April 16, 2020 Edition.
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Sadly the virus is running around the world with the US now being the epicentre of the pandemic with over 20,000 deaths so are and over 100,000 deaths globally.
Boris seems to have survived COVID-19 and if he continues to do well the UK will be relieved.
Regarding Australia we seem to be doing amazingly well. We can only hope it continues.
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Major Issues.
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The life savings of everyday Australians are at risk
The failure by super funds to write down unlisted assets appropriately has created a dangerous instabiilty that could cost ordinary Australians their life savings and needs to be urgently fixed.
Apr 5, 2020 – 9.43am
As we move into Q2, some serious decisions need to be made to protect the life savings of everyday Australians.
There is a first-order problem, which has to be addressed soon. Then there is a broader policy challenge, where reform of the superannuation sector needs to be prioritised.
Bear with us, as some numbers are required to illustrate.
Think of a hypothetical super fund with $50 billion in assets under management as at December 31. Assume that the fund has 1 million members, most of whom are eligible to access two instalments of up to $10,000 under the Treasury’s current plan, applications for which open on April 20.
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What were the trustees of these super funds thinking?
The trustees of some super funds now face a dilemma: how to go about valuing the huge swathes of illiquid assets the funds hold without spooking fund members.
Apr 5, 2020 – 7.00pm
Just as the Hayne royal commission exposed lax risk management on the part of the country's bank directors, so the coronavirus pandemic has exposed the failure of some super fund trustees to properly monitor how members' funds have been invested.
It's now apparent that some super funds juiced up their investment returns by holding a disproportionately large number of illiquid assets – such as infrastructure assets, or commercial property – in their investment portfolios.
But this has left some funds facing a liquidity crunch, now that members are either switching to cash, or stepping up their early redemptions.
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360,000 register at ATO for early super release
More than 360,000 superannuation fund members have rushed the Australian Taxation Office to register for the early release of their retirement savings in just three days, in a move that is expected to put a squeeze on cash for the nation’s super funds.
Since last Tuesday, Australians have been able to tell the ATO they are interested in taking up Morrison government’s plan to allow retrenched workers and those suffering hardship through the COVID-19 crisis to access up to $20,000 of their retirement savings over the next two years.
By the end of Thursday, April 2, about 361,000 people had registered their interest through the MyGov portal — roughly 2.5 per cent of Australia’s 15 million super members.
While the early draw-down scheme won’t be operational until April 20, at which point Australians will be able to draw down up to $10,000 this year and a further $10,000 next year, the ATO will contact those who have registered their interest when the application form is complete.
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Industry super issued please explain over write-downs
Apr 5, 2020 – 7.03pm
House economics committee chairman Tim Wilson has queried why industry superannuation funds have written down their unlisted assets by less than the share price drops experienced by listed companies with comparable assets.
The Liberal MP is also demanding to know which funds might face liquidity issues when they are asked to honour hardship claims of up to $20,000 per member.
Funds will need to disclose to the committee whether there have been any write-downs to the value of their unlisted infrastructure and property assets, given the big falls in the value of comparable listed assets such as Sydney Airport and Transurban.
The unlisted asset holdings of super funds are typically revalued quarterly. But a number of large funds have made ad hoc revaluations in the unfolding crisis, cutting unlisted infrastructure, for example, by about 7.5 per cent.
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Hostplus changes rules to freeze withdrawals, stop cash switching
Apr 7, 2020 – 12.00am
Hostplus has quietly changed its terms and conditions so it can freeze redemptions and prevent cash switching, as the $50 billion fund faces questions about its capacity to meet what could be an avalanche of requests for up to $20,000 by out-of-work members.
A new clause has been inserted into Hostplus' product disclosure statement that allows the fund to "suspend or restrict applications, switches, redemption and withdrawal requests".
The statement previously assured members that any request to switch investment options received before 4pm on a business day would be processed. Now, the trustee retains "absolute discretion" to disallow the movement of money and warns requests might be processed with "significant delay".
Chris Brycki, the founder of online investment adviser Stockspot, believes the abrupt change occured on Friday night and is concerning for Hostplus members.
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Absolute discretion': Super fund Hostplus rewrites rules to suspend cash withdrawals
By Charlotte Grieve
April 7, 2020 — 8.50am
The $44 billion superannuation fund representing the hospitality industry has silently given itself "absolute discretion" to "suspend or restrict" applications for cash withdrawals, despite furiously defending its ability to pay out the government's emergency early access scheme.
Hostplus has altered an extraordinary clause that will be relevant to a large portion of its members without any warning. Previously, the same clause had told members they can switch between investment options and it would be processed within two days. The amended clause gives the fund the total power to halt payouts at its discretion.
"The trustee may suspend or restrict applications, switches, redemptions and withdrawal requests for all or a particular investment option at its absolute discretion. In such circumstances, transactions may not be processed or may be processed with significant delay," the updated clause on page 62 of the 215 fund's product disclosure document said.
"The trustee may also decide to process a transaction request for a particular type of benefit from a suspended, restricted or closed option on a case by case basis. Any decision about whether to process transactions from such an option will be made in the best interests of investors as a whole.
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Bushfire Crisis And Climate Policy
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There are no entries in this category.
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Coronavirus And Impacts.
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Very high risk of complications and death: COVID-19 and heart disease
Apr 5, 2020 – 3.33pm
Leading Australian experts have warned that people with heart disease are at a very high risk of severe complications and death from COVID-19 and should take extra personal precautions.
They also recommend an immediate change in treatment. The routine practice of using stents (little mesh tubes) to unblock heart vessels should be replaced, in most stable patients, with drugs to dissolve the blockage.
The problem is not with the stents, but with the invasive procedure of putting them in place, and its attendant risks to patients and staff.
They caution that the new coronavirus can also worsen existing heart conditions, such as heart failure, and increase the chance of a heart attack. Further, in people with no heart disease, they say it may trigger cardiac complications.
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Coronavirus blow: market has much further to fall
“We are now in recession. It is way worse than the global financial crisis,” IMF managing director, Kristalina Georgieva, said on Friday.
That global financial crisis caused the ASX 200 index to fall 54 per cent between November 1, 2007 and March 9, 2009. The MSCI global index fell 59 per cent.
The COVID-19 crisis, which I think we can agree is “way worse” than the GFC, has so far produced a fall of 30 per cent in the ASX 200 and 27 per cent by the MSCI.
Apart from that simple comparison, there’s another way to see that the stockmarket has come nowhere near to correctly pricing for the earnings recession now underway: in March 2009, the market price earnings (PE) ratio got down to about eight times; it’s currently 13-13.5 times, and that’s based on inflated earnings projections from analysts who haven’t yet put reality into their spreadsheets.
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PM prepares nation to live with the virus
The scenario now envisaged inside government is one of enabling the country to live with the coronavirus for longer.
Apr 6, 2020 – 12.00am
In an ideal world, Scott Morrison would have two dials at his disposal to help deal with the coronavirus catastrophe.
With one, he could control the rate of spread of the virus; with the other, he could turn up economic activity.
The government will on Tuesday release the latest modelling of how the virus outbreak may play out, which is underpinning its decision-making.
As Morrison alluded to on Friday, it will be a better outlook than that he released on March 15, before we all began social distancing, and which showed up to 4 million Australians could be infected over the next six months.
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Why Canberra has resisted releasing the data behind the curve
Apr 6, 2020 – 12.00am
"We don't want to scare the living shit out of everyone" was how one state minister described their attitude to releasing the epidemiological modelling the national cabinet is using to guide the COVID-19 response.
That finally changed on Friday, when Prime Minister Scott Morrison said he would be releasing the modelling after national cabinet meets Tuesday.
Federal ministers and officials had until then been resisting the release of the modelling, which a team of Melbourne University academics has been supplying to the almost daily meetings of chief medical officers.
The change in heart belatedly recognises the need to foster trust and instil confidence in the serious and sometimes draconian measures needed to minimise the spread of infection.
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Border lockdown is working to flatten Australia's curve
Apr 5, 2020 – 5.50pm
The lockdown of Australia's international borders is helping deliver a dramatic drop in the increase in new coronavirus cases and the flattening of the COVID-19 curve, health experts say.
The percentage increase in new cases has moved steadily downward since peaking in mid-March, dropping from a 26.2 per cent daily jump immediately after the ban on foreign arrivals to the low single digits in recent days.
Australia had 5687 confirmed cases of the deadly virus on Sunday afternoon, with Chief Medical Officer Brendan Murphy welcoming the low daily increase in new diagnoses as a sign the nation was successfully limiting the spread.
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'Very useful resource': How Australia could utilise people with coronavirus immunity
By Michael Fowler
April 6, 2020 — 12.00am
Australia should be moving to utilise people who have recovered from coronavirus and may have developed immunity against the virus to bolster essential services, a leading expert says.
Countries including Britain are already discussing introducing “immunity passports” to increase the workforce in healthcare and other crucial sectors, and gradually re-open society.
With a coronavirus vaccine likely to be at least 12 months away, Australian health workers with immunity could be prioritised to work in intensive care units and higher-risk scenarios, said Professor Nigel McMillan, the director of infectious diseases and immunology at the Menzies Health Institute.
Schools could be kept open with immune teachers while other frontline workers, such as air stewards and public transport employees, could return to their jobs.
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Coronavirus: Global giants stumble while agile nations inspire
We don’t know what will happen next with the coronavirus pandemic. We can’t predict which way the curve will bend in the future. We can only see through a glass, darkly. But we do know that COVID-19 will alter some of the patterns of international life. Even now, when we are still at the start of this thing, we can discern some changes. First, the nation is back. This is a global crisis, but we have all turned inwards, not outwards. We are tuning in to speeches by our national leaders. We are resolving to make things for ourselves, in our own countries. We are changing some aspects of our national politics — for example, the establishment of a national cabinet here in Australia — in ways that will have lasting effects after the pandemic is over.
Second, the state is back. Governments are intervening in national economies and central banks are wading into financial markets. Conservative politicians in Australia, the UK and elsewhere are introducing generous new payments to their citizens. Companies may be nationalised. Government debt is up; individual liberties are down — in some countries at least. Emergency powers that are being instituted to slow the spread of the virus will survive the current emergency.
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Six million dollars for each life saved is too high
Better targeted social distancing could preserve almost as many lives -- and leave more to be spent on other health issues.
Sam Lovick
Apr 6, 2020 – 2.58pm
Last week, three close friends and family lost their jobs because of COVID-19. Two were in hospitality, unsurprising perhaps, but the other was in engineering.
The economic costs of this pandemic are clearly huge. Which led me to think not that the cure is worse than the disease but, more constructively, are there ways to lower the costs?
Let’s not be shy about balancing the economy against health. Governments do it all the time. The Pharmaceutical Benefits Advisory Committee rejects 69 per cent of anti-cancer drugs because they are not cost-effective.
This means the drug would cost the government (that is, society – us) more than $30,000-$70,000 for each (quality adjusted) year of life saved. Anything higher is too much; $4 million for a drug that saves a newborn for 80 happy years appears to be the yardstick.
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COVID-19's intergenerational wealth transfer
Central bank policy will see a great transfer of wealth from savers to borrowers, and from the old to the young.
Apr 6, 2020 – 2.57pm
I have been surprised at just how negative some economists are about COVID-19. Not so much about the near term, where there is general agreement on the severity of the initial rise in unemployment, but rather about what happens on the "other side". No "V-shaped" recovery and perhaps a stagnating “L”?
The "other side" will be different, but certainly not an “L”.
It’s possible the longer the health crisis and social distancing persists, the more likely some governments will run out of firepower so that more businesses won’t sustain. Banking problems could follow.
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JPMorgan could suspend dividend in 'extremely adverse' scenario: Dimon
Apr 7, 2020 – 7.27am
JPMorgan has stopped buying its own stock and could suspend its dividend "out of extreme prudence" if the US economy collapses and the jobless rate soars through the rest of 2020, chief executive Jamie Dimon said.
In his annual letter to shareholders, Mr Dimon said the bank entered the current crisis "in a positive of strength".
Mr Dimon also pointed to the outcome for the bank in the latest Federal Reserve stress test, saying that while the bank would see revenue drop, it would be profitable in every quarter this year.
That stress test assumed outcomes like US unemployment peaking at 10 per cent and the stock market falling 50 per cent.
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Big four scramble to assure investors
Apr 8, 2020 – 9.36am
The big four banks have rushed to reassure the market they are well positioned to weather the fallout from the COVID-19 crisis after an order from the prudential regulator to slash dividends and credit ratings were downgraded last night.
Banks were left scrambling on Tuesday evening after weathering the one-two punch of the edict from the Australian Prudential Regulation Authority to "limit discretionary capital distributions" and consider "prudent reductions in dividends" and the historic downgrade to A+ from AA-.
On Wednesday morning Westpac informed the market no decision has yet been made on the upcoming first half dividend while NAB said it would take the new instructions into account.
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We may be at peak infection: modeller
Apr 7, 2020 – 6.12pm
Australia could be at the peak of its infection rate according to one of the chief modellers of the COVID-19 virus, Melbourne University professor James McCaw.
Releasing the official Doherty Institute epidemiological modelling that has informed the health response to the virus, Professor McCaw said the Doherty team expected to see a further decline in cases.
"There's fewer infections from returning travellers or returning Australians or otherwise. And it looks like community transmission is continuing to be well suppressed. So in that sense, you would say that it looks from a case infection point of view that a peak might have almost passed or it's passing,” Professor McCaw said.
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World banking system cannot weather a long shutdown
By Ambrose Evans-Pritchard
April 8, 2020 — 11.05am
It is no easy task to prevent an induced economic coma from slipping out of control and turning into a secondary financial crisis. No major country has ever tried to do such a thing before.
The longer the sudden stop continues in Europe and North America, the greater the risk that we slide into a self-feeding credit and liquidity crisis. The financial storms would then reinforce each other to overwhelm the defensive system.
Crisis veterans are watching the three month dollar Libor rate (not equity markets). This has jumped 60 basis points since mid-March despite a shower of liquidity and unprecedented emergency action by the Federal Reserve. Libor matters: some $US9 trillion ($14.6 trillion) of global contracts are priced off the benchmark.
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ANU boss Brian Schmidt predicts 'transformed' university system after COVID-19
By Fergus Hunter
April 7, 2020 — 10.00pm
Australian National University vice-chancellor Brian Schmidt says the country's universities will be permanently "transformed" by the COVID-19 crisis and a new higher education system must be developed as revenue from international students dries up.
Universities are likely to lose billions of dollars in revenue this year because of the pandemic and Professor Schmidt has warned the sector needs long-term certainty as it confronts the disruption to its teaching and research. He said the government and universities had to start "co-designing the future" for the sector.
"I do think that higher education will be transformed," he told The Sydney Morning Herald and The Age.
"What do we want our domestic course offerings to look like? What is the research that we need done for the short- and long-term? And how do we ensure this system – which had grown a fairly large dependency on international student income, which is going to be less in the future – what does that system need to look like?"
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What recovery from COVID-19 could look like
Some of the key signals as to when the market may trough are already happening. But disease peak will be the most critical.
Apr 7, 2020 – 8.55am
Investors are probably not the most esteemed sources of analysis when it comes to disease outbreaks. But history shows that outbreaks have been inevitably brought under control, often via human behaviour. The SARS outbreak lasted nine months, swine flu lasted eight months, and MERS outbreaks have typically taken several months to contain, as in South Korea.
COVID-19’s contagiousness and relatively long (asymptomatic) incubation period make this a challenging pandemic to contain, as evidenced by more than 1.2 million cases around the world (and more than 70,000 fatalities). The full weight of the global medical technology sector is being applied to discovering a vaccine and Peter Doherty from The Doherty Institute in Australia says a COVID-19 vaccine could be available within 12 to 18 months.
At Crestone, we have been scenario-testing the three different recoveries you may have heard investors refer to as U-, V- and L-shaped recoveries.
U-shaped recovery
This is our central case, with a 50 per cent probability. Here the first-half confirms a sharp mid-2020 collapse in activity and earnings. For most countries, growth in the second and third quarters contracts and Purchasing Managers Indexes (PMIs) trough around 30. Fiscal stimulus mitigates but cannot prevent an inevitable rise in global unemployment. But a peak in the spread of the virus is achieved early in the third quarter (around July).
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Coronavirus: Not helping Australian universities undermines exports and diplomatic relations
Australia has five great export industries: iron ore, gas, agriculture, tourism and education. Iron ore and agriculture will be fine. Gas will struggle but will recover while tourism and hospitality are the biggest single beneficiaries of the JobKeeper rescue package and are in “hibernation”.
But universities have been ignored and will therefore be greatly damaged. Some, particularly smaller ones, will be forced to close next year or in 2022. One of our great regional export initiatives, where we successfully competed with the rest of the world, will be setback a decade and may never recover.
Education Minister Dan Tehan comes from the rural areas of Western Victoria and is based in Hamilton. He may not be aware of what is taking place in the university sector. Tehan is a Liberal (not National) member and he will carry ministerial responsibility for what is about to happen to this great export industry and centre of Australian employment.
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Sydney University expects a $470 million loss due to coronavirus crisis
By Jordan Baker
April 8, 2020 — 1.09pm
Sydney University expects a $470 million loss due to the COVID-19 crisis this year, thanks to a 17 per cent drop in international students, fewer than expected domestic students, and the extra cost of online teaching.
In an email to staff on Wednesday, vice-chancellor Michael Spence said the university's census on March 31 - the last date for students to change their enrolment - clarified its financial position.
It showed a total of 9.9 per cent fewer students than the university had planned for in 2020, including 4.8 per cent fewer domestic students and 16.8 per cent fewer international students, "which has significant revenue implications," he said.
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Doctors say management errors worsened coronavirus crisis in Lombardy
By Crispian Balmer
April 8, 2020 — 2.24pm
Rome: Doctors in Lombardy, the Italian region hardest hit by the coronavirus epidemic, have criticised local officials for their handling of the crisis and said the mistakes they made should be a lesson for everyone.
A total of 17,127 people have died from the virus in Italy, the most anywhere in the world, with Lombardy accounting for 55 per cent of the tally. The region also accounts for 39 per cent of the country's 135,586 confirmed cases.
The particularly large death toll in Lombardy, the wealthiest region in Italy, has raised eyebrows, with local officials suggesting that both the high urban density and considerable elderly population might have played a part.
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Lives matter but at what cost?
It is legitimate to ask if policymakers should prioritise people of all ages equally.
Apr 9, 2020 – 10.12am
Scott Morrison says "every Australian matters”.
“It doesn’t matter if they’ve just been born or they’re approaching the end of their life."
The Prime Minister was responding to criticism that governments are inflicting economic destruction on a generation of working-age Australians to save the lives of, overwhelmingly, older people from the coronavirus.
As we head into Easter, the devoutly Christian Morrison is juggling his desire to preserve lives with his economic pragmatism as a former treasurer to save jobs.
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This great leveller will end, but the world will be different
In the same way the Black Death impacted art and religion, COVID-19 will shape our post-pandemic reality.
Apr 8, 2020 – 2.34pm
“It’s the great equaliser. I don’t care how smart, how rich, how powerful you think you are. I don’t care how young, how old.” These are the words of New York Governor Andrew Cuomo, uttered as the self-proclaimed greatest city in the world experiences scenes of horror unimaginable just a month ago.
Crematoriums are burning COVID-19-riddled bodies 24/7 in New York, just as they have been for more than three months in the Chinese city of Wuhan, epicentre and incubator of the global pestilence. The technology and clothing may be different, but the scenes of health workers emptying bodies into frozen makeshift morgue trucks lined up outside New York hospitals evoke images from the Great Plague of the 14th century that visited such death and destruction across Eurasia.
The Triumph of Death, an oil painting by Dutch painter Pieter Bruegel, and inspired by the Black Death, shows an army of skeletons wreaking havoc across a desolate landscape. Fires burn, fish rot on the shores of a pond riddled with corpses, and hordes of skeletons menace the living. Peasants, soldiers, nobles, kings and cardinals alike are indiscriminately cut down by Black Death’s Grim Reaper, just as Governor Cuomo says the coronavirus is doing today.
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Investors reel as banks suspend dividends
Bank shareholders have given up any hope of receiving an interim dividend from ANZ, Westpac and NAB, but they're hopeful that Macquarie and Commonwealth Bank may still deliver.
Apr 8, 2020 – 3.54pm
Ouch! Bank shareholders were bracing themselves for a steep drop in their dividend income, but this is way, way worse than they were expecting.
It's going to require a lot of courage for any bank board to approve dividend payments in the next few months, given the high bar that's been set by the prudential regulator.
Investors were quick to see the writing on the wall. The share prices of ANZ, Westpac and National Australia Bank fell sharply on expectations they'll follow the lead of Bank of Queensland in deciding to shelve dividend payments, at least in the short-term.
This marks a sobering new reality for bank investors. Even during the depths of the last recession in 1992, which left Westpac and ANZ teetering on the edge of collapse, the two banks were able to still able to rustle up enough money to continue to pay dividends, albeit they were much more meagre than they had been.
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Job ads dive as deficit heads towards WWII record
By Shane Wright
April 9, 2020 — 12.01am
Job ads in some industries have dived 97 per cent as Australia's commitment to the largest budget deficit since World War II puts the nation's triple A credit rating at risk.
One of the world's biggest credit rating agencies, S&P Global, put Australia on negative outlook, the first of 11 nations with a triple A rating the agency warned could be downgraded due to the coronavirus pandemic and measures aimed at easing its financial effects.
Passing the government's $130 billion wage subsidy package is a mere formality with the Labor leader promising not to stand in the way of what he calls good legislation.
As the government won parliamentary approval for its $130 billion JobKeeper wage subsidy program, on top of $64 billion in other spending to help the economy through the coronavirus slowdown, Employment agency SEEK reported job ads are collapsing in the wake of the virus outbreak.
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How would you decide to restart the economy?
By Mohamed A. El-Erian
April 9, 2020 — 11.09am
The tentative optimism in parts of Europe and the US about a turning point in the rate of coronavirus infection is encouraging more people to start thinking about how and when to restart economies. It is a crucial and complex issue involving an unusual range of risks, uncertainties, difficult judgments and trade-offs.
I certainly don't have an easy answer, and neither do people I talk to whom I respect greatly. With a view to generating ideas, how about collectively engaging in the following thought exercise?
Imagine you, as the leader of a liberal democracy, have to make the decision based on the following conversation among three sets of experts - which, for simplicity, we will aggregate into a single expert each on health, the economy and social behaviour.
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Don't add government debt to your list of things to worry about
Jessica Irvine
Economics writer
April 8, 2020 — 11.36pm
It's only natural to wonder, amid mind-bogglingly large amounts of government spending to fight against a coronavirus-induced recession: how will it all be funded?
According to calculations by ANZ senior economist Cherelle Murphy, we've already witnessed the biggest ramp-up in government spending since World War II, when government spending grew to account for half of total economic output.
On Murphy’s reckoning, Australia’s pile of outstanding federal government debt is set to climb to $850 billion by the middle of next year, up from $584 billion today.
The government’s net debt position, which includes the offsetting value of some government-held assets, is likely to climb to 30 per cent of GDP, up from 19 per cent today.
For a nation trained by both sides of politics to fear government debt and deficits, it’s a scary prospect.
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Coronavirus: ‘Catastrophe’ looms as university losses skyrocket
The coronavirus will cost the University of Sydney almost half a billion dollars this year, according to the institution’s vice-chancellor.
Michael Spence told university staff on Wednesday that student numbers for 2020 were 10 per cent below expectations, with most of the shortfall due to fewer international students.
Domestic student numbers were 4.8 per cent below target while international students, who pay much higher fees, were 16.8 per cent down.
The estimated $470m budget shortfall includes an extra $55m being spent on efforts to mitigate the effect of the virus, such as additional cleaning, technology for online teaching and support for students, including those suffering hardship.
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Is the vast cost of stopping COVID-19 deaths really worth it?
Dr Malcolm Kendrick crunches the numbers on saving lives in times of a global pandemic
9th April 2020
The global response to the coronavirus threat is coming at vast social and economic cost with hundreds of thousands of jobs lost and millions of lives turned up-side-down.
Here, Dr Malcolm Kendrick, a Scottish GP, sceptic and author, asks that basic question: How much should we spend to save a human life threatened by COVID-19?
The current COVID pandemic has brought a very thorny and difficult issue to the forefront. How much money should we, as a society, spend on keeping people healthy and alive?
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How to lift the lockdown in six to eight weeks
Apr 10, 2020 – 5.30am
Rather than dragging out the COVID-19 lockdown for six months, Australia should make it short and sharp over the next four to six weeks, according one of the country’s leading biosecurity experts.
Professor Raina MacIntyre, from UNSW Sydney’s Kirby Institute, says this strategy would “bring Australia down to a very, very low baseline of cases compared to what we'd otherwise be dealing with.”
But it has to be supported by a parallel strategy which expands testing and gives doctors discretion to test.
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Pandemic to unleash worst recession since Great Depression: IMF
David Lawder and Andrea Shalal
Apr 9, 2020 – 11.18pm
Washington DC | The COVID-19 pandemic sweeping the world will turn global economic growth "sharply negative" in 2020, triggering the worst fallout since the 1930s Great Depression, with only a partial recovery seen in 2021, the head of the International Monetary Fund said.
IMF managing director Kristalina Georgieva painted a far bleaker picture of the social and economic impact of the new coronavirus than even a few weeks ago, noting governments had already undertaken fiscal stimulus measures of $US8 trillion ($12.7 trillion), but more would likely be needed.
She said the crisis would hit emerging markets and developing countries hardest of all, which would then need hundreds of billions of dollars in foreign aid.
"Just three months ago, we expected positive per capita income growth in over 160 of our member countries in 2020," she said on Thursday in remarks prepared for delivery ahead of next week's IMF and World Bank Spring Meetings.
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This virus could change the way we live for years, not months
David Crowe
Chief political correspondent
April 10, 2020 — 12.00am
Australia now has the foundations to withstand a long shock to its health and economy, but the road out of the crisis is easier to describe than navigate. Parliament has set a legislated deadline in the fight against the coronavirus by approving a six-month sunset clause for the new $130 billion JobKeeper wage subsidy.
The boost to confidence is significant when the economic support is combined with the sharp fall in new infections. But this virus sets its own timetable. While the politicians offer reassurance, the scientists urge vigilance. And it is worth heeding the science. The medical experts who advise the government expect this threat to continue in waves for years.
Even if we eradicate the disease in Australia, says James McCaw of the Doherty Institute and the University of Melbourne, the virus will spread around the world and easily return.
“That epidemic in some places may also go locally extinct after a small or a large wave,” he says. “But it’s almost implausible to imagine this virus going extinct globally, which means that it will be here to stay. It will become a part of our everyday life and the transition to it not being a huge driver of complete societal change is a very difficult thing to work through.”
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Brace for things to get worse
The curve has flattened and I sense optimism that we’re through the worst of coronavirus. Nothing could be further from the truth.
10 April, 2020
Australians need to brace for the reality that things are going to get a lot worse before they get better when it comes to the coronavirus crisis.
Because the curve has flattened as successfully as it has leading into this Easter long weekend, I sense optimism all around me that we may have gotten through the worst of this virus.
Nothing could be further from the truth. Let me explain why.
Just over 6,000 Australians are confirmed as having contracted the virus. Roughly half those numbers have recovered from it. Just over 50 people have sadly died from it, mostly older Australians.
Even if we assume no one else within the 3,000 cohort of people still fighting the virus passes away, which some surely will, that’s still a mortality rate of roughly 0.8 per cent. In other words, just under one person dying for every 100 people who contract the virus.
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How the virus will change us
It's the steepest, sharpest shock since the Great Depression and the biggest social and business disruption since WWII. What shadows will the coronavirus pandemic cast over our future?
Apr 9, 2020 – 12.00am
What a difference a crisis makes. Or does it? After the 1970s oil shock, we thought about economics differently but we stuck with the combustion engine. After Black Monday in the 1980s, and after the 2001 tech wreck, we just went back to doing what we did before. But after the all-consuming COVID-19 pandemic, what?
This crisis could be in a class of its own. As Commonwealth Bank chief executive Matt Comyn told The Australian Financial Review last week: "None of us has ever seen anything like this in our lifetimes."
It is the sharpest, steepest economic shock since the Depression and the most profound disruption of ordinary social and business life since World War II.
After such a body blow, is it really possible that we dust ourselves off and move on? Or will it be that when some kind of normality returns, everything will look unfamiliar – even unsettling?
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World virus deaths pass 100,000, New York hit hard
Apr 11, 2020 – 7.22am
New York | The worldwide death toll from the coronavirus surged past 100,000 on Friday as the epidemic in the US cut a widening swath through not just New York City but the entire three-state metropolitan area of 20 million people connected by a tangle of subways, trains and buses.
In the bedroom communities across the Hudson River in New Jersey, to the east on Long Island, and north to Connecticut, officials were recording some of the worst outbreaks in the country, even as public health authorities expressed optimism that the pace of infections appeared to be slowing.
As of Friday, the New York metropolitan area accounted for more than half the nation's 18,000 or so deaths, with other hot spots in places such as Detroit, Louisiana and Washington, D.C.
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Australia's coronavirus safety net must be tight to go the distance
By George Megalogenis
April 11, 2020 — 12.06am
Scott Morrison says lines had to be drawn somewhere. The safety net his government created across eight frenzied days of policy making last month had to leave some workers out.
The explanation he gave on Tuesday, at the special sitting of parliament to pass the government’s historic wages subsidy, underlines the difficulty of designing new payment systems from scratch to cope with a once-in-a-century health crisis.
The prime minister didn’t put it quite this way, because he is not one to admit regret, let alone fault. But the truth is he didn’t have enough time to ensure that all casual workers could be treated equally.
The line he drew was at 12 months. Any casual worker who spent at least a year with their current employer would be eligible for the $1500 a fortnight wage subsidy. Those with fewer than 12 months will have to settle for a generous dole payment of $1117.50 per fortnight if they lose their job. Morrison said 12 months was “a status that is already recognised under Australia's taxation system”. That is, the Australian Taxation Office can’t get the money to all casual workers at the moment, even if the government wanted it to.
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Coronoavirus: Americans demand answers as angry blame game begins
Easter Sunday was the day Donald Trump wanted America “opened up and just raring to go”.
“You’ll have packed churches all over the country … I think it will be a beautiful time,” the US President said barely three weeks ago.
Instead, Americans are spending this Easter locked in their homes in a state of fear and disbelief about the magnitude of the coronavirus tragedy that has enveloped their country.
The toll from the virus would be jaw-dropping even if the US were not the richest and most powerful country in the world, boasting some of the best scientists, medical experts and facilities.
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Coronavirus: Plan B needed, says Australian vaccine hunter Jane Halton
The Australian woman driving the global search for a COVID-19 vaccine has warned that there is no guarantee of success and the government must have a “plan B” to end the pandemic.
The sobering assessment by Jane Halton, a former federal mandarin who chairs the Bill Gates-backed Coalition for Epidemic Preparedness Innovations, will dampen hope that a vaccine could be available early next year.
Puncturing the optimism fired by first-stage human trials of a vaccine in the US and accelerated progress towards others here, in China and Israel, Ms Halton said it was “heroic” to assume an answer to the virus would emerge so soon.
Some scientists involved in the CEPI-sponsored program insist that a 12- to 18-month timeline is realistic, but Ms Halton told The Weekend Australian: “If you said we pulled out all the stops and a vaccine was approved and deemed efficacious by the middle of next year, that would be unbelievably quick … we would be ecstatically overjoyed, delighted.
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Prepare for 'zig zag' approach to lifting restrictions: chief health officer
By Michael Koziol
April 12, 2020 — 12.00am
NSW Chief Health Officer Kerry Chant says the state should prepare for a "zig and zag" approach to easing the coronavirus restrictions, where certain liberties could be trialled and peeled back if there is a spike in virus cases.
She also held out an olive branch to business owners who are doing it tough during the shutdown, saying there may be ways to reopen some parts of the economy if businesses can demonstrate they could operate while enforcing vital social distancing measures.
In an interview with The Sun-Herald, Dr Chant said she will spend the next fortnight – the school holidays in NSW – diving deep into the data, particularly studies that will guide the government on its approach to schools in term 2 and give parents "confidence" that schools are safe.
"Being very clear to the community what schooling looks like in term 2 is clearly something we're working on," she said. "I think we need to give parents – and teachers – confidence that school is a safe environment."
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Guaranteed funding and new online courses under university relief package
By Fergus Hunter
April 12, 2020 — 12.00am
The federal government will safeguard university funding for domestic education and introduce discounted online courses under a relief package aimed at helping the higher education sector weather the COVID-19 crisis.
Universities and other tertiary education providers have been crying out for support since the pandemic began, warning their viability is at risk from billions of dollars in revenue losses. The disruption has also forced providers to fund a rapid shift to online delivery and support international students in financial hardship.
The newly announced relief package will guarantee funding for universities this year based on expected levels of Commonwealth-supported domestic enrolments before the hit to student numbers from the crisis. Ordinarily, the amount of funding provided would be revised throughout the year based on variations to enrolments.
The government will seek to bolster revenue for universities and private colleges by creating new certificates for six-month, discounted online courses. The courses are targeted at national priority areas and are intended for people to learn new skills during the recession and period of social distancing.
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Borders to stay closed, travellers urged to 'see Australia first' once curbs ease
By David Crowe
April 12, 2020 — 12.00am
Australians will have to wait until the end of this year or beyond to restart overseas travel amid estimates the coronavirus crisis has wiped out inbound and domestic tourism worth $9 billion a month.
Travel restrictions could be eased within states if efforts to slow the spread of the virus succeed in the months ahead, but travel across state borders and outside Australia will face tough bans for the longer term.
Tourism Minister Simon Birmingham urged people to "see Australia first" when the curbs are eased over time but said bans on international travel would remain while the virus raged overseas.
"My message is now is the time when you can dream and plan but not execute those plans," he said in an interview.
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Helpline calls by family violence perpetrators 'skyrocket' amid isolation
By Wendy Tuohy
April 12, 2020 — 12.01am
An “alarming” surge in reports by perpetrators of family violence has been recorded as pressure mounts due to COVID-19 isolation.
Calls to the Men’s Referral Service by men who have perpetrated family violence in the isolation period, or fear they will do so, have skyrocketed, according to the agency, as the pandemic causes a sharp spike in distress.
On April 5, the day Stage 3 restrictions were announced by the federal government, a 94 per cent increase on usual traffic was recorded from self-referred callers to the service run by No to Violence, the peak body funded to work with men to end family violence in Victoria, New South Wales and Tasmania.
This came after a 67 per cent surge in self-referred calls from men on April 1, as existing pressure from restrictions to movement, plus mass job losses and financial stress, started to bite.
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Coronavirus: medics on frontline of epicentre doubt malaria drug cure
· The Wall Street Journal
Doctors who have for months treated patients on the frontlines of China’s fight against the new coronavirus offered a sobering assessment of potential treatments, saying they hadn’t seen clear evidence that drugs such as chloroquine were effective.
One doctor, however, said he saw some promise for Kaletra — an antiretroviral drug for HIV.
In interviews arranged on Thursday by authorities in Wuhan, where the coronavirus crisis erupted late last year, doctors called for further research into the use of chloroquine, an anti-malarial drug.
The assessments came a day after Chinese authorities eased their lockdown of Wuhan.
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Sharemarket sectors have the ability to rebound from crisis
Sue Dahn
I must confess to numerous weeks now of palpable relief on Saturday mornings when all international markets finally stop trading to allow those of us working in financial advice some respite for the digestion of the week’s events and for reflection on the likely next direction of markets.
All advisers and investors are racing to understand the depths of the impending COVID-19 recession. “This is not a normal recession that builds and spreads through time,” said Justin Wolfers, an economist at the University of Michigan. “Rather, it is a synchronised event, with the government as conductor.”
Recessions generally unfold over a period of months or quarters. This time it has been instant. As a result, the metrics we would typically use to analyse the depth, length and impact of a recession are either out of date, not yet available or practically useless.
In essence, the viral spread must show sustained slowing before the economic impacts of the containment efforts can be definitively assessed.
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Oxford team leader Sarah Gilbert aims for vaccine within months
· The Times
A vaccine against coronavirus could be ready as soon as September, as opposed to predictions of next year at the earliest, the scientist leading one of the world’s most advanced efforts has said.
Sarah Gilbert, professor of vaccinology at Oxford University, told The Times she was “80 per cent confident” that the vaccine being developed by her team would work, with human trials due to begin in the next two weeks.
The British government signalled that it would be willing to fund the manufacture of millions of doses in advance if results looked promising. This would allow it to be available immediately to the public if it were proven to work.
With ministers struggling to find a strategy to exit the lockdown, long-term hopes of a return to normality rely on a vaccine. Even if measures to stop the spread of coronavirus are eased in the coming weeks, officials are expecting that without a vaccine some element of social distancing, such as shielding of the vulnerable or working from home, would remain in place for a long time.
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Royal Commissions And The Like.
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There are no entries in this category.
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National Budget Issues.
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Regional papers get $5m COVID-19 lifeline
· Australian Associated Press
The announced closure of several regional newspapers has prompted the release of $5 million in federal government funding to "help keep local communities informed" during the coronavirus crisis.
Communications Minister Paul Fletcher says the fund has been adjusted "so money is available as quickly as possible to help publishers keep journalists in jobs and local communities informed".
"Many media organisations, particularly those in regional areas, are facing significant financial strain due to the community's necessary response to COVID-19," Mr Fletcher said on Monday.
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Virus will leave an economic impact for decades
By Shane Wright
April 7, 2020 — 9.27am
The coronavirus pandemic could leave an economic impact including higher wages and lower interest rates for decades, special research looking at past disease outbreaks has found.
While the Reserve Bank of Australia, which holds its regular monthly meeting on Tuesday, has warned it will hold official interest rates at a record low of 0.25 per cent, the research out of the United States suggests the RBA is selling itself short.
We could be heading for a recession with the coronavirus causing businesses to close and unemployment to rise. Find out what lasting impact a recession will have in Australia.
The University of California economists, Sanjay Singh, Alan Taylor and Oscar Jorda (who also works for the Federal Reserve Bank of San Francisco) looked at some of the worst pandemics in history and their impact on interest rates.
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$130bn JobKeeper package gives huge boost to consumer confidence
Scott Morrison’s $130bn JobKeeper package has provided the biggest weekly boost to consumer confidence on record, albeit to still low levels, according to the latest ANZ-Roy Morgan survey.
The confidence index jumped 10 per cent over the week to 72 points - the largest increase since the survey went weekly in 2008.
ANZ head of Australian economics David Plank said the blockbuster move represented “a strong endorsement of the government’s massive wage subsidy package”.
“Better news about the flattening of the ‘pandemic curve’ may also have contributed,” Mr Plank said.
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Statement by Philip Lowe, Governor: Monetary Policy Decision
Number 2020-11
Date 7 April 2020
At its meeting today, the Board reaffirmed the targets for the cash rate and the yield on 3-year Australian government bonds of 25 basis points, as well as the other elements of the package announced on 19 March 2020.
The coronavirus remains first and foremost a very major public health issue, but it is also having very significant effects on economies and financial systems around the world. Many countries are expected to experience large economic contractions as a consequence of the public health response. Large increases in unemployment are also expected. Once the virus is contained, a recovery in the global economy is expected, with the recovery supported by both the large fiscal packages and the significant easing in monetary policy that has taken place.
Financial market volatility has been historically high and many markets around the world have been dislocated. There are, however, some signs that markets are working more effectively than they were a few weeks ago. This improvement partly reflects the substantial measures undertaken by central banks.
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Is the RBA worried about the steepening yield curve?
Apr 8, 2020 – 9.51am
While society is uniting, and mostly succeeding, to flatten the coronavirus curve, there's one curve that is steepening aggressively.
That is the Australian bond market yield curve. After the Reserve Bank somewhat triumphantly said on Tuesday it would slow the rate of its bond purchases having restored order to a previously dysfunctional market, long term bond yields took off.
By late Tuesday, the 10-year bond rate was well above 0.9 per cent and with the three-year rate pinned near 0.25 per cent by the Reserve Bank, the gap between the two rates had widened to nearly 70 basis points.
That is the steepest the yield curve has been since March 20, when the Reserve Bank began buying bonds to restore order and lower borrowing costs. And it's about double the 35 basis point gap that existed prior to the COVID-19 panic.
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Ratings agency puts Australia on negative watch over virus spend
By Shane Wright
Ratings agency S&P Global has put Australia's triple A credit rating on negative watch, saying there had been a "substantial deterioration" in the nation's finances and the country faced the risk of a deep recession.
As the Morrison government introduces its $130 billion JobKeeper program into the Federal Parliament, the agency said the fiscal and economic risks facing Australia were "tilted toward the downside".
On top of its JobKeeper program, the government has promised more than $66 billion in spending plus billions more in loan guarantees to help businesses survive pandemic-related closedowns.
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Standard & Poor’s warns Australia on AAA rating
The world’s biggest rating agency has become the first to warn it could cut the Australian government’s prized AAA credit rating if the economy fails to bounce back from recession quickly, pointing to “substantial deterioration” in public finances.
As the parliament meets to vote on the federal government’s $130bn wage subsidy package, Standard and Poor’s said it had qualified its AAA rating for Australia with a “negative outlook”, pointing out that net government debt would double by next year to 32 per cent of GDP.
“We could lower our rating within the next two years if the COVID-19 outbreak causes economic damage that is more severe or prolonged than what we currently expect,” it said in a statement.
“The COVID-19 outbreak has dealt Australia a severe economic and fiscal shock. We expect the Australian economy to plunge into recession for the first time in almost 30 years, causing a substantial deterioration of the government’s fiscal headroom at the ‘AAA’ rating level,” the agency said.
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Ratings agency puts Australia on negative outlook over virus spend
By Shane Wright
April 8, 2020 — 10.55am
Ratings agency S&P Global has put Australia's triple A credit rating on negative outlook, saying there had been a "substantial deterioration" in the nation's finances and the country faced the risk of a deep recession.
As the Morrison government introduces its $130 billion JobKeeper program into the Federal Parliament, the agency said the fiscal and economic risks facing Australia were "tilted toward the downside".
On top of its JobKeeper program, the government has promised more than $66 billion in spending plus billions more in loan guarantees to help businesses survive pandemic-related closedowns.
S&P said Australia had strong institutions, credible monetary policy and a floating exchange rate which all helped support the country's triple A rating.
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RBA to big super: don't expect a liquidity bailout
Apr 9, 2020 – 4.11pm
The Reserve Bank of Australia is wary of providing emergency loans to superannuation funds experiencing sudden member cash withdrawals, because allowing it could increase risk.
The federal government is letting super fund members experiencing financial hardship due to the coronavirus economic downturn to withdraw up to $20,000 over the next two financial years.
More than 600,000 members have so far registered with the Australian Taxation Office to tap into their super.
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Liveris calls the start of the on-shoring era
He's been tapped by Barack Obama and Donald Trump to save American manufacturing. Now Andrew Liveris is doing the same for Scott Morrison.
Apr 9, 2020 – 12.00am
Washington | Andrew Liveris, the former Dow Chemical chief who helped write manufacturing policy for Barack Obama and Donald Trump – and is now doing the same for Scott Morrison – believes the post-coronavirus economy needs an historic overhaul.
"Australia drank the free-trade juice and decided that off-shoring was OK. Well, that era is gone," said Mr Liveris, who's been tapped to work with Nev Power's advisory commission into restoring local manufacturing.
"We've got to now realise we've got to really look at on-shoring key capabilities," he said.
In an interview with The Australian Financial Review in which he was at times deeply critical of past policies, Mr Liveris indicated Australia should never have accepted the hollowing-out of its manufacturing base – part of what is known as "Dutch disease" – to the extent it has.
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Why Morrison dropped the 'snap back' strategy
The political task ahead is mammoth. First, how to keep a society and an economy in hibernation to save lives. And then, how to wake it up.
Apr 9, 2020 – 12.00am
Like tens of thousands of other Christians, Scott Morrison won't be going to church this Easter.
Instead, the Prime Minister, his wife and two daughters, his mother and mother-in-law, all of whom have been bunkered down in The Lodge for several weeks, will celebrate the Resurrection of Christ on Sunday morning by observing a televised service.
And then it will be pretty much straight back to work to deal with not just how to manage the health and economic crises in the months ahead, but how and when to structure the economic resurrection.
Morrison is not relying on prayer to fix the myriad problems consuming his government. He's relying on it to give him the strength to make the right decisions.
“As a Prime Minister I have to take my decisions based on very strong advice and exercise the best judgment I can,'' Morrison told a televised prayer session on March 23.
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Up to a third of mortgage holders don't have a buffer for virus downturn
By Shane Wright
April 9, 2020 — 9.10pm
A third of Australian mortgage holders are going into the coronavirus economic downturn less than a month ahead in their loan repayments with warnings many of these people are at risk from a sharp fall in income.
As the Reserve Bank revealed there had been a surge in people hoarding cash through March with some customers withdrawing more than $1 million from local banks, it warned there were hundreds of thousands of Australians facing extreme financial pressures.
Analysts, the RBA and Treasury expect a deep economic downturn as efforts to control the spread of the coronavirus weigh on the economy. Job advertisements have collapsed while unemployment has started rising as firms lay off staff.
In its six-monthly report into the health of the financial system, the bank said among people with mortgages, more than half were in front of their loans to cover at least three months of payments. About 30 per cent were at least three years ahead on their mortgages.
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Snap back to what? We need a steady march to reform - and a broader tax base
John Hewson
April 9, 2020 — 11.22am
The 1987 federal election campaign was defined by the TV add featuring “whingeing Wendy”, a suburban housewife questioning John Howard from her kitchen, with devastating effect, about the financing of his promised $8 billion tax cut: Where’s the money coming from?
Wendy listed an emotive range of possible “cuts” – home nursing, meals on wheels, pharmaceutical benefits, asthma and diabetes allowances, pensions, Medicare, child minding centres. The result was an historic third Labor win in a row, with an expanded margin of 24 seats (previously 16), despite a swing of 1 per cent against the government, and a small win by Howard in the popular vote. Howard’s case wasn’t helped when he finally released funding of his tax cuts didn’t add up, compounding the substance of Wendy’s question.
While oppositions have always been bedevilled to provide funding detail, governments have struggled with the reality, to deliver responsible, conservative, fiscal management – Fraser undoing Whitlam’s profligacy, Hawke/Keating coming out of global recession and post-Fraser, Keating again after the early-90s recession, and Rudd/Gillard/Abbott/ Turnbull/ Morrison post-global financial crisis.
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We shouldn't read too much into sharemarkets rallying, our economic crisis has just begun
By Garry White
April 10, 2020 — 11.05am
Sharemarkets have staged a significant recovery from the coronavirus slump, rallying sharply from lows hit in March. But gains of 10 per cent or more are common in bear markets - and the crisis at many of the world's businesses has only just begun.
A wave of insolvencies will puncture the optimism, as companies with too much debt fail to remain afloat. There will be some individual winners that have seen demand soar, but earnings will slump at most that escape going bust. In fact, the fall in company profits this year will probably be more severe than at the height of the last financial crisis.
People's behaviour and spending will not return to normal after restrictions on movements are lifted. In Wuhan, where the lockdown has been eased, people are still cautious. All this pain will be reflected in economic data releases scheduled over the next six months. It's hard to see the optimism surviving as the reality is being revealed.
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Coronavirus: Government needs to lead debate about post-COVID-19 future
Prime Minister Scott Morrison wouldn’t say so publicly, but you sense he was privately pleased Qantas chair Richard Goyder was out in the press expressing some concerns about the lockdown.
Given we are at the start of Easter the last message Canberra wants to send is that it is starting to relax about the virus.
Yet the messaging is all about the crisis and how to cope, with nothing about what happens next.
Neville Power’s co-ordination commission is meant to be part of that mission.
If the politicians start musing about the future, it would create an image that they were becoming relaxed about the virus. So the messaging is all lockdown.
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Virus fight leaves Australia with a mountain of debt, so how will we deal with it?
By Shane Wright
April 11, 2020 — 12.00am
Two weeks after the formal end of World War II, debate was underway in Canberra into Ben Chifley's latest federal budget. Billy Hughes, a former (Labor) prime minister during World War I, stood to argue that while the war had been won, the country was about to face another battle. A battle against debt.
"The budget figures are astronomical, but the people do not realise their implication," he said. "They speak and act as if they can go back to where they were, and even improve the conditions under which they lived before the war. All such ideas must be swept from our minds ... Imposed upon us now are heavy liabilities which we must discharge."
A year after Hughes' words, Australian government debt reach 120 per cent of GDP, its highest level ever recorded.
Seventy-five years later, Australia is in the midst of a new type of crisis - stopping the spread of the coronavirus pandemic - that will leave the country with enormous debt and budget deficits. Government debt this week reached a record $592 billion, likely on its way to $850 billion or more while the parliament committed itself to the $130 billion JobKeeper wage subsidy program.
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10.07am April 12, 2020
Significant increase in jobless, significant reduction in growth
The Treasurer expects Australia's unemployment rate to significantly increase, while he expects the economy to see a "significant reduction in growth". He touted the strength of the economy before the pandemic as a "position of economic strength.
"We had balanced the books for the first time," he said. "Unemployment was ticking... Ticking down. Growth was ticking up."
Mr Frydenberg was concerned about the huge rise in US jobless claims where 6.6 million more people made a claim for the benefit last week, bringing the number to more than 15 million in just three weeks.
"That is greater than the size of the whole Australian economy" and "around 10 times what we saw at the height of the GFC."
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Health Issues.
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Private health deal a warning for competition
Australia’s 38 private health funds were meeting on Thursday to co-ordinate rebates to members in a deal somewhat strangely sanctioned by the competition regulator the Australian Competition and Consumer Commission.
The interim authorisation, aimed at providing financial relief to policy holders, is one of a string of otherwise uncompetitive behaviours sanctioned by the ACCC due to the coronavirus.
The private health insurance sector is tightly regulated by the federal government, which is one saving grave in this authorisation.
Because elective surgery is sidelined to free more resources to cope with COVID-19, the health funds have excess cash and are headed towards an unusually profitable year.
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From jaws of death to lifeline: Private health insurers' unexpected windfall
By Colin Kruger
April 11, 2020 — 12.00am
The coronavirus has hit Australia's private health sector but the financial impact on the ASX-listed insurers is not what many would expect.
Health Minister Greg Hunt has effectively nationalised the country's private hospital sector for the duration of the contagion crisis after promising to "guarantee the viability of private hospitals" which have lost most of their business after the government banned non-essential elective surgery.
And the 13.6 million Australians who have private health insurance did not take a hit from the mandated increase in premiums of just under 3 per cent due to take effect on April 1.
Australia's ASX-listed health insurance giants Medibank and NIB have delayed the increase by six months, so has the privately-owned BUPA and not for profit players such as HCF.
Private health insurers have also offered financial relief for customers who have lost their jobs, are underemployed or have contracted the virus. This includes the insurers offering full hospital coverage for all policy holders affected by COVID-19 irrespective of the level of cover.
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International Issues.
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The US recovery will not be fast
Australian investors, households and policymakers can't afford to be be as sanguine about what's happening to the US economy.
Apr 5, 2020 – 10.33am
Washington | Australians watching the deadly results of America's failed preparation ahead of what Donald Trump warns will be a week with "a lot of death" can be forgiven for feeling relief.
Relative to the brutal human disaster unfolding across the US, Australia is having a benign pandemic. That's a good thing and shows the benefit of taking short-term economic pain to avoid what's happening across America.
But Australian investors, households and policymakers can't afford to be as sanguine about what's happening to the US economy.
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America’s Chance to Escape Trumpy Casino Capitalism
RECKONING TIME
This fall, Americans will face a choice. One party promotes the illusion of prosperity, masking vast inequality. The other wants to use the crisis toward better ends.
David Rothkopf
Updated Apr. 04, 2020 7:42AM ET / Published Apr. 04, 2020 5:10AM ET
It is hard to imagine this crisis getting worse. But it will. Much, much worse. While we struggle to cope with the pain, suffering and sacrifice it generates every day, another question looms. What will our nation be after this grim chapter is ended?
The data and the projections are clear. The White House is estimating that 100,000-240,000 of us will be dead before this is over. If we do not rigorously apply sound measures to contain the virus, the number could be many times that. In the past two weeks, nearly 10 million people have applied for unemployment benefits. The St. Louis Fed predicts that before this is over 47 million Americans will be out of work and the unemployment rate will be 32 percent—half-again higher than it has ever been before.
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Boris Johnson admitted to hospital as Queen rallies UK
Mark Landler
Apr 6, 2020 – 8.03am
London | Queen Elizabeth II rallied her fellow Britons on Sunday evening (Monday AEST) to confront the coronavirus pandemic in a rare televised address that was followed almost immediately by news that the nation's most prominent victim of the virus, Prime Minister Boris Johnson, had been admitted to the hospital.
The British government said Johnson would undergo tests after suffering symptoms for 10 days and would continue to carry out his duties.
But the uncertainty surrounding his condition underscored the sense of crisis that led the queen to address the country in a speech that evoked the darkest days of World War II.
"I am speaking to you at what I know is an increasingly challenging time," the queen said in taped remarks from Windsor Castle, where she has sequestered herself against a virus that has infected at least 40,000 people in Britain. Among them are her eldest son and heir, Prince Charles.
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As Italy teeters, EU wrestles with crisis that could tear it apart
By Bevan Shields
April 5, 2020 — 11.30pm
London: It might be remembered as one of the most consequential calls for help in modern European history.
On February 28, just as the coronavirus was claiming its first victims on the continent, Italy pushed the panic button and pleaded with the European Union for urgent assistance.
In what Rome considered a simple and uncontroversial request, the EU was asked to activate its disaster response mechanism so that less-affected countries could send face masks and equipment to the frontline of the outbreak in Italy's north.
Marco Schiesaro, the Lega mayor of Cadoneghe, filmed himself "suspending" the flag of the European Union. The footage was tweeted out by Lega leader Matteo Salvini, who has urged the country to reconsider its relationship with Brussels following the crisis. Credit:Facebook
Brussels quickly sent the message out but not one of the bloc's 27 member countries responded. Prime Minister Giuseppe Conte, a mild-mannered academic facing the worst crisis since World War II, was stunned by the radio silence. To add insult to injury, Germany and France even initially banned private firms from exporting medical supplies.
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Pitting the states against the nation is accelerating the US crisis
Nicole Hemmer
Columnist and visiting research associate at the University of Virginia’s Miller Center.
April 6, 2020 — 12.09am
Desperately low on medical supplies, state governors in the United States have been clamouring for equipment held in the federal stockpile. In response, Jared Kushner – the President's son-in-law, whose portfolio includes Middle East peace negotiations, criminal justice reform and a shadow pandemic taskforce – made a startling claim: "The notion of the federal stockpile was it's supposed to be our stockpile. It's not supposed to be states' stockpiles that they then use."
This is, of course, nonsense. But it's illuminating nonsense. President Donald Trump has in recent days turned the war against COVID-19 into a war against the states, in a desperate effort to shirk responsibility for his pandemic denialism. In doing so, he has abandoned the core responsibility of the presidency, exacerbating political fractures that not only bode ill for the health of Americans but the health of the country as a whole.
Two weeks ago, Trump was asked about the disastrous federal response to the pandemic. His answer: "I don't take responsibility at all." It was a spot-on summary of his governing philosophy. Still, it took another week or so for him to land on who, exactly, should be held responsible. After easing off his attacks on China, he focused instead on Democratic governors in Washington, New York and Michigan, all of whom were fighting deadly outbreaks in their largest cities.
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Coronavirus: US Surgeon General Jerome Adams warns nation to brace for ‘Pearl Harbour’ moment
America faces its “Pearl Harbour’’ moment this week as the nation braces for a frightening surge of coronavirus deaths, the US Surgeon General Jerome Adams has warned.
His grim forecast came as the top US infectious diseases expert Anthony Fauci, admitted that the experts were “struggling’’ to get the virus under control and that the worst was still to come.
“The next week is going to be our Pearl Harbor moment,” the surgeon general, Dr Adams said. “It’s going to be our 9/11 moment. Only it’s not going to be localised. It’s going to be happening all over the country ... it’s going to be the hardest moment for many Americans in their entire lives.”
Donald Trump also repeated his warning that the US was facing a period where deaths would increase sharply, tweeting that “a rough two weeks are coming up!’’
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Coronavirus: America faces new ‘Pearl Harbor, 9/11’
America faces its “Pearl Harbor” moment this week as the nation braces for a frightening surge of coronavirus deaths, US Surgeon General Jerome Adams has warned.
His grim forecast came as the top US infectious diseases authority, Anthony Fauci, admitted the experts were “struggling” to get the virus under control and that the worst was still to come.
“The next week is going to be our Pearl Harbor moment,” Dr Adams said. “It’s going to be our 9/11 moment. Only it’s not going to be localised. It’s going to be happening all over the country ... it’s going to be the hardest moment for many Americans in their entire lives.”
Donald Trump also repeated his warning that the US was facing a period where deaths would increase sharply, tweeting: “A rough two weeks are coming up!”
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US death estimate slashed yet again
Apr 9, 2020 – 3.17am
The number of Americans expected to die during the first wave of the COVID-19 virus was slashed by more than one-quarter to 60,415, according to one of the most respected modellers.
In its latest update, the Institute for Health Metrics and Evaluation also said deaths would peak in the US on April 12, four days earlier than previously expected.
The first wave is seen extending through August 4.
The IHME forecasts a daily death peak of 2212 on April 12.
As New York city appeared to hit a plateau, there were 10 states yesterday with more than 1000 new cases, as other hot spots have developed in places like Boston and Philadelphia, joining New Orleans and Detroit among others, Amherst Pierpont's Stephen Stanley said.
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Record 16.6m people are jobless in the US in just three weeks
Apr 9, 2020 – 11.01pm
Washington DC | With another record 6.6 million people seeking jobless benefits for the second week in a row, the United States has reached a grim landmark: roughly one in 10 workers have lost their jobs in just the past three weeks.
All told, in the past three weeks, 16.6 million Americans have filed for unemployment aid. The surge of jobless claims has overwhelmed state unemployment offices around the country. And still more job cuts are expected. The unemployment rate could hit 15 per cent when the April employment report is released in early May.
The figures collectively constitute the largest and fastest string of job losses in records dating to 1948. They paint a picture of a job market that is quickly unraveling as businesses have shut down across the country because of the coronavirus outbreak. More than 20 million American may lose jobs this month.
The viral outbreak is believed to have erased nearly one-third of the economy's output in the current quarter. Forty-eight states have closed non-essential businesses. Restaurants, hotels, department stores and small businesses have laid off millions as they struggle to pay bills at a time when their revenue has vanished.
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Fed pumps $US2.3trn as US unemployment soars
· AP
The US Federal Reserve unleashed a new series of moves Thursday to try to make loans available to states, localities and companies that have been hard hit by the coronavirus.
In doing so, the Fed will pump an additional $US2.3 trillion into the US economy. The central bank, in part, is drawing on money made available in Congress’ new economic relief package to buy municipal bonds as well as debt that did not previously qualify for federal backing.
The extraordinary rescue package comes on top of efforts the Fed has already made to bolster the economy, including cutting its benchmark interest rate to near zero and supplying more than $US1 trillion to purchase Treasury and mortgage- backed securities to help keep credit flowing.
On the same day that the number of Americans seeking unemployment benefits reached 16.8 million in just the past three weeks, Chairman Jerome Powell said the Fed fully intended to use its powers “forcefully, proactively and aggressively until we are confident that we are solidly on the road to recovery.” On Wall Street, the Dow jumped 300 points after the Fed action. Powell said there was “every reason to believe that the economic rebound, when it comes, can be robust” because the economy was doing well before the virus hit.
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Coronavirus: IMF expecting worst downturn since Great Depression
· AP
The coronavirus pandemic will push the global economy into the deepest recession since the Great Depression, with the world’s poorest countries suffering the most, the head of the International Monetary Fund said Thursday. “We anticipate the worst economic fallout since the Great Depression,” IMF managing director Kristalina Georgieva said Thursday in remarks previewing next week’s virtual meetings of the 189-nation IMF and its sister lending organization, the World Bank.
She said that the IMF would release an updated world economic forecast on Tuesday that will show just how quickly the coronavirus outbreak has turned what had been expected to be a solid year of growth into a deep downturn. Just three months ago, the IMF was forecasting that 160 nations would enjoy positive income growth on a per capita basis. Now the expectation is that over 170 nations will have negative per capita income growth this year. Emerging markets and low-income nations across Africa, Latin America and much of Asia are at high risk, she said.
“With weak health systems to begin with, many face the dreadful challenge of fighting the virus in densely populated cities and poverty-stricken slums, where social distancing is hardly an option,” Ms Georgieva said.
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US surpasses Italy for most virus deaths
Sophie Wingate
Apr 12, 2020 – 7.02am
New York | The United States on Saturday surpassed Italy for most fatalities from the new coronavirus of any country, according to Johns Hopkins University.
A running tally from the Baltimore-based university showed that at least 19,700 people had died in the U.S., while nearly 19,500 had lost their lives in Italy, which previously bore the grim record for the highest death toll during the global pandemic.
Different population sizes, reporting standards and approaches to testing make comparisons between countries difficult, and the true number of infections is likely higher, in part owing to testing shortages. Similarly, the death tolls might be greater.
In the U.S. - which has by far the highest number of confirmed coronavirus cases globally, with about 503,600 infections - New York remains the hardest hit state, with more cases than any other country in the world.
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I look forward to comments on all this!
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David.
