November 10, 2022 Edition
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The US Mid-Term elections have come and gone and it is interesting to see how it plays out. Whether or not the US is in recession had become academic!
In the UK things seem to have settled down a little as inflation soars and people are struggling with recession.
In Australia energy prices are causing real trouble and the fear of a recession grows.
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Major Issues.
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https://thenewdaily.com.au/finance/2022/10/31/twitter-elon-musk-kohler/
6:00am, Oct 31, 2022 Updated: 6:55pm, Oct 30
Alan Kohler: The twitterverse bows to the chief twit, Elon Musk
So far Elon Musk’s acquisition of Twitter looks like a pretty standard private equity takeover – load the business with debt and sack most of the staff.
But Twitter is not a department store or widget manufacturer. As Musk says, it is the digital town square, a tool used by hundreds of millions of people around the world to inform each other, shout at each other and tear each other down.
It’s a place where the world’s earnest and elite mingle with anonymous clowns and bullies. Twitter is a river of 500 million messages per day that you dip a cup into as it flows past, and spit, weep or vomit into yourself, as you feel the urge.
It’s also not
a very good business. In the latest quarter, revenue was $US1.17 billion, costs
$US1.52 billion, loss $US343.7 million.
And Elon Musk paid way too much. When he first offered to pay $US54.20 a share
in April, or $US44 billion in total, Twitter was trading at under $US40.
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How long will it take to recover the money we’ve lost this year?
After this year’s slump in share, bond and property prices, investors are wondering whether they’ll ever get back to the position they were in at the beginning of 2022.
Karen Maley Columnist
Oct 31, 2022 – 5.00am
As investors continue to pine for the halcyon days of January – when the US share market touched a fresh record, while the yield on benchmark US 10-year bonds was still an ultra-low 1.63 per cent – some analysts see grounds for hoping that the worst of the rampant wealth destruction we’ve seen this year could be over.
After all, the US share market has performed solidly this month, as investors have rejoiced at signs from the US central bank that it may slacken its pace of rate rises and at the prospect of a divided government after the November 8 midterm elections.
The blue-chip Dow Jones Industrial Average has climbed 14.4 per cent in October and is on track for its best month since 1976, while the broader S&P 500 index is up 8.8 per cent.
Investors, it appears, welcome the possibility of a split government, with President Joe Biden, a Democrat, while Republicans control the country’s purse strings, since it would likely stymie new spending initiatives.
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Australia’s alliances in Asia are a tale of two regions
The competing narratives of regional confrontation and co-operation have their champions in cabinet in the views of Defence Minister Richard Marles and Foreign Minister Penny Wong.
James Curran Historian
Oct 30, 2022 – 1.18pm
The Biden administration’s recent decision banning the sale of semiconductors to China has laid bare the real intent of its policy towards Beijing – economic and military containment.
It again exposes the competing narratives Australia faces in the near term around regional security.
For Canberra, as for South-East Asia and the Pacific, this heightened confrontation is becoming a tale of two regions.
Whether these differing narratives can be unified is the great challenge for 21st-century Australian diplomacy, as it is for regional neighbours. It goes to the core of how this country can survive what is unambiguously a new cold war.
The first is America’s Asian alliance system, now over 70 years old and the source of regional political stability since its inception. That system has not been without tumult, not least around the Vietnam War, the Guam doctrine – calling on Asian allies to stand more on their own two feet – and the shock of Richard Nixon’s opening to China.
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Newspoll: Lukewarm budget response won’t set off alarms, but it’s early days
8:30PM October 30, 2022
Labor’s first budget has fallen flat with voters.
The response from the punters has been lukewarm at best.
Confidence in the budget’s ability to deliver any good for the economy is the lowest on record.
And while the number of people who believe it will be bad for the economy isn’t as bad as the assessment of the Coalition’s budget emergency of 2014, it’s still the highest for a while. This is not the ringing endorsement that Jim Chalmers’ was hoping to achieve.
It confirms the view among most voters that the Labor government so far has no answers to the problem.
It has failed the principal political test that when you tell people there is a problem, you better tell them in the same breath that you have a plan to deal with it.
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Brisbane posts the sharpest house price decline on record
Nila Sweeney Reporter
Nov 1, 2022 – 5.00am
Brisbane house prices slumped by 2 per cent in October, a sharper fall than in any other capital and their largest monthly decline on record, CoreLogic’s home value index shows.
But the Queensland capital is yet to feel the full brunt of the downturn experienced in other markets.
Brisbane house prices have plummeted by 2 per cent over the month, the biggest monthly decline on record as higher interest rates and runaway prices dented demand.
Since peaking in June, Brisbane house prices have dropped by 6.2 per cent, Sydney’s have plummeted by 10.2 per cent since peaking this January and Melbourne’s declined by 6.4 per cent since hitting their peak in February.
Sydney house prices dropped by 1.3 per cent during the month and Melbourne by 0.8 per cent, significantly smaller falls than their August declines of 2.3 per cent and 1.2 per cent respectively.
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Australia can’t prevent the collapse of US democracy, but we can learn from it
Political and international editor
November 1, 2022 — 5.00am
The January 6 mob attack on the US Congress last year was not the end of the movement to topple American democracy by violence.
A 42-year-old American man is to be charged with attempted murder after breaking into the home of the House Speaker, Nancy Pelosi, on Friday armed with a hammer and zip ties.
He asked, “Where’s Nancy?” and then struck Pelosi’s husband on the head with the hammer, according to the police officers who arrived on the scene at that moment. Paul Pelosi, age 82, suffered a fractured skull.
The Speaker was not at home. Paul Pelosi is expected to make a full recovery after urgent surgery.
“It’s reported that the same chant was used by this guy they have in custody that was used on January 6 in the attack on the US Capitol,” President Joe Biden told a fundraising event for his party, the Democrats. “And the chant was, ‘Where’s Nancy? Where’s Nancy? Where’s Nancy?’ This is despicable.”
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US to deploy B-52 bombers to Australia to create ‘unified front’ against China
October 31, 2022 — 3.47pm
The United States plans to deploy six nuclear-capable B-52 bombers near Darwin as part of a strategy experts say would dissuade China from invading Taiwan but increase the chance of Australia being drawn into a conflict.
While the aircraft have been used in training exercises in Australia for decades, the ABC’s Four Corners reported the US is planning to build dedicated facilities for up to six B-52 bombers at the Tindal air base, south of Darwin, for use during the Northern Territory dry season.
The US Defence Department has budgeted $23 million for the construction of the new “squadron operations facility” at Tindal.
The US Air Force told the program: “The ability to deploy US Air Force bombers to Australia sends a strong message to adversaries about our ability to project lethal air power ... the RAAF’s ability to host USAF bombers, as well as train alongside them, demonstrates how integrated our two air forces are.”
None of the B-52s, or any other aircraft, would be able to carry nuclear weapons while visiting Australia under international treaties Australia has signed.
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B52s in NT sign of growing ‘pre-war’ environment
November 1, 2022
The drumbeats of potential war are sounding across the world.
This is not alarmist, it’s reality. Sensible leaders are doing all they can to avoid war, mainly through strengthened deterrence. But the disturbed feeling of a pre-war period is unmistakeable.
The news that facilities will be constructed at RAAF Base Tindal that could house six American B-52 strategic bombers has to be seen in this context. It’s both nothing new and quite revolutionary. The idea B-52s would spend time in Australia goes back to agreements signed by Julia Gillard and Barack Obama. B-52s already exercise in Australia but haven’t landed at Tindal.
We are extending the size of the Tindal runway to make their presence here more frequent and longer in duration. And we’re building facilities that could house up to six B-52s, which means they will rotate in and out like the US marines in the Northern Territory.
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The pros and cons of nuclear-capable B-52s on our shores
Military leader and strategist
November 1, 2022 — 11.30am
In 1989, my army unit deployed to Katherine as part of the massive Exercise Kangaroo 89 with our American allies. As a new lieutenant, I learnt much on this activity. One of my clearest memories of this exercise, now 33 years ago, was sitting near Tindal airfield and watching a massive B-52 bomber conduct its very slow but enormously impressive take-off.
The huge, lumbering bombers – for some a symbol of a bygone era – are being modernised and will serve into the 2040s. These aircraft and their crews have been flying out of the Northern Territory for decades. Indeed, the relationship between American B-52 Squadrons and the Northern Territory is so close that one of the bombers was gifted to the Darwin Aviation Museum.
While the B-52s have been flying in the north of Australia for decades, their operations were stepped up in 2012 as part of a US-Australia program called the Enhanced Air Cooperation initiative. This agreement has also covered deployments of United States Air Force B2 bombers to RAAF Base Amberley in Queensland in mid-2022.
Therefore, stories in the media over the past 48 hours about enhanced infrastructure for basing B-52s in northern Australia should not surprise anyone with even a passing interest in defence issues. There are, however, several issues associated with this potential basing of USAF bombers Down Under.
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Austraila must ‘build and maintain a strong deterrent’ to regional aggressors: Hastie
November 2, 2022
Opposition defence spokesman Andrew Hastie says Australia needs to invest in bombers, be prepared to spend “well above” 2 per cent of GDP on defence, and appeal to young people’s sense of duty to build a stronger military.
The former SAS captain and former assistant defence minister told a business breakfast in Perth on Tuesday that “the window is closing fast” for Australia to prepare for a major conflict.
As the government’s defence strategic review chairs prepare to hand Richard Marles their interim report this week, Mr Hastie said the nation needed to “build and maintain a strong deterrent” against “unilateral military adventurism” by any regional aggressor.
“I don’t want to discuss particulars here today except to make clear that we need to build strike capabilities that can hold an adversary at risk beyond the archipelago to our north,” he told the Business News breakfast.
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A weak Australia will attract more intimidation from Beijing, not less
11:00PM November 2, 2022
American B-52 bombers have been flying missions to and from Australia since the 1970s, when the Fraser government granted staging rights through Darwin. Anti-alliance activists have been opposed to the B-52s for almost as long. “Australia remains a loyal cog in the United States military machine”, rails a 1990 study on my bookshelf.
There is a long lineage to the criticism, voiced in the ABC’s Four Corners report on Monday night, that Australia is “going along with American planning for a war with China”.
Heaven help us if the sum of American war planning is to rotate six B-52s from the Tindal airbase near Katherine.
The Gillard government announced plans to increase US Air Force rotations through northern Australia back in 2010.
It has taken a dozen years to start installing jet fuel reserves in Darwin and to build hard stands for B-52s at Tindal. In that time, the annual rotation of US Marine Corps troops has grown from 200 to a little over 2000 personnel.
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https://www.afr.com/politics/federal/clare-o-neil-s-strange-immigration-priorities-20221103-p5bvft
Clare O’Neil’s strange immigration priorities
The urgent priority should simply be to bring into the country as many qualified people across as many fields as needed, as fast as possible.
Nov 3, 2022 – 5.23pm
Two years of international border closures that locked out migrants and led to labour and skills shortages across the economy makes it difficult to fathom Home Affairs Minister Clare O’Neil’s decision to cull 27 jobs from the list of occupations eligible to receive a priority skilled visa to work in Australia.
The shake-up is supposedly about giving greater priority to filling workforce shortages in health and teaching, and in regional areas.
But what seems bizarre amid the hacking attacks at Optus and Medibank is sending cyber experts and other technology engineers and developers to the back of the queue. This will further exacerbate the critical shortage of tech workers that is making it harder for Australian businesses to progress their digital transformations.
Labor had to be dragged into supporting a temporary increase in the migration cap to 195,000 places to help make up for the pandemic population loss. Making the process of importing workers with much-needed skills and expertise longer and harder suggests Labor’s heart simply isn’t in higher immigration. Ms O’Neil’s explanation that streamlining the priority list will speed up visa approval times sounds like a line from Yes Minister.
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If we went to war, our ammo would not last a week
11:00PM November 3, 2022
Despite the increasingly contentious blame game about who is responsible for the chronic failure to deliver promised defence capabilities on time and on budget, Labor and the Coalition agree that Australia needs a viable defence industry.
Yet Australian industry participation in major defence projects has declined significantly since the last of our locally built Anzac-class frigates was christened in 2008. Labor and the Coalition have talked a good game but seldom walked the walk.
We still import most of our major defence equipment. Our naval shipbuilding industry is in disarray. Australian companies are bit players in a defence industry dominated by big overseas prime contractors. And we have no defence industry strategic plan or a funding model that meets our needs and provides a pathway to greater defence self-reliance. Israel and Sweden, both smaller than us, have built world-class defence industries.
A preliminary report into Australia’s strategic defence capability is due to be handed to the federal government… tomorrow. Darwin Bureau Chief Matt Cunningham says the likelihood of more defence assets being based in Australia’s north as part of the review is “pretty strong”. “Both politicians and defence experts More
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Tackle debt ‘or it could get out of hand’: Treasury secretary Steven Kennedy
8:20PM November 3, 2022
Treasury secretary Steven Kennedy has warned that the national debt risks “ratcheting higher” to unsustainable levels if the budget deficit is not brought under control before future economic shocks.
“We have this persistent imbalance that’s emerged between spending and taxing, and we most certainly have to address that over time,” Dr Kennedy told a Parliamentary Budget Office conference in Canberra on Thursday.
Last week’s budget showed booming commodity prices helped drive an estimated $41bn improvement in the bottom line this financial year, but that runaway growth in spending in areas such as the NDIS, health, aged care and defence – alongside a massive lift in the cost of servicing the $1 trillion-plus debt – would drive steadily widening deficits and increasing debt into the next decade.
Dr Kennedy said Australia had “a relatively low level of debt. But that debt is not going to fall over time if that imbalance is not narrowed,” he said. “And what we don’t want is, for example, our debt position to worsen with each shock and effectively ratchet up over time in a world where we imagine we may well get these multiple shocks.”
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When stepchildren miss out on inheritance
An ATO ruling that excludes family members on the death or divorce of their natural parent seems arbitrary in a society where blended families are widespread.
John Maroney Contributor
Nov 4, 2022 – 6.00am
For self-managed super fund trustees, the issue of how stepchildren are treated regarding superannuation death benefits would seem cut and dried.
Under the Superannuation Industry (Supervision) Act, death benefits can be paid only to a beneficiary meeting the definition of a dependant – spouse, child (natural child, adopted child or stepchild), or someone with whom the deceased person has an interdependency relationship.
Stepchildren have always been included in this definition. When the original SIS bill was tabled in 1993 by Labor treasurer John Dawkins, it defined a child to include “adopted, step or ex-nuptial”. And while the definition of a child was expanded in 2008 after amendments from the Same Sex Relationships Act, it did not alter the position of stepchildren.
But – there always seems to be a “but” in superannuation law – issues arise when someone wants to pass on some or all their superannuation benefits on death to a stepchild but the natural parent has pre-deceased or has divorced the person who is the step-parent. In these circumstances, the Australian Taxation Office says a stepchild is no longer entitled to receive benefits.
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‘It’s not optional’: PM’s strategic ambitions laid bare
Anthony Albanese may look and sound a mild man. But he has an ambition that no Australian leader has had for decades: to create a military force capable of actually defending us.
November 4, 2022
Anthony Albanese may look and sound a mild man, and that is one of his strengths. But he has an ambition that no Australian leader has had for decades. He wants to create a military force capable of defending Australia.
To do this, he plans to change the structure of the Australian Defence Force and increase the defence budget. He is determined to do this – fully explicit in his commitment on money – even in the face of a budgetary tourniquet screwing ever tighter.
“Yes, yes! We will do what is necessary to achieve it,” he insists in an exclusive interview. “We’ve made that very clear. We’ve been really upfront, and we’ll do what is necessary. This is not optional, it’s necessary.”
He has a lot of other foreign policy ambitions as well: greater alliance intimacy with the US; a much closer mutual security relationship with Japan; developing the Quadrilateral Security Dialogue (he will host the Quad summit next year); deeper engagement with the South Pacific and Southeast Asia; a bigger aid budget; resisting Chinese coercion; and ambitious action on climate change.
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Negative gearing is back with a bang, and it has its positive side
2:56PM November 4, 2022
Just when you thought it had faded away negative gearing is back with a bang. The tax deductions from investment property losses are just about to go through the roof.
You might call it the other side of the ‘‘mortgage cliff’’ where many homeowners are about to face an escalation in mortgage payments. Property investors are about to face the same problem – except they can use negative gearing to offset their extra interest costs.
We have the unlikely source of the Greens to thank for this information, because Adam Bandt got the Parliamentary Budget Office to run fresh numbers on the costs of negative gearing – it turns out the cost was about $3.8bn last year but it is heading closer to $8bn next financial year.
You can use these numbers to protest about the very existence of this tax break; as an investor you can also use them to get a clearer picture of the investment property market just now.
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Albanese’s five-year plan to boost military capabilities
Editorial
11:00PM November 4, 2022
Anthony Albanese’s forward-looking approach to upgrading the capability of the Australian Defence Force is right for the times and for the nation’s worsening security outlook. The growing interest of the US in the strategic value of northern Australia is the most powerful deterrent added to our security in the past 20 years, as Australian Strategic Policy Institute senior fellow Peter Jennings wrote this week. But more is needed. A weak Australia will attract more intimidation from Beijing, not less.
In an exclusive interview with foreign editor Greg Sheridan in Inquirer, the Prime Minister sets out his plans to create a military force capable of defending the nation, promising major changes within five years. Despite fiscal restraint in the effort to control inflation, Mr Albanese is determined to increase the defence budget to acquire the “(defence) assets Australia needs to defend ourselves, but also to project (force)”.
His focus is on “weaponry that can actually make a difference”, assets that improve security for every dollar spent. His singling out of missiles, missile defences, drones and cyber security is eminently sensible. As he said: “Are we going to be involved in a land war, in central Queensland? If so, you need some assets for that. But is that likely? Well, no. A lot of the expenditure was based on where Australia’s recent military experience had been, in Iraq and Afghanistan.” The force structure review by former foreign and defence minister Stephen Smith and former Defence Force chief Angus Houston and the study into what type of nuclear-propelled submarine should be acquired under the AUKUS pact with the US and Britain will be major influences shaping the future. Cabinet’s national security committee is closely involved with both processes.
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COVID-19 Information.
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Coronavirus ‘variant soup’ arrives in Victoria, increases risk of reinfection
November 1, 2022 — 5.00am
Key points
· Immunity-evading offshoots of the Omicron variant are expected to drive up infections in Victoria.
· Doctors say they are increasingly treating patients who have been infected with coronavirus “three or four times”.
· There were 8500 new COVID-19 infections confirmed in Victoria last week, an increase of 25 per cent on the previous week.
· The number of people in Victorian hospitals with COVID-19 last week grew by more than 20 per cent to 172.
A “variant soup” of coronavirus has arrived in Victoria and experts warn the new Omicron offshoots will be better at evading immunity and will soon drive up infections.
The new wave of infections, which triggered a 25 per cent increase in reported coronavirus cases in Victoria in a week, has also sparked a fresh warning from infectious disease experts about the heightened risk of being reinfected with the virus.
However, they say it is too early to tell how big the wave will be or whether it will lead to more severe disease.
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We failed Australians with chronic fatigue. Will we do the same with long COVID?
By Liam Mannix
November 1, 2022 — 7.30pm
We failed the many thousands of Australians with chronic fatigue syndrome. We did not invest enough in research. We did not build an effective care system. We did not believe them.
Now we are beset with a disease that bears striking similarities: long COVID. And chronic fatigue advocates say we are in danger of repeating the same mistakes.
“Frustration, is a gentle way of putting it,” says Anne Wilson, CEO of Emerge Australia, the peak body for chronic fatigue syndrome.
Myalgic encephalomyelitis or chronic fatigue (ME/CFS, it’s now called) is often characterised by overwhelming fatigue and post-exertion exhaustion. Years of underfunding of research has left us without a biomarker to help identify the disease. That has allowed many to go on believing that ME/CFS is not real – that it’s psychosomatic, imagined by someone who, for reasons unclear, wishes to ruin their life.
Long COVID – which overlaps significantly with ME/CFS – blows that scepticism out of the water. As many thousands of Australians have been struck down with long COVID during the pandemic, it has become increasingly difficult to deny that post-viral illnesses are real, debilitating and need to be taken seriously.
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The notion that COVID-19 has been vanquished is not supported by the facts
Emergency Doctor
November 2, 2022 — 11.00am
We are story-tellers. It’s what distinguishes us from all other species. It’s how we make sense of the world, how we transmit knowledge down the generations and how we soothe ourselves.
Right now, we are telling ourselves a soothing story about COVID-19, one which follows the pattern of many of the fairytales we have liked to tell since our days around the campfire. It has a typical beginning (a dark threat stalks us), middle (a valiant and desperate fight against overwhelming odds) and end (the foe vanquished, a return to normal).
In an exclusive interview, Dr Anthony Fauci is delivering his own shot as he prepares to bow out of public life.
The pleasing notion that COVID has now been vanquished, however, that it has been turned into “just another seasonal upper respiratory virus” by vaccination, “hybrid” immunity from repeated infection and natural attenuation of the virus itself, is not supported by the facts.
New variants continue to arrive, irrespective of season, and the world is now on its eighth. Actuarial analysis from around the world, including in Australia, shows an ongoing 10 to 15 per cent excess death rate, as compared with before the pandemic. These deaths are mostly in the older age group, of which about half are directly due to COVID-19. An analysis from Singapore shows the rest “can be explained by patients who passed away from other illnesses within 90 days after being infected with COVID-19”.
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Covid-19 virus linked to brain disorders
6:52PM November 1, 2022
The Covid-19 virus may trigger an inflammatory response in the brain similar to that which occurs in Parkinson’s disease and Alzheimer’s, exacerbating the risk of developing neurodegenerative conditions for susceptible individuals.
Researchers at the University of Queensland found that Covid-19’s activation of an inflammatory pathway in the brain began a chronic and sustained process of killing off neurons.
The discovery was made when scientists from UQ’s School of Biomedical Sciences, together with virologists from the School of Chemistry and Molecular Biosciences, grew a type of immune cell called microglia from donor blood and infected the cells with the virus that causes Covid-19.
These are the key cells involved in the progression of brain diseases like Parkinson’s and Alzheimer’s.
“These cells, normally, in the brain they respond to pathogens and cell injury, and they can induce an inflammatory response that protects us from disease and infection,” UQ pharmacology professor Trent Woodruff said.
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Covid has hit eight in 10 of us
4:30AM November 3, 2022
At least two thirds of all adults and children have contracted Covid-19, according to tests on the blood of thousands of Australians, but the true figure is likely to be more than eight in 10 people.
The Australian Covid-19 Serosurveillance Network has released its latest data based on specimens collected from 5000 blood donors, and has for the first time analysed blood samples from children to ascertain the level of Covid spread in the younger age groups.
The 2000 children’s blood samples were collected via paediatric hospitals by consent when kids were undergoing an anaesthetic procedure.
The results of the two studies showed that by September, at least two thirds of the population had been infected with SARS-CoV-2, with at least 20 per cent infected between June and the end of August.
The children and adolescents survey found at least 64 per cent of 0–19 year olds in Australia had been infected with SARS-CoV-2. In unvaccinated children aged one to four years, approximately eight out of 10 had evidence of past infection.
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https://www.afr.com/companies/healthcare-and-fitness/nsw-entering-new-covid-19-wave-20221103-p5bvex
NSW entering new COVID-19 wave
Maureen Dettre
Nov 3, 2022 – 4.32pm
NSW is on the cusp of a new wave of COVID-19 cases, with an uptick of recorded cases as new variants spread in the community.
NSW Chief Health Officer Kerry Chant said the latest data indicated a new wave of infections has begun.
“We are starting to see an increase of COVID-19 cases and changes in the variants circulating in NSW, which tells us we are entering the next COVID-19 wave,” she said on Thursday in a video on the NSW Health Facebook page.
“By looking at all the local information we have and what’s happening overseas we believe COVID cases will rise in the coming weeks.”
It comes after Victorian Chief Health Officer Brett Sutton warned about a spike in cases in that state. He said an increase in antiviral prescriptions and the positivity rate of PCR tests suggested the state was “at the start of another COVID-19 wave”.
Dr Chant said there are several subvariants of the virus circulating and while the BA.4 and BA.5 continue to be the most common variants, their dominance has diminished to 63 per cent.
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Expert warns living with Covid does not mean ignoring virus, as new wave looms
Health experts across Australia have warned against complacency with Covid-19, as a new wave of the disease resistant to vaccines looms.
November 5, 2022 - 11:48AM
NCA NewsWire
Living with Covid-19 does not mean ignoring the virus, an epidemiologist has warned, as Australia braces for a new wave.
NSW chief health officer Kerry Chant this week urged people to get a booster vaccine, with Omicron sub-variants BQ. 1 and XBB expected to overtake BA. 5 as the dominant variants in Australia.
“We’re starting to see an increase in Covid-19 cases and changes in the variants circulating in NSW, which tells us that we’re entering the next Covid wave,” she said.
“By looking at all the local information we have, and what’s happening overseas, we believe Covid cases will rise in the coming weeks.”
Her comments came after Victorian chief health officer Brett Sutton said there were “indicators” to show “we are at the start of another Covid-19 wave”.
Professor Sutton’s weekly report warned the rise in cases of the subvariants was concerning due to their “ability to escape immunity from past infection” and “waning immunity from past vaccination”.
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https://www.afr.com/world/asia/six-things-to-know-about-the-new-xbb-covid-variant-20221105-p5bvu8
Six things to know about the new XBB COVID variant
Singapore has been living with the highly infectious, immune evasive strain for months - and now it’s taking off in Australia.
Emma Connors South-East Asia correspondent
Nov 6, 2022 – 8.14am
Singapore | Public health experts are warning a new COVID-19 wave is about to break in Australia as more recent strains of the virus including XBB take hold. Singapore is coming off the crest of its XBB wave, heath authorities say. Here’s what you should know.
First, if you’ve managed to dodge COVID-19 so far, your luck may have run out. The XBB sub-variant is a singularly successful escape artist. The combination of two strains of the omicron variant has at least seven mutations along the spike of the virus, which makes it harder for antibodies made by vaccines to recognise and repel it. It’s more “immune evasive” than previous strains.
The good news is that vaccines, even those not designed with omicron in mind, are still effective in preventing serious illness from an XBB infection. The bad news is you still get sick.
Second, if you had COVID-19 before omicron, you could be in for another bout. The World Health Organisation notes there is early evidence pointing at a higher reinfection risk from XBB, “as compared to other circulating omicron sublineages”.
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Climate Change.
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Here’s what you can do about the energy price crisis
Finance expert
November 1, 2022 — 10.01am
Despite the Albanese government’s best efforts to sell their first budget as a ‘five-point cost of living plan’, the aftermath has been dominated by the bombshell prediction that power bills will rise by 56 per cent over this year and next.
That’s made up of a 20 per cent increase in this financial year and a 30 per cent increase next year, for a cumulative 56 per cent hike. For a home with electricity and gas, it adds about $1300 over two years.
There were no solutions proposed in the budget. But the options now being debated range from taxing the windfall profits of gas exporters to fund household relief in the form of capped prices (as half a dozen European countries have done), to reserving a portion of east coast gas for domestic use (as WA does), to capping the domestic price of wholesale gas (as former ACCC boss Rod Sims argues every self-respecting gas-exporting nation does).
The Greens want money poured into transitioning households away from gas, while the Coalition wants more gas fields to be tapped and a new conversation about nuclear power.
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https://www.afr.com/companies/energy/time-for-two-sensible-gas-market-interventions-20221101-p5buq9
Time for two sensible gas market interventions
Diverting LNG exports for domestic supply and taxing windfall profits would cut power prices and help with the structural budget deficit.
Rod Sims Former ACCC Chair
Nov 1, 2022 – 4.27pm
Change is now needed in two areas of our gas market.
First, the three Queensland onshore LNG producers need to be required to supply sufficient gas to the domestic market, rather than export it to the international spot market, so that prices can return quickly to levels of around a year ago, say below $10GJ.
Second, we need to change how the Petroleum Resource Rent Tax works to gain an appropriate sharing of the windfall gains now flowing to the offshore LNG producers.
These are separate issues. You can do one without the other. I think we need to do both.
Virtually all nations are facing an energy price crisis because of high gas prices, which also drive high electricity prices given that gas-fired generation is often the price setter in electricity markets.
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Gas crisis due to 'glut of greed, not shortage of supply'
3 – 11 - 2022
Industry and Science Minister Ed Husic says gas contracts offered by LNG exporters are “just as high if not higher” despite the federal government’s negotiated heads of agreement signed in September to drive down prices.
Amid mounting pressure for the government to fix rising power bills, Mr Husic said a gas pricing mechanism needed to be “seriously examined” and argued prices were high because producers had failed to pass on lower prices to manufacturers.
“This is not a shortage of supply problem, this is a glut of greed problem that has basically short circuited and common sense must prevail,” Mr Husic told the ABC.
“To my mind they are saying they're not taking this issue seriously, they are not picking up the signals, they are completely tone deaf to the view that’s being expressed publicly.
"This is why we’ve got to a point where we are now forced to consider a wide range of interventions to get a better deal, because these companies are just not doing the right thing."
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Royal Commissions And The Like.
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https://www.afr.com/politics/ndis-cost-could-hit-115b-in-a-decade-20221104-p5bvp7
NDIS cost could hit $115b in a decade
Michael Read Reporter
Nov 4, 2022 – 10.00pm
Expenditure on the National Disability Insurance Scheme could hit $115 billion a year under an extreme scenario released by the government on Friday, with more than 1 million Australians expected to be on the program by 2032.
Fewer than expected people leaving the NDIS, more people joining than anticipated, and higher inflation have pushed the National Disability Insurance Agency (NDIA) actuary to revise its long-term projections of the NDIS’ annual running cost higher.
The annual financial sustainability report, which was tabled in the Senate on Friday afternoon, projects the annual cost of the NDIS will hit $89.4 billion in 2032, a marked increase on its expected running cost of $34 billion this financial year.
The figures underpin forecasts from Treasury that the NDIS’ annual cost could hit $97 billion by June 2033 should the current growth rate persist.
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National Budget Issues.
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Memo RBA board: Time to stop digging in deeper on interest rates
Economics Editor
October 31, 2022 — 5.00am
If, as seems likely, the combined might of the advanced economies’ central banks pushes the world into recession, the biggest risk isn’t that they’ll drag us down too, but that our Reserve Bank will raise our own interest rates too far.
That’s the message to us – and everyone else – from the International Monetary Fund’s repeated warnings about the unexpected consequences of “synchronised tighten” by the big economies – America, Europe and, in its own way, China, all jamming on the brakes at the same time.
Synchronised macro-policy shifts are a relatively new problem in our more globalised world economy. Until the global financial crisis of 2008, world recessions tended to roll from one country to the next. Since then, everyone tends to start contracting – or stimulating – at the same time.
When you were stimulating while your trading partners weren’t, much of your stimulus would “leak” to their economies, via your higher imports. But, as we learnt in the fight to counter the Great Recession, when everyone’s stimulating together, your leakage to them is offset by their leakage to you, thus making your stimulus stronger than you were expecting.
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Aussies spend another record amount in shops, supermarkets, cafes, could fuel further RBA rate hikes
5:36AM November 1, 2022
Australians spent another record amount in shops, supermarkets and cafes in September, as retail trade lifted for the ninth consecutive month despite growing cost-of-living pressures that threaten to sink growth next year.
After hiking rates from 0.1 per cent in April to 2.6 per cent, the Reserve Bank board at Tuesday’s meeting will weigh consumers’ ongoing resilience to soaring inflation and last week’s hot inflation figures against the delayed impact of monetary policy tightening on household budgets.
The consensus among economists and in financial markets is for the RBA to deliver a 0.25 percentage point rise to 2.85 per cent on Tuesday, although analysts have highlighted a real risk of a double hike.
RBA governor Philip Lowe will provide a preview of the central bank’s updated economic forecasts, which will be released in full in Friday’s Statement on Monetary Policy.
Economists believe the RBA could lift its estimate for peak inflation from 7.75 per cent in December, to over 8 per cent.
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https://www.rba.gov.au/media-releases/2022/mr-22-36.html
Statement by Philip Lowe, Governor: Monetary Policy Decision
Number 2022-36
Date 1 November 2022
At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 2.85 per cent. It also increased the interest rate on Exchange Settlement balances by 25 basis points to 2.75 per cent.
As is the case in most countries, inflation in Australia is too high. Over the year to September, the CPI inflation rate was 7.3 per cent, the highest it has been in more than three decades. Global factors explain much of this high inflation, but strong domestic demand relative to the ability of the economy to meet that demand is also playing a role. Returning inflation to target requires a more sustainable balance between demand and supply.
A further increase in inflation is expected over the months ahead, with inflation now forecast to peak at around 8 per cent later this year. Inflation is then expected to decline next year due to the ongoing resolution of global supply-side problems, recent declines in some commodity prices and slower growth in demand. Medium-term inflation expectations remain well anchored, and it is important that this remains the case. The Bank’s central forecast is for CPI inflation to be around 4¾ per cent over 2023 and a little above 3 per cent over 2024.
The Australian economy is continuing to grow solidly and national income is being boosted by a record level of the terms of trade. Economic growth is expected to moderate over the year ahead as the global economy slows, the bounce-back in spending on services runs its course, and growth in household consumption slows due to tighter financial conditions. The Bank’s central forecast for GDP growth has been revised down a little, with growth of around 3 per cent expected this year and 1½ per cent in 2023 and 2024.
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https://www.afr.com/policy/economy/rba-gallops-ahead-to-2-85pc-cash-rate-20221101-p5buks
RBA gallops to 2.85pc cash rate, inflation to hit 8pc
Ronald Mizen Economics correspondent
Nov 1, 2022 – 2.32pm
The Reserve Bank of Australia has increased the official interest rate by 0.25 percentage points, the seventh straight rise in a galloping tightening cycle aimed at curbing inflation now expected to peak higher.
The Melbourne Cup Day increase was inline with expectations and means the overnight cash rate has leapt from 0.1 per cent to 2.85 per cent since early May, the fastest tightening cycle in almost 30 years.
RBA governor Philip Lowe revealed the bank now expected inflation to peak around 8 per cent, above the 7.75 per cent tipped in last week’s federal budget, and more interest rate rises would be needed to stymie price rises.
“As is the case in most countries, inflation in Australia is too high,” Dr Lowe said in his usual post-meeting statement, adding while global factors explained some pressures, strong domestic demand was also a factor.
“The board expects to increase interest rates further over the period ahead ... [and] remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.”
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Rates to go even higher to fight evils of inflation
Ronald Mizen Economics correspondent
Nov 1, 2022 – 7.35pm
Reserve Bank of Australia governor Philip Lowe has issued a bleak warning on the perils of high inflation after the bank lifted the official interest rate to 2.85 per cent and said more rises were coming with inflation now forecast to peak higher and stay there for longer.
Defending the RBA’s seventh straight rate rise, Dr Lowe said high inflation was a scourge that needed to be dealt with swiftly to stop people becoming accustomed to high price increases, making a bad situation worse.
“If this were to happen, the evil of inflation would be with us for longer and the eventual increase in interest rates needed to bring it down would be greater,” he said in a speech in Hobart on Tuesday evening.
“This would increase the risk of a severe recession and a sharp rise in unemployment. It would be much better to avoid such a costly outcome, and so we have acted strongly to avoid it.”
In his most pointed remarks to date, the central bank governor said high inflation worsens inequality, and it undermines living standards.
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Interest rates lifted to nine-year high to tackle ‘the evil of inflation’
By Rachel Clun and Shane Wright
Updated November 1, 2022 — 7.20pmfirst published at 2.30pm
Australia risks a “severe recession” that would drive up unemployment if inflation is not brought under control, the Reserve Bank has warned after lifting official interest rates for a record seventh consecutive month.
Bank governor Philip Lowe, just hours after taking the official cash rate to a nine-year high of 2.85 per cent, said even higher interest rates would be necessary to deal with the “evil of inflation” if prices continued to climb.
The bank lifted interest rates by a quarter of a percentage point despite revealing it now expects the economy to slow through 2023 and 2024 as households wind back their spending due to tighter monetary policy.
On an $800,000 mortgage, the rise will lift monthly repayments by $122 to almost $4300. It is a near-$1100 a month increase since the RBA started increasing interest rates in early May.
Following the board’s decision, RBA governor Philip Lowe said he understood higher interest rates were unwelcome for many people, particularly mortgage holders who borrowed large sums in recent times.
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Runaway Inflation the dark horse nobody’s cheering on
6:30PM November 1, 2022
Short-priced favourite Whatever It Takes got the nod in the 2.30 at Hobart on Tuesday, as the Reserve Bank’s spring raising carnival ventured to Tasmania.
But the persistent nag to watch in the straight is Runaway Inflation, now tipped by the central bank to gallop to 8 per cent this year.
Even Keel is having a spell this season, with connections revealing uncertainty over its form means it only has a narrow path next year to return to the winners’ circle.
The RBA’s seventh consecutive move in this aggressive hiking cycle, from a cash-rate target of 0.1 per cent at the start of May to 2.85 per cent, won’t be its last.
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Unchecked inflation will have dire consequences, warns Chalmers
Ronald Mizen Economics correspondent
Nov 2, 2022 – 5.57pm
Treasurer Jim Chalmers and Reserve Bank governor Philip Lowe are singing from the same hymn book on the economic perils of unchecked inflation as households become increasingly pessimistic about the outlook.
Defending the RBA’s seventh straight rate rise on Tuesday night, Dr Lowe warned that the evils of prolonged inflation could spark a recession and drive unemployment higher. A day later, Dr Chalmers echoed the sentiments.
“We know inflation limits aspiration, erodes the purchasing power of take-home pay, and reduces the value of hard-earned savings. It also corrodes the real return on investment, it threatens the growth prospects of countries like ours, and eats away at the foundations of opportunity,” he said.
Speaking at an economic summit hosted by the Melbourne Institute, the treasurer said a responsible budget had to focus on inflation foremost because of the dire consequences of pervasive unchecked inflation.
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https://thenewdaily.com.au/finance/2022/11/03/interest-rates-economists-disagree-kohler/
6:00am, Nov 3, 2022 Updated: 6:11pm, Nov 2
Alan Kohler: Economists disagree on where interest rates are heading – shock
Australia’s assembled economists were agreed on Tuesday that the cash rate would be raised by 0.25 per cent, but as for what comes next, they’re all over the place.
In fact, it’s hard to recall a time when the interest rate forecasts of economists were as widely, and wildly, different as they are now.
At one extreme is Stephen Anthony and Warren Hogan predicting a peak cash rate of 4.5 per cent – basically rate hikes throughout next year.
At the low end of the scale are Gareth Aird, Craig Emerson, Shane Oliver and Michael Blythe predicting 3.1 per cent – that is, one more rate hike in December.
The first two are basically saying a recession will be needed to control inflation; the others are saying that inflation is already tipping over and the Reserve Bank should pause to see what happens, and then probably won’t need to do more.
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Food prices at Woolworths surge 7.3pc
Carrie LaFrenz Senior reporter
Nov 3, 2022 – 9.10am
Woolworths Group has posted a 1.8 per cent gain in first quarter sales, with growth dragged down by its Australian Food businesses where sales fell moderately, but average prices surged 7.3 per cent due to double-digit inflation in fresh fruit and vegetables.
The nation’s biggest supermarket chain’s group revenue reached $16.36 billion in the September quarter – lower than what MST Marquee had estimated at $16.62 billion – and compared with $16.07 billion a year ago.
Woolworths chief executive Brad Banducci said while year-on-year sales growth rates reflected the cycling of COVID-19 lockdowns in the prior year, customer shopping behaviours and the trading environment continued to normalise during the quarter.
“In our Food businesses, sales were below the prior year as we cycled strong growth driven by COVID-related restrictions,” he said.
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‘Severe recession’: RBA Governor’s grim warning about inflation
RBA Governor Philip Lowe has issued a dire message about the consequences of inaction amid rising interest rates and a cost of living crisis.
Eli Green
November 2, 2022 - 9:32PM NCA NewsWire
Reserve Bank Governor Philip Lowe has issued a warning about inflation, saying that Australia risks a “severe recession” if the organisation doesn’t lift interest rates to combat the cost of living.
“The eel of inflation will be with us for longer [if we don’t lift rates] and the eventual increase in interest rates needed to bring inflation down will be even larger is would increase the risk of a seed, severe recession, and a sharp rise in unemployment,” he said during a speech to business leaders in Hobart on Tuesday.
The RBA lifted Australia’s cash rate another 25 basis points to 2.85 per cent on Tuesday, a smaller rise than previous months, but Dr Lowe indicated the central bank would be carefully looking at the effect of current rates on the economy and considering larger rises in the immediate future.
Dr Lowe indicated interest rates may need to be hiked even higher during
Australia’s cost of living crisis, saying that the bank will be “very
carefully” watching inflation over the summer.
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Call to cut super tax breaks for the rich to aid the budget
John Kehoe Economics editor
Nov 5, 2022 – 5.00am
The $48 billion of annual superannuation tax breaks should be curtailed for the wealthy to make the retirement system more equitable and to help repair the federal budget, the head of the former government’s retirement income review says.
After ruling out super tax increases during the election campaign, Treasurer Jim Chalmers has signalled that tax rises could come on to the agenda as the Albanese Labor government battles cost blowouts on the National Disability Insurance Scheme and spending pressures from interest payments, aged care, health and defence.
Dr Chalmers said this week the government would make “more accessible, more useful analysis of what tax concessions are costing the budget, and their distributional impact”.
Mike Callaghan, a former senior Treasury official who advised Liberal treasurer Peter Costello and was selected by the Morrison government to lead a retirement income review, said superannuation tax concessions were not well targeted to those most in need and overwhelmingly benefited high-income earners.
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‘Every central bankers’ nightmare’: Australia headed for ‘stagflation-lite’
By Shane Wright
November 4, 2022 — 5.05pm
Australia faces “stagflation-lite” after the Reserve Bank revealed it expects the economy to slow sharply, unemployment to rise and inflation to remain above its own target band until 2025 even as interest rates slash household spending.
Forecasting the worst two consecutive years of economic growth since the recession of 1990-91, the RBA on Friday said charities were reporting that renters and new home buyers were increasingly seeking help to cover bills and the growing cost of living.
CommSec chief equities economist Craig James said the RBA’s revised forecasts were a portent of stagflation – when economic growth slows and inflation remains high.
“Australia is not headed for stagflation, perhaps ‘stagflation-lite’. Slow economic growth and persistently higher than desired inflation is every central bankers’ nightmare,” he said.
The Reserve has lifted interest rates from 0.1 per cent at the start of May to 2.85 per cent this week, with markets expecting further increases as the bank seeks to bring inflation under control.
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Six months to see if Philip Lowe’s punt pays off
10:00PM November 4, 2022
The next few months are shaping up as some of the most important for the economy in a generation.
Your job security, how much you pay on the mortgage, and whether we all have to suffer through a potentially nasty recession could all depend on whether the Reserve Bank’s gamble pays off.
By slowing the pace of rate hikes in October despite 30-year highs in inflation – and holding to this slower pace this week – RBA governor Philip Lowe and his board have made a bet that we are different from the rest of the world, where central bankers are still slamming on the monetary policy brakes.
By February or March, Lowe will need to see evidence that this decision was the right one.
If Australians are still spending big as autumn approaches, if businesses are still talking about boom conditions, and if inflation is showing no sign of easing then expect the RBA to get more aggressive.
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Economic storm clouds building
Editorial
11:00PM November 4, 2022
As the federal government continues to wrestle with energy policy and changes to industrial relations laws, the task of managing the economy is becoming more precarious. The UK’s central bank warned on Thursday that Britain faced its longest recession in 100 years. Global sharemarkets have been on a wild ride following the US Federal Reserve’s latest 0.75 per cent rise in official interest rates during the week, with a promise of more to come.
In its November statement on monetary policy, released on Friday, the Reserve Bank of Australia confirmed a decidedly more pessimistic view of what might lie ahead. Inflation is expected to peak at 8 per cent next month and economic growth is tipped to fall to 1.5 per cent as household consumption growth slows. Australia remains in a better position than the US or Britain, but what happens internationally is a key concern for the RBA. It said the global outlook was darkening, with recessions likely across major developed economies, including the US, Britain and in Europe. The danger is that as central banks continue to lift rates, “tight financial conditions could expose previously unrecognised vulnerabilities in the global economy”.
At home, the RBA says there is a high degree of uncertainty about how households will react to falling real incomes or whether a very tight labour market will trigger a much faster growth in wages, which can make it harder to tame inflation.The RBA is still hopeful it can cool inflation without tipping the domestic economy into recession, but it warns the path is “a narrow one”. The main uncertainties around domestic demand centre on the outlook for consumption.
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Health Issues.
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The great doctor protection racket
Doctors who commit fraud are protected by a system created and enforced by the Australian Medical Association.
Aaron Patrick Senior correspondent
Oct 31, 2022 – 3.11pm
If you could steal from the government, and the only penalty if caught was to repay the money, would you?
This is a question the Australian Medical Association should answer as it tries to extend its influence over the system that investigates doctors for Medicare fraud.
Recent coverage in The Sydney Morning Herald and The Age may have overstated the extent of medical overcharging, which the newspapers put at up to $8 billion a year.
But the reports have usefully drawn attention to what looks like a protection racket for AMA members.
Abuse of the $31 billion Medicare system is policed by the Professional Services Review, a small federal government agency created in 1994 that can’t keep up with the paltry number of cases referred to it each year by the health bureaucracy.
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Maggot therapy surges in Britain as antibiotics fail
By Lizzie Roberts and Sarah Newey
November 4, 2022 — 8.30am
Maggot therapy at Britain’s National Health Service has surged by almost 50 per cent as the treatment becomes a key tool in the fight against antibiotic resistance.
Data from NHS Digital show the number of treatments given in England increased from 886 in 2008-9 to 1305 a decade later in 2018-19.
Modern use of medical maggots dates back to the World War I, when a surgeon discovered soldiers’ wounds healed faster when they were “colonised” by maggots.
But use of the treatment dwindled in the 1940s with the rise of antibiotics.
However, the rise of antibiotic resistance making wounds harder to treat has forced medics to return to the traditional method.
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Health minister raises stakes by calling independent inquiry into Medicare
November 5, 2022 — 5.00am
Health Minister Mark Butler has bowed to pressure and launched an independent inquiry into Medicare in an attempt to curb fraud, errors and over-servicing within the troubled universal healthcare system.
The probe – to be fronted by health economist, Deloitte Access Economics partner and former Victorian Department of Health secretary Dr Pradeep Philip – will also look at ways to beef up penalties for any medical professionals abusing the system.
Philip has been tasked with estimating the scale of waste, identifying specific integrity risks for Medicare payment channels, assessing ways to improve pre-payment mechanisms and controls, and examining existing legislation and regulations.
Other areas set for scrutiny include the effectiveness of Medicare’s watchdog, the Professional Services Review (PSR), which investigates just 0.07 per cent of health professionals each year.
Crucially, Philip’s investigation will also examine the independence of the PSR given the regulator’s recent leadership has strong links to the powerful Australian Medical Association.
Under the Health Insurance Act, the federal health minister can only appoint the head of the regulator if the AMA has agreed to the proposed hire.
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International Issues.
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https://www.afr.com/world/north-america/fear-and-loathing-in-crime-torn-usa-20221027-p5btav
Fear and loathing in crime-torn USA
In US midterm election polling crime is only second to inflation when it comes to the big issues for voters. I recently experienced up-close why voters rate it so high.
Matthew Cranston United States correspondent
Updated Oct 30, 2022 – 6.57pm, first published at 4.52pm
Washington | On a Saturday night last month in a crowded McDonald’s 20 minutes’ walk from the White House, America’s crime epidemic was on full display.
No more than a metre away from me as I waited to be served, two men had started brawling when suddenly – bang! – one of them fired a gun, sending customers stampeding for the door.
I hid behind a pillar, from where I could smell the gunpowder and see the fear etched on the faces of the McDonald’s workers as they huddled in a secured room designed for such occasions.
This is America. The crime wave is not Republican hyperbole; it is real, and it will help to determine the outcome of the US midterm elections on November 8.
The latest polls show Republicans ahead of Democrats on the general ballot, with most showing the latter losing the House and possibly the Senate. Poll aggregator FiveThirtyEight’s four latest polls shows a lead by Republicans of as much as 7 per cent, indicative of a landslide.
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Lula defeats incumbent Bolsonaro in stunning return to power in Brazil
By Diane Jeantet and Carla Bridi
Updated October 31, 2022 — 10.10amfirst published at 9.12am
Rio de Janeiro: Brazil’s electoral authority said that Luiz Inácio Lula da Silva of the leftist Worker’s Party defeated incumbent Jair Bolsonaro to become the country’s next president.
With 98.8 per cent of the votes tallied, da Silva had 50.8 per cent and Bolsonaro 49.2 per cent, and the election authority said da Silva’s victory was a mathematical certainty.
Da Silva — the country’s former president from 2003-2010 — has promised to restore the country’s more prosperous past, yet faces headwinds in a polarised society.
It is a stunning return to power for da Silva, 77, whose 2018 imprisonment over a corruption scandal sidelined him from that year’s election, paving the way for then-candidate Bolsonaro’s win and four years of far-right politics.
The vote was to determine if the world’s fourth-largest democracy stayed the same course of far-right politics or returns a leftist to the top job — and, in the latter case, whether Bolsonaro will accept defeat. There were multiple reports of what critics said appeared attempts to suppress the turnout of likely da Silva voters.
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A haunted America: US politics is too creepy, horror is too real
New York Times columnist
October 30, 2022 — 4.30pm
Halloween has always been one of my favourite days. I loved putting up twinkling bats and watching midnight monster-chiller-horror movies.
Not this year. The world is too scary. Politics is too creepy. Horror is too real.
When I was a child, on October 31, my older brother would put on a vinyl LP of Mussorgsky’s Night on Bald Mountain that he had carefully cleaned. The eerie music was used by Walt Disney in the segment of his animated masterpiece Fantasia about the surreal celebration of evil during the night of the witches’ Sabbath.
Chernabog, the lord of evil and death, wrapped in a dark cape, stands atop a jagged peak, summoning ghosts, witches and vampires to swirl out of the mountain and pay homage. I was so relieved when, at dawn, church bells rang and drove them off.
But now the bad spirits are lurking all around us. They will not be driven off.
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Inflation jolt in Europe challenges hopes for slower rate rises
Cecile Lefort Markets reporter
Oct 31, 2022 – 2.52pm
Stronger-than-expected inflation in Europe is challenging the view that central banks may be looking to slacken their pace of interest rate increases.
The Reserve Bank of Australia is anticipated to lift the cash rate by 0.25 percentage points to 2.85 per cent on Melbourne Cup day, but some economists argue it could surprise with a return to a half point increase after last week’s inflation shock.
Interbank futures markets imply a one-in-four chance of a 0.5 percentage point lift, and a peak cash rate of 3.9 per cent mid-next year. That’s after Australian annual headline inflation in the September quarter came in at a hotter-than-expected 7.3 per cent.
European data on Friday showed record inflation in Germany, France, and Italy, with figures due on Monday expected to show an all-time inflation top of 10.3 per cent for the entire eurozone.
Germany’s headline consumer price index struck an annual rate of 11.6 per cent in October, well above economists’ forecasts of 10.9 per cent. Italy’s raced to 11.9 per cent, against 9.5 per cent expected, and France’s rose to 7.1 per cent, topping forecasts for 6.5 per cent.
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Row grows over UK’s ‘inhumane’ migrant program
7:03AM November 1, 2022
British taxpayers are paying nearly £7million (A$12.5 million) a day to put asylum seekers, including illegal boat arrivals from across the English Channel, in various hotels and hostels, the Home Secretary Suella Braverman has told MPs in Westminster.
Ms Braverman said she was “frankly appalled’ to discover that the British taxpayer was paying on average £150 (A$270) per person per night for hotels for each asylum seeker, and she hit back at critics complaining about the standard of accommodation saying they were “ungrateful and indulgent”.
A political row over cross-Channel migration by boat has intensified, with the government unable to find enough beds quickly enough to satisfy political opponents who have warned they risk expensive legal damages because the current situation breaches international conventions and English law.
This year a record 38,000 migrants have arrived by boat across the Channel, 12,000 of them working age males from Albania. It has been suggested the reason that the men arrive by the illegal immigration route rather than register for a working visa is because of criminal backgrounds.
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German pension system near collapse
By Oliver Moody
The Times
5:35PM October 31, 2022
Germany’s state pension system is on the brink of collapse and the retirement age must be raised to account for growing life expectancy, according to the head of a powerful business group.
The country already has one of the oldest populations in Europe, with 22 per cent over 65, compared with 19 per cent in the UK. This will increase sharply in the next few years as the demographic bulge of the baby-boomer generation enters retirement, meaning that markedly less money will flow into the social insurance system at the same time as more is being paid out.
Despite warnings from several prominent economists, however, successive German governments have dismissed appeals for cutbacks, if anything making the system more generous.
A double-lock mechanism guarantees pensioners at least 48 per cent of the average salary they earned during their working life, adjusted for inflation. Last year this worked out at about €1200 a month for men and €860 for women after tax.
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https://www.afr.com/world/asia/china-s-diminishing-returns-under-xi-20221031-p5bug2
China’s diminishing returns under Xi
With the Chinese government even less inclined to adopt market-oriented reforms, a smooth landing from the real estate meltdown looks less likely than ever for China’s faltering economy.
Kenneth Rogoff Columnist
Nov 1, 2022 – 1.23pm
The Communist Party of China’s 20th National Congress, which gave President Xi Jinping an unprecedented third term as general secretary, also featured a leadership shake-up that replaced market-oriented technocrats with Xi loyalists, raising questions about China’s plans for its faltering economy.
Excessive state control, after all, is a tried-and-true recipe for becoming mired in the middle-income trap that Chinese leaders have long vowed to avoid.
The breakneck pace of state-guided investment in real estate and infrastructure – China’s go-to stimulus strategy – has generated diminishing returns, with slowing economic growth implying an inevitable fall in housing and office prices. This is especially true in the smaller, poorer, and less-developed cities that collectively account for more than 60 per cent of China’s GDP.
Housing prices in so-called third- and fourth-tier Chinese cities have fallen by roughly 15-20 per cent over the past two years. Some form of sustained financial stasis will most likely ensue. But even if it does not look quite like a Western-style banking crisis, the concomitant fall in lending will still inhibit growth.
Real estate constitutes such a large share of China’s economy that a sustained slowdown could cause years-long stagnation akin to Japan’s lost decades since 1990. Counting direct and indirect demand, real estate accounts for roughly 23 per cent of production and 26 per cent of final demand (the latter figure includes net imported content).
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Europe sinks deeper into stagflation
Economists believe the eurozone is either in, or on the cusp, of recession, even as the region struggles with double-digit inflation.
Karen Maley Columnist
Nov 2, 2022 – 5.00am
Europe is continuing to reel from the biggest price shock in four decades, as soaring energy prices push inflation sharply higher, while economic activity plummets.
Economists believe the eurozone is either in recession, or on the cusp on one, after the region’s growth slowed to 0.2 per cent in the third quarter, a sharp slowdown from the 0.8 per cent growth the previous quarter.
Economic activity in the eurozone has been battered by soaring inflation which has forced households to cut back on spending.
At the same time, the steep rise in energy costs has forced manufacturers to either scale back or shutter production.
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Scholz alarms the West by ‘selling out’ to China
By Oliver Moody
The Times
November 2, 2022
Olaf Scholz has dispatched his most senior foreign policy official to Washington in an attempt to allay concerns that his imminent trip to China could hand President Xi a propaganda coup against the West, The Times has been told.
Tomorrow the German chancellor will become the first leader of a large western country to visit Beijing since the start of the pandemic, days after Xi secured a third term with a display of absolute power at the Chinese Communist Party (CCP) congress. The US and some of Berlin’s European allies are understood to be concerned that this could give an appearance of western disunity at a time when they are trying to forge a stronger common front against China.
Chinese state media have already seized on the trip, which has been preceded by a flurry of Sino-German business deals, as evidence of discord and vulnerability within Europe. An editorial in the Global Times, one of the CCP’s flagship English-language organs, asked: “If Europe weakens or even cuts off its ties with China, can it really be more ‘independent’ and ‘secure’?”
So much is riding on the trip that Jens Plotner, the chancellor’s national security adviser and trusted diplomatic fixer, is believed to have travelled across the Atlantic in person to try to reassure the Biden administration that Scholz will not step out of line with the US.
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What investors can take from Ray Dalio’s warning on war
The hedge fund veteran turned amateur historian sees military conflict on the horizon, but his broader message for the market is one of instability and volatility.
Nov 2, 2022 – 11.31am
It’s always hard to know exactly how to interpret warnings about military conflict from market commentators, which have become increasingly mainstream since Vladimir Putin invaded Ukraine earlier this year.
While some investors are able to model and price the possibility of war – Coolabah Capital founder and The Australian Financial Review columnist Christopher Joye, for example, recently put the chances of a war between China and Taiwan at 74 per cent – I suspect most investors struggle to get to this level of analysis.
Which is fair enough: if war in our region breaks out, or heaven forbid a nuclear attack is launched, return profiles are the last thing that most investors will be thinking of.
How then should investors interpret the latest warning from Ray Dalio, billionaire founder of hedge fund manager Bridgewater, who says the world order is approaching stage six – the war stage – of what he calls “the Big Cycle”?
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https://www.afr.com/chanticleer/the-moment-powell-revealed-rate-hikes-aren-t-working-20221103-p5bv6j
The moment Powell revealed rate rises aren’t working
Federal Reserve chairman Jerome Powell refused to play ball with the market rally and made it clear rates need to go higher than the market expects – and stay there.
Nov 3, 2022 – 8.24am
The most revealing moment of Federal Reserve chairman Jerome Powell’s post rate hike press conference came when a journalist told him that stocks had risen in response to the Fed’s decision to lift its policy rate 0.75 per cent to between 3.75 per cent and 4 per cent.
The journalist was working off old data – Wall Street had risen modestly after the Fed’s official statement suggested it would eventually become appropriate to slow the pace of rate hikes, but as Powell’s press conference became increasingly hawkish, stocks reversed rapidly into the red, with the S&P 500 eventually closing down 2.5 per cent and the Nasdaq down 3.4 per cent.
But Powell, working live without a market ticker in front of him, wasn’t to know that. And so he turned uber-hawk, making it clear that the Fed was not here to help stocks maintain their recent rally by hinting at a pivot towards less restrictive monetary policy.
“What I am trying to do is make sure our message is clear, which is that we think we have a ways to go, we have some ground to cover with interest rates, before we get to that level of interest rates that we think is sufficiently restrictive,” Powell said.
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‘Trust no one’: US politics as The X-Files
By Ross Douthat
November 3, 2022 — 7.53am
One of the master keys to understanding our era is seeing all the ways in which conservatives and progressives have traded attitudes and impulses. The populist right’s attitude toward American institutions has the flavour of the 1970s — sceptical, pessimistic, paranoid — while the mainstream, MSNBC-watching left has a strange new respect for the FBI and CIA.
The online right likes transgression for its own sake, while cultural progressivism dabbles in censorship and worries that the First Amendment goes too far.
Trumpian conservatism flirts with postmodernism and channels post-structural philosophy ; its progressive rivals are institutionalist, moralistic, confident in official narratives and establishment credentials.
These reversals are especially evident in a pair of prominent headlines from the last week.
If you had been told at any point from, say, 1970 to 2005 that a disturbed-seeming man living in the Bay Area with a history of involvement with nudist activists and the hemp jewellery trade had allegedly followed his paranoid political delusions into a plan to assault an important national politician, the reasonable assumption would have been that his delusions belonged to the farthest reaches of the left and therefore his target was probably some notable Republican.
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Democrats’ worries about their midterm election strategy grow
By Lisa Lerer, Katie Glueck and Reid J. Epstein
November 3, 2022 — 5.48am
Top Democratic officials, lawmakers and strategists are openly second-guessing their party’s campaign pitch and tactics, reflecting a growing sense that Democrats have failed to coalesce around one effective message with enough time to stave off major losses in the House and possibly decisive defeats in the tightly contested Senate.
The criticisms by Democrats in the final days of the midterm elections signal mounting anxiety as Republicans hammer away with attacks over the economy and public safety. For weeks, Democrats have offered a scattershot case of their own, accusing their opponents of wanting to gut abortion rights, shred the social safety net and shake the foundations of American democracy.
Yet as the country struggles with high gas prices, record inflation and economic uncertainty, some Democrats now acknowledge that their kitchen-sink approach may be lacking.
Even among the chorus of criticism, there’s little agreement over exactly what could cost the party control of Congress. In areas where victory depends on high black voter turnout, Democrats worry that they are not mobilising that constituency. Others say there has been too much focus on abortion rights and too little attention on worries about crime or the cost of living. And across the country, Democrats point to an inadequate economic message and an inability to effectively herald their legislative accomplishments.
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Joe Biden warns on the future of US democracy, as Fed rate rise rattles voters
November 3, 2022 — 10.28am
Washington: US President Joe Biden made an impassioned plea for Americans to protect their ailing democracy, even as the Federal Reserve pushed through a sharp rate rise likely to rattle the voters he needs to win next week’s midterm election.
With days until the November 8 poll that will determine who controls Congress, Biden has highlighted the brutal attack on the husband of US Speaker Nancy Pelosi to warn that hundreds of candidates who believe the 2020 election was stolen and are running for office and could lead the country down a “path of chaos” if they end up winning their seats next week.
But hours before, the Federal raised rates by 75 basis points in an effort to tackle inflation - which has emerged as the top issue for voters who are fed up with the soaring costs of everything from fuel, to food and furniture.
Nonetheless, the President returned to a familiar theme - of democracy under threat - this time drawing on horrific attack of Paul Pelosi, who was last week bludgeoned with a hammer in his home by a conspiracy-fuelled perpetrator searching for his wife, the second most powerful woman in America.
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This will be the mother of all American midterm elections
The enduring belief that Donald Trump was robbed in 2020 has put the US political system itself on the ballot.
Edward Luce Columnist
Nov 3, 2022 – 10.38am
Midterm defeats can upend US presidencies. Think of Newt Gingrich’s new model Republicans in 1994, Nancy Pelosi’s Democratic wave in 2006, or the Tea Party sweep of 2010. These sounded the death knell for the domestic agendas of Bill Clinton, George W Bush and Barack Obama respectively.
If Democrats lose next week, a similar fate would befall Joe Biden. Yet, the 2022 race belongs in a class of its own. Roughly half the Republicans running for federal or statewide office believe the presidency was stolen from Donald Trump in 2020. That means America’s system itself is on the ballot next Tuesday.
The main thing Democrats have going for them is a dread of what their defeat would portend for the US republic. By most historic measures, Biden’s party should be heading for a drubbing. Inflation is at a 40-year high.
The murder rate is on the rise. And the president’s approval rating is stuck far below the 50 per cent that has previously been needed for his party to retain control of Congress.
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Pyongyang fires missile barrage near Japan, South Korea
Kim Tong-Hyung and Mari Yamaguchi
Updated Nov 3, 2022 – 12.12pm, first published at 11.34am
Seoul | North Korea renewed its barrage of weapons tests on Thursday, firing at least three missiles including a suspected intercontinental ballistic missile that forced the Japanese government to issue evacuation alerts and temporarily halt trains.
The launches are the latest in a series of North Korean weapons tests in recent months that have raised tensions in the region. They came a day after Pyongyang fired more than 20 missiles, the most it has fired in a single day.
South Korea’s Joint Chiefs of Staff said it detected the North firing a missile it presumed as an ICBM from an area near its capital Pyongyang around 7:40am local time, and then firing two short-range missiles from the nearby city of Kacheon that flew toward its eastern waters.
While South Korean officials did not immediately release more specific flight details, the longer range missile may have been fired on a high angle to avoid reaching the territory of neighbours. Japan’s Defence Minister Yasukazu Hamada said one of the North Korean missiles reached a maximum altitude of 2000 kilometres and flew about 750 kilometres.
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Bank of England jacks rates as economy braces for freefall
Hans van Leeuwen Europe correspondent
Nov 3, 2022 – 11.12pm
London | The Bank of England jacked up interest rates at the fastest pace since the 1980s, seeking to slam the brakes on stubbornly high inflation even as Britain faces what could be one of its longest-ever recessions.
The Bank’s monetary policy committee (MPC) upped its benchmark rate by 0.75 percentage points to 3 per cent, its eighth successive increase. That pushed the rate to its highest in 14 years. Seven MPC members voted for it, while two preferred a smaller increase.
But with the British economy already embarked on a potentially marathon contraction, the MPC took the unusual step of suggesting that financial markets were likely over-estimating how high interest rates would go.
“This was another ‘reluctant’ hike, albeit this time, the forecast and statement signal that the Bank is increasingly confident in voicing concerns regarding risks of overtightening,” Barclays analysts said in a note.
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‘Tough road ahead’: Britain already in recession that could last two years, warns Bank of England
By Rob Harris
November 4, 2022 — 5.56am
Key points
· Bank of England raises interest rates to 3%, the highest level since late 2008
· Inflation to hit 40-year high of 11 per cent in coming weeks
· The recession is expected to knock 2.9% off the size of UK economy
London: Britain is facing its longest recession on record, the Bank of England warned on Thursday, as it delivered the biggest interest rate rise in more than three decades to fight a surge in inflation from soaring energy prices.
The central bank board voted to lift interest rates by 0.75 percentage points to 3 per cent, in its most forceful act to tame the now double-digit inflation since 1989. Higher borrowing costs will likely hurt an already weak economy as consumers brace for a difficult winter of falling real incomes and rising household costs.
The world’s leading economies continue to face steep challenges, with countries that account for about one-third of global gross domestic product poised to contract this year or next, shaped by the Russian invasion of Ukraine and a cost-of-living crisis caused by persistent and broadening inflation pressures, and the slowdown in China.
Bank of England governor Andrew Bailey said the UK economy likely entered a recession in the three months through September, when output fell an estimated 0.5 per cent. He warned it would last until mid-2024 with inflation, as measured by the consumer prices index, expected to peak at 11 per cent this winter before falling next year.
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Netanyahu wins Israeli election, PM Lapid concedes defeat
By Tia Goldenberg
November 4, 2022 — 5.31am
Tel Aviv, Israel: Former Prime Minister Benjamin Netanyahu has won this week’s Israeli election, final results showed on Thursday, clearing the way for him to return to power.
Prime Minister Yair Lapid congratulated Netanyahu and instructed his staff to prepare an organised transition of power, his office said.
“The state of Israel comes before any political consideration,” Lapid said. “I wish Netanyahu success, for the sake of the people of Israel and the state of Israel.”
Lapid, who has served as interim prime minister for the past four months, made the announcement just before the final results were released showing Netanyahu securing a parliamentary majority with his religious and ultranationalist allies.
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https://www.afr.com/world/north-america/who-can-heal-these-disunited-states-20221102-p5bv1j
Who can heal these Disunited States?
Joe Biden sought at his inauguration in 2021 to reunify Americans. The midterm elections demonstrate how hard that will be.
Bruce Wolpe Political commentator
Nov 4, 2022 – 12.16pm
If anyone had any doubts about the degree of hyperpartisanship in the United States, the latest United States Studies Centre research on public opinion in the United States fully captures the immense divisiveness engulfing the country.
The top four issues for Joe Biden voters: Decreasing gun violence. Dealing with climate change. Improving education. Protecting abortion rights.
The top four issues for Donald Trump voters: Reducing inflation. Dealing with immigration. Reducing crime. Improving education.
The top three Trump voter issues do not coincide with any of the top four Democratic voter priorities.
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https://www.afr.com/policy/economy/britain-s-chancellor-eyes-tax-hit-on-dividends-20221104-p5bvnd
Britain’s chancellor eyes tax hit on dividends
Joe Mayes
Nov 4, 2022 – 1.32pm
London | Chancellor of the Exchequer Jeremy Hunt is considering increasing taxes on people who own shares, a move that could raise millions of dollars as he seeks to fill Britain’s fiscal black hole.
Mr Hunt is looking at cutting the amount that shareholders can earn in dividends before they begin paying tax from the current level of £2000 ($3500), two officials familiar with the matter said, speaking on condition of anonymity because no final decisions have been taken.
The measure is one of several tax-raising options under consideration as the chancellor, a role similar to treasurer, prepares to deliver an economic package on November 17, according to the people. A Treasury spokesperson said the department does not comment on speculation surrounding tax changes.
Mr Hunt and UK Prime Minister Rishi Sunak have said no options are off the table as they try to find £50 billion of spending cuts and tax rises to stabilise Britain’s public finances, which have been hit by inflation at a four-decade high, rising interest rates and stalling growth. Other potential measures include an expanded windfall tax on the profits of oil and gas firms and real-terms cuts to departmental budgets.
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US adds 261,000 jobs as labour market softens
Lauren Kaori Gurley
Nov 5, 2022 – 12.23am
US employers added 261,000 jobs in October, edging down for the third consecutive month after a streak of brisk growth during the first half of the year.
The unemployment rate ticked up to 3.7 per cent, the Labour Department announced on Friday in its monthly jobs report. Economists had projected that the report would show 205,000 jobs added in October and that unemployment would be unchanged, according to the Dow Jones newswire. The rate was 3.5 per cent in September.
The labour market remains an area of strength in the overall economy, but its gradual softening could be welcome news for the Federal Reserve, whose aggressive interest rate hikes have yet to trigger a slowdown in job creation.
The central bank, which announced its sixth interest rate hike of the year on Wednesday, is trying to fight inflation by engineering a labour market slowdown, despite a growing consensus among economists that a recession is likely to hit next year.
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America gets ready to welcome a rogue’s gallery of crazy
These extreme Republicans don’t have a plan. Their only idea is to get in, make trouble for Biden, start a bunch of stupid investigations, shut down the government, abandon Ukraine and hold the debt limit hostage.
Maureen Dowd
Updated Nov 6, 2022 – 7.47am, first published at 7.40am
Washington | Are we ready for our new Republican overlords?
Are we ready for an empowered Marjorie Taylor Greene?
Are we ready for a pumped-up, pistol-packing Lauren Boebert?
“How many AR-15s do you think Jesus would have had?” Boebert asked a crowd at a Christian campaign event in June. I’m going with none, honestly, but her answer was, “Well, he didn’t have enough to keep his government from killing him.”
The Denver Post pleaded, “We beg voters in western and southern Colorado not to give Representative Lauren Boebert their vote.”
The freshman representative has recently been predicting happily that we’re in the end times, “the last of the last days.” If Boebert is in charge, we may want to be in the end times. I’m feeling not so Rapturous about the prospect.
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I look forward to comments on all this!
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David.
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