September 08, 2022 Edition
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In the US we are seeing the outcomes of Climate Change really of and running with droughts and fires etc. Biden amped up the partisan divide with a fiery anti-Republican speech!
In Russia the last leader of Soviet Russia died.
In the UK we have a new PM while in Europe the energy crisis is just getting worse.
In OZ we have
survived the Jobs and Skills Summit with 36 prearranged outcomes. Stage
management +++ in action. The GP crisis is not being addressed fully and worries regarding the Global Economy - esp. China - worsen.
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Major Issues.
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Australia’s universities need to rethink who, what, where and when
Julie Hare Education editor
Aug 28, 2022 – 1.45pm
University students should be able to learn what they want, where, when and how they want, and Australia’s overly conservative higher education system is putting a brake on the acquisition of productivity-enhancing knowledge, says the OECD’s head of education and skills.
Andreas Schleicher says the Australian higher education system shows signs of being jaded and is struggling to modernise in the face of more diverse student cohorts.
“Australia has been very successful in expanding its higher education systems,” Mr Schleicher will tell The Australian Financial Review Higher Education Summit on Tuesday.
“But it is also true that the student base is far more diverse and institutional settings need to adapt their offerings to young people and their choices in what they’re learning, how and when they learn, and where they learn.”
The German-born and educated mathematician and statistician, who gained a master of science degree from Deakin University in 1992, said Australia’s system still functioned as though it had a small and elite student population of young, full-time students.
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Australians got addicted to subscription TV. What happens now?
Aug 28, 2022 – 4.56pm
Foxtel and HBO are flying high again.
The rights-holders and producers of House of the Dragon, the first spin-off of the prestige TV hit Game of Thrones, saw a record number of Australians tuning in to the watch the latest round of medieval geopolitics, brothel debauchery and now, at least one scarring forced-birth scene. A Foxtel spokesperson claimed the premiere was the company’s biggest ever across broadcast and streaming.
It accompanied a massive marketing campaign around the release, with bus stops and newspapers covered with ads. But Australians didn’t need a bulky cable subscription. To watch the show, Foxtel was also spruiking its streaming platform Binge, which charges $10 per month.
The latest numbers from research firm Telsyte appear to show the push for subscribers from local and international giants is working. The results from the company’s annual subscription entertainment study, shared exclusively with The Australian Financial Review, showed that memberships to subscription video on demand (SVOD) platforms were up 22 per cent over the last 12 months, with Netflix and Amazon Prime Video leading the pack.
But how streaming companies and consumers react to an economic downturn will be the ultimate test to see whether the sugar-rush of subscription TV can last.
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Plan to dump ‘best interest’ test in financial advice
Aleks Vickovich Wealth editor
Aug 29, 2022 – 5.00am
Quality of Advice Review chairwoman Michelle Levy will propose a radical overhaul of the complex laws governing financial advice, scrapping reams of consumer protection and disclosure regulations and making it easier for banks and super funds to provide cheap forms of advice.
A draft consultation paper, expected to be released by Treasury on Monday and seen by The Australian Financial Review, backs longstanding concerns of business leaders that over-regulation has priced most Australians out of financial advice, just as millions of Baby Boomers approach retirement.
The Levy review, which was recommended by the Hayne royal commission but expanded by the Morrison government to focus on access to affordable advice, will propose a new duty to “give good advice” to consumers.
Its introduction would overturn 20 years’ worth of legislation by regulating the quality and content of advice provided, rather than the conduct or business model of the provider, effectively making key planks of the Hayne reforms and Labor’s landmark Future of Financial Advice (FoFA) laws redundant.
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Five ways to make your savings last in retirement
A study of portfolios hit by previous bear markets has lessons for retirees worried about volatility in the market.
Tim Mackay Contributor
Aug 29, 2022 – 5.00am
Pre-retirees and retirees are rightly worried about the impact that volatile markets and high inflation in 2022 will have on their retirement savings.
Unlike those still working and contributing to their super, retirees must sell into a weak market to meet their living expenses. This not only drains their retirement savings more quickly but leaves them with fewer assets that can generate growth in the market recovery.
Further, there is a strong emotional uncertainty – new retirees face up to 30 years of retirement, their nest egg is taking a big hit and they are just starting to withdraw money from it.
So how do you retire confidently during a time of market uncertainty?
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Retail sales smash expectations as Australians keep spending
Michael Read Reporter
Aug 29, 2022 – 12.14pm
Higher interest rates and soaring inflation have not dampened households’ enthusiasm to open their wallets, with new data showing Australians spent a record $34.7 billion at stores in July.
Retail sales climbed 1.3 per cent last month, according to the Australian Bureau of Statistics, well above market forecasts for a more modest 0.3 per cent gain.
The monthly figures do not reveal how much of the increase in turnover came from higher prices rather than consumers buying more items.
The July figure marked the reversal of a gradual slowdown in monthly spending growth that began in February.
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Four reasons not to panic about recession talk
Feeling like you’ve got to change your portfolio to brace for more volatility? Read this first.
Alexis Gray Contributor
Aug 30, 2022 – 5.00am
There has been much discussion of rising interest rates, recent inflation spikes and continuing market volatility affecting investment and super balances. Add to that the increased chatter about the possibility of Australia falling into a recession and things may appear very gloomy for investors.
But before panicking and considering portfolio adjustments to weather a potential recession, here are a few reasons to stay the course and stick to a long-term investment strategy.
First, a recession is often defined as two consecutive quarters of gross domestic product contraction. While there is indeed a more meaningful risk of recession (particularly in Europe), Vanguard modelling estimates the chances of this happening at around 35 per cent over the next 12 months in Australia, and 45 per cent over the next 24 months – ie, it’s not a base case scenario.
The Australian economy continues to grow, supported by low unemployment and robust household spending. Australia is also benefiting from high global energy prices, given its status as a net exporter of energy-related commodities such as coal. As interest rates rise at home and abroad, while economic growth is expected to soften, it should not be sufficient to trigger a recession.
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Emergency powers, secret ministries avoid scrutiny of parliament
12:00AM August 30, 2022
Scott Morrison’s accumulation of ministries began with his appointment as health minister in March 2020. This occurred as the Covid-19 pandemic took hold and made the most sense of any of his additional portfolios.
Morrison was concerned that the Biosecurity Act conferred health minister Greg Hunt with “godlike” powers. Appointing Morrison as a second health minister provided a backup to Hunt and the opportunity for greater oversight.
Even though this plan was flawed, fears arising from Hunt’s new powers were well founded.
The enactment of the Biosecurity Act in 2015 raised barely a murmur of concern. The possibility of a public health emergency seemed remote, and little scrutiny was applied to the health minister’s capabilities in the event of a pandemic. It was only when threat of Covid-19 became apparent in early 2020 that the authoritarian powers in the legislation attracted public attention. By then the regime was in place and ready to be activated.
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Is it ‘morally sustainable’ to fund research from international students?
Tess Bennett Work, careers and technology reporter
Aug 30, 2022 – 6.14pm
Universities’ reliance on international student fees to fund research may not be “morally and ethically” sustainable, the head of the Group of Eight has said.
Speaking at The Australian Financial Review Higher Education Summit in Sydney on Tuesday, Go8 chief executive Vicki Thomson said Australia needed to ask itself if it is “morally sustainable” to continue funding research in this way.
The absence of international students during the pandemic again highlighted universities’ dependence on foreign students to finance their research.
Each year the Go8 spends $6.5 billion on research, of which only $2.8 billion comes from the federal government, Ms Thomson said.
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Foreign student work visa extension proposed
Aug 30, 2022 – 12.31pm
Federal Education Minister Jason Clare has flagged visa extensions for international graduates as a key initiative of this week’s Jobs and Skills Summit to encourage foreign students to stay in Australia to help relieve workforce shortages.
Mr Clare is considering extending the two-year work visa for international graduates to three or four years, a move that won the immediate backing of businessman and university chancellor David Gonski.
Just 16 per cent of international students stay on to work after their studies, compared to 27 per cent in Canada, the Federal Education Minister told the Australian Financial Review Higher Education Summit on Tuesday.
“A lot of those students are busy during the day and during the night, delivering us food or making coffee between classes,” he said.
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We’ll get $45b future frigates into the water on time, Marles vows
Hans van Leeuwen Europe correspondent
Updated Aug 31, 2022 – 7.30am, first published at 7.29am
London | Australia’s troubled $45 billion future frigate project will deliver the Navy’s Hunter class warships on time, Defence Minister Richard Marles has pledged as he visited shipbuilder BAE’s docks in Glasgow.
“We’ve had really frank conversations not only today but over the last few months about what the government expects in respect of getting the frigate program on track,” Mr Marles told reporters at the Govan shipyard.
Defence Minister Richard Marles echoed BAE Systems’ confidence that the Hunter class frigate program was on track.
He said the first Hunter class frigate would roll into the water in 2031, but “we’re working with BAE Systems to see whether we can get that date sooner”.
The Australian Financial Review reported on Monday that the government would not switch course and buy ships more cheaply from Spain, despite several years’ worth of delays to the British firm’s project.
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A quarter of retirees will die with their super wealth intact
Michael Read Reporter
Aug 30, 2022 – 9.54am
Almost one in four retirees have no intention of drawing down their superannuation and next to none are tapping into their housing equity, despite federal government efforts to encourage seniors to spend more in retirement.
The findings, from a survey of more than 3000 retirees by National Seniors and annuity-provider Challenger, suggest the government has its work cut out for it in its efforts to get Australians to spend more in retirement.
The push is in response to a growing body of evidence that retirees are dying with most of their wealth intact.
Almost 23 per cent said they did not want to spend their capital in retirement, and instead live off earnings. About half said they wanted to preserve at least some of their capital.
Some 84 per cent of people who want to hang on to some of their super cited concerns about medical and aged care costs, said Aaron Minney, Challenger’s head of retirement income research.
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Australia’s richest self-managed super fund has $401m
Michael Read and Michael Roddan
Aug 30, 2022 – 6.21pm
Taxpayers are spending $200 million per year on concessions for Australia’s 100 largest self-managed super funds, with new data showing the 32 biggest accounts each have more than $100 million assets, including one mega-SMSF with $401 million.
The release of the figures, published by the Australian Taxation Office on its freedom of information log, follow calls by economists to rein in and simplify Australia’s system of generous superannuation tax concessions which Treasury estimates will cost $93 billion over the next four years.
The data from the ATO’s top 100 SMSF monitoring program show there were 32 individual SMSFs that had retirement savings greater than $100 million in the 2020 financial year – the most recent year for which there are available figures. It marks an increase on 2019, when 27 individuals cracked the threshold and 2018, when there were 22 SMSFs with more than $100 million in assets.
Australia’s biggest SMSF in 2020 had $401 million in assets.
The largest SMSF in 2020 held $401 million in assets, 8120 times more than the national median balance of $49,374. The figure has likely increased since then due to the strong growth in asset prices following the early pandemic downturn.
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One in four retirees won’t touch their super savings. Why?
7:30PM August 30, 2022
Roughly one in four retirees will die without touching their super savings. That’s the surprising new finding contained in a new report from investment house Challenger.
Pressure is growing for older Australians to actively draw on their superannuation more fully – Treasury is pushing for retirees to spend not only the earnings but also the capital. In doing so, retirees would improve their own lives and reinforce the wider super system, or so the theory goes.
Treasury officials have already claimed that many retirees blankly refuse to spend their savings in retirement. “Retirees struggle with the concept that superannuation is to be consumed to fund their retirement,” a recent Treasury white paper reads.
But the reality is much more likely to be that the vast majority of older Australians would readily draw down more in retirement.
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Immortal jellyfish’s secret revealed
By Charlie Devereux
The Times
August 31, 2022
Scientists have unlocked the genetic code of the immortal jellyfish, which they hope could provide clues to understanding human ageing.
Like most jellyfish, the Turritopsis dohrnii begins life as a drifting larva which eventually transforms into a polyp and attaches to the seabed. It then reproduces asexually by cloning itself and breaking away as juvenile medusa.
However, the immortal jellyfish can also do the reverse, returning to the polyp stage to regenerate when triggered by stressors in its environment or injured.
Researchers from the University of Oviedo have sequenced the jellyfish’s genome to compare it with the genes of a close relative, the crimson jellyfish, which does not rejuvenate, to find out how exactly it keeps ageing at bay.
The study in Proceedings of the National Academy of Sciences found that the Turritopsis dohrnii had twice as many genes designed for DNA repair and protection and could also silence certain developmental genes.
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Crunch is coming: Five things we learnt from reporting season
Profit season painted a distorted picture of the economy, which will look very different by Christmas. Here are clues about the potential winners and losers.
Aug 31, 2022 – 4.02pm
The third extraordinary full-year reporting season in a row is finally over. But the return to anything that feels like “normal” conditions still doesn’t seem any closer.
The August profit season is always a marathon, exacerbated by the uncanny ability of companies to crowd into a couple of huge days in the last two weeks of the month.
But the past three years have also been distorted by three distinct phases of the pandemic: the confusion of the outbreak of the virus in August 2020; the extraordinary rollercoaster of supply chain shortages and soaring spending in 2021; and the outbreak of post-pandemic inflation, labour shortages and higher interest rates in 2022.
As UBS strategist Richard Schellbach points out, few of the CEOs leading our biggest companies have faced any of these problems, let alone all three at the same time.
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China, recession worries hammer the Australian dollar
Cecile Lefort Markets reporter
Aug 31, 2022 – 3.28pm
The Australian dollar is set to end August sharply lower as aggressive central bank rate rises and slowing growth in China put it on course for a 1.6 per cent monthly loss. The Aussie has lost US4¢ so far this year.
ANZ on Wednesday lowered its 2022 GDP forecast for the world's second-largest economy to 3 per cent, from 4 per cent, citing weaker demand.
The $A rose 0.3 per cent on Wednesday to US68.73¢ in a relief rally after the latest Chinese factory activity was not as bad as feared, even though such output contracted for a second consecutive month. The Australian dollar is often used as a proxy for Chinese economic growth.
The official manufacturing Purchasing Managers’ Index (PMI) edged up to 49.4 in August, from 49 in July, China’s National Bureau of Statistics said. A Reuters poll had expected the PMI at 49.2; any figure under the 50-point mark signals a contraction.
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AUKUS could pave way for local nuclear power industry: UK minister
Andrew Tillett Political correspondent
Aug 31, 2022 – 6.27pm
Australia’s bid to acquire nuclear-powered submarines could eventually pave the way for it to acquire small modular reactors from Britain for power generation as the two countries look to deepen co-operation on clean energy, UK Secretary for International Trade Anne-Marie Trevelyan said.
In an interview with The Australian Financial Review while visiting Sydney, Ms Trevelyan said the free trade agreement between Australia and the UK would also help boost the supply of skills and industrial base that Australia requires under the AUKUS program.
With the FTA needing parliamentary approval in both countries, Ms Trevelyan expects the free trade deal will come into force next year, which is a bit later than originally planned.
She denied momentum had been lost after the prime ministers who hammered out the final deal in 2021, Scott Morrison and Boris Johnson, had now seen their leadership careers end.
“Not at all. Economic growth is critical at a time of disruptive economics more widely,” she said.
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https://thenewdaily.com.au/finance/finance-news/2022/09/01/financial-advisers-reform-alan-kohler/
5:59am, Sep 1, 2022
Alan Kohler: To reform financial advice, start again
The best thing about lawyer Michelle Levy’s consultation paper for her Quality of Advice review, published by Treasury on Monday, is that she is not tinkering, but thinking big, and she also wants to get rid of the cursed Statement of Advice.
The worst thing is that she doesn’t think big enough.
The regulation of financial advice in Australia has been a disaster and a debacle, swinging from not enough to too much of the wrong sort.
Over-compliance has made financial advice far too expensive and largely useless.
The controversial centrepiece of Levy’s ideas is that the duty of a financial adviser to act in the best interests of their client should be replaced with a requirement to provide “good advice”.
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‘They have to be held to account’: Future Fund chairman lashes RBA over rate rises
August 31, 2022 — 4.22pm
Future Fund chairman Peter Costello has lashed the Reserve Bank for misjudging the economy, saying borrowers are now facing steeper interest rate hikes because of its failure to act earlier on surging inflation.
As the $194.4 billion taxpayer-owned fund on Wednesday delivered a negative return of minus 1.2 per cent for the year to June, Costello predicted more volatility on financial markets as central banks continued to push rates higher.
Costello argued the fund’s minus 1.2 per cent return, the fund’s first negative result since 2020, was a strong performance against a volatile backdrop, as he accused central banks of being too slow to raise interest rates to combat inflation.
“It’s our belief that monetary authorities, both in the US and in Australia, were caught napping,” Costello said.
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https://www.afr.com/policy/economy/three-fast-fixes-for-the-jobs-summit-20220829-p5bdoe
Three fast fixes for the jobs summit
Migration targets, female participation and older workers are all speedy ways for the government to relieve workforce and inflationary pressures.
Danielle Wood and Brendan Coates
Aug 31, 2022 – 4.09pm
There’s no shortage of ambition heading into this week’s Jobs and Skills Summit. The challenge for the Albanese government is to find some easy wins.
Here are three ways it can get runs on the board.
More skilled migrants and more female workers are a way out of the jobs jam.
With business screaming out for more staff, debate has turned to boosting Australia’s permanent migrant intake.
But a larger intake alone would do little to tackle widespread skills shortages because three-in-four migrants who are granted skilled visas are already in Australia. Even if a larger intake attracts people from offshore, more migrants will also add to demand, creating further need for workers.
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https://www.afr.com/chanticleer/three-reasons-this-house-price-collapse-may-last-20220901-p5bemk
Three reasons this house price ‘collapse’ may last
House prices are falling at their fastest for 40 years. But this downturn could look different to those we’ve seen in the past 25 years.
Sep 1, 2022 – 2.03pm
Earlier this week, the president of the Federal Reserve Bank of Minneapolis, Neel Kashkari, confessed he was happy with the sharemarket sell-off in reaction to Fed chairman Jerome Powell’s hawkish speech at Jackson Hole. Falling share prices mean tighter financial conditions, which help the Fed’s inflation fight.
Would Reserve Bank of Australia governor Philip Lowe have a similar reaction to falling house prices?
CoreLogic data released on Thursday confirmed what various commentators have been saying for weeks: Australian house prices are falling at the fastest pace in 40 years, with prices declining by 1.6 per cent across the eight capital cities in August, to be down 4.2 per cent from their April peak.
Sydney is bearing the brunt of this fall, with prices now down 6.7 per cent in just three months. As Commonwealth Bank chief economist Gareth Aird says: “That can only be described as a collapse in prices.”
None of this is surprising. As fund manager and AFR Weekend columnist Christopher Joye has regularly reminded readers, he has been predicting a peak-to-trough fall of between 15 per cent and 25 per cent since last October and this view is now fairly consistent across the market: Aird sees prices down 15 per cent, while AMP Capital’s Shane Oliver tips a fall of between 15 per cent and 20 per cent.
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https://www.afr.com/policy/economy/an-economist-emerges-as-the-summit-s-early-star-20220901-p5begh
An economist emerges as the summit’s early star
Danielle Wood’s 31-minute analysis of the nation’s economic plight was clear, compelling and couched perfectly to the morning’s activist agenda.
Aaron Patrick Senior correspondent
Sep 1, 2022 – 11.40am
Given the moment, Danielle Wood seized it.
Whatever the consequences of the Labor government’s Jobs and Skills Summit in Canberra, the Melbourne economist will probably emerge as a powerful force in Australian public policy.
Wood, the chief executive of the Grattan Institute think tank, was given the plum first speaker’s slot after Anthony Albanese and Jim Chalmers on Thursday morning in Parliament House’s Great Hall.
Her 31-minute analysis of Australia’s economic plight was clear, compelling and couched perfectly to prepare for the morning’s push by activists for greater childcare subsidies.
“I can’t help but reflect that if untapped women’s workforce participation was a massive ore deposit, we would have governments lining up to give tax concessions to get it out of the ground,” Wood said, while Fortescue Metals Group executive chairman Andrew Forrest listened in between tapping on his phone.
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Get ready for the first rates-led collapses since 1991
An incredible 34 per cent of all ASX companies would be classified as “zombies” based on their ability to produce sufficient profits to cover interest repayments.
Christopher Joye Columnist
Sep 2, 2022 – 9.26am
This column has been warning since 2019 about the rise of “zombie companies” kept alive by perpetually cheap money.
That’s been thanks to the near-zero interest rate and QE-to-infinity policies of profligate central banks in the period following the global financial crisis.
The worry is that as interest rates now normalise, many of these zombies could fail to survive, creating waves of corporate defaults the likes of which have not been seen since the 1991 recession in Australia and during the GFC in the US.
We have, therefore, updated our quantitative zombie detection models to cover both Australia and the US. And we have stress-tested some of the definitions of what is, and is not, a zombie.
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‘Stop kidding ourselves about budget’: Garnaut revives mining tax
John Kehoe Economics editor
Sep 1, 2022 – 7.15pm
Economist Ross Garnaut has revived imposing a mining tax to spread high resource profits to workers, instead of increasing wages through labour market interventions that could hurt job opportunities.
The Albanese government’s handpicked, keynote speaker at the Jobs and Skills Summit said in Canberra on Thursday night that the forecast fall in real wages of 7 per cent was much worse than expected before the election due to soaring energy prices and inflation.
Professor Garnaut said high commodity prices should be driving budget surpluses, instead of “eyewatering” levels of “peacetime record highs of public debt” after massive stimulus spending during the pandemic.
“We have to stop kidding ourselves about the budget,” he said.
“In this successful Australia, rising standards of living will rely less on regulated wages and more on fiscal transfers.
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Australia needs vast investment in renewables to escape economic funk: Garnaut
September 1, 2022 — 7.33pm
Australia emits only about 1 per cent of all greenhouse gases but could equip the world for cutting a further 7 per cent of all global emissions, creating an economic boom in the process, according to an eminent economist.
Melbourne University’s Ross Garnaut says “Australia is better placed than any other country” to prosper from the energy transition now under way, with the potential to turn from global laggard to global leader.
In a keynote address to the jobs and skills summit in Canberra, Professor Garnaut said Australia’s economic funk was much worse than generally understood, but so was its potential for economic rejuvenation.
The global energy transition was a transformative economic opportunity for Australia and a potential boost to global decarbonisation, he said.
“Australian export of zero emissions goods and services could reduce global emissions directly by about 7 per cent.
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How to play politics with $1.3 billion (a lesson for Albanese to avoid)
Chief political correspondent
September 2, 2022 — 5.00am
The high hopes for a consensus at the jobs summit this week set up a moment to consider the scandalous waste of time and energy on a political ploy over the past few years that promised a torrent of money but delivered it too slowly to help.
An abrupt email to 400 companies last week brought a sad end to projects that would have helped thousands of workers under one of the marquee schemes of the JobMaker program, the brand Scott Morrison created as prime minister to convince voters he had the answer on the recovery from the pandemic.
Some companies were lucky and were promised cash from the $1.3 billion “modern manufacturing initiative” announced in October 2020 as a way to issue grants to employers with good ideas to create jobs in fields such as food production, medical innovation and clean energy. But even the lucky ones had to wait for when a decision on the MMI money might suit Morrison and his ministers – which meant they had to wait until an election was in sight.
Only now have the details been uncovered to show how long it took for the former government to decide the grants. The results are another reminder of the way political ambition now distorts the use of taxpayer funds on policies that are meant to be about the national interest – and why it is important that Anthony Albanese has vowed not to repeat this pattern now he sits in the prime minister’s suite.
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‘The backlog will be cleared’: visa processing gets $36m boost
Michael Read Reporter
Sep 2, 2022 – 12.17pm
Home Affairs will get a $36 million funding boost to clear Australia’s extraordinary visa backlog, Immigration Minister Andrew Giles has announced, as hundreds of extra public servants are deployed to process applications from businesses in desperate need of workers.
Labor is also poised to increase the salary a migrant must earn to qualify for a skilled worker visa, but unions and businesses disagree about how high the threshold should be.
Mr Giles announced at Friday’s Jobs and Skills Summit the federal government will invest $36.1 million to hire 500 surge staff over the next nine months to process Australia’s crippling backlog of active non-humanitarian visa applications, which stood at 962,000 when Labor took office in May.
Of the outstanding visa applications, 571,000 were for temporary visas, almost 150,000 were skilled applicants and 232,000 were family visas.
The funding boost is on top of the 180 additional public servants the government has deployed to process visas and 190 staff who are currently being onboarded.
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https://www.afr.com/politics/federal/jobs-summit-tackles-worker-shortage-20220902-p5betc
Jobs summit tackles worker shortage
Phillip Coorey Political editor
Sep 2, 2022 – 6.29pm
The Albanese government will tackle the immediate skills and labour crisis by boosting the permanent migration intake by 35,000 places for a year, allowing pensioners to earn another $4000 before their benefit is pared back, and enabling foreign students to stay in the county for an extra two years after competing their studies.
The decisions were among the 36 “concrete outcomes” Treasurer Jim Chalmers said were delivered by the two-day Jobs and Skills summit in Canberra over which he presided, and which concluded on Friday.
While business applauded the labour crisis measures, it remained concerned about a separate pledge to reintroduce multi-employer bargaining, fearing it could morph into the larger industry-wide bargaining and create the potential for industry-wide strikes.
“The idea of industry-wide bargaining is something Australia left behind a long time ago and there were good reasons why, so in trying to solve one set of problems we need to be careful to avoid creating new ones,” said Qantas chief executive Alan Joyce.
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The summit was a political success, now for the delivery
Phillip Coorey Political editor
Sep 2, 2022 – 6.00pm
For what began as a largely unnoticed promise made during the dim, dark days of opposition, Anthony Albanese and Jim Chalmers managed to turn their Jobs and Skills Summit into a political success.
So far, at least.
Yes, the press releases for the key policy “outcomes” were drafted well in advance of the two-day gabfest.
These included the boost to the permanent migration intake, the proposed changes to enterprise bargaining, enabling pensioners to work more hours without losing their benefit, or letting foreign students working in critical areas of need stay for an extra two years after competing their studies.
It was the optics the government was chasing, and all involved agreed it was a relief to see groups and individuals who had been at cross purposes for years sitting in a big room arguing for the common good.
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https://www.afr.com/politics/labor-backflips-on-super-fund-political-donations-20220902-p5bex6
Labor backflips on super fund political donations
Michael Read Reporter
Sep 2, 2022 – 3.40pm
Super funds will still be required to provide itemised information about political donations after Labor backflipped on a controversial proposal that would have allowed funds to declare donations in aggregate.
The proposal to shield funds from the obligation to disclose specific information about political donations had faced heavy scrutiny from the crossbench and the opposition, which is still threatening to disallow the government’s new regulations.
Superannuation Minister Stephen Jones announced on Friday the government had finalised changes to rules governing what funds were required to disclose in annual members’ meeting notices, after the completion of a six-week consultation process.
While the final regulations closely mirror Labor’s exposure draft, the government has created a carve-out for political donations, maintaining the requirement for funds to provide itemised information about political party donations.
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The RBA’s rate rises aren’t working on shoppers (yet)
Simon Evans and Carrie LaFrenz
Sep 2, 2022 – 3.28pm
Shoppers are still out spending with gusto. It is something Reserve Bank governor Philip Lowe hoped would have begun to slow as he ploughs on with sharp interest rate increases in an attempt to stomp on inflation, with a fifth rise expected on Tuesday.
Rate rises are a blunt tool designed to cool demand. It has certainly happened in the housing market where property prices are falling and big home loans taken out in good faith by buyers, when rates were at 50-year lows, now soak up so much more of their household income.
New home loans in July slumped at their second-fastest rate in the past two decades, dropping 8.5 per cent in seasonally adjusted terms, Australian Bureau of Statistics figures showed.
But consumers have not yet backed off when it comes to buying big-ticket items such as large-screen televisions, a new laptop or a stylish sofa. Household consumption makes up almost 60 per cent of Australia’s total economic output and retail sales surged 1.3 per cent in July to a record $34.7 billion.
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Memo to Jim Chalmers: Settling old political scores won’t fix debt
12:00AM September 3, 2022
Jim Chalmers is fond of referring to the national debt that the Labor government has inherited as “Liberal Party debt” – all $1 trillion of it. In fact even gross debt is currently less than that figure, although it is forecast to top the trillion-dollar mark soon enough.
You can slice roughly a quarter off the total debt burden if you just look at net debt, which is arguably the better marker anyway. But let’s not quibble, shall we? Describing the total quantum of debt as Liberal Party debt is good politics, even if it’s fiscally inaccurate. And not simply just because it’s national government debt.
In political terms the former Coalition government didn’t inherit no debt when it came to power in 2013. At that point gross debt was already around $250bn, largely courtesy of global financial crisis spending by the Rudd government shortly after it came to power.
Which is not to criticise Labor for what at the time was big spending in the wake of the global recession Australia avoided. The Coalition in opposition agreed with much (though not all) of the spending, and arguably the spending that occurred saved jobs and stimulated economic growth, helping us avoid recessionary effects. Chalmers would know this; he was chief of staff for the treasurer at the time, Wayne Swan.
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Anthony Albanese shows Labor open for business
12:00AM September 3, 2022
Australia is going to change as a country. This is the real lesson of the two-day Jobs and Skills Summit. It saw Anthony Albanese and Jim Chalmers chasing a new political culture as the Prime Minister declared he was pro-business and pro-worker – a useful optic for policies designed to boost wages and give trade unions extra leverage.
Summits are about legitimising new policies with collective imagery. Albanese and his Treasurer should be satisfied with the outcome. The summit displayed Albanese with a refined sense of how to build his authority – he cultivated the great and the good in a talkfest delivering outcomes that give momentum to Labor’s cause.
This was a cleverly orchestrated event. Albanese is a more sophisticated practitioner of prime ministerial influence than many people anticipated. He seeks to seduce business, reward the trade unions, elevate women, champion a better skilled workforce, promote a more caring and inclusive society, cloak policy in the ethic of fairness and back a more decarbonised, more hi-tech economy. But as the summit proved, Albanese is a deal-maker with his senior ministers fixing the details.
Chalmers hailed the summit as the beginning of a “new era”. Indeed, the entire purpose was to foster a new culture of Labor government far different from the rejected Morrison model. In its optics, the summit has been a political success for Labor.
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Business cannot allow this terrible idea to be revived
The government wants to create some faux consensus for a return to 1970s-style industrial relations. Business should make it clear that it will fight hard against this.
Sep 2, 2022 – 6.30pm
Business leaders must sink any attempt by the Albanese government to present the goodwill evident at the Jobs and Skills Summit as some fake consensus for a return to sectoral bargaining and strikes across whole industries. There is no consensus for this.
Business peak bodies and chief executives must urgently press Labor and the ACTU to spell out exactly where this is headed and to loudly point out the dangers.
This is the slippery slope to a rebooted version of 1970s-style industrial protest, totally unsuited to today’s digital-age Australia, which needs to compete in a disrupted global economy and radically transform for a net zero world.
Brazenly, the unions are also on the verge of winning a retreat to old-style compulsory external arbitration of workplace disputes, an expansion of the issues on which unions are allowed to strike, and even to the unionisation of smaller businesses that don’t want it.
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COVID-19 Information.
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The five virus families most likely to cause the next pandemic
By Liam Mannix
August 30, 2022 — 12.01am
Key points
· Coronaviridae, Flaviviridae, Togaviridae, Orthomyxoviridae and Paramyxoviridae viruses pose the biggest pandemic threat to Australia, CSIRO research says
· Coronaviridae includes coronaviruses - five of which have jumped into humans in the last 20 years
· Flaviviridae and Togaviridae viruses are often spread by mosquitoes, and include dengue fever, chikungunya fever, and Japanese encephalitis.
· Orthomyxoviridae viruses include all the influenza strains we live with. But it is highly-lethal Paramyxoviridae viruses like hendra that are perhaps our closest geographical threat.
Australian scientists have identified the five virus families that pose the greatest pandemic threat and have told the federal government to start bolstering its defences and developing new drugs to prevent and treat them.
The virus families include those that cause dengue fever, chikungunya and hendra – which scientists discovered last year was mutating and picking up new animal hosts.
Pandemic threats are increasing dramatically as the climate crisis and deforestation push humans and animals ever-closer together, while air travel allows a virus to quickly sweep the globe.
“Large-scale viral outbreaks are increasing in frequency and severity,” said Greg Williams, associate director of health and biosecurity at the CSIRO. “There will be another one.”
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‘Get ready for two pandemics a year’, warns CSIRO
12:05AM August 30, 2022
Australia must prepare for the emergence of up to two pandemic threats a year, the CSIRO warns in a benchmark report detailing new thinking on the next disease crisis.
The sobering assessment identifies zoonotic viruses crossing over from animals to people in line with Covid-19 as the most likely cause of future pandemics and finds lethal breakouts are increasing in frequency.
The biggest dangers include coronaviruses such as Covid-causing SARS-CoV-2, the paramyxoviruses involved in deadly Australian Hendra disease and its Asian cousin, Nipah, as well as flaviviruses responsible for mosquito-borne dengue and Zika infections.
“As the world continues to better understand these connections between human, animal, plant and environmental health … it is becoming clearer that viruses are shifting between species at alarming rates,” the report says.
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Climate Change.
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https://www.afr.com/companies/energy/accc-to-gas-giants-fill-the-domestic-shortfall-20220829-p5bdmb
ACCC to gas giants: Fill the domestic shortfall
Gina Cass-Gottlieb has told Australia’s big gas producers to get on with the job of signing domestic contracts and filling a projected shortfall in 2023, while saying she remains concerned about a lack of competition in the sector.
James Thomson Columnist
Aug 30, 2022 – 5.00am
Australian Competition and Consumer Commission chair Gina Cass-Gottlieb has told Australia’s big gas producers to get on with the job of signing domestic contracts and filling a projected shortfall in 2023, while saying she remains concerned about a lack of competition in the sector.
In an exclusive interview with The Australian Financial Review, Ms Cass-Gottlieb also said the ACCC is expecting a continued rise in the number of companies asking the watchdog to approve mergers on the grounds of financial hardship, as rate increases slow the economy.
Ms Cass-Gottlieb, who took up her post in late March, said she had been heavily involved in the drafting of the latest edition of the ACCC’s series of regular reports into the east coast gas market, which forecast a shortfall of 56 petajoules in 2023, equivalent to about 10 per cent of next year’s forecast demand for 571 petajoules.
While gas producers accused the ACCC of demonising the industry and insisted there was no shortage of gas, Ms Cass-Gottlieb said the projection was based on data supplied by gas producers themselves, and reminded the producers that 99 per cent of uncontracted gas was exported to international markets last year
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Clough in talks with Snowy Hydro and two banks to maintain liquidity
8:55PM September 3, 2022
The West Australian contractor building Snowy 2.0 and the EnergyConnect transmission line has revealed it is in the “ludicrous” position of holding no working capital – and is locked in talks with Snowy Hydro over delays and cost blowouts on the project.
Clough does not have any existing working capital facilities in place and is negotiating with two banks to finalise term sheets given looming cost requirements for several of its large projects, its South African owner, Murray & Roberts, disclosed.
“Clough as an entity, with that enormous order book, can you believe it have got zero working capital facilities,” Murray & Roberts financial director Daniel Grobler said on a call with analysts. “It’s ludicrous for Clough to not have anything in place.”
Clough’s financial health has come under the spotlight after reports in The Australian revealed its joint venture had filed $2.2bn of additional payment claims against Snowy Hydro for work on Snowy 2.0, blaming the cost hike on the pandemic and a surge in material prices.
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‘Doomed’ Greenland ice sheet set to raise sea levels by almost 30 centimetres, study finds
By Seth Borenstein
August 30, 2022 — 7.53am
Zombie ice from the massive Greenland ice sheet will eventually raise global sea level by at least 10 inches (27 centimetres) on its own, according to a study released Monday.
Zombie or doomed ice is ice that is still attached to thicker areas of ice, but is no longer getting fed by those larger glaciers. That’s because the parent glaciers are getting less replenishing snow.
Meanwhile the doomed ice is melting from climate change, said study co-author William Colgan, a glaciologist at the Geological Survey of Denmark and Greenland.
“It’s dead ice. It’s just going to melt and disappear from the ice sheet,” Colgan said in an interview. “This ice has been consigned to the ocean, regardless of what climate [emissions] scenario we take now.”
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‘Sleepwalking to destruction’: World struck by relentless climate catastrophes
September 3, 2022 — 5.00am
Authorities are having difficulties finding the words to properly capture the devastation caused by the floods that have swept across Pakistan in recent days, killing more than 1400 people and displacing up to 50 million as water inundates about a third of the country.
“The Pakistani people are facing a monsoon on steroids — the relentless impact of epochal levels of rain and flooding,” said United Nations Secretary General Antonio Guterres said this week, calling on the world to stop “sleepwalking towards the destruction of our planet by climate change”.
The horror of his language was echoed in Pakistan, a nation of 220 million citizens.
“It has been a catastrophe of unprecedented proportions,” Pakistan Climate Minister Sherry Rehman told Associated Press.
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Russia to keep Nord Stream pipeline shut, citing mechanical problems
By Georgi Kantchev and Andrew Duehren
Dow Jones
September 3, 2022
Russia indefinitely suspended natural gas flows to Europe via a key pipeline hours after the Group of Seven agreed to an oil price cap for Russian crude — two opposing blows exchanged between Moscow and the West in an economic war running parallel to the military conflict in Ukraine.
Kremlin-controlled energy company Gazprom PJSC said late Friday it would suspend supplies of gas to Germany via the Nord Stream natural-gas pipeline until further notice, raising the pressure on Europe as governments race to avoid energy shortages this winter.
Gazprom said it had found a technical fault during maintenance of the pipeline, which connects Russia with Germany under the Baltic Sea. The company said the pipeline will remain shut down until the issue is fixed, without giving any timeline.
The pipeline was due to resume work early Saturday after three-day maintenance. Before the maintenance, the pipeline was operating at 20% of its capacity.
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Royal Commissions And The Like.
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No entries in this category.
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National Budget Issues.
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https://thenewdaily.com.au/news/politics/australian-politics/2022/08/29/jobs-summit-rival-agendas/
6:00am, Aug 29, 2022 Updated: 7:15pm, Aug 28
Alan Kohler: Business is on a hiding to nothing at the jobs summit
Australia’s businesses will show up at this week’s Jobs and Skills Summit with one thing in mind – give us more workers.
Unions will be there with a different thing in mind – give us more money.
Both will probably end up disappointed, but business is on a hiding to nothing.
The increase in immigration likely to be announced at the summit will be a fraction of the hundreds of thousands of job vacancies there are at the moment and, anyway, migrants need to live somewhere and go shopping, so their demand creates almost as many new vacancies as people to fill them.
And education, even if the topic progresses from fine words to concrete ideas, is a long-term proposition and won’t solve the problem of 2022.
In any case, it’s possible that part of the problem is that too many people have been getting too educated doing arts and philosophy at university, rather than a trade or diploma at a TAFE.
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Building defence equipment in Australia could cost $23m per job
Andrew Tillett Political correspondent
Aug 30, 2022 – 5.00am
A former senior Defence Department executive has cast doubt on the affordability of the federal government’s ramp up in military spending, saying warships and armoured vehicles should be built overseas rather than propping up local jobs.
In a paper for the Australian Strategic Policy Institute to be released on Tuesday, Rob Bourke, a former director-general for economic and commercial analysis in the Defence Department’s procurement section, argued savings from overseas production would be able to help stretch defence dollars to pay for new critical technology under the AUKUS pact, such as artificial intelligence.
Mr Bourke’s analysis using Defence’s own data also concludes the economic benefits of local builds are exaggerated, and in some cases would mean taxpayers were hit with a premium of $23 million per job created.
A 10 per cent price premium on building the equivalent of a Collins class submarine with 40 per cent of Australian content would incur a cost of $494,000 per job. But increasing the price premium to 30 per cent would create each extra job at a cost of $23.6 million.
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Focus on local defence production endangers Australia’s security, report warns
August 30, 2022 — 12.01am
Australia will not be able to afford all the high-tech weaponry it needs to defend itself unless the federal government ends its fixation on building defence equipment locally, a former senior Defence official argues.
With the federal budget deep in deficit, former Department of Defence economic adviser Rob Bourke warns that a misguided focus on “sovereignty” and “nation-building” could have disastrous consequences for national security.
Construction of a fleet of frigates for the Royal Australian Navy has been plagued by cost blowouts and delays.
Pointing to delays and cost blowouts with the planned fleet of nine Navy frigates set to be manufactured in South Australia, Bourke argues the government should prioritise value for money by buying more military equipment directly from overseas.
However, this would risk a backlash from unions and limit politicians’ ability to chase votes in key electorates by promising to create well-paying local manufacturing jobs.
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Health Issues.
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National nurse shortfall to hit 85,000 by 2025: Universities Australia
Gus McCubbing Reporter
Aug 30, 2022 – 6.08pm
Victorian Premier Daniel Andrews has batted away criticism that his plan to offer thousands of nurses and midwives free university and specialist training won’t resolve the underlying issue of work placement opportunities.
The Andrews government on Sunday pledged to pay the university fees of more than 10,000 Victorian nursing and midwifery undergraduates, in a $270 million initiative to boost the state’s health workforce.
But Australian National University professor of higher education policy Andrew Norton said free tuition would not solve the shortfall of nurses in Victoria.
“There is already sufficient demand [for nursing courses],” Professor Norton told The Australian Financial Review.
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Cosmetic surgery reforms need more than a nip and tuck
September 1, 2022 — 12.00am
When you have been forced to watch hundreds of videos of barbaric, illegal and exploitative cosmetic surgery procedures, including facelifts done while awake and patients left butchered and in agony, the urgent need for a fundamental overhaul of this area is crystal clear.
Changes need to be strong, immediate and effective.
The 16 recommendations in a report commissioned by the Australian Health Practitioner Agency (AHPRA) and released on Thursday are more akin to a nip and tuck instead of the urgent reforms required to keep patients safe.
While some recommendations will theoretically help to protect vulnerable patients, their impact will depend on the regulator, which until now has been ineffectual.
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Surgeons pan hit on ‘cosmetic cowboys’
12:00AM September 1, 2022
Doctors with no recognised surgical training may be able to receive the specific endorsement of the medical regulator and be included on a public register of recognised experts in cosmetic surgery under a plan that has been fiercely criticised by specialised surgeons.
Specialist surgeons say the plan by the national medical regulator to introduce a register of endorsed cosmetic surgery practitioners is not an adequate response to grave risks to public safety posed by rogue doctors.
The Australian Health Practitioner Regulation Agency plans to introduce an “endorsement’ process that would allow cosmetic surgeons who complete minimum qualifications accredited by the Australian Medical Council and the Medical Board of Australia to be recognised as having an extended scope of practice in cosmetic surgery that would allow them to be listed on a public register that could be checked by patients.
The plan is the centrepiece of a six-month review into how to improve consumer safety in the sector that also recommended improvements to complaints and investigation processes and consideration of a ban on advertising cosmetic surgery.
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‘Unchecked for years’: Ministers crack down on cosmetic surgery ‘cowboys’
September 3, 2022 — 12.00am
In the biggest crackdown on the $1.4 billion cosmetic surgery industry, Health Minister Mark Butler and his state counterparts have agreed to sweeping changes focusing on who can call themselves a cosmetic surgeon, limiting surgery to proper accredited facilities and introducing new hygiene and safety standards.
At a meeting on Friday, the ministers agreed to amend the law so that anyone conducting a cosmetic procedure must be properly qualified.
Under the current law, anyone with a basic medical degree can call themselves a cosmetic surgeon, even though they aren’t registered as specialist surgeons, who receive eight to 12 years of postgraduate surgical training.
In an exclusive interview with The Sydney Morning Herald and The Age, Butler said urgent action was needed to clean up the booming cosmetic surgery industry.
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International Issues.
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The $14b steel plant at the heart of Russia’s economic warfare
Mehul Srivastava and Roman Olearchyk
Aug 28, 2022 – 2.50pm
Kryvyi Rih | The Russians came for the city of Kryvyi Rih in the first days of the war, their columns of armoured cars advancing within kilometres of its sprawling Soviet-era steel plant, once coveted by Nazis and oligarchs and, now, Vladimir Putin.
Beaten back, they now menace the central Ukrainian city from some 50 kilometres away, occasionally lobbing rockets from afar. The prize, Ukraine’s largest steel mill, which ArcelorMittal spent $US5 billion ($7.3 billion) modernising, is within reach of their rockets, a mere half-hour’s drive from the city.
Russia’s invasion of Ukraine is usually measured by lines on a map – territory lost, cities vanquished, borders erased. But Putin’s war on his neighbour has included a deliberate assault on Ukraine’s industrial heartland, designed to choke its economy and cripple its ability to finance its army and defend itself.
In the eastern city of Mariupol, the Russian army advance destroyed, then occupied, Ukraine’s second-largest steel plant, the Metinvest-owned Azovstal, and its smaller cousin, Ilyich. Its soldiers are still fighting over a Metinvest coking coal plant in the mineral-rich Donetsk region.
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Powell: ‘We will keep at it until we are confident the job is done’
Jerome Powell
Aug 28, 2022 – 2.21pm
This is an edited version of Fed chairman Jerome Powell's speech on Monetary Policy and Price Stability at Jackson Hole, Wyoming on Friday.
At past Jackson Hole conferences, I have discussed broad topics such as the ever-changing structure of the economy and the challenges of conducting monetary policy under high uncertainty. Today, my remarks will be shorter, my focus narrower, and my message more direct.
The Federal Open Market Committee’s (FOMC) overarching focus right now is to bring inflation back down to our 2 per cent goal. Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy. Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labour market conditions that benefit all. The burdens of high inflation fall heaviest on those who are least able to bear them.
Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labour market conditions. While higher interest rates, slower growth, and softer labour market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.
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https://www.afr.com/policy/economy/jay-powell-is-focusing-too-much-on-the-present-20220828-p5bda3
Jay Powell is focusing too much on the present
The central banker missed an opportunity to regain control of the Federal Reserve’s policy narrative.
Mohamed El-Erian Contributor
Aug 28, 2022 – 7.40am
Over the years, the annual central bank confab at Jackson Hole has seen Federal Reserve chairs address immediate policy issues as well as longer-term and more academic ones, that involve the economic and institutional context for policymaking.
Present circumstances called for Jay Powell, the current chair, to do both — that is, address the policy errors of the last 18 months, try to realign monetary policy expectations and establish a path for the resetting of the guiding policy framework.
In the event, his brief speech (just under nine minutes) last Friday (Saturday AEST) largely attempted just one of these three. By focusing on the present, he left much still to be said while less than fully exploiting a much-anticipated opportunity for enhancing policy effectiveness.
There are five reasons why Powell needed to deal with issues that relate to the past, present and future. First, time has not been kind to his presentation at last year’s gathering. His characterisation of inflation as transitory, his forecasts of the economy and his elucidation of the required policy responses have fallen short.
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The Republican Party is having an identity crisis
By Mario Parker
August 29, 2022 — 7.09am
Washington: The GOP is now acting like a party in search of itself with less than three months before US elections that once favoured Republicans to retake both chambers of Congress and set them up for 2024.
Should the party fumble, as polls increasingly suggest, August will have been a pivotal month.
It began with the FBI’s search of Donald Trump’s Florida home and the party’s bellicose defence of the former president that belied its pro-law enforcement image. The weaknesses of Senate candidates Trump personally picked became glaring as the cycle moves from the primary season, where the focus is on a small number of party-faithful voters, to the general election, which requires a broader appeal to a varied electorate.
The FBI investigation comes as Donald Trump hints at running for president again in 2024.Credit:Bloomberg
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Two US navy warships transit through Taiwan Strait
By AFP
4:35PM August 28, 2022
Two US warships sailed through the Taiwan Strait on Sunday, the American navy said, the first such transit since China staged unprecedented military drills around the island.
In a statement, the US Navy said the transit “demonstrates the United States’ commitment to a free and open Indo-Pacific.”
Tensions in the Taiwan Strait soared to their highest level in years this month after US House Speaker Nancy Pelosi visited Taipei.
Beijing reacted furiously, staging days of air and sea exercises around Taiwan. Taipei condemned the drills and missile tests as preparation for an invasion.
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Global economy faces its greatest challenge in decades
Colby Smith
Aug 29, 2022 – 7.56am
Jackson Hole, Wyoming | Central bankers face a more challenging economic landscape than they have had in decades and will find it harder to root out high inflation, top multilateral officials and monetary policymakers have warned.
The world’s leading economic authorities this weekend sounded the alarm about the forces working against the US Federal Reserve, European Central Bank and other central banks as they combat the worst inflation in decades.
Speaking at the annual gathering of central bankers in Jackson Hole, Wyoming, many said that the global economy was entering a new and tougher era.
“At least over the next five years, monetary policymaking is going to be much more challenging than it was in the two decades before the pandemic struck,” Gita Gopinath, the IMF’s deputy managing director, told the Financial Times.
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The days of cheap and easy air travel may be over, but Australian policymakers seem oblivious
Given the country’s geography and reliance on mobility, transport links are essential infrastructure. So where’s the strategy?
Mon 29 Aug 2022 09.00 AESTLast modified on Mon 29 Aug 2022 09.21 AEST
Headlines and hashtags abut “air-mageddon” and “being Joyced” (delays, cancellations and lost baggage) miss a fundamental point – air travel is unlikely to return to what existed before, at least any time soon.
Australians living at “the arse end of the world“ (a phrase attributed to but denied by Europhile former prime minister Paul Keating) depend on mobility. Cheap air travel, based on large, efficient jets and low-cost airlines, fostered an illusion of integration which is reversing.
One problem is the higher cost of domestic and international air travel, with basic tickets often up over 50%. At the pointy end of the aircraft, a return trip to the US now costs about the same as a compact car.
The rises reflect losses (some US$190bn over 2020 and 2021) and increased debt (US$220bn) that airlines must recover or repay. There are additional costs of resuming operations – re-employing and training staff, reintroducing aircraft – which are complicated by shortages of skilled workers. Higher fuel prices, which make up as much as one third of an airline’s costs, Covid-19 disruptions and airports unable to cope with an upsurge in flights add to operating expenses.
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https://www.afr.com/chanticleer/it-s-not-just-powell-scaring-markets-20220829-p5bdn5
It’s not just Powell scaring markets
The Federal Reserve’s hawkishness is spooking markets, but Europe, China and red-hot Australian consumers are a worry too.
Aug 29, 2022 – 4.54pm
It’s easy to point the finger at Federal Reserve chairman Jerome Powell for the 2 per cent fall on the ASX 200 on Monday.
Powell’s hawkish speech at the Fed’s Jackson Hole sent Wall Street tumbling on Friday night and the pain spread across the local bourse from the opening bell, with the Australian tech sector dropping 4.4 per cent amid some spectacular falls, including Life360 (down 8.4 per cent), Block (down 7.8 per cent), Megaport (down 9.1 per cent) and Zip (down 8.9 per cent).
Certainly markets are still digesting Powell’s message that his resolve to raise rates and fight inflation is unshaken; yields on US two-year Treasuries rose in trade in Asia on Monday to hit 3.46 per cent, the highest since 2007.
The belief that the Fed might not be a million miles from a pivot to a more accommodative policy stance had built in bond markets throughout July, but Monday’s sell off (bond prices move in the opposite direction to yields) has erased those gains.
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Putin’s failures exposed by the men forced to fight his war
Peter Hartcher
Political and international editor
August 30, 2022 — 5.00am
What does an elite Russian paratrooper do when he reports to his unit for duty and finds there is nowhere for him to sleep? He finds a budget hotel nearby and pays for it himself.
When he finds there is no helmet or body armour for his protection? He joins a scheme with comrades to share their inadequate kit.
When he is given shoes way too small? He shops and pays for his own. His uniform, too – Russian soldiers commonly buy American or European or even Ukrainian uniforms for quality and fit.
When COVID breaks out among the troops? The positive test results are miraculously turned into negative ones, on paper at least.
And then, when deployed to the war zone in Ukraine, when the food runs out? He and his fellow soldiers loot the homes of civilians.
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https://www.afr.com/policy/economy/the-enemies-of-globalisation-are-circling-20220830-p5bdvm
The enemies of globalisation are circling
Rising nationalism and concerns about inequality and the environment threaten international trade.
Gideon Rachman Columnist
Aug 30, 2022 – 11.54am
Globalisation is not just about trade and technology. It is also about politics. Political change, above all the collapse of communism, created the conditions for an age of hyperglobalisation.
Now political change, above all rising nationalism, is threatening the dense network of economic ties built up over the last three decades.
The enemies of globalisation can be found across the political spectrum, from the nationalist right to the anti-capitalist left, and from the environmental movement to the intelligence services.
It is true that deglobalisation has not yet really shown up in the trade figures. As my colleague, Alan Beattie pointed out recently, “most standard measures of globalisation — cross-border movements of goods, services, capital, data and people — (are) doing pretty well”.
One possible conclusion to draw is that global economic connections and supply chains are now too intricate to be disentangled. While there may be a will to deglobalise, there is no real way.
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Mikhail Gorbachev, who steered Soviet breakup, dead at 91
Gorbachev won the 1990 Nobel Peace Prize for his role in ending the Cold War and spent his later years collecting accolades and awards from all corners of the world. Yet he was widely despised at home.
Jim Heintz
Aug 31, 2022 – 8.32am
Moscow | Mikhail Gorbachev, who as the last leader of the Soviet Union waged a losing battle to salvage a crumbling empire but produced extraordinary reforms that led to the end of the Cold War, died on Tuesday. He was 91.
The Central Clinical Hospital said in a statement that Gorbachev died after a long illness. No other details were given.
Kremlin spokesman Dmitry Peskov said in a statement carried by Russian news agencies that Russian President Vladimir Putin offered deep condolences over Gorbachev’s death and would send an official telegram to Gorbachev’s family in the morning.
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A risky experiment that could lead to a market meltdown is about to get underway
Senior business columnist
August 30, 2022 — 11.58am
The US is about to start a largely untested experiment in monetary policy amid great uncertainty as to its effects. They could be benign or create a liquidity crisis in financial markets.
For most of the 13 years after the global financial crisis the US Federal Reserve Board has been buying US government bonds and bills and securitised mortgages; a program it ramped up dramatically in response to the pandemic.
It stopped that buying in June and began allowing the securities to run off at a rate of $US47.5 billion ($68.8 billion) a month.
Now the rate of run-off is about to double, to $US95 billion a month, which means the biggest buyer of US treasuries is about to accelerate its withdrawal from the markets and about $US1.14 trillion of liquidity will be sucked out of the government bond and mortgages markets over the next year.
Combined with the new-found aggression of the Fed in raising US interest rates to tackle inflation in a US system that is the cornerstone of the global financial system, conditions and the amounts of liquidity in global financial markets are about to tighten significantly.
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Don’t be too quick to write off Biden (or Starmer)
Political obsessives demand that leaders should be inspirational, but swing voters aren’t so needy. Diligent, unprepossessing, best-of-a-bad-bunch candidates have long thrived in politics.
Janan Ganesh Contributor
Updated Aug 31, 2022 – 10.56am, first published at 10.54am
As the waters closed over him at Manchester United, José Mourinho showed three fingers to a group of impertinent reporters. He was comparing his haul of Premier League titles with that of the 19 other coaches in the division. “Three for me. Two for them. Respect. Respect, man.”
Now there is a speech on British soil that Joe Biden should plagiarise. Often treated as a figure of fun, he has been on three winning presidential tickets. He led the 2019-20 Democratic primaries almost from start to finish, even as opinion-formers preferred Elizabeth Warren, Pete Buttigieg, Kamala Harris, Bernie Sanders and almost any bipedal mammal in the vicinity.
This summer, he has salvaged a failing presidency with major climate legislation. His approval rating is up. He isn’t a Lincoln, no. He is not even a Clinton. But his reputation as an affable klutz dies harder than it should.
At a given time, the reigning US Democrat and UK Labour leaders will resemble each other. John F Kennedy and Harold Wilson were slick but shallow icons of generational change. Jimmy Carter and James Callaghan were decent plodders in difficult times. Bill Clinton and Tony Blair were silver-tongued centrists.
‘He was too decent for the country he led’: Gorbachev remembered
David Ljunggren
Aug 31, 2022 – 3.47pm
Ottawa | Mikhail Gorbachev, who ended the Cold War without bloodshed but failed to prevent the collapse of the Soviet Union, died on Tuesday (Wednesday AEST) at the age of 91, hospital officials in Moscow said.
Mr Gorbachev, the last Soviet president, forged arms reduction deals with the United States and partnerships with Western powers to remove the Iron Curtain that had divided Europe since World War II and bring about the reunification of Germany.
But his internal reforms helped weaken the Soviet Union to the point where it fell apart, a moment that President Vladimir Putin has called the “greatest geopolitical catastrophe” of the 20th century.
“Mikhail Gorbachev passed away tonight after a serious and protracted disease,” said Russia’s Central Clinical Hospital.
Mr Putin expressed “his deepest condolences”, Kremlin spokesman Dmitry Peskov told Interfax. “Tomorrow he will send a telegram of condolences to his family and friends,” he said.
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UN human-rights agency issues report on Xinjiang over China’s protest
By Chun Han Wong and James T. Areddy
The Wall Street Journal
September 1, 2022
The United Nations human-rights agency on Wednesday alleged “serious human-rights violations” in the Chinese region of Xinjiang that often targeted ethnic Uyghurs and other members of Islamic groups, in a report that broadly supports critical findings by Western governments, human-rights groups and media.
The findings were contained in a long-awaited report by the U.N. agency that quoted what it described as former detainees of internment camps in Xinjiang with “credible” accounts of torture and other forms of inhuman treatment between 2017 and 2019, including some instances of sexual violence. The UN body said detainees had no form of redress.
The UN agency said what it termed arbitrary detentions in Xinjiang stemmed from a system of antiterrorism laws in China “that is deeply problematic from the perspective of international human-rights norms and standards.” It also alleged people are detained for religious practices.
It said the extent of arbitrary and discriminatory detention of members of Uyghur and other predominantly Muslim groups “may constitute international crimes, in particular crimes against humanity.”
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How Mikhail Gorbachev’s ambitious reforms changed the world
12:00AM September 1, 2022
In the West, Mikhail Gorbachev’s death quite rightly is being commemorated to mark the end of the dangerously expansionist Soviet Union and of the ever-present danger in the Cold War of mutual nuclear annihilation.
Today’s younger generation cannot imagine what it was like to be living year after year with the looming risk of nuclear war.
It is not correct to assert – as some do – that the 1962 Cuban missile crisis was the greatest danger. In fact, it was in 1983 when the secretary-general of the Soviet Communist Party and former head of the KGB, Yuri Andropov, believed the US was planning to launch a surprise nuclear attack on Moscow.
He ordered KGB agents worldwide to urgently collect intelligence warning indicators of such an attack. In the 1980s, the Soviet Union had more than 12,000 strategic nuclear warheads, compared with a mere handful in 1962.
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German companies halt production to cope with rising energy prices
Guy Chazan
Sep 1, 2022 – 5.15pm
Berlin | German manufacturers are halting production in response to the surge in energy prices caused by Russia’s squeeze on gas supplies, a trend the government has described as “alarming”.
Economy minister Robert Habeck said industry had worked hard to reduce its gas consumption in recent months, partly by switching to alternative fuels such as oil, making its processes more efficient and reducing output.
But he said some companies had also “stopped production altogether”, a development he said was “alarming”.
“It’s not good news, because it can mean that the industries in question aren’t just being restructured but are experiencing a rupture – a structural rupture, one that is happening under enormous pressure,” he said.
He was speaking as Russia halted the flow of gas through the Nord Stream 1 pipeline for three days of planned maintenance. The outage comes with European countries already labouring under drastic cuts in Russian gas supplies that have driven up gas prices to record levels.
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‘Soul of the nation’: Biden warns American democracy in peril in Trump, MAGA era
September 2, 2022 — 10.53am
Washington: US President Joe Biden has warned that democracy is in peril due to extremist forces loyal to Donald Trump, accusing them of fuelling political violence and taking America backwards.
Two months out from the midterm elections that will determine who controls Congress, Biden has sought to reframe the contest as a battle “for the soul of the nation”, delivering a blistering attack on the so-called Make America Great Again (MAGA) conservatives.
They are the hardline Republicans who ardently support Trump’s false claims about the 2020 election and his attempts to shun the rule of law.
“Too much of what’s happening in our country today is not normal. Donald Trump and the MAGA Republicans represent an extremism that threatens the very foundations of our Republic,” the President said in a fiery prime-time speech at Philadelphia’s Independence Hall, where the declaration of independence was debated and drafted.
“MAGA forces are determined to take this country backwards. Backwards to an America where there is no right to choose, no right to privacy, no right to contraception, no right to marry who you love.”
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Sarah Palin loses Alaska house race to Democrat Mary Peltola
By Lindsay Wise and Natalie Andrews
The Wall Street Journal
5:09PM September 1, 2022
Democrat Mary Peltola scored an upset victory in a special election for Alaska’s only US House of Representatives seat, frustrating the efforts of Republican former governor and vice-presidential nominee Sarah Palin to mount a political comeback.
Ms Palin, who was endorsed by Donald Trump, and Ms Peltola, a former state legislator, were competing to complete the term of Republican Don Young, who held the seat for 49 years before he died in March. Another candidate, Republican Nick Begich III, trailed in third. All three are on the ballot again this November to run for the next term.
“We built a great deal of momentum in a short time,” Ms Peltola said. “I plan to continue introducing myself to Alaskans and working to earn their trust.”
Ms Peltola, a Yup’ik Eskimo, will be the first woman to represent Alaska in the House and the first native Alaskan in congress. Officials said on Thursday the latest round of calculations in the state’s ranked-choice voting system showed Ms Peltola, 49, ahead by more than 5000 votes.
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Will Liz Truss crash or crash through as Britain’s new PM?
She is all but certain to be named as the UK’s next prime minister on Monday. But she will enter Downing Street to find her in-tray on fire.
Hans van Leeuwen Europe correspondent
Sep 2, 2022 – 8.41am
There have been plenty of consumer boycotts before, but never one quite like this. “Don’t Pay” is a campaign to get Britons to cancel their monthly direct debits to their gas and electricity suppliers.
If the movement reaches 1 million pledges by the start of October – about seven or eight times the number it reportedly has now – then everyone involved will stop paying in unison. The idea is to catalyse a crisis that will force the government and industry to respond.
The fact that people are prepared to risk having their creditworthiness downgraded, or being switched to more costly tariffs, is a sign of how desperate things are getting.
The IMF says households will experience a decline in their spending power of 9 per cent this year. In October, domestic energy bills will have tripled in 12 months. The cap is now an annual slug of £3549 ($6000), and could hit £6000 next year.
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https://www.afr.com/world/europe/russia-west-step-up-the-energy-war-20220903-p5bf63
Russia, West step up the energy war
Tom Balmforth
Sep 3, 2022 – 8.14pm
Ukraine | As UN inspectors sought to avert a nuclear disaster on Ukraine’s frontline, the West and Russia wounded each other’s economies, with Moscow keeping its main gas pipeline to Germany shut on Saturday while threatened with price caps on oil exports.
Russia’s state-controlled energy giant Gazprom blamed a technical fault in the Nord Stream 1 pipeline for the delay on Friday. But the high-level manoeuvres in energy politics were seen as an extension of the war, and the ramifications would be felt far beyond Ukraine.
The announcements came as Moscow and Kyiv traded blame over their actions at the Russian-occupied Zaporizhzhia nuclear power plant, where UN inspectors arrived on Thursday on a mission to help avert a catastrophe.
Vladimir Rogov, a pro-Russian official in the Zaporizhzhia region, said Ukrainian forces had shelled Europe’s largest nuclear plant several times overnight and the main power line to the station had been downed, forcing it to use reserve power sources, as occurred last week.
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I look forward to comments on all this!
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David.
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