-ukraine-20211206-p59f1p.html
Why would Putin want to invade Ukraine?
By Anton Troianovski
December 6, 2021 — 10.25am
Moscow: As the Kremlin masses troops near Ukraine, it is signalling one core conviction: Russia cares more about the fate of its southwestern neighbour than the West ever will.
In speeches, interviews and lengthy articles, President Vladimir Putin and his close associates have telegraphed a singular fixation this year on the former Soviet republic. The Kremlin thesis goes that Ukrainians are “one people” with Russians, living in a failing state controlled by Western forces determined to divide and conquer the post-Soviet world.
Ukrainians, who ousted a Russia-friendly president in 2014 and are increasingly in favour of binding their country to Western institutions, would largely beg to differ.
But Putin’s conviction finds a receptive ear among many Russians, who see themselves as linked intimately with Ukraine by generations of linguistic, cultural, economic, political and family ties. Now, with a force of 175,000 Russian troops poised to be in position near Ukraine by early next year, in what Western officials fear could be a prelude to an invasion, centuries of shared history loom large.
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The China Evergrande crisis is coming to a head
Senior business columnist
December 6, 2021 — 11.47am
The crisis at the teetering giant Chinese property developer, China Evergrande, appears to be reaching a decisive moment, with the world’s most indebted property company conceding that it may be unable to meet the demand for repayment of a $US260 million ($A371 million) debt.
In a statement to the Hong Kong stock exchange on Friday Evergrande said it had received a demand to perform its obligations under a guarantee for repayment of the $US260 million but was unsure whether it could satisfy the demand.
“In the event that the group is unable to meet its guarantee obligations or certain other financial obligations it may lead to creditors demanding acceleration of repayment,” it said. “In the light of the current liquidity status of the group, there is no guarantee that the group will have sufficient funds to continue to perform its financial obligations.“
Evergrande has been peering into a financial abyss for much of this year as China’s “three red lines” policy on borrowing by developers, which imposed leverage and debt-servicing limits, cut off its access to new borrowing and plunged the group, which has debt of more than $US300 billion, into a self-reinforcing liquidity crisis.
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US can’t win two wars at once: Joe Biden’s worst nightmare
Political and international editor
December 7, 2021 — 5.00am
The Russian brown bear and the Chinese panda sport different colour schemes but share many common attributes. They have different diets but, most fundamentally, they are both members of the same species.
Recent developments raise troubling questions about whether they might be interested in co-ordinating their plans for territorial conquest.
The Chinese panda has been prowling ever closer to its favoured morsel, Taiwan, as the Russian bear stretches its claws in the direction of its, Ukraine. We now hear increasingly urgent warnings that each is considering aggressive action as early as next year to seize their respective targets.
And we see US President Joe Biden taking the risks very seriously, engaging the leaders of both China and Russia in separate summits within three weeks of each other in an effort to head off any potential crisis.
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Ukraine vows to fight off Russia, shows off military hardware
By Natalia Zinets and Matthias Williams
December 7, 2021 — 6.54am
Kiev: Ukraine’s President Volodymyr Zelenskiy on Monday (Tuesday AEDT) said his armed forces were capable of fighting off any Russian attack, as the country marked its national army day with a display of US armoured vehicles and patrol boats.
US President Joe Biden has pledged his “unwavering support” to Ukraine in its standoff with Moscow and will hold talks with Russian President Vladimir Putin on Wednesday AEDT to try to defuse the crisis.
Zelenskiy is set to speak to US Secretary of State Antony Blinken on Tuesday AEDT, as well.
Ukraine has accused Russia of massing tens of thousands of troops near its border in preparation for a possible large-scale military offensive, raising the prospect of open war between the two neighbours.
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https://www.afr.com/politics/federal/australia-joins-winter-games-diplomatic-boycott-20211208-p59fr6
Australia joins Olympic Games boycott
Phillip Coorey Political editor
Dec 8, 2021 – 10.06am
Australia has joined the United States in imposing a diplomatic boycott of the 2022 Winter Olympics in China, citing Beijing’s coercive trade practices as well as its human rights abuses as reasons.
Prime Minister Scott Morrison has told reporters in Sydney the decision should come as no surprise. He said any reprisals from China would be “completely and utterly unacceptable”.
“There would be no grounds for that,” he said.
He stressed there would be no sporting boycott.
“People have been very aware that we have been raising a number of issues (with China) that have not been received well in China and there’s been a disagreement between us on those matters,” Mr Morrison said.
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Russia deploys tanks, snipers, bombers to Ukraine as world holds breath
By Aliki Kraterou and The Sun
news.com.au
December 8, 2021
Russia has deployed tanks, snipers and bombers to Ukraine as Vladimir Putin is trying to “provoke return fire,” Kyiv has said.
It comes as Putin went on a high-stakes call with Joe Biden earlier today amid growing fears Moscow is preparing for a massive offensive against Ukraine.
Ukrainian Defense Minister Oleksiy Reznikov told CNN that there would be a “really bloody massacre” if Russia decides to invade Ukraine and warned that ”Russian guys also will come back in the coffins.”
A serviceman of the Ukrainian Armed Forces near the border with Russian-annexed Crimea. Picture: Supplied
The defence Minister also said that five million Ukrainian refugees are fleeing into Europe amid heightened alarm about troop movements on the nations‘ border, The Sun reported.
“The red line is here in Ukraine and the civilised world will react without hesitation,” he said.
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Russia-India weapons deal upsets US
By Aishwarya Kumar
AFP
8:07AM December 7, 2021
Russian President Vladimir Putin lauded India as “a great power” in New Delhi on Monday night as the traditional allies bolstered their military and energy ties, despite Washington’s increasing courtship of the world’s largest democracy.
India confirmed that Russia this month began deliveries of its long-range S-400 ground-to-air missile defence system, which has prompted threats of US sanctions.
A 10-year defence technical co-operation agreement and a one-year oil contract were among the deals signed as Mr Putin held talks with Indian Prime Minister Narendra Modi.
It was only Mr Putin’s second trip abroad since the pandemic began and comes after a June summit with US President Joe Biden in Geneva.
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https://www.afr.com/policy/foreign-affairs/what-vladimir-putin-really-wants-20211207-p59fi3
What Vladimir Putin really wants
Haunted by the fall of the Soviet Union, the Russian President is using the pandemic, the climate crisis, migration and looming conflict to turn chaos into power.
Bruno Maçães
Dec 10, 2021 – 5.00am
What does Vladimir Putin want? Answering this question is difficult as there appears to be little logic to his restless actions. The Russian president once tried to diversify the country’s economy to make it less dependent on its energy sector, only to later abandon the project as utopian. Under his leadership, Russia invaded Ukraine in 2014 and intervened in Syria in 2015, leaving Russian troops in both countries without exit strategies.
His long reign of power, which began in 1999 and included a stint as prime minister between 2008 and 2012, was supposed to bring order and continuity to Russian politics, but now his succession looms like a deadly game of roulette.
Putin repeatedly talks about chaos, and appears to regard himself as a creature of the chaos that enveloped Russia after the collapse of the Soviet Union three decades ago. Today, both Russia and Putin have no illusions about the world. At the Valdai summit in the Caucasus mountains this year – a private gathering of Russian and international intellectuals and officials, at which I was present – Putin said that Russian society had developed “herd immunity to extremism”, which makes it well-suited to the “upheavals and socio-economic cataclysms” that are to come.
For Putin, stability is an illusion. As he said at the Valdai summit, quoting the German poet Johann Wolfgang von Goethe, those who felt like the winners after the end of the Cold War “and thought they climbed Mount Olympus, soon discovered that the ground was falling away … this time it was their turn, and nobody could stop the moment, no matter how fair it seemed”. The once-dominant West must now brace for deep changes in the world system.
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Lithuania shows the world China’s ‘nuclear option’ on trade
Michael Smith and Hans van Leeuwen
Dec 9, 2021 – 12.30pm
Tokyo|London | China temporarily erased Lithuania as an economic partner last week after going nuclear on the tiny Baltic country for allowing Taiwan to open a de facto embassy in its capital.
Exporters in Lithuania suddenly found their country was no longer listed by China Customs. This meant they could not clear cargoes destined for China, while exporters trying to send goods to Lithuania were in the same boat.
The move showed the lengths that China, whose fury with the Morrison government just intensified over the diplomatic boycott of the Winter Olympics, is willing to go to when faced with criticism from small countries. China has already slapped restrictions on $20 billion worth of Australian coal, wine, beef, barley, seafood and coal.
“This is unprecedented. Outside wartime conditions, full trade bans are extraordinarily rare – think North Korea, the US-Iran sanctions, etc,” Jeffrey Wilson, director of the Perth-USAsia Centre at the University of Western Australia, said.
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Beginning of the end for Evergrande as real estate giant declared in default
By Rebecca Choong Wilkins
December 9, 2021 — 10.09pm
China Evergrande has been officially labelled a defaulter for the first time, the latest milestone in months-long financial drama that paves the way for a massive restructuring of the world’s most indebted developer.
Fitch Ratings cut the developer to restricted default over its failure to meet two coupon payments after a grace period expired on Monday, according to a statement. The credit assessor said the developer didn’t respond to requests for confirmation on the payment, and is assuming it wasn’t made. The downgrade may trigger cross defaults on Evergrande’s $US19.2 billion ($26.9 billion) of debt.
The development marks the beginning of the end for the sprawling real estate empire started 25 years ago by founder Hui Ka Yan, setting off a lengthy battle over who gets paid from what remains.
It also poses a challenge to the Chinese government’s efforts to prevent a debt crisis in the property sector from sparking broader contagion. Authorities have scored some successes, with markets taking the most recent developer debt stumbles in their stride after a reserve-ratio cut announced by the central bank on Monday.
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China Evergrande finally defaults. Now what?
By Alexandra Stevenson and Cao Li
December 10, 2021 — 6.56am
For weeks, global markets have been watching the struggles of China Evergrande, a teetering real estate giant weighed down by $US300 billion ($420 billion) or more in obligations that just barely seemed able to make its required payments to global investors.
On Thursday, three days after a deadline passed leaving bondholders with nothing but silence from the company, a major credit ratings firm declared that Evergrande was in default. But instead of resolving questions about the fate of the Chinese behemoth, the announcement only deepened them.
The firm, Fitch Ratings, said in its statement that it had placed the Chinese property developer in its “restricted default” category. The designation means Evergrande had formally defaulted but had not yet entered into any kind of bankruptcy filing, liquidation or other process that would stop its operations.
It is the nature of that next step — bankruptcy, a fire sale or business as usual — that remains unknown. In the United States and many other places, bondholders could push an unwilling company into some form of reorganisation, usually in court, and divvy up the pieces.
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A fresh trade war is brewing as China flexes its muscles
Senior business columnist
December 9, 2021 — 11.55am
When Lithuania allowed Taiwan to open a representative office in Vilnius last month, using its own name instead of Taipei, you wouldn’t have to be Australian to foresee how China would respond.
Lithuania has claimed that China removed it from the list of countries in its customs portal, denying Lithuanian exporters a customs clearance because they are unable to select “Lithuania” as the products’ country of origin. Products from technology, to beer, food and timber are said to have been impacted.
China also recalled its ambassador, demanded Lithuania withdraw its envoy and downgraded diplomatic relations. Lithuania has also claimed Beijing has pressured third countries, urging them not to trade with the Baltic state.
Last week, after high-level talks between the US and European Union centred on developing a shared approach to China, the US deputy secretary of state, Wendy Sherman, accused China of “bullying” Lithuania and Taiwan and said the US was “very worried” about the measures China had taken against Lithuania.
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NZ to create first smoke-free generation with lifetime tobacco ban
By Bridie Witton
December 9, 2021 — 11.48am
Christchurch: The New Zealand government will ban young people from ever being able to purchase tobacco in their lifetime under world-leading plans to make the country smoke-free.
Older generations will only be able to buy tobacco products with very low levels of nicotine, and fewer shops will be able to sell tobacco products, Associate Health Minister Dr Ayesha Verrall announced in Parliament on Thursday. The measures are part of the government’s new Smokefree 2025 action plan.
“We want to make sure young people never start smoking, so we will make it an offence to sell or supply smoke tobacco products to new cohorts of young people,” she said. “People aged 14 when the law comes into effect will never be able to legally purchase tobacco.”
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The West may not survive its own woke madness
11:00PM December 8, 2021
There are straws in the wind, sometimes more telling than bigger events. If the West does not believe in itself, it will struggle, may not even survive, culturally, politically, socially and militarily. When a person, institution or culture loses belief in itself, it decays, declines or dies.
Here are three disparate signs, none decisive, all revealing. The EU has long been beyond parody and I have often jokingly referred to it as essentially the work of the devil. As usual, reality overtook satire. The European Commission recently produced an authoritative internal document, Union of Equality, a guide to inclusive language. Naturally, its first ruling was that no official document, and no approved usage, should include reference to Christmas. Therefore an expression like “the Christmas period can be stressful” had to be changed to “the holidays can be stressful”. It was similarly verboten to use Christian names in any instructive literature. Don’t say John and Mary are a European couple but use generic names like Malika and Giulio.
There were a lot of other obnoxious, idiotic instructions in this document. No one, for example, was ever again to begin remarks at an EU function with the words “Ladies and gentlemen”. But it was the anti-Christian animus that was most revealing. It provoked a furious reaction even from Pope Francis, politically the most left of centre, and certainly the most woke, pope in the past 100 years. He accused the EU of colonialism, trying to impose its illiberal religious identity against the indigenous religion of Europe, which is Christianity.
Christianity, according to the Pew Research Centre, is the most persecuted religion in the world. While a universal religion open to all, it is also the foundation of Western civilisation and especially of Europe. I have never known a follower of any other non-Christian religion object to Christmas in Western societies. This is rather the work of illiberal, coercive, uber-secularists, typically lost in the swamp lands of postmodern identity fanaticism.
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https://www.afr.com/markets/equity-markets/wall-st-higher-as-inflation-threat-eases-20211211-p59gq2
S&P 500 closes at record high as inflation threat eases
Timothy Moore Online editor
Dec 11, 2021 – 5.58am
All three major US equity benchmarks closed higher with investors relieved that November’s consumer prices gains met expectations, easing pressure on the Federal Reserve to accelerate it taper and the timing of a rate hike.
The Fed’s policy-making committee will hold their final gathering of the year next week. They are expected to announce a faster taper pace. The committee also will release new economic and rate projections.
The consumer price index climbed 6.8 per cent from November 2020, according to Labor Department data released on Friday. The median forecasts in a Bloomberg survey of economists called for a 6.8 per cent annual gain.
“We expect the path for inflation over the next year is decisively lower,” said LPL Financial asset allocation strategist Barry Gilbert, “but we may still push higher for the next 1-3 months.”
· On Wall St: Dow +0.6% S&P 500 +1% Nasdaq +0.7%
· In New York: Tesla +1.3% Ford +9.8% GM +6%
· Apple +2.8% Amazon -1.1% Microsoft +2.8% Alphabet +0.3%
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The truth is, China will stop at nothing until the West is lost
Beijing, 30 years ago — at the height of Australian delusions about China — used organised crime as one of the tools of state to try to force the US out of Asia. It’s been the plan all along.
From Inquirer
December 10, 2021
The hostility between the Chinese Communist Party and the Morrison government intensified this week when Canberra joined the US in declaring a diplomatic boycott of next year’s Beijing Winter Olympics.
The China relationship can always get worse.
Here are three questions we have not answered, or even much asked: how long has Beijing been a geostrategic opponent of the US and Australia? What are Beijing’s ultimate strategic objectives? And what happens to the world if Beijing does take Taiwan?
US President Joe Biden held a video summit with Russian President Vladimir Putin. The ever closer de facto alliance between Beijing and Moscow is acutely dangerous. Biden threatened fierce economic sanctions if Moscow invades Ukraine. But he also made it clear that the US would not intervene militarily.
This led so seasoned an observer as The Wall Street Journal’s Gerard Baker to conclude that the US would also never fight for Taiwan. This is a disastrous assessment. One hopes that Baker is wrong. It also shows he does not understand what is at stake in Taiwan.
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Joe Biden dials up ‘strong’ support for Kiev against Moscow
Joe Biden on the phone to Volodymyr Zelensky on Thursday. Picture: AFP
AFP
4:19PM December 10, 2021
President Joe Biden gave “strong” backing on Thursday to Ukraine in its struggle with Russia and urged a diplomatic solution to the conflict in eastern Europe, while promising US help if Moscow attacks.
Ukraine’s President Volodymyr Zelensky issued a statement thanking Mr Biden for his “strong support” in a phone call lasting about an hour and a half.
And the White House said Mr Biden “reaffirmed the United States’ unwavering commitment to Ukraine’s sovereignty and territorial integrity”.
Mr Biden placed a separate call to the leaders of NATO members Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia, which are all deeply concerned by Russian military threats to Ukraine. They “discussed Russia’s destabilising military build-up along Ukraine’s border and the need for a united, ready, and resolute NATO stance for the collective defence of allies”, the White House said.
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Market bravado tested as bonds flash Fed policy danger
Justina Lee and Denitsa Tsekova
Dec 12, 2021 – 7.33am
The fastest inflation print in nearly 40 years is rattling nerves on Wall Street where economically sensitive trades are hitched to an ultra-accommodative Federal Reserve.
The spread between five- and 30-year Treasury yields has narrowed relentlessly this quarter, with that curve now near the flattest since March 2020. It’s a sign bond traders are betting faster rate hikes will undercut the red-hot economic expansion, possibly disrupting the business cycle in the name of inflation-fighting credibility.
A slew of stock market corners beneath a heady S&P 500 are channelling bond-market angst, with stimulus fading, still-clunky supply chains and a new coronavirus variant spreading.
Yet it’s far from clear-cut. Many say the bond warning is a head fake with plenty of juice left in stock trades hitched to the robust recovery.
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China looms large as South Korea uses visit to seek Australia’s help
By Eryk Bagshaw
December 12, 2021 — 5.00am
Singapore: South Korean President Moon Jae-in will use his visit to Australia to show his country can be a partner to the United States in the region amid fears Asia’s fourth-largest economy is being left behind by the members of the Quad.
The Quad – which includes Japan, India, Australia, and the United States – has evolved into a security grouping designed to manage the rise of China, but is now becoming a platform for economic co-operation, COVID-19 vaccine distribution and infrastructure investment.
Moon’s visit, which starts on Sunday, will be only the second by a world leader since New Zealand’s Jacinda Ardern after the pandemic began in 2020.
South Korea has adopted a more cautious approach than neighbouring Japan to China’s increasingly assertive foreign policy because of its reliance on Beijing to negotiate any future peace deal with communist North Korea.
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I look forward to comments on all this!
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David.
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