February 02, 2023 Edition
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As we settle properly into 2023 it seems little has changed in the US other than the sadly familiar repeat of police killing of innocents every once in a while and ridiculous level of gun violence for which there seems to be no solution.
Plans are now in place to send heavy armour to Ukraine but will it arrive in time?
China seems to be on the mend after COVID.
In OZ the proper treatment of racial disparities is again very much on the agenda sadly – again seemingly unfixable….we need smarter policy in many areas…
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Major Issues.
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Australia is just different when it comes to corporate bonds
A culture of bank term deposits and equities means would-be retail bond investors are exposed to risks they may not understand and can’t bear.
Jeremy Cooper Financial industry expert
Jan 22, 2023 – 1.55pm
The Australian Financial Review has recently reported on the failures of the Australian retail corporate bond market and called out red tape as the culprit.
It is true that the domestic Australian non-bank corporate bond market is sub-scale, bordering on anaemic. The question is why? There are myriad compelling factors.
Historically, Australian banks didn’t want to be disintermediated by market-based finance (that is, debt issued by corporates into a market, or bonds). They preferred lending direct to customers, possibly even at overly competitive prices; ensuring that no such market ever evolved.
Even today, Australian banks offer attractive term deposit rates that dampen demand for other types of retail fixed income investing. Not only can TDs be attractively priced, but they’re risk-free up to $250,000. End of story for most households.
Australian corporates find it attractive to access the wholesale markets in the United States, where large issues can be keenly priced and executed smoothly. There is a well-oiled ecosystem of intermediaries who facilitate this and are happy with the status quo.
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https://www.afr.com/policy/health-and-education/why-australian-schools-are-failing-20230122-p5cejh
Why Australian schools are failing
The education system seems unable to turn new reform and funding inputs into better outcomes for school students. Where does it fall down?
Glenn Fahey Contributor
Jan 22, 2023 – 1.02pm
A new Productivity Commission report confirms what’s long been known: Australia’s school systems are failing on the twin goals of educational excellence and equity.
Little progress has been made in raising the bar, levelling the bar, or ensuring more students are able to meet basic standards. Most damning is the conclusion that most who fall behind early in school never go on to beat minimum expectations in literacy and numeracy.
This is a far cry from the lofty ambitions of decades of reform efforts – including two rounds of Gonski reviews, two rounds of National Innovation and Science Agendas, several reviews of teacher training, Building and Digital Education Revolutions, among many more.
The commission blames vague and bureaucratic policy wonk-speak for governments not making any dent in outcomes. It’s right to do so.
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Australia buys ‘potent and powerful’ sea mines to deter China
January 23, 2023 — 5.00am
Key points
· Australia will spend up to $1 billion on high-tech underwater weapons to deter China from sending ships into our waters.
· It’s the country’s first major investment in sea mines since the Vietnam War.
· Naval experts say sea mines are the most effective weapons system ever deployed in maritime warfare.
Australia will make its first major investment in sea mines since the Vietnam War, spending up to $1 billion on high-tech underwater weapons to deter China and other potential adversaries from sending ships and submarines into the nation’s waters.
Sea mines are self-contained explosive devices that can be placed in key strategic choke points, such as straits and harbours, to blow up encroaching enemy naval vessels.
The weapons have been used in virtually every maritime conflict since the 14th century, but fell out of favour with Western naval leaders in recent decades, including in Australia.
China has built up a stockpile of up to 100,000 sea mines as part of its massive military expansion.
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https://www.afr.com/chanticleer/why-microsoft-is-betting-14b-on-ai-20230124-p5cf0q
Microsoft itself shows how AI will change your job
With its investment in Open AI, the tech giant knows only too well how artificial intelligence will change the way people work.
Jan 24, 2023 – 11.10am
Microsoft founder Bill Gates says the latest wave of artificial intelligence that has been ushered in by ChatGPT is yet to cost anyone a job at the tech giant.
But Microsoft’s own blog post announcing its $US10 billion ($14 billion) investment in ChatGPT-maker OpenAI shows that AI is changing the nature of work inside the group.
While ChatGPT has captured an extraordinary amount of attention since its launch in November, it’s been more than 18 months since Microsoft subsidiary GitHub, which provides tools to help software developers do their jobs, launched a product called Copilot.
As Microsoft noted on Monday night, Copilot is powered by OpenAI technology. It helps a developer create software by offering prompts and suggestions based on the code the developer has already written – not unlike the way Microsoft and Google’s email and word-processing product suggest phrases or replies based on the contents of a document or email.
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https://www.afr.com/policy/economy/besieged-alice-springs-waiting-to-erupt-20230124-p5cf0f
Besieged Alice Springs ‘waiting to erupt’
Central Australia is a region that should have huge opportunities for the traditional owners, especially in roles that are related to their culture and connection to country.
Paul Cleary
Jan 24, 2023 – 3.47pm
When I first arrived in Central Australia to work for a large land council three years ago, the Aboriginal chief executive told me how difficult it was to drive economic development for the benefit of his people.
His organisation, he lamented, was imbued with the “soft bigotry of low expectations”, a reference to “nay saying” non-Indigenous bureaucrats who shot down ideas that related to Aboriginal employment and small business development.
Some of his units were devoid of Aboriginal staff and managers especially, and there was little effort to bring Aboriginal people into an organisation that offered many career pathways.
His comment about low expectations comes from a line used by George Bush about the left’s view of minorities, especially black Americans, but it is certainly an apt summary of the challenges faced by marginalised people of Central Australia.
Upon arriving in Alice, it was immediately clear to me that Alice Springs was like a mini Johannesburg that was waiting to erupt.
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Indigenous Affairs Minister says NT ‘clearly got it wrong’ lifting alcohol bans
January 25, 2023 — 8.55am
Minister for Aboriginal Australians Linda Burney says she has been pushing the Northern Territory government for months to get tougher on alcohol following persistent calls from Alice Springs community leaders to act.
The morning after the federal and territory governments jointly announced an overhaul of alcohol sales to curb rising crime in the central Australian town, Burney told ABC’s Radio National Breakfast on Wednesday said the territory government had admitted “they clearly got it wrong” in not responding sooner.
Federal laws restricting alcohol in some communities were allowed to lapse in July. Alcohol-driven crime has risen dramatically in the Territory as liquor became legal in some areas for the first time in 15 years.
The Central Australian Aboriginal Congress wrote to Burney about violence and alcohol on June 9, shortly after the minister was sworn in, and several other Indigenous groups have been calling for bans ever since.
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Sydney house prices post steepest annual fall on record
By Kate Burke and Melissa Heagney-Bayliss
January 25, 2023 — 12.01am
Key points
· Sydney’s median house price has dropped 11.3 per cent from its market peak.
· The pace of declines has slowed, but experts say further price falls are to come.
· Sutherland recorded the largest price falls in the December quarter.
Property listings
Sydney house prices have had their steepest annual fall on record, declining 10.9 per cent last year as rising interest rates took a toll on buyer demand and spending power.
Sydney’s median house price fell more than $170,000 to $1,413,658 last year, the latest Domain House Price Report, released on Wednesday, shows.
However, the pace of declines slowed in the December quarter when the median fell 2.1 per cent — three times slower than the previous three months.
House prices are now 11.3 per below their early 2022 peak, but are still 24.2 per cent higher than they were when the market troughed in mid-2020.
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More Russian attacks are a matter of time, and geography. Australia must look and learn
Military leader and strategist
January 25, 2023 — 5.00am
Last week, participants from nearly 50 countries assembled for their eighth Ramstein summit to discuss support for Ukraine in its defence against the Russian invasion. With the recent Russian mobilisation of troops, the appointment of the country’s most senior soldier, General Gerasimov, as overall commander, and the step-up in missile attacks on Ukrainian cities, the need for military assistance is acute. The Russians will be launching more offensives in Ukraine. It is only matter of time and geography.
Europe and the United States have now evolved their strategy for Ukraine. They have shifted from a strategy focused on defending Ukraine, to one encompassing the defence of Ukraine and the defeat of Russia. The quality and quantity of military aid being provided ensures Ukraine has the capacity and confidence to conduct offensives in 2023 to reclaim its territory.
Importantly, this summit, like those before, has breathed new life into the North Atlantic Treaty Organisation. An alliance established at the beginning of the Cold War to provide for the collective defence of Western Europe, it had been an institution in search of a cause until February 24 last year, when Russia invaded Ukraine. The existence of NATO, while often used by Putin to justify his invasion, has checked Russian aggression beyond Ukraine and has co-ordinated essential military intelligence and other support to Ukraine.
It is an alliance that has no parallel in the western Pacific.
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Treasurer slams PwC tax leak as ‘shocking breach of trust’
Edmund Tadros, John Kehoe and Neil Chenoweth
Jan 25, 2023 – 3.48pm
Federal Treasurer Jim Chalmers accused the nation’s largest accounting firm, PwC, of a “shocking breach of trust” after certain partners and staff leaked confidential information obtained while advising the government on measures to combat tax avoidance.
Dr Chalmers said the PwC partners who shared the secret information with clients and prospective clients had put at risk the established practice of government consulting business experts when developing policy.
The Treasurer said he was “absolutely furious, absolutely ropeable” and vowed to implement recommendations effectively ignored by the previous Coalition government to beef up the powers of the Tax Practitioners Board (TPB) to police the nation’s tax advisers.
“This is a shocking breach of trust, an appalling breach of trust,” he said. “And as a government that wants to be consultative where we can, it puts that sort of consultation at risk. It puts the quality of economic decision-making and policymaking at risk as well.”
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https://thenewdaily.com.au/finance/2023/01/26/australia-day-two-day-festival-kohler/
Alan Kohler: Happy Australia Day. Let’s make it a two-day festival
January 26 is a ridiculous national day, but it’s the one we’ve got, and we’re stuck with it.
It’s just the day in 1788 when the ships carrying convicts from England decamped from Botany Bay to Port Jackson because it was a better spot.
They had landed a week earlier, but the place was nothing like the nirvana James Cook and his botanist Joseph Banks had described. The anchorage was too shallow, there was little fresh water and the soil was poor, so Arthur Phillip decided to check out an inlet 10 miles up the coast.
Cook had sailed into Botany Bay by chance, but then went straight past Port Jackson as he headed north to claim the whole island continent for Britain in the Torres Strait on August 22, 1770, calling it New South Wales for some weird reason. Apparently, he thought it looked a bit like South Wales.
He was in the neighbourhood to observe the transit of Venus from the Pacific Ocean, for which he was paid a bonus of 100 guineas, and first touched Australian soil at Point Hicks in what became Victoria on April 19, 1770, after spending time in New Zealand.
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https://www.afr.com/politics/we-have-to-talk-about-adolf-hitler-20221208-p5c4wf
We have to talk about Adolf Hitler
The Nazi dictator has gone from being the worst embodiment of evil in human history to just another meme to be exploited in our social media and petty political skirmishes.
Andreas Kluth
Jan 25, 2023 – 5.09am
We could try to just dismiss people such as Ye, the celebrity formerly known as Kanye West, as unhinged. After all, American talk shows – like the one on which Ye slavered his latest drivel from underneath the black ski mask he was wearing – teem with bigoted twaddle. Nobody takes that stuff seriously, right?
But ask yourself how one of the few remaining Holocaust survivors would hear the words Ye uttered. Or, for that matter, how one of the many Holocaust deniers will now use them. No, we can’t just call Ye and his ilk deranged and move on. We’ve got a problem.
Ye’s topic was Adolf Hitler. The rapper apparently sees the Fuehrer as yet another right-wing victim of the woke and lamestream media’s fake news. “Every human being has something of value that they brought to the table, especially Hitler,” Ye insisted. “There’s a lot of things that I love about Hitler, a lot of things.” He clarified: “I am a Nazi.” More generally, Ye added, “we got to stop dissing the Nazis all the time.”
A few days earlier, Ye and another anti-Semitic Holocaust denier, Nick Fuentes, had dined with Donald Trump at the former US president’s resort in Florida. But it’s not only the odious bully pulpit that comes with celebrity that makes these haters dangerous. It’s the way they simultaneously propagate and embody a preexisting trend toward general ignorance and bad faith, the preconditions for a resurgence in anti-Semitism, racism and hate.
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Xi says China-Australia ties heading in ‘right direction’
Andrew Tillett Political correspondent
Jan 26, 2023 – 5.57pm
Canberra | Chinese President Xi Jinping has sent a fresh signal about the revival of the bilateral relationship with Australia, saying ties are heading in the “right direction” in an Australia Day message.
Prime Minister Anthony Albanese declined to comment on the diplomatic courtesy note from Mr Xi to Governor-General David Hurley.
But it comes just days after it was revealed Trade Minister Don Farrell would hold a virtual meeting with his Chinese counterpart in coming weeks to discuss Beijing’s trade sanctions that have nobbled $20 billion worth of exports to China.
State-run news agency Xinhua said Mr Xi sent a message to Governor-General Hurley to mark Australia Day. The Chinese leader said he attached “great importance to the development of relations between the two countries”.
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https://www.afr.com/politics/federal/the-voice-is-not-going-to-fix-alice-springs-20230126-p5cfm7
The Voice is not going to fix Alice Springs
Any policy which does not increase economic participation and independence is a waste of time and money.
Nyunggai Warren MundineI ndigenous advocate
Jan 26, 2023 – 2.10pm
This week senior politicians, including Prime Minister Anthony Albanese, descended on Alice Springs amidst an escalating crisis of alcohol related violence and crime in Aboriginal communities. This crisis is not a surprise. Last year, alcohol bans were lifted in hundreds of town camps, remote communities and homeland communities across the Northern Territory and the Albanese government proudly abolished cashless welfare across the country. Many Aboriginal people, including Senator Jacinta Price and myself, warned that abolishing these measures would be a disaster. And here we are.
Rather than take responsibility and admit error, Albanese travelled halfway across the country to deliver mealy-mouthed statements about the problem being “complex” and people need to be “treated with respect”. How about showing some respect to the women and children living in daily fear of violence and abuse?
Bizarrely, Albanese also thought this would be a good opportunity to plug his proposed Voice to parliament. As if that will change any of this.
It won’t. The Voice to parliament won’t lead to any practical improvements in Aboriginal lives.
The problems in Alice Springs aren’t hard to understand. The world over, social breakdown, family violence and abuse, drug and alcohol abuse go hand in hand with kids not going to school, adults not in work and chronic intergenerational welfare dependency. And the only way to lift Aboriginal people – any people – out of this is economic participation.
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Division over Voice as huge crowd turns out for Invasion Day rally
By Bianca Hall
January 26, 2023 — 5.23pm
Standing before a crowd stretching further than the eye could see, Alkira Austin’s voice wavered only for a moment.
“My father was forcibly removed [from his family],” she said.
“In 2011 he received a state apology, and 12 years later, one in nine Aboriginal babies under the age of one are still being removed by the state government. This is the worst proportion in the country and more than double the national average ... stop stealing our babies!”
Anger, despair and pride filled central Melbourne on Thursday, where tens of thousands of people created a human sea of black, red and yellow as they marched from Parliament House to Federation Square as part of the annual Invasion Day rally. Organisers said it was the biggest march to protest Australia Day – and injustices faced by Aboriginal people – yet.
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Has investing’s only ‘free lunch’ lost its lustre?
By John Collett
January 28, 2023 — 5.00am
Diversification is often described as the only free lunch in investing, but the strategy failed to protect investors last year when almost all investments lost money.
Even investments that typically perform well in times of high inflation, such as bonds and gold, failed to provide protection to investors last year. That failure has led some to question the future of traditional diversification.
Minh Tieu, the head of ETF capital markets, Asia-Pacific, at Vanguard, one of the world’s largest fund managers, defends the diversification strategy, saying one negative year of returns does not mean diversification is dead – far from it.
“Sticking with a diversified asset allocation and avoiding the urge to time the market is the best way to achieve long-term investment success, no matter which asset class is predicted to outperform,” Tieu says.
Just how dismal a year it was for investors is best illustrated by the performance of the typical balanced superannuation investment option – the option that most people have. It is designed to produce steadily compounding returns by spreading the money around.
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Disrupting the narrative: the case for taking Australia’s colonial statues down
By Bronwyn Carlson and Terri Farrelly
Updated 6:39AM January 28, 2023, First published at 12:00AM January 28, 2023
The toppling of statues is nothing new. For as long as we have erected monuments, we have also defaced and destroyed them. Ancient civilisations removed commemorations that no longer reflected their social values, and so, too, have modern populations.
The French Revolution saw the destruction of many monuments representing the monarchy. The US Army televised its toppling of the statue of Saddam Hussein in Baghdad in 2003, an event that, even more than the death of the leader by hanging in 2006, signified the end of Iraq’s Baath dictatorship.
For a long time, Aboriginal and Torres Strait Islander peoples have been registering their discontent with colonial commemorations (statues, plaques and the like) and who and what they honour, including the claim that Captain James Cook “discovered” this country and the myth of peaceful settlement.
These very arguments divided the nation during the 1988 bicentenary and during the “history wars” of the 1990s. In fact, as professor of history Mark McKenna has pointed out, all that is remarkable about this debate is the fact that a public declaration that Cook did not discover Australia is still “capable of causing controversy” – although “controversy” is clearly an understatement.
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Beijing rapprochement: We should trade very carefully
12:00AM January 28, 2023
All the signs point to the beginning of a rollback in Australia’s testy relations with China after a three-year deep freeze, lowlighted by the almost complete absence of official contact, Beijing’s wolf-warrior diplomacy and an unprecedented $20bn-a-year coercive trade hit on a wide range of Australian exports.
Trade and Tourism Minister Don Farrell is set to meet his Chinese counterpart in the coming weeks. Expectations are high that this will be the catalyst for a relationship reset that has broad, in-principle domestic support.
A good outcome would play to Labor’s narrative that only it can restore bilateral ties gratuitously damaged by the Coalition’s aggressive rhetoric and inability to patch up differences.
“We seek to co-operate where we can and will disagree where we must,” says Foreign Minister
Penny Wong, in a now familiar mantra intended to reassure Australians that the government can achieve this goal without compromising core national interests.
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What to expect from the Yes and No campaigns for the Voice
January 29, 2023 — 5.00am
The campaign for an Indigenous Voice to parliament will launch next month with an onslaught of door-knocks, letter-box drops, street stalls and online advertisements, as it looks to counter two narratives that could derail the referendum.
As the ‘Yes’ side prepares for the advertising and campaign blitz, the organising committee behind the ‘No’ side will adopt a strategy of supporting constitutional recognition while opposing the Voice.
Uluru Statement co-author and constitutional lawyer Megan Davis said the “week of action” starting on February 20 - which will act as the launch of the Yes side’s campaign - will be the first time many Australians have the opportunity to hear about the Voice.
“It will be the beginning of the momentum for ‘Yes’ as we move towards the referendum at the tail end of the year,” she said.
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COVID-19 Information.
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ResMed hits $1.4b in quarterly revenue
Yolanda Redrup Reporter
Jan 27, 2023 – 9.58am
Sleep disorder and breathing devices company ResMed has significantly increased device production in the last few months, as its supply chain improved but competitors struggled, leading to a 10 per cent jump in revenue in the first half of 2023.
For the half, ResMed’s revenue grew to $US1.98 billion ($2.8 billion), driven by a strong second quarter, in which revenue leapt 16 per cent to more than $US1 billion, meeting analyst consensus estimates.
The San Diego-based, dual-listed company makes products to help treat sleep apnoea, chronic obstructive pulmonary disease (COPD) and asthma. It also makes software products to support patients and clinicians.
Its growth was driven by the Americas region - US, Canada and Latin America - which had strong devices growth in the half, with revenue up 32 per cent.
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Climate Change.
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No entries in this category
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Royal Commissions And The Like.
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The Voice is in danger of being drowned out by the noise
Politics faces the spectre of people making up their minds on a defining issue before a date is even set.
Laura Tingle Columnist
Jan 27, 2023 – 5.06pm
January 26 is not the best day to gauge the progress of a campaign to recognise Indigenous Australians in the Constitution, and to establish a body that gives them a platform from which to be heard by the government and the parliament on issues that affect them.
It is a raw day for Indigenous Australia, and equally a day when many Australians feel entitled to celebrate the country as it is, without reflecting on its historic significance.
Still, it would have been dispiriting to supporters of the Voice to see the day marked by an evolution in opposition from a position of there not being enough “detail” about how such a body could work, to a sense that the underlying constitutional question of recognition – and why that was important – had got lost in the melee.
Equally, there were hostility and clear divisions within the First Nations community, with some not only arguing against supporting the Voice because they don’t believe it will change anything, but claiming it would actually undermine Indigenous rights.
A lot of people will not have been paying much attention over the summer to the Voice debate, despite the increasing noise it has been generating.
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National Budget Issues.
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https://thenewdaily.com.au/opinion/2023/01/23/liberal-party-future-kohler/
6:00am, Jan 23, 2023 Updated: 6m ago
Alan Kohler: The Liberal Party is a retirement village for male baby boomers
The Liberal Party’s biggest problem, unmentioned in the review of the 2022 election result by Senator Jane Hume and Brian Loughnane, is that young people aren’t voting for it.
It has a problem with women as well, of course, but millennials are not voting for it and they are no longer getting more conservative as they get older, which means that conservative parties face inexorable long-term oblivion.
The Liberal Party has become a retirement village for male baby boomers like me, and like all residents of retirement villages, we’re not long for the world.
That would be fine if Winston Churchill’s quote were still true: “If a man is not a socialist by the time he is 20, he has no heart. If he is not a conservative by the time he is 40, he has no brain.”
Whether or not Churchill actually said that, it has long been a truism of politics that people tend to get more conservative as they get older, but that’s not true any more.
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Recession warning over next rates hike
Updated 7:48AM January 23, 2023, First published at 10:30PM January 22, 2023
Households are “at the mercy” of a Reserve Bank that, in its quest to restore its inflation-fighting credentials, risks tipping the economy into recession this year if it chooses to keep hiking rates.
Ahead of key consumer price growth data on Wednesday that could show inflation ended last year as high as 7.5 per cent, Deloitte Access Economics’ flagship Business Outlook report warned that a “dramatic” slowdown was already likely in 2023, even without the widely anticipated ninth straight rate hike to 3.35 per cent at the RBA’s board meeting on February 7.
The average variable mortgage holder with half-a-million dollars in debt will have their annual repayments raised $10,000 as a result of the past year’s interest rate rises.
Deloitte partner Stephen Smith said a collapse in household spending through the first half of this year would drag growth from 3.6 per cent last year, to just 1.7 per cent in 2023.
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Economy slows, inflation peaked: NAB
DAVID ROGERS 24 Jan 2023
NAB’s monthly business survey shows the economy was beginning to slow and inflation was passed its peak as of December, reinforcing market expectations that a peak in interest rates is near.
Business conditions fell 8 points to be up 12 index points, with trading, profitability and employment down. Confidence rose 3 points to be down 1 index points, but remained well-below average.
Confidence rose in all industries except transport and utilities. Leading indicators fell slightly, with forward orders and capacity utilisation down. Forward orders fell in all industries except mining and retail.
“Forward orders have softened over recent months, likely reflecting a cooling in demand, while any backlogs are being worked through,” said NAB chief economist, Alan Oster.
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Post-lockdown boom fades as rates hurt businesses
12:06PM January 24, 2023
Businesses reported deteriorating conditions into the end of 2022, as the post-lockdown economic boom fades and surging interest rates begin to bite.
NAB’s latest survey of corporate Australia showed firms were still enjoying a “healthy” operating environment in December, but also revealed a “significant easing” in conditions.
Confidence, however, remained deeply negative despite recovering a little December, the report showed.
NAB Chief Economist Alan Oster said “after holding up relatively well in recent months, business conditions eased significantly in December with the trading conditions, profitability and employment indexes all falling”.
“The falls were significant and occurred in every sector,” Mr Oster said.
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Travel, power prices rise as inflation hits 7.8pc
Inflation accelerated to 7.8 per cent in the year to December, from 7.3 per cent in September.
The Australian Bureau of Statistics’ consumer price index rose by 1.9 per cent in the three months to December, versus 1.8 per cent in the previous quarter.
The biggest contributors to inflation in the final quarter of 2022 were a 13 per cent jump in holiday travel and accommodation, while electricity prices jumped by 8.6 per cent.
Leading into today’s CPI reading, financial markets were pricing in a 40 per cent probability of a rate hike from 3.1 per cent to 3.35 per cent when the RBA board meets on February 7.
But the stronger than anticipated final inflation reading for 2022 suggests that a rate hike next month is now more likely.
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Inflation ‘peaks’ near 33-year high, ‘cements’ rate rises
Ronald Mizen Economics correspondent
Jan 25, 2023 – 12.08pm
Annual inflation jumped to a near 33-year high 7.8 per cent in the December quarter, below the Reserve Bank’s 8 per cent forecast, but economists said underlying price momentum cemented more interest rate rises.
Headline CPI was up 1.9 per cent over the quarter, driven largely by significant price rises in both domestic and international travel and accommodation, and a long-flagged increase in electricity bills.
Treasurer Jim Chalmers said it was his expectation that inflation had now peaked, but warned “extreme price pressures” were not yet a thing of the past for stressed household budgets.
“Inflation will still be higher than we’d like, for longer than we’d like, on the other side of peak inflation,” Dr Chalmers told reporters in Canberra.
The result in the latest Australian Bureau of Statistics data was well above economist expectations of a 7.5 per cent through the year growth, but below the RBA’s most recent forecasts.
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Inflation green lights $200,000 lift in tax-free super
5:21PM January 25, 2023
A stronger-than-expected inflation number means investors will now be able to put an extra $200,000 into tax-free superannuation this year.
The extraordinary “double indexation” – which kicks in on July 1 – means the total amount that can be held in individual super accounts where the earnings are tax free will move up from $1.7m to $1.9m.
Such a significant jump in so-called super caps will create a headache for the government as special tax treatment inside super is already under attack and there is major pressure to cut back on tax breaks for wealthier investors.
The sheer pace of the inflation increase over 2022 has caught many investors and financial advisers by surprise. The tax-free super cap was introduced in 2016 and the original limit was $1.6m.
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Back to the drawing board after wake-up call
6:07AM January 26, 2023
Just as Reserve Bank governor Philip Lowe and Jim Chalmers were hoping for a sign that inflation was loosening its grip on the economy, Wednesday’s consumer price report will force them to stick with policy choices they would much prefer not to make.
Dr Lowe would dearly like to press pause on the most aggressive rate cycle in three decades, but the official data showing consumer price growth ended the year at 7.8 per cent and showed no signs of moderating comes as a wake-up call that the inflation challenge is as pressing as ever.
The end of the worst of the global energy crisis, falling shipping rates and declining demand for goods amid a worldwide slowdown were supposed to blunt cost-of-living pressures over coming months and allow the RBA to take its foot off the brake.
Instead, economists on Wednesday afternoon were adding extra rate hikes into their forecasts, saying a ninth consecutive increase next month was now a given.
With hundreds of billions in fixed-rate mortgages rolling off record low rates to much higher ones, there is a tsunami of higher interest repayments about to swamp family budgets.
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https://www.afr.com/policy/economy/chalmers-new-economic-blueprint-20230126-p5cflz
Chalmers’ new economic blueprint
John Kehoe Economics editor
Jan 27, 2023 – 10.30pm
Treasurer Jim Chalmers has unveiled a grand vision to revamp the nation’s long-standing market-based economic model, attacking “neoliberalism” and urging business to co-invest with government to deliver “values-based capitalism”.
Dr Chalmers criticised the free market economic ideology pursued by political conservatives and the “negative form of supply-side economics” prescribed by traditional economic institutions, including the International Monetary Fund and World Bank.
In a seminal 6000-word essay entitled “Capitalism after the Crises” due to be published by The Monthly on Monday, Dr Chalmers said markets were a positive and powerful tool, but had been poorly designed.
The philosophical assessment comes just weeks after the Albanese government’s intervention in the gas market to cap wholesale prices and the extension of multi-employer bargaining in workplaces.
It is in stark contrast to the economic approach of the successful Hawke-Keating Labor government, and provides a framework for the government’s thinking in a year when important decisions on budget spending and stage three tax cuts are expected.
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Chalmers’ new economic model means more market intervention
Treasurer Jim Chalmers has pivoted from previous governments in his philosophy on the best economic model for Australia’s future.
John Kehoe Economics editor
Jan 27, 2023 – 10.30pm
Treasurer Jim Chalmers has laid bare his philosophy to build a new economic model for Australia under the Albanese government.
Decoded, government will play a more active role in the economy, while co-opting business to help fund and implement Labor’s clean energy and progressive social agendas.
The policy details are so far vague beyond election commitments, but the direction of travel is made clear in his 6000-word essay for the progressive The Monthly magazine, “Capitalism after the Crises”.
Chalmers’ world economic view is borne out of perceived perpetual crises during his career in politics – the 2008 global financial meltdown, COVID-19 and now the energy and inflation shock.
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https://www.afr.com/policy/economy/capitalism-after-the-crises-20230126-p5cfni
My vision for a new values-based capitalism
Jim Chalmers Federal treasurer
Jan 27, 2023 – 10.30pm
In late October, just before the Albanese government’s first budget, a journalist I’ve known for two decades messaged me a quote from one of the earliest Greek philosophers, Heraclitus: “No man ever steps in the same river twice. For it’s not the same river, and he’s not the same man.”
She knew I had worked on or responded to sixteen budgets in government and opposition, but she also knew delivering a first would be something much more new than familiar. Experience would matter, but hers was a neat reminder not to assume that what had worked in the past would necessarily work in the present.
“We make our own new way across the river – rock-hopping and wading through the peril and polycrisis of 2023,” writes Jim Chalmers, who penned his essay at his home in Logan over the break.
Heraclitus’s words are especially salient and resonant for these times, and for that budget. As we put it together, the global economy was beginning a third crisis in 15 years, one which will play out more substantially in 2023.
This latest crisis, of global inflation, has already begun to force the bluntest and fastest interest rate increases since the inflation-targeting era began, and this could cause recession in some of the economies that matter most to us.
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Jim Chalmers playing the long game with intricate makeover of financial food chain
10:30PM January 27, 2023
Jim Chalmers believes in the genius of the market, but not so much that he’ll cede the levers of power to the caprice of supply, demand and the animal spirits of capitalism.
Eight months after Anthony Albanese won an election off a third of the popular vote and a safety-first, minimalist platform, Labor’s approach to governing is becoming clearer and riskier.
Intervention is back, as nations confront the “polycrisis” of rampant inflation, Covid-19, social dislocation, food shortages, climate change and war in Ukraine. Globalisation is disintegrating and the openness to trade and investment that has been the bedrock of higher living standards for decades is under strain.
Here, the Albanese government is empowering trade unions, boosting social welfare, reviving industry policy, putting clamps on gas producers, and using regulation and taxpayer funds to accelerate the transition to renewable energy.
Undoing the premium growth engine, which is not without its faults, may even be reckless given our inheritance. Yet Labor appears determined to break with the past.
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Paltry offerings for consumer savings rates deserves regulatory scrutiny
Banking reporter
January 28, 2023 — 11.54pm
The competition watchdog will put bank deposit interest rates under the microscope this year, after paltry rises in many savings account interest rates since the Reserve Bank began lifting rates last May.
So far, details of the probe are scant. Treasurer Jim Chalmers said earlier this month that he had flagged the issue with the Australian Competition and Consumer Commission (ACCC), but there are no public terms of reference yet.
Even so, the inquiry is welcome. Savings interest rates generally receive much less public scrutiny than home loans, which are a regular target of such inquiries. Perhaps because savings rates tend to fly under the radar, they have also been highly lucrative for the big four in the past year, by helping to boost margins.
By shining its light on savings accounts, the regulator might pressure the banks to explain why some deposit rate rises have been so minimal, and with luck, it might also raise awareness about how people can get a better return on their cash in the bank.
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Health Issues.
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Australia faces an era of unprecedented disease threat
Jill Margo Health editor
Jan 20, 2023 – 10.00am
As Australia comes out of the emergency phase of COVID-19, it is facing new health threats.
Established patterns of some viral respiratory diseases have been disrupted, new bacterial threats are causing concern and widespread flooding has public health experts worried about the Japanese encephalitis virus.
They are worried because stagnant water provides a good breeding ground for the mosquitoes that carry this virus and can then transport it around the country.
No one knows if the various infectious diseases will settle into their old seasonal patterns, so they can be better anticipated and managed.
Take the respiratory syncytial virus (RSV), which can have a serious impact on infants, young children and people over 65. In older adults, it can cause pneumonia and worsen lung disease and heart failure.
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Anthony Albanese says outdated Medicare needs ‘urgent shake up’
Medicare has become an outdated system that needs an urgent fix, Prime Minister Anthony Albanese says.
January 23, 2023 - 10:26AM
Medicare will undergo its most significant overhaul since its inception, opening up primary care delivery to nurses and pharmacists.
Prime Minister Anthony Albanese said the Medicare system his government had inherited was “struggling to keep up”.
Bulk billing rates plummeted by seven per cent in the past year, and are continuing to fall as general practice surgeries are left with no choice but to charge higher fees to supplement Medicare rebates.
In addition, patients are struggling to get timely appointments with their GPs, with waiting times blowing out to more than a month for some doctors, due to a slimmer workforce and exploding demand.
Mr Albanese said too many people were turning up to emergency departments because they couldn’t get access to a GP.
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Nurses, pharmacists held back by red tape, turf wars: health minister
January 23, 2023 — 3.59pm
Key points
· The health minister has flagged the government is considering a wraparound model of care that enhances the role of all healthcare professionals.
· His comments were welcomed by nurses and the allied health sector.
· But the college of GPs said it was concerned such changes could fragment the health system and leave patients worse off.
Health Minister Mark Butler says too much red tape and too many turf wars are limiting nurses, pharmacists and other allied health professionals from stepping in to fix a Medicare system under strain from rising costs and demands.
As the federal government pursues an overhaul of Medicare, Butler warned “more of the same is not going to cut it” and flagged the government was considering a wraparound model of care that enhanced the role of all healthcare professionals.
His comments were welcomed by nurses and the allied health sector – which includes optometrists, physiotherapists and dieticians – which called for a team-based approach to healthcare and said their members were willing to step up.
But the college of GPs said it was concerned such changes could fragment the health system and leave patients worse off.
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Falling rate of bulk-billing sparks urgent call for overhaul of Medicare
January 29, 2023 — 5.00am
One-fifth of Australians report that their GP has stopped bulk-billing and more than half say they go to a doctor who charges them out-of-pocket expenses, amid mounting pressure from the medical industry on the federal government to raise the Medicare rebate.
More than three-quarters of Australians support increasing the rebate to encourage more GPs to offer bulk-billing, out-polling both increased hospital funding and out-of-hours clinics as a way to fix the crisis.
The exclusive findings in the Resolve Political Monitor comes ahead of a national cabinet meeting on Friday where state leaders will ask Prime Minister Anthony Albanese to reform Medicare.
NSW Premier Dominic Perrottet and Victorian Premier Daniel Andrews have united to pressure the federal government to improve access to GPs, including by changing Medicare schedule rebates that have failed to keep up with inflation
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The gift of life … straight from the heart
Updated 7:29AM January 28, 2023, First published at 10:00PM January 27, 2023
Alexandra Moroianu was not sure she would make it.
In the cardiac ward of a Perth hospital waiting for a donor heart, adrenaline fed through her veins from a drip was the only thing keeping her alive as her failing heart struggled to pump blood.
“I was very grey, I was so pale that I was see-through,” Ms Moroianu says.
“My heart was so enlarged, it would shake my body with every pump.”
Although doctors did not know why their young patient’s heart was failing, they knew she would not survive long without a transplant. She was placed on the waiting list, but in Western Australia hearts are donated only about once every four or five weeks, and not all donated hearts are suitable. The east coast was too far away for a donor heart to be transported and survive.
Deprived of oxygen, the precious organs deteriorate fast – within four to five hours – and it’s a race against time. Three out of four donor hearts nationally are currently discarded.
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Medicare reform is overdue and must be handled with great care
Updated 4:13PM January 28, 2023, First published at 12:00AM January 28, 2023
Medicare’s status as a national insurance scheme that stands as a bulwark against inequality and guarantees universal access to healthcare has long been cemented in the national psyche. Labor has sought to capitalise on its status as the party synonymous with the birth of the cherished national scheme at every opportunity, especially since the May election.
While Bill Shorten’s failed 2016 and 2019 election pitches relied heavily on a “Mediscare” campaign that railed against Liberal cuts, Anthony Albanese’s Labor put more meat on the policy bone at last year’s poll and promised to “strengthen” the national health insurance scheme and usher in a “21st century Medicare”.
Now federal Health Minister Mark Butler finds himself at the pointy end of that promise, with a monumental and highly complex policy task ahead of him as it becomes clear Medicare needs far more than just strengthening, with bulk billing rates plummeting and primary care facing an enormous looming workforce shortage.
A report of the Strengthening Medicare taskforce convened by Labor immediately after the election and made up of peak medical and consumer groups, public servants and health economists is soon to be publicly released amid consensus across the sector that the 40-year-old fee-for-service rebate model of funding primary healthcare must be overhauled.
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International Issues.
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https://www.afr.com/world/europe/pressure-mounts-on-germany-over-tanks-for-ukraine-20230122-p5cei6
Pressure mounts on Germany over tanks for Ukraine
Andrew McCathie
Updated Jan 22, 2023 – 2.47pm, first published at 2.38pm
Berlin | German is under renewed international pressure after it left open a decision on dispatching its Leopard 2 battle tanks to Ukraine, which Kyiv sees as vital to a new military offensive against a regrouping Russia.
Berlin and its Western allies failed to agree on supplying the tanks at a meeting of the 50-member Ukraine Contact Group on Friday (Saturday AEDT). The impasse is testing the unity of the pro-Ukraine alliance and threatens to leave Germany isolated on the international stage.
Ukrainian President Volodymyr Zelensky has appealed to Germany and its allies for a speedy decision on the highly mobile Leopard tanks.
However, Berlin has veto power over any decision to export the tanks and Chancellor Olaf Scholz’s government has appeared reluctant so far to authorise that for fear of provoking Russia.
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https://www.afr.com/world/europe/berlin-must-send-tanks-20230122-p5cek7
Berlin must send tanks
Germany is hiding behind its history to shirk its responsibilities to the present.
Jan 22, 2023 – 6.51pm
Australia has made invaluable contributions to Ukraine’s war effort in prized Bushmaster vehicles and the training of soldiers. The West’s resolve to support Ukraine, and the flow of weapons, is stronger than ever.
The bottleneck is Berlin’s permission to send the Ukrainians some of the Leopard main battle tanks Germany has sold in large numbers to other European allies. The Scholz government fears this will “provoke” Vladimir Putin, as if that’s possible any more.
The British are sending some of their few Challenger 2 tanks to give Berlin some political cover, but it has not worked. Instead, Putin will be comforted that even after Ukraine has humiliated his armies, some European capitals are still too afraid to confront him.
During the Cold War, Western powers stuck their necks out to keep West Berlin free against all manner of threats, allowing Germany to eventually reunite around its old capital. Is Berlin really going to now shirk a difficult choice that would help preserve the freedom of others?
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https://www.afr.com/world/pacific/meet-chris-hipkins-new-zealand-s-accidental-pm-20230122-p5cekn
Meet Chris Hipkins, New Zealand’s accidental PM
Ben McKay
Jan 22, 2023 – 3.42pm
Pragmatist. Hard worker. Political warrior. Party man.
Ask Chris Hipkins’ colleagues what they think of the new New Zealand prime minister, and the same responses come up.
Labour through-and-through. Can make and take a joke. Diligent, talented and dependable. A details man.
Ask them if they thought he’d be prime minister, and the answer is also the same: never.
In his 15 years in parliament, Labour has elected five leaders. Hipkins was never a candidate or even mentioned as such, until Jacinda Ardern’s shock resignation this week.
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Negotiated ‘peace’ better than endless carnage in Ukraine
Updated 7:21AM January 23, 2023, First published at 12:00AM January 23, 2023
General Mark Milley, chairman of the US Joint Chiefs of Staff, delivered an uncomfortable assessment last week of Ukraine’s chances of ejecting Russia: slim to zero. “From a military standpoint, I still maintain that for this year it would be very, very difficult to militarily eject the Russian forces from every inch of Ukraine … That doesn’t mean it can’t happen; doesn’t mean it won’t happen, but it’d be very, very difficult,” he said, adding the war “is likely to end in a negotiation”.
Milley was attacked for his supposedly defeatist attitude by the usual foreign policy grandees, but as the 12-month mark of the war looms, after tens of thousands of deaths on both sides, a reality check is more than welcome.
For almost a year we’ve read how Vladimir Putin is on the verge of death and Russia, enfeebled by Western sanctions, is about to collapse. None of this has happened, for all the billions spent and lives lost, and there’s precious little evidence it will.
The more likely, however unappealing, scenario is that Russia gets to keep the territory it controls, regardless of how long the conflict goes on.
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A look inside the Leopard 2 tanks that matter so much to Ukraine
Experts say just 100 of the German-made battle tanks would make a key difference in the country’s war with Russia. Here’s four reasons why they are so important.
Jamey Keaten and Frank Jordans
Jan 24, 2023 – 8.55am
Geneva | Following intense pressure from its allies, Germany appears to be inching toward approving deliveries of high-tech Leopard 2 main battle tanks that Ukraine and its biggest Western backers hope will boost Kyiv’s fight against Russian invaders.
Over the weekend, German Foreign Minister Annalena Baerbock said Berlin would not get in the way if Poland – arguably Ukraine’s most vocal supporter among European Union neighbours – wanted to ship Leopard 2 tanks from its arsenal across the border into Ukraine. And Germany is not ruling out supplying such tanks to Ukraine itself, cautioning however that the implications of such a step need to be carefully weighed.
Here’s a look at what those tanks might mean for Ukraine’s defence against Russian forces – and hopes for driving them out.
What is the Leopard 2?
Germany’s Krauss-Maffei Wegmann, the manufacturer of the Leopard 2, touts it as “the world’s leading battle tank” that for nearly a half-century has combined aspects of firepower, protection, speed and manoeuvrability, making it adaptable to many types of combat situations.
The 55-tonne tank has a crew of four and a range of about 500 kilometres, and top speeds of about 68 kilometres per hour. Now with four main variants, its earliest version first came into service in 1979. Its main weapon is a 120mm smooth bore gun, and it has a fully digital fire-control system.
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Crisis, what crisis? Luxury boom shows staying power of ultra-rich
For the world’s richest, their money – and their lifestyles – really do seem to reflect a new Gilded Era. I can’t help but wonder when, and how, it will all end.
Rana Foroohar Contributor
Jan 24, 2023 – 9.38am
We may be heading for a global recession, but there’s one group of people who can’t seem to stop spending – the world’s richest.
While retail sales in general have been falling, and the stock market was down by 20 per cent last year, spending on luxury goods and experiences actually grew by roughly the same amount in 2022, as wealthy individuals unleashed their animal spirits.
The data, which comes from a new Bain & Company study of the luxury market, challenges much of our conventional wisdom about luxury spending and the rich in general.
For starters, last year’s boom in the €1.38 trillion ($2.1 trillion) market was driven almost entirely by Gen Z and Y, who dominated the personal goods market (including luxury clothing, bags, jewellery, etc). “The spending of Gen Z and even the younger Generation Alpha is set to grow three times faster than other generations through 2030,” according to Bain. So much for youthful worries about the materialism of their predecessors.
Further confounding our assumptions, this luxe boom wasn’t fuelled by China, which was still in lockdown for much of last year, but by the US, which led the market. And within America, it was New York that doubled down on its status as the luxury capital of the world.
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Gates says Putin’s war has destroyed world’s sustainability goals
Campbell Kwan Breaking news reporter
Jan 23, 2023 – 4.23pm
Climate change crusader Bill Gates says the Russia-Ukraine war has all but guaranteed the United Nations’ 2030 sustainable development goals will not be met. Those 17 goals, which Australia adopted in 2015, include ending poverty and ensuring access to low-cost sustainable energy globally.
Speaking at the Lowy Institute on Monday, Mr Gates said Russia’s invasion of Ukraine had distracted the world’s attention from issues such as poverty and climate change, and countries were funnelling money and governance into war efforts instead of those goals.
“The countries involved will miss ... every one of those goals,” he said.
Mr Gates warned that efforts should now be focused on limiting warming to 2.5 degrees, saying the world could no longer cut warming to less than 1.5 degrees.
He said the effects of global warming had yet to match diseases such as malaria, which kills 400,000 children annually, but it could soon be as dangerous if left unchecked.
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Kishida prioritises arms buildup, lifting birthrate
Mari Yamaguchi
Jan 23, 2023 – 5.54pm
Tokyo | Prime Minister Fumio Kishida said on Monday that Japan faced the severest security environment in the region since the end of World War II, and pledged to push a military buildup under a newly adopted security strategy over the next five years.
He said he would also tackle the country’s rapidly declining births so it could sustain national strength.
Mr Kishida’s government in December adopted key security and defence reforms, including a counterstrike capability that makes a break from the country’s exclusively self-defence-only, postwar principle. Japan says the current deployment of missile interceptors is insufficient to defend it from rapid weapons advancement in China and North Korea.
In his speech opening this year’s parliamentary session, Mr Kishida said active diplomacy should be prioritised, but that it required “defence power to back it up”. He said Japan’s new security strategy was based on a realistic simulation “as we face the most severe and complex security environment since the end of World War II and a question if we can protect the people’s lives in an emergency”.
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The software giant warning Ukraine where Russia plans to strike
Political and international editor
January 24, 2023 — 5.00am
They call them “hunters”. An international network of cyber sleuths, reporting to a US headquarters, study their systems maps day and night, searching for signs of new Russian attacks on Ukraine’s networks.
Often, Russian cyber targeting of a facility is prelude to a missile strike, so it’s a matter of urgency to let the Ukrainian authorities know what the hunters are seeing.
For instance, on February 28, a media company in Kyiv was hit with a disabling Russian cyberattack. The day after, a Russian missile slammed into a TV transmission tower.
“We were able to successfully give Ukraine enough insight so they could continue to message their people [through TV broadcasts despite the assault],” says a person with overview of the program. “They’ve proved immeasurably helpful to Ukraine.”
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How China’s reopening will shake up the global economy
Senior business columnist
January 23, 2023 — 11.56am
There are a lot of conflicting views about the outlook for the global economy this year, and a lot of conflicting developments to complicate that outlook.
It does appear that the outcomes are likely to be better than once feared. Only a few months ago it appeared the world was on the brink of a deep recession.
Now, with China’s economic reopening, Europe’s success (with the help of a milder than usual winter) in blunting the worst of an energy crisis, the apparent peaking of inflation rates in the developed economies and a substantial depreciation of the US dollar, the outlook is somewhat less threatening.
That doesn’t mean that there won’t be recessions in key economies but the prospect of a “soft” or “softish” landing remains alive.
The biggest development has been China’s abrupt dropping of its harsh “zero COVID” policies, which had depressed China’s economic activity over the past three years and produced rolling disruption of global supply chains.
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Why passive investing makes less sense in the current environment
This is an investment world in which greater selectivity, smart structuring and dynamic asset allocation trump more often the lower fees on passive vehicles.
Mohamed El-Erian Global financial commentator
Jan 25, 2023 – 8.16am
Should the vehicles that investors choose to place their money be a function of the investing environment? This question is not asked often enough by investment committees, which tend to focus on asset allocation issues, model portfolios and manager selection.
Yet it is a question that has become a lot more important for generating high risk-adjusted returns, particularly given the massive shift of money from active to passive investment strategies in recent years.
A simplified illustration of why this is the case comes from my student days. Armed with a Eurail-type pass, I travelled the European continent and, like many others, took advantage of the fixed menu offered by restaurants.
They were diversified, low-priced and did not require much local knowledge to choose from a long list of dishes. In short, it was a good way to fill my stomach and keep expenses down.
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Tank battalions headed for Ukraine, as US and Germany finally commit
Hans van Leeuwen Europe correspondent
Updated Jan 26, 2023 – 6.05am, first published at 3.36am
London | Washington and Berlin will send almost 50 tanks to Ukraine, ending weeks of dither and debate, as the Kremlin vowed make them “burn”.
President Joe Biden said the US would send a 31-strong battalion of its M1 Abrams tanks, worth $US400 million ($564 million), to Ukraine. He described them as “the most capable tanks in the world”, though also “extremely complex to operate and maintain”.
That came after German Chancellor Olaf Scholz committed 14 Leopard 2A6 tanks, having all along stuck to his line that he would do so only if the US made a pledge of its own.
Mr Scholz also signalled that Germany would allow other countries to ship their own German-made Leopard tanks to Ukraine.
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Joe Biden and Olaf Scholz pledges help set up ‘tank coalition’ for Ukraine
By Oliver Moody and Alistair Dawber
The Times
10:52PM January 25, 2023
Germany and the US are getting ready to supply Ukraine with advanced Western battle tanks, paving the way for their allies to follow suit and deliver a potentially decisive boost to Kyiv’s self-defence.
On Tuesday night, local time, American officials indicated the Biden administration was ready to give the Ukrainians 30 M1 Abrams main battle tanks, after months of stonewalling their appeals for the armour.
Then on Wednesday morning, also local time, Germany yielded to sustained international pressure and confirmed it would send a company of 14 Leopard 2A6 tanks.
Importantly, Berlin also granted approval for other European countries to send tanks from their own stocks to Ukraine. “The aim is to quickly assemble two tank battalions with Leopard 2 tanks for Ukraine,” government spokesman Steffen Hebestreit said.
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https://www.afr.com/policy/economy/things-may-be-better-but-they-are-far-from-good-20230126-p5cfo9
Things may be better, but they are far from good
Business is feeling more cheerful about the year ahead, but many unresolved global challenges remain.
Martin Wolf Columnist
Jan 26, 2023 – 12.26pm
One always learns something from the World Economic Forum. At the very least, one learns what rich and powerful people think is happening. They may be wrong: indeed, they often are. The world is, as we have recently been reminded, full of surprises. But here are my reactions.
The business people are feeling more cheerful. Yes, they are still suffering from the legacies of COVID-19, the inflationary post-pandemic reopening and Russia’s assault on Ukraine.
They are still threatened by the hostility between the US and China. But the news has been more positive: Ukraine has been doing better in its fight for survival; the lunatics fared worse than expected in the US midterm elections; gas prices have tumbled; headline inflation may have peaked; recession worries have lifted; and China has reopened.
With that background, let us consider some of the more important topics, starting with the economic outlook.
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Russia unleashes fury after Ukraine secures tanks
Tom Balmforth and Ivan Lyubysh-Kirdey
Jan 27, 2023 – 9.38am
Kyiv | Ukrainian civilians raced for cover on Thursday (Friday AEDT) as Russia fired a barrage of missiles and drones across the country, killing at least 11 people, according to officials, a day after Kyiv won Western pledges of battlefield tanks to combat Moscow’s invasion.
The German and American announcements that they would send dozens of tanks infuriated Russia, which in the past has responded to apparent Ukrainian successes with massed air strikes that left millions without light, heat or water.
The Kremlin said the promised delivery of Western tanks was evidence of growing “direct involvement” of the United States and Europe in the 11-month-old war, something both deny.
Ukraine said it had shot down all 24 drones sent overnight by Russia, including 15 around the capital, and 47 of 55 Russian missiles – some fired from Tu-95 strategic bombers in the Russian Arctic.
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Dystopian future: The brave new world according to the world’s economic elite
By Ambrose Evans-Pritchard
January 26, 2023 — 7.15pm
Data technology is accelerating from a polka to a lightning-fast tarantella. Algorithms will start to “help” and then displace doctors over the next decade because they are statistically better at diagnosis. Nurses will last longer, indispensable for care and the human touch. This will slash health care costs.
Routine journalism will be usurped by ChatGPT and its ilk, the talk of the World Economic Forum 2023 (WEF) in Davos. It can already write passable news articles at a fraction of a reporter’s salary. Before long, it will compete with commentators, and I will retire to our goat farm in France. (chèvres poitevines, if you were wondering). Whether they realise it yet or not, TV news anchors are replaceable too. I learnt that it is already possible to create what looks like human beings talking on screen.
Artificial intelligence (AI) is taking over our lives even faster than I realised. Breakthroughs have happened over the past five years that are suddenly unleashing volcanic social change. “We have the emergence of a completely new set of technology, which I think is going to be revolutionary. AI is just at the beginning of the S-curve,” said Microsoft’s Satya Nadella. “The internet maybe took 30 years to spread around the world, maybe the cloud and mobile took 15 years, and now I think we’re talking months,” he said.
He predicts that the latest tech will be a powerful “deflationary force”. If you think that the internet, the cloud, and digital commerce, were behind the great disinflation from 1990 to 2020, be prepared for the next tidal wave.
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Ancient Egyptian treasures hailed as biggest find for years
By Magdy Samaan
The Times
11:00AM January 27, 2023
Statues of Egyptian priests, officials and servants and an exceptionally well-preserved sarcophagus dating from 4300 years ago have been uncovered in an ancient necropolis near the Nile, in one of the largest such discoveries of recent years.
Zahi Hawass, an archaeologist and former Egyptian minister of antiquities, announced the findings on Thursday from the excavated tombs of the Gisr el-Mudir necropolis in Saqqara, southwest of Cairo, one of the earliest known stone-built structures in the world.
The tombs date back to the Fifth and Sixth dynasties of the Old Kingdom, before 2300BC – about 1000 years before the birth of Tutankhamun.
Hawass, 75, said the most important discovery was a tomb decorated with scenes of daily life, belonging to a man named Khnumdjedef, who was an inspector of officials, a supervisor of the nobles and a priest in the pyramid complex of Unas – the last king of the Fifth Dynasty, who ruled from 2375 to 2350BC.
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https://www.afr.com/policy/economy/the-west-will-rue-its-protectionism-20230126-p5cfln
The West will rue its protectionism
Elite guilt about globalisation is handing an intellectual victory to the zero-sum world of populists and dictators.
Janan Ganesh Contributor
Jan 27, 2023 – 11.32am
Germany’s taste for Russian gas over recent decades was a double tragedy. It gave the Kremlin leverage over Europe. But it also gave protectionists throughout the Western world a spurious credibility. Look what happens, they say, when strategic industries are open to trade.
The first of these tragedies is fixable: there are substitutes for Russian fossil fuels. The second is here to stay. Within a year of the attack on Ukraine, the US Congress has passed a king’s ransom of domestic industrial aid and a piqued Europe is shaping its own version.
The goal has widened: from punishing Russian violence to slowing China’s ascent. So has the key industry: from gas to chips and green tech. Over time, lots of sectors will turn out to be “strategic”. Why not agriculture? Why not the professional services that China will need to master to go from middle to high income?
The West will rue this protectionist turn. Its hard-won cohesion over the past year is already yielding to mistrust, not just between the US and EU, but within the EU, where trading nations with small domestic markets (Sweden) dread the protectionism of big states (France).
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As US hits its debt ceiling, a painful reckoning looms
America is addicted to borrowing; as debt soars past $US trillion, the world watches in dread.
From Inquirer
January 28, 2023
The Abbott government sensibly dumped the federal government’s debt ceiling in 2013, but the US hasn’t been so fortunate.
Every year or so an artificial, archaic borrowing limit — currently set at US$31.4 trillion — ensures a risky standoff between a Democrat-controlled White House and a congress where Republicans control at least one chamber.
Such showdowns almost pushed the US, whose creditworthiness underpins the global financial system, to default in 2011 and then again in 2013, when small-government, “Tea Party” Republicans demanded the Obama administration cut spending and reduce the debt.
Whatever the details of the agreements, the debt ceiling did nothing to stop a US government, of both political stripes, that’s been addicted to borrowing.
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On losing face, psychopath Putin ‘may push the button’
For anyone who continues to give the Russian tyrant the slightest benefit of doubt, this explosive account of his decades-long reign of terror is required reading.
By Paul Monk
From Review
January 28, 2023
Vladimir Putin is a dark character, straight out of a novel by Dostoevsky. His whole coterie of kleptocrats and thugs and neo-fascists come across as though they were the realisation in actuality of Dostoevsky’s Notes From Underground or The Possessed. The question hanging in the balance, as we fly into 2023, is what could possibly be an appropriate punishment for the carnage and destruction he has inflicted on Ukraine?
John Sweeney, a veteran war correspondent and prolific author, has written a new book, from the front lines in Ukraine, about Putin and his crimes. For anyone who continues to give the Russian tyrant the slightest benefit of doubt, this book is required reading. In personalised and highly accessible prose, Sweeney steps through the nature of Putin’s war, his life and rise to power, his staggering corruption and his many brutal crimes.
What are Sweeney’s credentials? He is a writer and journalist who worked for the BBC for years, until his hammering of Putin made some of his bosses uncomfortable – given the amount of Russian money in the City of London and the demonstrated willingness of Putin to have critics assassinated, even on British soil. He has written scathing books for years about brutal dictators from North Korea to Zimbabwe and from Romania to Russia.
He is scathing but very good at what he does. He has, in a career spanning many decades, won an Emmy Award, two Royal Television Society Awards, a Sony Gold Award, a What the Papers Say Journalist of the Year Award, an Amnesty International Award and a Paul Foot Award. In other words, he is credible and well-established.
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‘Wettest on record’: Torrential rains, flash floods claim lives in Auckland
By Sam McKeith
Updated January 28, 2023 — 5.04pmfirst published January 27, 2023 — 10.41pm
Residents of Auckland are bracing for more storms this weekend, after an unprecedented storm on Friday night killed at least three people, caused widespread floods, shut airports and also forced organisers to cancel a concert by Elton John.
One man was found dead in a flooded culvert, another in a car park, New Zealand media outlet Stuff reported. Another person died after a landslide hit a house in Remuera, an inner suburb of Auckland. A search was under way on Saturday for another man believed swept away, police said.
A state of emergency remained in place in the city of about1.6 million people on New Zealand’s North Island as the rains eased on Saturday after causing flooding in the north, north-west and west.
Auckland Mayor Wayne Brown made the state of emergency declaration on Friday due to the extent of the “damage, displacement and disruption” caused by the weather and the need for response agencies to draw on more powers.
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David.
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