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In the US the big news has been the plan to leave the ‘Forever War’ after 20 years. There is a real risk that they will leave behind an awful mess. Elsewhere we see yet more gun violence and we see the relief with the verdict on the George Floyd murder.
In the UK vaccination continues apace and the economy seems to be rebounding, but the country was really just mourning Prince Philp and worrying about how the Queen could go on.
In Australia the ‘Holgate Affair’ rumbles on doing the PM more than a little harm while the Government tries to frame the Budget due in a few weeks. A lot going on even though parliament isn’t sitting with big modifications of the vaccine program!
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Major Issues.
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Bristling at new nationalist bark will only bait China
The lesson Australia should learn from the 20th-century rise of nationalism in Asia is that whipping up an anti-Beijing frenzy will just worsen the sensitive, snarling sense of grievance.
James Curran Columnist
Apr 11, 2021 – 1.29pm
Australians cannot say they were never warned about China’s rise.
Alarm bells rang in the late 19th century as Australia approached federation.
In 1893, the liberal intellectual Charles Pearson, in his book National Life and Character, tried to explain the modernising forces that were then reshaping the world.
A former education minister in colonial Victoria, Pearson was interested primarily in how Western nations would respond to the inevitable rise of countries such as China, India and Brazil as they underwent modernisation, grew in numbers and searched for more land to settle. He was trying to make sense of a new world arising from the ashes of the old.
But it was China he identified as the greatest potential threat, predicting that “the preponderance of China over any rival, even over the United States of America, is likely to be overwhelming”.
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https://www.afr.com/politics/federal/australia-s-350m-bank-tax-break-enrages-eu-20210407-p57h7c
Australia’s $350m bank tax break enrages EU
John Kehoe Economics editor
Apr 11, 2021 – 7.30pm
A $350 million tax dispute between the federal government and European Union has threatened to stop banks raising funds from European debt investors.
The government is being forced to end a special tax break for banks and fund managers after the EU threatened to blacklist Australia for running a harmful tax regime.
The disagreement comes amid separate political tension over the EU blocking the supply of COVID-19 vaccines to Australia.
The tax spat was over Australia’s offshore banking unit (OBU) regime, which taxes offshore profits of local financial institutions at the concessional rate of 10 per cent, instead of the 30 per cent corporate rate.
The big four banks, Macquarie Group, foreign banks, investment banks, insurers, market traders such as Optiver, hedge funds and fund managers use the regime for some of their offshore business activities that is conducted from Australia.
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Former Turnbull security adviser auditing universities’ foreign interference risks
April 11, 2021 — 12.00am
Some of Australia’s top universities have called in a Chinese Communist Party expert to detect foreign interference risks, including auditing academics from at least one institution to see if they have secret secondary jobs.
The universities of Sydney, New South Wales, Monash and Queensland have all engaged former journalist and government adviser John Garnaut through consultancy firm McGrathNicol in a move designed to reassure the federal government they are taking the issue seriously.
Mr Garnaut’s appointment follows the introduction of the Foreign Influence Transparency Register, which requires people acting for overseas governments to declare their activities, and the refusal of several academic funding grants by the Education Minister last year on security grounds.
There have been growing fears in the West, including Australia, that the Chinese government is using academic talent programs to acquire intellectual property that can be put to military use.
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Taking stock of inflation risk to equity portfolios
While prices are likely to rebound in the short term supporting the rotation into value and defensive stocks, inflation is unlikely to be high enough to derail valuations.
James Wright Contributor
Apr 12, 2021 – 12.00am
It is often said that equity investors always need to climb the wall of worry. The most recent addition to the laundry list of concerns is that the reopening of economies will lead to inflation and create a serious issue for equity market valuations.
In the early stages of the pandemic, one of the many worries was deflation as prices softened. More recently, bond yields have risen sharply as markets weigh up the prospects of an overheating economic rebound further supported by monetary and fiscal stimulus leading to the unleashing of long-contained inflationary pressures.
While some fiscal measures have started to be withdrawn, including the ending of JobKeeper in Australia in March, governments across the globe have maintained a steadfast resolve to do whatever it takes to support growth. Federal Reserve officials have suggested that the US economy will need to grow above trend for a couple of years before its policy will likely be tightened. The Reserve Bank has indicated that it is likely to keep rates on hold until 2024.
So with authorities reaffirming such a strong commitment to growth, are central banks about to generate inflation after more than a decade of trying?
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Historic change sees RBA leave the dog days behind
Ross Garnaut Contributor
Apr 11, 2021 – 12.35pm
The RBA governor’s statement after Tuesday’s board meeting would have been remarkable before late 2019 for its reference to full employment. It would have been remarkable before the first half of 2020 for its commitment to interest rates near zero for cash and out along the yield curve. It would have been remarkable until recently for its acceptance of RBA purchases of large quantities of government bonds.
There has been a historic change in the basic stance of monetary policy since the beginning of the pandemic and especially since early February. The change gives Australia a chance of achieving full employment for the general run of citizens for the first time in the working lives of most Australians.
The Australian economy performed poorly in the seven years (2013-19) between the China resources boom and the pandemic recession. Australians experienced slower growth in output per person than other developed countries, including Japan. There was no growth at all in real household income per capita. There was persistently high unemployment (while the US went from much higher to much lower unemployment than Australia), and inexorably increasing underemployment. These were the dog days.
My book RESET: Australia After the Pandemic Recession attributes the stagnation to several causes, and gives a central place to monetary policy being tighter than the rest of the developed world even when our economy was weaker.
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‘Core-satellite’ approach gets best of active and index investing
This concept recognises the fundamental differences between the two and combines the best aspects of both to construct a portfolio.
Aidan Geysen Contributor
Apr 12, 2021 – 12.00am
If there’s one investment lesson to be learned from the pandemic, it’s that short-term market movements are truly unpredictable.
This uncertainty is understandably not very comforting for many. Google trends reveal that the demand for market information tripled as COVID-19 hit this time last year. The great investors of our time – Warren Buffett, Ray Dalio, Bill Ackman – all saw an increase in search engine interest as investors flocked to them for guidance.
The search phrase “what stocks should I buy?” reached peak popularity in March 2020, as did the phrase “active vs index”.
The latter has been widely debated, particularly recently. On average, active management has underperformed over the past three decades when compared to index counterparts. And while active managers can more easily adjust portfolios and minimise losses when markets tumble, it’s not guaranteed that they’ll always re-enter at the opportune time. This was evidenced by the fact that many active managers missed the market rebound last year, for it happened almost as quickly as it fell.
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Archegos reveals a banking system still full of hidden risk
Excessive leverage was supposed to have been taken out of the banks after 2008. Cheap money and the need for yield has brought it back.
Adrian Blundell-Wignall Columnist
Apr 12, 2021 – 1.49pm
One would think that the near-end of the financial world in 2008 would have been enough for regulators and central banks to deal with the problem of bank business models.
Instead, the aftermath focused on updating capital requirements for banks. Leverage risk cannot be destroyed this way. It simply shifts where the risk is held.
Welcome to the Archegos saga.
Banks now hold fewer structured products on their balance sheet due to capital rules and instead act as intermediaries for shadow banks that increasingly hold them.
Two-thirds of the losses in the 2008 crisis were due to credit valuation shifts with derivative counterparties.
As Archegos shows, such loss channels are alive and well.
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https://www.afr.com/chanticleer/rba-study-exposes-super-flaws-20210412-p57ie1
RBA study exposes super flaws
Australia’s superannuation funds have effective liquidity management practices, according to a Reserve Bank of Australia study of the impact of COVID-19. But the study exposes weaknesses in the retirement savings system.
Apr 12, 2021 – 11.25am
It is reassuring to know that the Reserve Bank of Australia believes the country’s $2.3 trillion superannuation fund industry has effective liquidity management during times of crisis.
But reading between the lines of the RBA’s study of the impact of COVID-19 on super fund liquidity it is clear there are fundamental flaws in the system.
The RBA study, which was reported in the latest financial stability review, found that during the pandemic aggregate cash balances in super funds increased by $51 billion over the March quarter of 2020.
The study found that about half of the increase in cash holdings in the 2020 March quarter, or $25 billion, was “due to members choosing to switch from higher-risk investments into cash”.
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‘This crisis is different’: the dramatic rebound in the global economy
By 2024, the IMF now believes, the US economy is likely to be stronger than it had predicted before the pandemic. For most advanced economies, it says, there will be only limited scars from the crisis.
Chris Giles
Apr 12, 2021 – 10.09am
From an economic point of view, it is almost as if the past year was just a bad dream.
As recently as October, the IMF was warning that the coronavirus will cause “lasting damage” to living standards across the world with any recovery likely to be “long, uneven and uncertain”.
Yet the forecast it released last week is very different. By 2024, the IMF now believes, the US economy is likely to be stronger than it had predicted before the pandemic. For most advanced economies, it says, there will be only limited scars from the crisis.
Such a positive transformation in the global economic outlook within the space of just six months is extremely rare.
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https://www.afr.com/politics/federal/turnbull-unloads-on-lying-news-corp-20210412-p57idj
Turnbull unloads on ‘lying’ News Corp
Andrew Tillett Political correspondent
Apr 12, 2021 – 11.33am
Former prime minister Malcolm Turnbull has unloaded on Rupert Murdoch’s News Corporation, accusing the media company of being “utterly liberated from truth” and campaigning against his government in an attempt to restore Tony Abbott to the Liberal leadership.
Appearing before the Senate inquiry into media diversity, Mr Turnbull said the media empire acted like a “mafia gang” as it pursued its own corporate interests, campaigned against climate change action and held vendettas against politicians and other opponents.
“News Corp now is like a political party, but with just one member, or one family of members and that is an absolute threat to our democracy,” he said.
“The most powerful political actor in Australia is not the Liberal Party, or the National Party or the Labor Party. It is News Corporation and it is utterly unaccountable.”
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Deluge of new US bond sales to test markets’ nerves
Senior business columnist
April 12, 2021 — 11.45am
The tug of war between financial market hawks and doves is likely to resume this week after a brief hiatus as an avalanche of US Treasury bond sales begins against a backdrop of better-than-expected economic data.
The first quarter of this year was the worst for bond investors for more than 40 years as bond yields spiked and prices (which are inversely correlated to bond prices) fell. The fear of rekindled inflation that triggered the falls was reflected in the weakest demand on record for a February auction of seven-year US Treasury notes.
After peaking at 1.74 per cent at the end of last month - a post-pandemic high - however, yields on the key 10-year bond rate fell back to the 1.6 per cent to 1.65 per cent range among reassuring confirmations from the US Federal Reserve Board that it still expects to maintain its ultra-low rates and $US120 billion ($158 billion) a month of bond and mortgages buying until at least 2024.
On Friday, yields pushed back up to just under 1.7 per cent after the release of stronger-than-expected producer price data which, while distorted by its base – the real onset of the pandemic in March last year – was, at 4.2 per cent, the biggest annual gain in a decade.
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‘A market for crazy’: Turnbull serves cold fury for the Murdochs
By Tony Wright
Updated April 12, 2021 — 4.10pmfirst published at 2.43pm
Malcolm Turnbull, possibly making a subliminal point about revenge and how it is best served cold, sat himself in front of a cool blue curtain in calming botanical print... and set the room on fire.
As if screwing up a collection of Rupert Murdoch’s newspapers and wielding a flaming Zippo, Turnbull put Murdoch’s News Corp to the flame.
Former prime minister Malcolm Turnbull appears via videolink at a Senate committee.
“There is a market for crazy,” he said, referring to News Corp outlets and the damage he said they and other right-wing outfits had done to American democracy, culminating in the attack on the US Capitol on January 6.
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https://www.afr.com/politics/federal/holgate-returns-fire-and-hits-government-20210413-p57irc
Morrison must regret his stinging Holgate rhetoric
Christine Holgate’s devastating testimony will confirm her public status as corporate heroine standing up against workplace bullying and harassment.
Jennifer Hewett Columnist
Updated Apr 13, 2021 – 4.33pm, first published at 4.31pm
Ready, aim, fire.
Christine Holgate did not miss any of her very large targets as she sprayed around fiery blame for the “bullying and humiliation” forcing her out of Australia Post.
The most direct hit was on the chairman, Lucio Di Bartolomeo, who Holgate accused of lying repeatedly to “curry favour” with his political masters, arguing it was in the organisation’s best interest for him to resign or be sacked.
But Scott Morrison is part of the massive collateral damage to the government just when the Prime Minister is attempting to resuscitate his standing with women.
Holgate has always been an impressive performer in terms of her business achievements, at Australia Post and previously as CEO of Blackmores.
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Aussie ETFs storm through $100b barrier
Aleks Vickovich Wealth editor
Apr 13, 2021 – 3.44pm
Home-grown exchange-traded funds have now amassed almost $103 billion in investor assets, adding $8 billion in the first quarter of 2021, as the Robinhood generation of new investors chases relatively low-cost exposure to volatile coronavirus financial markets.
ETFs listed in Australia held $102.8 billion in assets at the end of March, according to analysis of both Australian Securities Exchange and Chi-X data by ETF provider BetaShares.
The milestone comes after investors ploughed an additional $8 billion into ETFs in the first three months of 2021, taking the total investment to $46 billion in new money over the 12 months to March 31.
That represents an 80 per cent increase in flows on the previous year, which BetaShares concluded was the “most rapid growth over a 12-month period in the industry’s history”.
However, that figure includes the major contribution of the Magellan Global Fund (MGF), which was converted from a closed-end fund to an ASX-listed active ETF in November last year.
MGF is the largest individual ETF in Australia by market capitalisation, with $13.6 billion in assets – almost twice the $7.7 billion held in the largest passively managed fund, the Vanguard Australian Shares Index ETF.
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Jamie Dimon’s five lessons for decision-making
The JPMorgan CEO says it’s crucial to look at raw numbers and reality when making decisions, but there are times when too much analysis can be harmful.
James Thomson Columnist
Apr 14, 2021 – 9.42am
As annual letters to shareholders go, JPMorgan chief executive Jamie Dimon’s 2021 missive released last week was an epic. It was more than 60 pages long, covering everything from the pandemic, the pros and cons of Zoom and the challenges facing the banking sector, right through to America’s inequality challenge.
It’s a thoughtful and considered piece of writing that many business leaders can take something from. And if Dimon’s views on the challenges facing America and the West aren’t tempting enough, there’s also a fantastic section on his lessons from modern leadership.
Dimon’s focus here is on making good decisions, which he says are based on “having the right people in the room with all information fully shared (all too often I have seen precisely the opposite)” plus “constant feedback and follow-up”.
But it’s what he has to say about putting together the information on which to base decisions that is particularly interesting. Five lessons stick out.
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https://www.afr.com/policy/economy/pm-wins-war-but-risks-the-peace-20210413-p57iw2
PM wins war, but risks the peace
The Morrison government’s failures on vaccines, jobs and wages leave it vulnerable to voters who sense a broken bargain.
Nick Dyrenfurth Contributor
Apr 14, 2021 – 2.51pm
Last year I warned that Scott Morrison’s government risked winning the war against COVID-19 – saving lives (albeit mainly a state government achievement), protecting the economy and saving jobs – but losing the post-COVID-19 peace.
Australians struck a pandemic bargain with his government, suffering lockdowns and business closures, triggering our first recession in 30 years and catastrophic job losses. The government’s end of the bargain was to protect us, in terms of both ongoing health risks and economic wellbeing. The buck stopped with the Prime Minister.
While JobKeeper, despite evident rorting of the scheme, and JobSeeker were solid policies, along with economic stimulus, deflecting blame for COVID-19 missteps onto state governments and taking all the credit was untenable political shtick. This was evinced by hotel quarantine and Commonwealth-regulated aged care failures.
COVID-19 has virtually been eliminated from our shores. Australia’s death toll of 910 – each and every one a tragedy – compares extraordinarily well globally, where third and fourth waves are wreaking misery.
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ETFs dispel fear-mongering to pass pandemic stress test
Exchange traded funds were meant to be the source of the next crisis, but they proved their worth in the last one.
Jonathan Shapiro Senior reporter
Apr 15, 2021 – 3.24pm
This week the Australian exchange traded funds sector reached the $100 billion milestone.
After years of derision that one of the true investment innovations would cause the next crisis, there’s a general acceptance that they are now an important part of financial markets.
ETFs survived a severe liquidity test in March 2020.
Much of the angst has focused on ETFs as an amplifier of a trend towards passive investing that has pushed too much money into stocks with large index weights, distorting their valuation. ETFs were a “ponzi” scheme that would unravel when the swift, undiscerning flows reversed, we were warned.
That turned out to be hogwash. While ETFs do leave distortive footprints, they tend to be idiosyncratic, and are arbitraged away by smart hedge funds that can anticipate changes to index constituents.
But more cutting criticism of ETFs came from within the fixed income community. That was where the great ETF accident was meant to occur.
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Capping super contributions was never going to fly politically
Even before the government hit troubled waters, meddling with the super guarantee was always laden with risk. Now it would be a suicide mission.
Phillip Coorey Political editor
Apr 15, 2021 – 10.30pm
Even before the government hit troubled waters, meddling with the superannuation guarantee in the shadow of an election, and breaking a promise in the process, was always going to be a risky proposition.
The events of recent days and weeks turned the idea into a political suicide mission and, thus, it was of little surprise that the expenditure review committee knocked it on the head during a marathon pre-budget session earlier this week.
The proposals being pushed included stopping the already-legislated increase to the compulsory contribution from 9.5 per cent to 12 per cent by 2025.
On this, the government really had no basis on which to act. Scott Morrison said last year the decision would be made close to the May budget and would be contingent on the state of the economy then.
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In the end, it was politics that felled Christine Holgate
Labor set up an ambush for Scott Morrison, who blundered in. And a competent professional woman became the collateral damage.
Phillip Coorey Political editor
Apr 15, 2021 – 8.00pm
On October 22 last year, when Labor raised the issue of the four Cartier watches given to Australia Post executives, its target was Scott Morrison. If Christine Holgate or anyone else was to be collateral damage, then so be it.
Morrison was under a lot of pressure at the time over waste and supposed largesse. The federal Auditor-General had recently revealed that some departmental dunderplunken had paid $30 million for a parcel of land at Western Sydney Airport that was worth just $3 million.
The government also knew that the next day the Australian Securities and Investments Commision expenses scandal that eventually took out James Shipton and Daniel Crennan was to be revealed.
As well, the government was still unable to shake off the sports rorts affair. So the spectre of a chief executive and a board stacked with Liberal Party mates handing out flash watches to highly paid executives, while punters were scraping by on JobKeeper and JobSeeker, fitted seamlessly into the narrative Labor was weaving around the government.
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Future shock: a how-to guide for the new world disorder
A series of recently released books attempts to make sense of the extraordinary change and upheaval that have hit Australians over the past 18 months.
Andrew Clark Senior writer
Apr 16, 2021 – 12.00am
In 1970 American futurist Alvin Toffler published Future Shock. It’s a book about “too much change in too short a period of time”, according to the author. As things turned out, Toffler was half a century ahead of his time.
Over the course of just 18 months, our lives have been turned upside down. Devastating bushfires in Australia, millions perishing from COVID-19 around the world, a brutal, contagion-driven economic contraction; lockdowns and border closures; a public debt mountain; a titanic power struggle between the US and China; and an Australian gender relations crisis – all have commentators gasping for words.
Soon after the virus spread around the world, the cover of The Economist magazine summed up the 2020 zeitgeist with a picture of Earth and a “Closed” sign hanging from it.
“Journalistic cliches like ‘uncharted waters’ and over-used adjectives like ‘unprecedented’ and ‘unimaginable’ do not adequately capture the scale of developments,” financial analyst and author Satyajit Das says in a just published 150-page postscript to his 2015 book, A Banquet of Consequences.
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https://www.afr.com/policy/economy/foreign-investment-uncertainty-jumps-20210415-p57jfq
Foreign investment uncertainty jumps
John Kehoe Economics editor
Apr 16, 2021 – 12.00am
Foreign investment uncertainty for Australia doubled last year as the federal government imposed tough screening restrictions on offshore investors during COVID-19, according to a new “Foreign Investment Uncertainty Index”.
The index, developed by US Studies Centre economist Stephen Kirchner, is based on a keyword search of major Australian newspapers from 1997 through to the end of 2020.
The rise in uncertainty for foreign investors was largely due to the temporary COVID-19 requirement for all foreign direct investments to attain government approval and the introduction of a permanent tougher national security test, tacitly targeting China-related investments.
The inflow of foreign direct investment fell to only half the average of the five years ending in 2019.
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‘Priority’ super reforms face resistance in the Senate
Ronald Mizen Reporter
Apr 16, 2021 – 12.00am
The superannuation sector is demanding more detailed information about proposed reforms which would give the Morrison government powers to prohibit funds from making certain payments and investments and establish performance benchmarking for funds.
Key crossbench senators have also raised concerns about the legislation, with Senator Rex Patrick saying he would be moving amendments.
Labor and super funds believe powers contained in the bill are politically motivated and would be used by governments to silence criticism, including advertising campaigns opposing government policy.
The explanatory notes for the bill, which was introduced into the Parliament and is being considered by the Senate economic legislation committee, said the power to stop certain payments was deliberately broad.
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Focus for super set on fees, says Treasurer Josh Frydenberg
Josh Frydenberg says his priority on superannuation is lowering fees, as the government crabwalks away from a proposal to pause an increase in the compulsory retirement payment.
The Treasurer would not say on Thursday whether he had rejected a call from Coalition MPs to pause the planned rise in the superannuation guarantee, after The Australian reported the measure would not be included in the May budget.
Instead, he talked up the government’s efforts on improving the system to “generate better outcomes”. “When it comes to super … the government’s focus has been on lowering fees,” Mr Frydenberg said.
“That’s why we have legislation before the parliament that is designed to bring greater transparency and accountability to superannuation funds’ performance — to give Australians more choice to be more actively informed about the performance of their super funds and to be able to better choose which one is right for them.
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Cancel culture is destroying our society
As we approach the anniversary of the death of George Floyd, and the wave of outrage it prompted around the world about the treatment and perceptions of black people, so too are we approaching the anniversary of one of the most unfortunate consequences: the expansion, or rather inflammation, of “cancel culture”.
This is the phenomenon by which anyone in public life, the media or academe who refuses to subscribe to the extreme leftist orthodoxies of a militant and vocal minority are “cancelled”. The “cancellation” entails not just the denial of public platforms to those who refuse to conform, but also attempts using social media to seek to remove such people from civilised society and the public consciousness. It had existed before Floyd’s killing, but that appalling event led in turn to what has become one of the most toxic manifestations of mob rule of modern times.
Thus, an economist’s tweet critical of the Black Lives Matter movement means he loses his contract with a Federal Reserve bank. An article written many years ago gets a company executive fired. Children’s books are put out of print. A progressive newspaper opinion editor loses his job for publishing an article by a conservative legislator. In university history departments, there is a campaign to “decolonise the curriculum”.
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https://www.afr.com/policy/economy/the-red-hot-economy-is-booming-20210414-p57j7o
Economic rebound may be less of a miracle than it appears
Fuelled by government and central bank cash, the economy has more than recovered and is now emphatically expanding.
John Kehoe Economics editor
Apr 16, 2021 – 1.53pm
Australia’s 30-year international reputation as the “miracle” economy was fortified this week after employment surged to 13.1 million people, surpassing pre-COVID-19 levels.
Yet Australia’s red-hot economic rebound may be less of a miracle than it appears. When federal and state governments pump in an unprecedented $300 billion of fiscal stimulus, and the Reserve Bank of Australia nails interest rates to almost zero and buys about half the new government debt on issue, it’s perhaps less surprising that the economy is blazing.
There is plenty of cash from governments and central banks sloshing around to fire up business and consumer activity as the virus remains suppressed.
Unemployment has rapidly fallen to 5.6 per cent. ANZ job ads are at a 12-year high, with 190,000 positions vacant. House prices are rising strongly. Consumer sentiment is at an 11-year high and discretionary consumer spending is booming.
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Canberra prepares for Taiwan conflict as tensions escalate
Jacob Greber, Michael Smith and Andrew Tillett
Apr 16, 2021 – 8.00pm
The Australian government has sharply escalated its internal preparations for potential military action in the Taiwan Strait.
This is part of a broader show of force by the US and its allies at forcing China to back down on its incursions into the island state’s air space and isolate its economic partners.
Sources have told AFR Weekend that the Australian Defence Force was planning for a potential worst-case scenario if the United States and China clashed over Taiwan, prompting debate over the scope and scale of Canberra’s contribution to what would be an unprecedented conflict in the region.
Options include contributing to an allied effort with submarines, as well as maritime surveillance aircraft, air-to-air refuellers and potentially Super Hornet fighters operating from US bases in Guam or the Philippines, and even Japan.
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https://www.afr.com/world/asia/the-gloves-are-off-when-it-comes-to-taiwan-20210415-p57jjw
The gloves are off when it comes to Taiwan
Australians should be worried about Taiwan, where the threat of a new great power conflict is fast rising, prompting planners in Canberra to consider the unthinkable.
Michael Smith and Jacob Greber
Apr 16, 2021 – 8.00pm
It’s been almost 20 years to the day since Washington and Beijing found themselves ensnared in a dangerous military standoff that some feared would herald the start of a new cold war.
The trigger – which consumed the early days of George W. Bush’s presidency – was a collision between a Chinese fighter jet and a US Navy surveillance plane over the South China Sea. The Chinese pilot died and the stricken US aircraft and its 24-member crew were forced to land on Hainan Island.
After a tense 10-day diplomatic tete-a-tete that ended with the crew’s release, and China stripping the valuable aircraft of its equipment and sensitive signals intelligence manuals, the so-called “Hainan Island incident” ended in recriminations that left both sides shaken.
Yet for all the warnings at the time of a new great power conflict, the crisis was soon forgotten, swept away by the September 11, 2001 attacks and the subsequent war on terror that consumed America and its Western allies. It was only this week that US President Joe Biden announced an end to troops in Afghanistan, America’s longest war.
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Diplomacy and resolve can defuse Taiwan tension
Australia must do nothing to make China think there’s a military solution to its frustrations with Taiwan.
Apr 16, 2021 – 6.51pm
Australia announced an end to its longest war this week, just as diplomats and military planners in Canberra began quietly preparing for the worst amid the emerging tensions between Taiwan, China and the United States.
The Afghan war was consequential for us. Conflict over Taiwan, though still a long way from turning hot, would be existential – dramatically changing our Asian neighbourhood and perhaps Australia itself.
The 20-year war in Afghanistan failed in its shifting goals of defeating the Taliban or remaking a traditional but unstable society. But the US-led multinational effort in the region wasn’t without purpose. It removed al-Qaeda and defeated the Islamic State. It helped ensure that Islamist terror never became the unrestrained global force that it was so feared it would become in the years after 9/11.
China’s rise, by contrast, has been one of the most positive world events of the post-1945 era in most respects. But Beijing no longer wants merely to be rich. It wants to be powerful too.
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Biden, Suga to ‘present united front on Taiwan’: US official
Trevor Hunnicutt and David Brunnstrom
Apr 16, 2021 – 12.57pm
Washington | The United States and Japan will present a united front on Taiwan, China’s most sensitive territorial issue, in a summit meeting on Friday (Saturday AEST), according to a senior US administration official.
President Joe Biden and Prime Minister Yoshihide Suga are expected to agree on a joint statement on the Chinese-claimed but democratically ruled island at Mr Biden’s first in-person meeting with a foreign leader, said the official, who spoke on condition of anonymity.
The leaders will also discuss Beijing’s treatment of Muslims in the Xinjiang region and its influence over Hong Kong, while announcing a $US2 billion ($2.6 billion) Japanese investment in 5G telecommunications to counter China’s Huawei Technologies.
“You’ve seen a series of statements out of both the United States and Japan on the cross-strait circumstances on Taiwan, on our desire for the maintenance of peace and stability, on preserving the status quo, and I expect that you will see both a formal statement and consultations on these matters,” the senior administration official told reporters.
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Afghanistan: it’s about a net positive, not victory or defeat
The withdrawal of the last Australian troops from Afghanistan will mark the end of a 20-year conflict. It’s an open question whether the gains made in that period are sustainable.
Andrew Tillett Political correspondent
Apr 17, 2021 – 12.00am
Perhaps the best epitaph to Australia’s involvement in Afghanistan came from from Tony Abbott, who was prime minister at the time.
“Australia’s longest war is ending, not with victory, not with defeat, but with, we hope, an Afghanistan that is better for our presence here,” Abbott said on a warm October day in 2013 at Tarin Kowt, the main base for Australian forces, at a ceremony marking the withdrawal of combat troops.
Now, almost eight years later, Australia’s commitment will truly be over when the final 80 personnel complete their training of Afghan security forces and return home by September, in concert with the US withdrawal.
The legacy of the Afghanistan war is complicated.
What began as a US-led international coalition to hunt down the mastermind of the September 11 terror attacks, al-Qaeda leader Osama bin Laden, and stop the ruling Taliban from allowing Afghanistan to be used as a safe haven for jihadists, morphed into rebuilding and democratising a country bedevilled by centuries of bloodshed and feuds.
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Too-great expectations: Morrison’s masterstroke of political mismanagement
Political and international editor
April 17, 2021 — 5.32am
If Scott Morrison wants to know why everyone’s getting cranky with him, he should turn to the six-word truth written by Australian novelist Kimberly Freeman: “Expectations are the enemy of happiness.”
High expectations are dashed easily. Morrison knows this. In January he spoke of the planned vaccine rollout: “We don’t want to make promises that we can’t keep. That is incredibly important.”
Yet that’s exactly what he’s done. He set Australia’s expectations very high, then progressively smashed his way through each. He set out his No. 1 priority for 2021: “Suppress the virus and deliver the vaccine.”
And he assured the nation in his big scene-setting speech for the year that “our strategy puts Australia at the front of the queue”. He even went so far as to say that “we have wisely planned for the unexpected”.
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Coronavirus And Impacts.
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Scott Morrison shelves vaccination targets
Prime Minister Scott Morrison says it is not possible to know whether every Australian will receive a vaccine shot before the end of the year, saying the federal government has no plans to set new targets.
Following new advice on the AstraZeneca vaccine due to the risk of blood clots, Mr Morrison said there were too many uncertainties involved in the rollout to set new targets.
“The government has also not set, nor has any plans to set, any new targets for completing first doses,” he said on Facebook.
“While we would like to see these doses completed before the end of the year, it is not possible to set such targets given the many uncertainties involved.
“We will just get on with the job of working together to produce, distribute and administer the vaccines as safely and efficiently as possible.”
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https://www.afr.com/policy/health-and-education/the-high-cost-of-vaccine-delays-20210411-p57iag
Caution over AstraZeneca comes at a cost
The comparative health costs say that restricting the use of the AstraZeneca vaccine is not worth the risk to herd immunity.
Sam Lovick Contributor
Apr 12, 2021 – 2.40pm
Could we be about to see the federal government turn a silk purse into a sow’s ear? Their latest pronouncement on vaccination could do just that.
The government, with the assistance of the states and the acquiescence of a patient and compliant population, has managed to stem the worst effects of the global pandemic. They have done this by, in essence, closing the borders, injecting vast amounts of liquidity into the economy by subsidising jobs, and riding the resurgence of commodity prices. In large part, these have offset the disastrous effects of the pandemic on education and tourism.
At the same time, they put in place plans for four COVID-19 vaccines, two from domestic sources and two (and a half) from overseas. The University of Queensland candidate fell over in trials. Imports have been less than anticipated, leaving the CSL-Seqirus manufactured AstraZeneca Oxford vaccine as the best candidate for vaccinating the Australian population quickly.
Now, we hear, the AstraZeneca vaccine may cause blood clots so will only be given to those over 50. Canberra is looking to buy more of the Pfizer vaccine to make up for the shortfall assuming, of course, that they can get it out of Europe. If they follow through with this (or if they don’t, and the under-50s are scared off the most abundant vaccine), then effective vaccination of the Australian population will be delayed.
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Universities hope vaccination delays won’t hinder return of international students
By Anna Patty
April 12, 2021 — 5.30pm
The $40 billion a year international education sector is warning it cannot afford to lose a third academic year before international students return to Australia as universities hope rollout delays of COVID-19 vaccines will not further restrict intakes.
Western Sydney University vice-chancellor Barney Glover said he hopes the vaccine rollout will not affect a program designed for the safe return of international students in modest numbers.
A “safe corridors proposal” for the return of overseas students to NSW would start with small numbers and progressively increase to a maximum of up to 600 each fortnight, pending federal government approval.
“I am hoping that the challenges around the vaccine program in Australia are not going to adversely affect the very modest trial of students coming inbound who will be required to be tested before departure and be tested during quarantine and will do full quarantine here under the strict arrangements that apply to NSW hotel quarantine,” Professor Glover said.
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Vaccine rollout casts a long shadow over the Morrison government’s competence
Chris Uhlmann
Nine News Political Editor
April 14, 2021 — 5.30am
The commentariat is nothing if not inconsistent. As the year began the distilled wisdom was that the Morrison government could not lose the next election, now it apparently can’t win.
In the strange land of political obsessives, every wind shift is a cyclone; every stumble an earthquake. The truth is usually greyer and the future always a mystery, despite the unshakeable confidence of soothsayers in their latest prediction.
There are few certainties but here is one guarantee: on almost any day, at almost any hour, whatever political hashtag is trending on Twitter won’t be what most Australians are talking about. I can say this with some authority because I occasionally trend and have never been stopped in the street by a citizen wanting to remonstrate over my disconnect with the zeitgeist. And I live in Canberra.
Most Australian voters inhabit a different universe where they spend their time working to ensure they and their families are safe and fed. It will be these people who decide the fate of the Morrison government, not those who long ago planted their political flags and who revel in the self-basting echoes of their mentally gated community.
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Anthony Fauci’s words of COVID warning for Australia
By Kate Aubusson
Updated April 15, 2021 — 7.08amfirst published April 14, 2021 — 7.30pm
America’s top COVID adviser says Australia cannot rely on vaccines and border controls to protect its population, warning no country is safe while the virus is allowed to spread beyond its borders.
Dr Anthony Fauci issued the sobering reality check during the University of NSW’s inaugural David Cooper Lecture this week as the US administered a record 4.6 million vaccines in a single day and Australia’s vaccination rollout continues to stumble.
There would be no freedom from the virus for Australia or any country that had successfully suppressed it within its own communities until the overwhelming majority of the world’s population was vaccinated against COVID-19 and its spread was controlled globally, US President Joe Biden’s chief medical adviser said via video conference from his home office.
“As long as there’s the dynamic of virus replication somewhere, there will always be the threat of the emergence of variants which could then come back,” said the long-time director of the National Institute of Allergy and Infectious Diseases at the US National Institute of Health.
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We’ll be feeling the effects of Covid for years to come
COVID-19 keeps surprising us, as it is right now. What will be the permanent changes to our lives it will bring? The brilliant achievement of the global vaccine effort is being challenged by the virus. A South African strain looks as though it can challenge immunity. New strains attack young people more frequently so that some nations that did well just because they had a younger population are now suffering.
Similarly, until recently we never ever had even one coronavirus vaccine. Now we have several. But ours, AstraZeneca — and now Johnson & Johnson as well — has shown up a tiny blood clotting risk. People naturally are spooked by this and want the safest vaccine.
It is true, though, that there is a price to pay in our being slow with vaccines. We are accruing enormous debt to remain safe and affluent. That debt has consequences.
So the permanent effects of COVID depend a good deal on how effective vaccines are in the long run. There’s still plenty of reason to be optimistic.
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Covid carries higher blood-clotting risk than Oxford-AstraZeneca vaccine
· The Times
The risk of severe blood clots in the brain from COVID-19 is about eight times greater than the risk associated with taking the Oxford-AstraZeneca vaccine, scientists have found.
The researchers said that the figures, from a database of half a million COVID-19 cases in the US, should help regulators and the public better to understand the “risk-benefit question” when looking at the side effects of vaccines.
The study, published before a peer review, found that about 40 in a million people suffered blood clots in the brain two weeks after a coronavirus infection. Of those, about one in five were fatal. Regulators believe that the Oxford-AstraZeneca vaccine is linked to a four to five in a million risk of similar clots.
John Geddes, from Oxford University, said that although this appeared to be a rare side effect of vaccines, it was just one of many caused by the virus.
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‘Raging inferno’: Worldwide COVID-19 death toll tops a staggering 3 million
By David Biller and Maria Cheng
April 17, 2021 — 7.38pm
Rio de Janeiro: The global death toll from the coronavirus topped a staggering 3 million people Saturday amid repeated setbacks in the worldwide vaccination campaign and a deepening crisis in places such as Brazil and India.
The number of lives lost, as compiled by Johns Hopkins University, is about equal to the population of Kyiv, Ukraine; Caracas, Venezuela; or metropolitan Lisbon, Portugal. It is bigger than Chicago (2.7 million) and equivalent to Philadelphia and Dallas combined.
And the true number is believed to be significantly higher because of possible government concealment and the many cases overlooked in the early stages of the outbreak that began in Wuhan, China, at the end of 2019.
When the world watched back in January, the toll passed the bleak threshold of 2 million deaths, immunisation drives had just started in Europe and the United States. Today, they are under way in more than 190 countries, though progress in bringing the virus under control varies widely.
While the campaigns in the US and Britain have hit their stride and people and businesses there are beginning to contemplate life after the pandemic, other places, mostly poorer countries but some rich ones as well, are lagging behind in putting shots in arms and have imposed new lockdowns and other restrictions as virus cases soar.
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Climate Change.
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No need for coal, but 100pc renewables ‘too expensive’: Grattan
Angela Macdonald-Smith Senior resources writer
Apr 11, 2021 – 9.00pm
Australia does not need coal-fired power stations to keep electricity bills down, but rushing to 100 per cent renewable energy will be “expensive” without major technology breakthroughs to provide back-up power during long winter wind droughts.
The findings from the Grattan Institute debunk the myth that cheap coal power stations need to be kept running to ensure power bills do not skyrocket. But they also sound a distinct note of caution against a full-on shift to an all-renewable electricity supply system.
Energy program director Tony Wood said the findings underscore that Australia should at this stage commit only to “net zero” emissions in the National Electricity Market by the 2040s, rather than “absolute zero” or 100 per cent renewable energy.
“This .... shows that we can make the historic transition to a low-emissions electricity system without the lights going out and without power bills skyrocketing,” Mr Wood said, describing the findings as “good news”.
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https://www.afr.com/policy/energy-and-climate/gas-can-get-us-to-net-zero-20210408-p57hm4
Gas can get us to net zero
Modelling the future NEM shows we don’t need coal to keep the lights on and electricity prices down. But a 100 per cent renewables grid is also the wrong goal.
Tony Wood Contributor
Apr 11, 2021 – 12.47pm
Australia’s National Electricity Market (NEM) can achieve net-zero emissions without threatening affordability or reliability of supply.
This simple, but clear, conclusion flows from analysis published in a new Grattan Institute report, Go for Net Zero: A Practical Plan for Reliable, Affordable, Low-emissions Electricity.
This report debunks two competing myths: first, that we need to continue to rely on coal-fired power stations, and second, that moving rapidly to 100 per cent renewable electricity is the best way to reach net-zero emissions.
The electricity sector will more than deliver its proportionate share of Australia’s current 2030 emissions reduction target. The federal government projects that renewable electricity will meet 55 per cent of demand by the end of this decade.
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Royal Commissions And The Like.
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‘Very big package’: $10 billion aged care boost at heart of federal budget
By James Massola
April 18, 2021 — 5.00am
The Morrison government will promise at least $10 billion over four years for aged care in the May federal budget, including allowing more people to stay in their own homes for longer.
When the final report of the aged care royal commission report was released last month, Prime Minister Scott Morrison said the government’s response would be at the heart of the budget.
The Sun-Herald and The Sunday Age have been told one of the commission’s key recommendations – that people be allowed to stay in their homes longer and receive care there if they choose, rather than moving into a residential facility – will be implemented over time as part of the package.
“It [home care] is clearly what people want,” said a source familiar with discussions held by the government’s expenditure review committee [ERC], who asked for anonymity so they could speak freely about the “very big package”.
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National Budget Issues.
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Consumer confidence soars to 11-year high in April
Consumer confidence has “soared” to an 11-year high as Australians shrugged off the end of JobKeeper and proved untroubled by widely publicised vaccine delays.
The Westpac-Melbourne Institute sentiment index jumped 6.2 per cent to 118.8 in April, the highest since August 2010 as households expressed “considerable” optimism about the trajectory of the economy and their future financial situations.
Westpac chief economist Bill Evans described the result as “extraordinary” in the context of a stream of negative headlines around major delays to the Morrison government’s vaccine rollout, and given wage subsidy scheme ended in the week before the survey was undertaken.
“Initial fears that (the end of JobKeeper) and associated job losses would undermine confidence have proven to be unfounded,” Mr Evans said.
The national survey of 1200 households was conducted between April 5 and April 10. Scott Morrison on the evening of April 8 released advice that the AstraZeneca vaccine would not be rolled out to those under the age of 50 – a significant setback.
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https://www.afr.com/policy/economy/the-australian-economy-has-fully-recovered-20210414-p57j5r
The Australian economy has ‘fully recovered’
Matthew Cranston Economics correspondent
Apr 14, 2021 – 3.39pm
Economists at three of Australia’s biggest banks say the economy is now bigger than before the COVID-19 crisis struck, but that there is still substantial unused capacity that needs to be put to work before the central bank lifts interest rates.
NAB chief economist Alan Oster has forecast unemployment to fall faster and GDP growth to continue.
“We see GDP as having fully recovered its pre-COVID level in the March quarter, with another quarterly rise of around 1 per cent,” Mr Oster said.
“While this is encouraging, a large degree of spare capacity remains in the labour market and the output gap remains positive – and will not likely be closed for an extended period.
“The key implication of ongoing slack in the labour market, as well as the economy more broadly, is that wages growth and hence inflationary pressure will remain soft, despite above-trend growth in the near term.”
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Unemployment rate drops to 5.6 per cent in March: ABS
The unemployment rate fell from 5.8 per cent to 5.6 per cent, as the economy added a further 70,700 jobs in March, marking the sixth consecutive monthly rise in employment.
In the final month before the end of JobKeeper, full-time employment fell by 20,800, while part-time employment jumped by 91,500, the seasonally adjusted figures from the Australian Bureau of Statistics showed.
The labour market has recouped all of its COVID-related losses, with total employment climbing to 13,077,600 in March.
Underemployment, which measures those with work but who would like to do more but are unable to find the additional hours, dropped a sharp 0.6 percentage points to 7.9 per cent and its lowest level since 2014.
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https://www.afr.com/policy/economy/strong-jobs-rebound-prompts-budget-rethink-20210415-p57ji4
Strong jobs rebound prompts budget rethink
John Kehoe Economics editor
Apr 15, 2021 – 3.24pm
The rapid drop in the unemployment rate to 5.6 per cent has led the government to review its fiscal strategy for repairing the nation’s trillion-dollar debt in the run-up to the May 11 federal budget.
Treasurer Josh Frydenberg last year said the government would aim to stabilise federal public debt as a share of GDP once the jobless rate was “comfortably below” 6 per cent.
He then clarified that meant an unemployment rate of about 5.25 per cent to 5.5 per cent.
But with jobs growth surging rapidly towards its budget goal, there is now an acknowledgement within the government that this target has some “flexibility”.
It is possible that “comfortably below” 6 per cent will end up being defined as even closer to 5 per cent.
A jubilant Frydenberg said on Thursday there is still a “long way to go” in the recovery and this is not a time for “austerity”, but it is time to wind back emergency payments such as JobKeeper and transition to more targeted support.
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Don’t rush: Warning budget repair could hurt economy out of pandemic
By Shane Wright
April 16, 2021 — 5.00am
Treasurer Josh Frydenberg is being warned against trying to rush back to a budget surplus with concerns it could leave the Reserve Bank unable to deal with any future economic downturn and hurt its plans to get wages growing strongly.
Ahead of next month’s budget, which is expected to show a sharp fall in the size of the forecast deficit, senior economists say while an improvement in the nation’s finances was a welcome development there were also major economic risks if fiscal policy was tightened too aggressively.
In the mid-year update, the budget deficit was forecast to reach a record $197.7 billion this financial year before falling to $108.5 billion in 2021-22. By 2023-24 it was predicted to be down to $66 billion.
But Australia’s strong economic recovery, much lower than expected unemployment plus soaring iron ore prices mean the budget deficit unveiled by the Treasurer on May 11 will be much smaller than feared.
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‘No time for austerity’: Frydenberg puts the priority on economic repair
By David Crowe
April 16, 2021 — 4.39pm
Australians passed a milestone in a marathon during the past few weeks when the country grew strongly enough to undo the great shrinking of the national economy last year.
Treasurer Josh Frydenberg will not even claim to have passed this marker in the recovery from crisis, but economists believe the nation’s gross domestic product is now as big as it was before the pandemic.
This was not meant to happen so fast. The pandemic recession destroyed so much economic activity – as measured by the imperfect benchmark of real GDP – that most thought Australia would take years to regain ground.
Official statistics are yet to prove the scale of the gains, but Deloitte Access Economics director Chris Richardson believes the economy returned to its old size at some point in February or March. This reversed the whopping contraction of 0.3 per cent and 7 per cent in two consecutive quarters last year.
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Health Issues.
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Australians need healthcare that is both accessible and high quality
By Mariam Tokhi
April 13, 2021 — 2.00pm
Last week, as I waited at a local pharmacy, I found myself watching the mix of people streaming out of the in-pharmacy discount GP clinic. They were poor. Agitated. Unwell looking. Chaotic, undernourished kids. Frazzled parents. One was hearing voices. Two didn’t appear to speak any English. Most appeared to have prescriptions in hand.
They were in and out of there within a few minutes.
We need to find ways of making quality healthcare more accessible to those who need it most.
I felt a bit sad watching this stream. They were the cohort of my community’s most vulnerable people. They were seeking accessible care, and here it was: a bulk-billing clinic at the back of a large pharmacy, providing quick, curt consultations. So many missed opportunities to provide support, engagement and care to the people who needed it most. I also felt sad for the GPs who were working in this way.
Australia has an enviable healthcare system. For those who need emergency care, for the most part, Australia provides it. But, Australia, we need to lift our game in general practice. We need to find ways of making quality healthcare more accessible to those who need it most. For the mother wanting to discuss escaping domestic violence. For the teenager who needs to talk about their suicidal thoughts. For the baby who isn’t gaining enough weight. For the young man who wants to clean up his drug-habit as he seeks care for his PTSD. For the new refugee who doesn’t understand the scary media stories about COVID-19 vaccination.
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‘We just need to be bolder’: Craig Drummond’s health plea
Outgoing Medibank chief Craig Drummond hasn’t lost the fire for health reform. He also reveals his retirement pans and why you won’t see him on a bank board.
James Thomson Columnist
Apr 16, 2021 – 12.22pm
Memo to Australia’s bank chairman: if you’ve been thinking that retiring Medibank Private chief executive and former NAB chief financial officer Craig Drummond might be perfect for your board, think again.
He’s been there, done that – and has no intention of going back.
“I think it’s going to be a really, really challenging five years for that sector,” Drummond says. “Having been on the executive side, having seen what the board needs to get its head around as part-timers – good luck.”
The 60-year-old, who will finish up on June 30 after five years in the role, insists he’s “an old guy” and ready for the next stage of his career, which will include the presidency of the Geelong Cats in the AFL, a role with an as-yet-unnamed private equity firm, some public board seats and philanthropic work.
Having announced his retirement in late February on the same day Medibank announced its main brand had grown policyholder numbers for the first time since 2013, there’s an argument that Drummond is retiring at the wrong time.
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Analysts put $1.3bn-plus valuation on Australian Clinical Labs for IPO
Analysts believe the pandemic is likely to refinforce the demand for pathology services.
Crescent Capital’s pathology business Australian Clinical Labs is estimated by analysts at Goldman Sachs to be worth between $1.265 billion and $1.67bn, as the company gears up for an initial public offering.
The valuation range includes debt and comes after a bumper year for the company, during which earnings soared on the back of strong demand for COVID-19 testing.
The healthcare group is being prepared for a float through Goldman Sachs and Bank of America after it was on the market last year.
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International Issues.
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In a Prince’s passing, England sees a glimpse of its unknown future
Twilight is gathering over Britain’s postwar era, and the country will soon have to learn to live without the reassuring constancy of its current Queen.
Hans van Leeuwen Europe correspondent
Updated Apr 11, 2021 – 4.52pm, first published at 4.45pm
London | The passing of Prince Philip has sent a collective shiver of chill down England’s spine. Lurking in the back of many minds is the newly heightened awareness that the Queen herself is mortal, and that her extraordinary span, too, may be nearing its end.
By her longevity and dependability, the Queen has become the thread of constancy through England’s, and Britain’s, entire postwar era.
Amid decade after decade of disruption and change, she has evolved from figurehead to anchor. She is the fulcrum of the assortment of images, allusions and myths about what Britain is, and what it means to be English.
She is the living link to the Blitz, the postwar reinvention of Empire as Commonwealth, the social shake-up of the 1960s, the economic shake-down of the 1970s, the embrace of Europe, and all else that has followed.
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Iran calls Natanz atomic site blackout ‘nuclear terrorism’
By Jon Gambrell
April 12, 2021 — 6.53am
Dubai: Iran has described a blackout at its underground Natanz atomic facility an act of “nuclear terrorism,” raising regional tensions as world powers and Tehran continue to negotiate over its tattered nuclear deal.
While there was no immediate claim of responsibility, suspicion fell immediately on Israel, where its media nearly uniformly reported a devastating cyberattack orchestrated by the country caused the blackout. Israeli defence chief, Aviv Kochavi, later said Iran’s “operations in the Middle East are not hidden from the eyes of the enemy”.
If Israel was responsible, it further heightens tensions between the two nations, already engaged in a shadow conflict across the wider Middle East. Israeli Prime Minister Benjamin Netanyahu, who met on Sunday with US Defence Secretary Lloyd Austin, has vowed to do everything in his power to stop the nuclear deal.
Details remained few about what happened early on Sunday morning at the facility, which initially was described by Iran state media as a blackout caused by the electrical grid feeding its above-ground workshops and underground enrichment halls.
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Famed Egyptian archaeologist reveals details of ancient city
By Samy Magdy
April 11, 2021 — 12.51pm
Cairo: Egypt’s best-known archaeologist has revealed further details on a Pharaonic city recently found in the southern province of Luxor.
Zahi Hawass said that archaeologists found brick houses, artifacts, and tools from pharaonic times at the site of the 3000-year-old lost city. It dates back to Amenhotep III of the 18th dynasty, whose reign is considered a golden era for ancient Egypt.
“This is really a large city that was lost... The inscription that found inside here says that this city was called: ‘The dazzling Aten’,” Hawass told reporters at the site.
Archeologists started excavating in the area last year, searching for the mortuary temple of boy King Tutankhamun. However, within weeks they found mud brick formations that eventually turned out to be a well-preserved large city.
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US promises to defend Taiwan from China
The US has warned China against encroaching on Taiwan’s independence just days after the Chinese air force sent planes to fly near the island nation in a display of force.
US Secretary of State Antony Blinken in his strongest remarks yet underscoring the US commitment to defend Taiwan said the Biden administration would defend Taiwan militarily.
“It would be a serious mistake for anyone to try to change the existing status quo by force,” he said, speaking on Sunday in Washington DC on NBC.
“What is a real concern to us is increasingly aggressive actions by the government in Beijing directed at Taiwan, raising tensions in the straits.”
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Upbeat Fed does little to soothe inflation worries
Sarah Turner Reporter
Apr 12, 2021 – 3.11pm
Federal Reserve chairman Jerome Powell says the US economy is set to boom, issuing his upbeat forecast just days after the release of strong US producer price data that supports fears of an inflation breakout on the horizon.
Mr Powell told CBS’ 60 Minutes on Monday that “we feel like we’re at a place where the economy’s about to start growing much more quickly and job creation [will be] coming in much more quickly”.
Mr Powell said: “This growth that we are expecting in the second half of this year is going to be very strong."
Andrew Ticehurst, a fixed income strategist at Nomura Securities, said the message from the Fed chairman was “very upbeat”. The broker’s US economics team is also “very upbeat in the near term, with stimulus starting to come through and the economy reopening”.
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Brexit is the catalyst for rioting in Northern Ireland
The Economist
As surely as spring follows winter, warmer weather brings rioting to Northern Ireland.
It comes in two varieties. What is known locally as recreational rioting is localised and not too violent. Serious street disorder, of the sort seen during the past week, usually involves politics.
Since Good Friday, mobs have taken control of streets in loyalist areas of Belfast and Londonderry on most nights.
Such eruptions often last only a few days. Even if that happens, the disorder will leave a lasting mark on some lives. A policewoman’s leg was broken in two places while taking an alleged rioter into custody, and scores of her colleagues suffered head wounds, leg injuries or burns after being attacked with masonry, metal rods, fireworks, manhole covers and petrol bombs.
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East Timor’s independence hero risks his legacy and the lives of his people
By Michael Rose
April 14, 2021 — 5.30am
Xanana Gusmao, famed icon of East Timor, is letting his people down. Once placed by many of his Australian supporters in the same pantheon as Nelson Mandela, on Monday he was filmed assaulting two women in the street. Having taken it upon himself to demand the body of their deceased kin be released from the morgue in a flagrant violation of his country’s public health measures, he then apparently took exception to their speaking – repeatedly bellowing “nonok” (shut up!) and slapping them, one with significant force. In video footage, the sickening sound of his hand hitting her face is clearly audible.
In a country that is struggling with not just devastating floods and a looming COVID-19 outbreak but also endemic violence against women and children, this is particularly cutting.
Former East Timor president Xanana Gusmao talks with demonstrators outside an isolation centre in the capital Dili. At one point he slaps a female relative of a deceased man whose body they are demanding to be released.
Ubiquitous for decades as a guerrilla leader, political prisoner and statesman, last year Gusmao was outplayed by his rivals and found himself bereft of formal power. Yet he remains the most influential person in his country. That country needs him more than ever, but his recent conduct is not helping.
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Biden urges Putin to ‘de-escalate tensions’ over Ukraine, calls for summit
By Matthew Lee, Raf Cassert and Aamer Madhani
April 14, 2021 — 6.12am
Brussels: US President Joe Biden urged Russian President Vladimir Putin on Tuesday (Wednesday AEDT) to “de-escalate tensions” following a Russian military buildup on Ukraine’s border in their second tense call of Biden’s young presidency.
Biden also told Putin the US would “act firmly in defence of its national interests” regarding Russian cyber intrusions and election interference, according to the White House. Biden proposed a summit in a third country “in the coming months” to discuss the full range of US-Russia issues, the White House said.
The Biden-Putin relationship has been rocky in the early going of the new US administration. Biden is weighing action against Russia for the SolarWinds hacking campaign, Russian interference in the 2020 presidential election, reports of Russian bounties on US soldiers in Afghanistan and the poisoning and jailing of Russian opposition leader Alexei Navalny.
There is growing concern in the West about a surge of cease-fire violations in eastern Ukraine, where Russia-baсked separatists and Ukrainian forces have been locked in a conflict since Moscow’s 2014 annexation of Ukraine’s Crimean Peninsula.
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Biden to withdraw all US troops from Afghanistan by September 11
· AFP
President Joe Biden will withdraw all US troops from Afghanistan before this year’s 20th anniversary of the September 11 attacks, finally ending America’s longest war despite mounting fears of a Taliban victory, officials said Tuesday.
The drawdown delays only by around five months an agreement with the Taliban by former president Donald Trump to pull troops, amid a growing consensus in Washington that little more can be achieved.
The decision came as Turkey announced an international peace conference on Afghanistan in hopes of reaching an agreement that brings stability to a nation battered by nearly 40 years of war. But the Taliban, newly emboldened, said they would boycott the conference.
Mr Biden, who will make an announcement on Wednesday night, had earlier mused about keeping a residual force to strike at al-Qa’ida or an emergent Islamic State extremist threat or making withdrawal contingent on progress on the ground or in slow-moving peace talks.
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https://www.economist.com/europe/2021/04/14/a-russian-military-build-up-on-ukraines-border-prompts-alarm
A Russian military build-up on Ukraine’s border prompts alarm
Vladimir Putin is using his armed forces as an instrument of coercive diplomacy
Apr 14th 2021
THE LAST time that Russia gathered so many troops on Ukraine’s borders, it went on to invade the country and annex Crimea. A deployment in recent weeks “mirrors the size and scope and scale” of Russian activity in 2014, noted General Todd Wolters, America’s senior commander for Europe, on April 13th.
A public acknowledgement that same day by Sergei Shoigu, Russia’s defence minister, that the country had indeed built up two armies and three airborne units, but only for “combat training exercises”, was hardly reassuring—the invasion seven years ago was also preceded by similarly ambiguous manoeuvres.
The aim of the Russian build-up remains uncertain. It is certainly not a routine exercise. For instance, a long-range military communication system deployed near Voronezh, some 200km (125 miles) from the border with Ukraine (see map), is only used for very large units and thus “indicative of the scale of the deployment”, notes Janes, a defence-intelligence company. Some units have travelled from thousands of kilometres away. Tom Bullock, an analyst at Janes, says that troops still appear to be moving towards the border.
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The trillion-dollar inflation conundrum facing the world
Stephen Bartholomeusz
Senior business columnist
April 14, 2021 — 11.56am
The US inflation numbers came in above the consensus forecasts on Tuesday but bond yields edged down and Wall Street hit another record. The recovery from the depths of pandemic-driven recession is producing confusing outcomes.
The March US CPI, at 2.6 per cent, was slightly above the 2.5 per cent anticipated and the highest since 2012. Between February and March the rate was up 0.6 per cent against expectations of 0.5 per cent and was again the biggest increase in nearly nine years. Core inflation, with energy and food prices stripped out, was 1.6 per cent, also ahead of expectations.
At face value, the confirmation that inflation seems to be accelerating should have shaken financial markets. Instead the S&P 500 and the technology stock-laden Nasdaq both rose slightly to post records, although the more industrially-flavoured Dow Jones Index slipped marginally.
Bond yields edged down, although that might be attributable as much to the success of a closely-watched auction of $US24 billion ($31.4 billion) of 30-year Treasury bonds as it was to the inflation data. A succession of Treasury bond and note auctions over the next few weeks will test bond investors’ convictions about the inflation outlook.
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Biden says ‘time to end’ US war in Afghanistan with total pullout
High profile Republicans have slammed Joe Biden’s decision to unilaterally withdraw from Afghanistan as sowing the seeds of a longer, deeper conflict that will put American lives in jeopardy.
President Biden announced this morning (AEST) it was “time to end” America’s longest war with the unconditional withdrawal of troops from the country where they have spent two decades in a bloody, largely fruitless battle against the Taliban.
Dubbed the “forever war,” the US military onslaught in Afghanistan began in response to the September 11, 2001 terrorist attacks against the United States.
Now, 20 years later — after almost 2,400 US military and tens of thousands of Afghan deaths — Mr Biden named September 11 as the deadline by which the last US soldiers will have finally departed.
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Afghanistan: US withdrawal makes return to barbarism all but certain
· The Times
Successive US presidents have grappled with the task of ending the war in Afghanistan without a repeat of the humiliating scenes that marked the exit from Vietnam.
There will be no desperate helicopter flights from the embassy roof when the troops pull out on September 11. The air of failure and the colossal waste of human life will linger, however. For most of Afghanistan’s 39 million people, the US withdrawal will only heighten dread of what will follow.
The Taliban have outlasted western firepower over two decades of bloody conflict and have now outlasted the US at the negotiating table.
Since joining the US-brokered peace talks in Qatar last year, they have conceded nothing. Conscious of Washington’s desperation for a fig leaf to justify its departure, they played along, pledging to cut ties with al-Qa’ida and disavowing its barbaric treatment of women during the Islamist government of the 1990s.
On the ground, however, the Taliban are paving the way for a return to power. Western intelligence agencies report that al-Qa’ida remains embedded with the insurgents. Girls’ schools have been bombed in Taliban-held areas. A wave of murders targeting journalists, judges, civil servants, scholars and rights activists has left scores dead, terrorising the educated classes. In recent weeks the militants have turned on professional women, to scare them out of the workplace.
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Farewell Afghanistan, mission unaccomplished
By Tony Wright
April 15, 2021 — 6.33pm
It was Australia’s longest war and — after World War II — its most financially costly.
And for what?
As Australia prepares to walk away, trailing the United States - having followed the US over there in 2001 - Afghanistan is hopelessly divided, from its ruling elite down, and one fifth of its districts are controlled by a Taliban considered stronger than at any time since it was toppled in 2001.
It is all but impossible to see, after the withdrawal of the US and Australia’s small remaining contingent, a future for Afghanistan that does not involve the collapse of its current and any future “interim” administration, and an effective takeover by the Taliban. It is fanciful to imagine the Taliban sharing power.
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‘Coiled spring’: The UK’s economic surge has taken the world by surprise
By Ambrose Evans-Pritchard
April 16, 2021 — 11.05am
Two cheers for the British Wirtschaftswunder. It may not be an economic miracle, but the accelerating recovery now under way is a breathtaking turn of fortunes for the much denigrated Brexit economy.
The UK will probably regain pre-COVID levels of output before the eurozone, perhaps by Christmas. By the end of next year it may even have recouped the entire cross-Channel gap in growth since the referendum.
Philip Shaw from Investec has pencilled in blistering growth of 7.3 per cent this year, but says it could be over 8 per cent. “We’re trying not to sound outrageous but that is what the numbers are telling us,” he said. The firm has the eurozone pegged at 4.4 per cent.
Upgrades are pouring in. The Swiss bank UBS has raised its UK forecast from 3.8 per cent to 5.5 per cent. Bank of America and Barclays have both raised theirs to 5.9 per cent.
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The echoes of China’s financial crisis are being heard as a giant struggles to survive
Senior business columnist
April 15, 2021 — 11.57am
There are sufficient echoes of the late 1990s in the struggles of China’s Huarong Asset Management to stay afloat to concern the authorities in Beijing and provide some context for their continuing efforts to reduce the excessive leverage in China’s financial system.
Huarong was created in the aftermath of the Asian Financial crisis of 1997 and 1998, which occurred just as China’s economy opened up during the earliest phase of a progressive and still-incomplete deregulation of its financial system.
While China dodged the worst of the crisis, largely because it still had stringent capital controls, the initial deregulation of a banking system (that until the 1980s had been confined to three state-owned banks and a network of rural co-operatives) had produced a lot of less than judicious lending to state-owned enterprises.
In the late 1990s China experienced a massive bad debt crisis – there are estimates that more than half of its state-owned enterprises( SOEs) were insolvent in the mid-1990s – with the non-performing loans within the balance sheets of China’s four major banks thought to be between a quarter and a third of their total assets.
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America’s patience snaps as Biden hits Putin with fresh sanctions
· The Times
American patience with Moscow snapped yesterday as President Biden announced sanctions targeting Russian interests in response to repeated cyberspying and meddling in last year’s presidential election.
Biden warned Vladimir Putin on Tuesday during a call that action was imminent. He also expressed a desire for a better relationship with the Russian president, whom he has recently described as “a killer”, proposing to meet him on neutral ground.
Any hopes of improved ties appeared to have dimmed, however, as Biden signed executive orders imposing sweeping moves against the Russian economy and individuals. The orders described the “extraordinary threat to the national security, foreign policy and economy of the United States posed by specified harmful foreign activities of the [Russian government].”
Maria Zakharova, the Russian foreign ministry spokeswoman, said the US ambassador had been summoned for “tough talks” over the sanctions.
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Chinese economy rebounds by more than 18 per cent since Wuhan lockdown
By Eryk Bagshaw
April 16, 2021 — 4.45pm
Singapore: The Chinese economy hit a record growth rate of 18.3 per cent in the first three months of this year, capping a remarkable 12-month turnaround from the depths of the coronavirus crisis.
The year-on-year figure, announced by the National Bureau of Statistics on Friday morning, was driven by a 34 per cent lift in retail sales, a 26 per cent increase in infrastructure investment and a 14 per cent rise in industrial production.
The milestone, China’s highest quarterly growth figure since records began almost three decades ago, comes from a very low base. The country’s economic activity collapsed in the first quarter of 2020 as provinces went into lockdown during the first wave of the COVID-19 pandemic.
“The economic snap-back has been breathtaking with China the only major economy to record positive annual GDP growth in 2020,” said Commsec senior economist Ryan Felsman.
The recovery will be a key driver of Australia’s economic fortunes over the coming year. Despite the relationship between the two countries falling to historic lows over multiple diplomatic disputes, Australia’s $9-billion trade surplus in January was driven by China’s demand for Australian iron ore. The value of exports to China increased by 21 per cent in December as the price of iron ore surged on the back of supply shortages.
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$80bn unexpected economic crisis about to hit
If you thought the Suez blockage was bad for world trade, you ain’t seen nothing yet. A new shortage is looming and Australia is underprepared.
April 17, 202112:26pm
The blockage of the Suez Canal by the container ship Ever Given is estimated to have cost the global economy some $13 billion.
The Egyptian Government wants a billion dollars from the ship’s owners just for the trouble it caused.
But the Ever Given’s undoubted shock to world trade is not the only crisis engulfing the global economy.
Another item suddenly threatening financial upheaval is as small as its impact is large.
Around $80bn has already been wiped off the global bottom line of car companies alone because of an unexpected worldwide shortage of semiconductor chips.
The worry is the economic damage could get far worse than that. Scores of jobs might be lost and the price of phones, console, cars and other everyday items could rise.
Australia could suffer more than others given the country has no domestic microchip manufacturing capacity. One expert has said it amounts to a “sovereign capability risk”.
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Last Castro brings curtain down on dynasty
· AFP
Cuba’s leadership is passing to a younger generation, with the last Castro leaving office and ending a 60-year dynasty, but there is little other change as power remains firmly with the communist party.
At a four-day party congress starting on Saturday, 89-year-old Raul Castro will relinquish the country’s most powerful position — that of Communist Party of Cuba first secretary — to 60-year-old Miguel Diaz-Canel, Cuba’s President.
This officially ends six decades of dominion over Cuban politics by Castro and his brother, who took power in 1959. Raul Castro has held the post since 2011, when he took over from Fidel, who died five years later.
Mr Diaz-Canel becomes Cuba’s first civilian leader since the Castro-led revolution of the 1950s, which happened before he was even born. But while the suit-and-tie wearing, tech-savvy Beatles fan may be more modern in some ways than his predecessors — both of whom were fond of donning military garb — he remains first and foremost a party disciple.
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Oath Keepers’ member enters first public guilty plea in Capitol attack
Spencer S. Hsu and Devlin Barrett
Apr 17, 2021 – 8.32am
Washington | A founding member of the Oath Keepers arrested in the January 6 riot at the Capitol pleaded guilty on Friday (Saturday AEST) and agreed to cooperate against others in the case.
Jon Ryan Schaffer is the first defendant to publicly flip in the sprawling domestic terrorism investigation that has led to charges against more than 410 people.
The plea comes exactly 100 days after Schaffer and hundreds of other supporters of former president Donald Trump stormed the Capitol, allegedly in an effort to prevent Joe Biden from being confirmed as the next president. Prosecutors hope Schaffer’s plea spurs others to provide additional evidence in hopes of avoiding long prison sentences.
The plea marks a new stage in the historic investigation, as prosecutors seek to work up the chain of defendants to gather evidence and better understand the full scope of any planning and organising of the violence - particularly among groups like the far-right Oath Keepers and the Proud Boys. Dozens of members from both groups appeared to act in concert to storm the building, prosecutors have alleged.
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Ontario is losing the battle between the variants and vaccines
Danielle Bochove and Kait Bolongaro
Apr 17, 2021 – 8.20am
Toronto | In a Hail Mary attempt to control a third wave of COVID-19, Ontario unveiled its strictest measures yet to restrict the movement of people, setting up checkpoints with neighbouring Quebec and Manitoba for the first time in the pandemic.
The government of Premier Doug Ford said it will extend an emergency stay-at-home order to six weeks from four.
The province is forcing non-essential construction sites to shut down and closing recreational facilities including golf courses, playgrounds and soccer fields. Essential stores such as supermarkets and pharmacies will have to operate at 25 per cent of usual capacity.
“My friends, we’re losing the battle between the variants and vaccines,” Ford said at a news conference on Friday (Saturday AEST). “The reality is, there are few options left.”
Schools, restaurants, personal care services and many retailers were already closed.
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Biden’s withdrawal ‘worst of both worlds’
America’s move to pull out of the ‘forever war’ in Afghanistan will only bolster both the Taliban and China.
· From Inquirer
April 17, 2021
President Joe Biden’s withdrawal announcement dominated discussion in Kabul this week, but three trending stories on Tolo, a popular Afghan news channel, emphasised what the US-led coalition leaves behind. A woman in Herat province was publicly flogged by the Taliban for an alleged affair, the UN reported a 38 per cent spike in civilians killed or wounded over the last six months, and Taliban fighters attacked the main military base in Zabul province, killing 10 soldiers and emphasising their expanding rural influence, even as they continue launching terror attacks into urban centres.
The US announcement prompted statements from NATO, Australia and other allies, confirming that the international coalition will follow Washington’s lead and withdraw by September 11. Most included comforting words about continuing diplomatic and aid efforts, and reassurances that the international community will remain engaged in the “Afghan peace process”.
In fact there is no Afghan peace process. The Taliban are boycotting talks with Kabul and have refused any form of power-sharing deal. They reject the Afghan constitution, continue quietly co-operating with al-Qa’ida, and regard all foreign presence, and the current Afghan republic — created and sustained by foreigners — as illegitimate. Taliban leaders reacted to Biden’s announcement with contempt, their Voice of Jihad website mocking the US and NATO as “victim to severe confusion and distress”, and pointing to Washington’s dilemma: “If America leaves Afghanistan, the Kabul administration shall collapse. On the other hand, if they [stay], then war will be renewed.” Taliban commanders believe they are winning the war anyway; they think the coalition pullout will only hasten their victory, so they see no need to negotiate.
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I look forward to comments on all this!
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David.
