December 15, 2022 Edition
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Sadly the bad news from Ukraine continues as does the suffering. The only change seems to be we are seeing some attacks into Russia which may weaken Russian morale! The recession is still coming!
Europe and UK just stumble on and continue towards recession.
In OZ the big issue is what to do with rapidly rising energy prices which are really hurting some of the population badly. Not sure what has been done so far will work!
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Major Issues.
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Liberal Party must unashamedly articulate its timeless values
After a year of failure, Liberals need to understand that managerialism is terribly uninspiring compared with fighting for individual freedom and responsibility against the progressive left.
Alexander Downer Columnist
Dec 4, 2022 – 1.21pm
Even the Liberal Party’s most passionate and partisan spin doctor would have to admit that 2022 has been one of the worst years electorally in the history of the party.
In March, the Liberals lost the state election in South Australia after being in power for just four years. Then there was the federal election in May, when the party not only lost government but lost some of its most treasured seats. And finally, the weekend before last saw the Liberal Party annihilated in the Victorian state election.
Many will argue that each of these elections was different. In every case, the leaders of the Liberal Party were very different people. They also had different political experiences in recent years.
The Victorian Liberal Party was in opposition throughout the great COVID-19 panic whereas the federal and South Australian Liberals were both in government.
The federal government’s handling of COVID-19 received mixed reviews from the public. They loved all the lockdowns and border closures, state and national, but they thought the vaccine rollout was too slow.
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Four tips for dealing with higher interest rates
Interest rates have climbed from 0.10 per cent to 2.85 per cent, leaving some borrowers strapped for cash. Here are four things they can do.
Michael Hutton Contributor
Dec 5, 2022 – 5.00am
With interest rates on the rise, anyone with a loan would be concerned about how to deal with ballooning monthly payments. Thankfully, there are ways to take control of the situation before it’s too late.
This year, the RBA cash rate has gone from 0.10 per cent to 2.85 per cent. Mortgage holders have seen their interest double from about 2.5 per cent to around 5 per cent per annum. Monthly repayments are becoming significantly larger.
Pointing out that interest rate increases are starting from a very low base provides little comfort for borrowers, since each rate increase has a significant impact on cash flow regardless of the starting point.
Rate rises can also affect all types of loans, not just large mortgages, including credit cards, personal loans and car loans.
So, what can borrowers do to alleviate the impact of these increased loan payments and not be overburdened with debt?
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Biggest generational voting change against Coalition since surveys begun, says ANU professor
By Ashleigh McMillan and Shane Wright Nov 5, 2022
The teal wave that wiped the Liberal Party from inner-city electorates was driven by tactical Labor and Green voters, a major study of the 2022 election has found while revealing Anthony Albanese was viewed by voters as far more trustworthy and honest than Scott Morrison.
The Australian Election Study, compiled by the Australian National University and Griffith University, also showed Albanese was the most popular leader at an election since Kevin Rudd’s 2007 victory while Morrison was the least popular since the study started in 1987.
Earlier this morning, we heard from the study’s co-author ANU political science Professor Ian McAllister on ABC Radio, who said there was a “continuing shift” of young people away from the Liberals and Nationals.
“That has advanced much more than it has in any previous election. For example, among people aged under 40, less than one and four are voting for the Coalition,” he said.
“Among younger people still, aged under 24, we find that about one in five or less were voting for the Coalition. That’s the biggest generational change than we’ve ever seen in any of the previous selection surveys.”
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Teals and Greens ‘key beneficiaries of seismic shift in voting behaviour’
By Tom Dusevic
10:10PM December 4, 2022
Teal voters are not disenchanted Liberals but primarily tactical progressives, according to the nation’s most exhaustive research on elections, which declares a “seismic shift” away from major parties.
The Australian Election Study, to be published fully on Monday, also found Scott Morrison was the least popular major party leader in the 35-year history of the report, covering the past 13 federal polls.
Although not viewed as inspiring, Anthony Albanese was the most popular party leader since Kevin Rudd in 2007, as the Prime Minister outshone his opponent in eight of nine leader traits, with the biggest differences in perceptions of honesty, trustworthiness and compassion.
The Australian National University-led study, based on a representative sample of 2508 voters, explores the reasons for the “large-scale abandonment” of Labor and the Coalition, with almost one in three voters casting their ballots for minor parties or independents.
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Brisbane crypto exchange fires 90 staff as FTX collapse carnage spreads
Jessica Sier Journalist
Dec 5, 2022 – 1.01pm
Brisbane-based cryptocurrency exchange Swyftx has fired 90 employees, or 35 per cent of the company’s workforce, ahead of an expected prolonged downturn in crypto sentiment, exacerbated by the recent collapse of global exchange FTX.
This is the second round of redundancies for the crypto exchange this year, and comes as Swyftx undergoes a capital raise in the hopes of beefing up its balance sheet and ensuring its $1.5 billion merger with budget stockbroker Superhero goes ahead.
According to documents filed with the Australian Securities and Investments Commission last week, Swyftx has suffered a 23 per cent fall in its after-tax profit due to a sharp downturn in crypto prices and a global investor rejection of riskier assets in a rising interest rate environment.
Swyftx booked a $36.7 million profit after tax for the 12 months to June 30, down from $48.2 million in the prior period.
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Clough collapse comes as cracks spread beyond construction
The collapse of contracting group Clough comes as rising rates, cost pressures, COVID-19 supply chain hangovers and a more active ATO start to hit the business sector.
Dec 6, 2022 – 10.57am
The collapse of West Australian-based, South African-owned engineering contractor Clough Group will have serious ramifications for some of Australia’s biggest infrastructure projects, including the Snowy 2.0 pumped hydro project and the much-hyped Inland Rail project.
But this is a slow-moving train crash that will come as no surprise to anyone in the contracting or insolvency sectors.
Clough’s owners, listed South African group Murray & Roberts, announced it wanted out of the business in October, citing the typical problem that has hit contracting and construction businesses in the past 18 months: the collision of fixed-price contracts and COVID-related disruptions, which has made it harder for Clough to complete jobs and collect payments.
Murray & Roberts managed to find an escape hatch, striking a deal with Italian group Webuild, which has worked alongside Clough on several projects, including Snowy 2.0, that saw the Italians pay just $500,000 and forgive $250 million of debt.
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It’s not just Albanese who’s stuck in an energy price mess
Divisions between NSW Premier Dominic Perrottet and his treasurer and energy minister also demonstrate the contradictions in Australia’s energy ambitions.
Jennifer Hewett Columnist
Dec 5, 2022 – 6.09pm
The stand-off between the federal government and various state governments over imposing a price cap on coal is out in the open before Wednesday’s meeting of the national cabinet.
State governments such as NSW and Queensland want not only generous compensation on their terms but also to avoid the political opprobrium for imposing price caps themselves and the blame for the inevitable unintended consequences.
But there are plenty of other internal contradictions – although less public – roiling state governments as they try to mix energy reality with emissions reduction ambitions. Queensland and Victoria, for example, remain heavily dependent on fossil fuels even as they focus attention on renewable energy plans and Victoria blocks paying gas producers to provide back-up capacity in case of shortages in the national electricity market.
Right now, though, NSW is the standout state case for how climate politics is crashing messily into the need for energy stability and limits on price increases before a difficult state election next March. The one remaining Liberal government in a big Australian state promotes its socially and environmentally progressive policies, personified by Treasurer and Energy Minister Matt Kean.
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Labor takes strong lead over Peter Dutton, new research shows
By David Crowe
December 6, 2022 — 10.40am
Voters have given the federal government a significant boost by increasing core support for Labor to 42 per cent and cutting the Coalition to just 30 per cent in another sign of a powerful shift since the May election.
Prime Minister Anthony Albanese has confirmed a personal advantage over Opposition Leader Peter Dutton to lead by 54 to 19 per cent when voters are asked to name their preferred prime minister.
Albanese and Labor also lead on more than a dozen key policy questions when Australians are asked which side of politics would perform best on issues such as the economy and national security - an issue on which Dutton and the Coalition held a narrow lead last month.
The exclusive survey, conducted by Resolve Strategic for this masthead, reveals a fall in support for the Greens, from 13 to 11 per cent over the past month, and steady support for independents, at 8 per cent nationwide.
The results come after a week in parliament that saw the government secure the passage of the National Anti-Corruption Commission, its workplace relations laws, tax breaks for electric vehicles and more generous childcare subsidies.
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How to keep your shares safe from hacks and collapses
By John Collett
December 7, 2022 — 5.20am
A rapid proliferation in the number of share trading platforms in the market has prompted warnings for investors to check in on the safety of their shareholdings to safeguard against a potential hack or company collapse.
The fall of major crypto exchange FTX and the high-profile hacks of Optus and Medibank have thrust data security and safety into focus at a time when Australians are increasingly trading equities on apps and other digital platforms.
Matt Leibowitz, the co-founder and chief executive of Stake, one such online share investing platform based in Australia, says the robustness and security of the services on offer is absolutely critical.
He says investors can get overly focused on deciding on what investments to hold and not give much attention to security, but they should make sure the broker is “robust and stable” and using the best technology and infrastructure.
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Labor will only ever get one Scott Morrison, so what’s its next trick?
Columnist
December 7, 2022 — 5.00am
Pretty much every government gets carried out in a box. Voters eventually tire of even the most successful leader. So if you manage to win office, best to make the most of your time in charge. The 50th anniversary of the election of the Whitlam government reminds us of the sense of urgency Gough Whitlam brought to his prime ministership. So anxious was he to get started after 23 years in opposition, he headed up a two-man cabinet until all his ministers could be sworn in several weeks later.
When Labor took office under Anthony Albanese in May the situation bore some similarity: the ALP had held office for only six of the previous 26 years. But there was no rush within the Albanese government to start pulling the levers of power. Its first parliamentary appearance took place two months after the election. Its jobs summit – a shot at building some consensus around economic policy – didn’t happen until September. Contrast that with the Hawke government, which in 1983 held a similar economic summit just a month after it was elected.
This has been a good year for people of the progressive persuasion, with the Labor Party notching up two state election wins and the big one, victory over Scott Morrison’s ragged, directionless outfit. The elation over electoral successes and the abysmal plight of the Liberal Party across the mainland tends to distract from the experimental nature of the Albanese government. It is in many important respects breaking with a Labor tradition of coming to office with a packed policy agenda. Instead, it presents as mildly reformist and, unlike past Labor governments, not as an agent of profound change. Mostly, it is there to do repairs with a Labor flavour and be seen as a safe pair of hands.
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‘We’ll stand by you’: Antony Blinken vows to plug defence capability gap
10:01AM December 7, 2022
The US has promised Australia that American defence forces, the world’s most powerful, will plug the looming gap in our defences as the navy’s aging Collins class submarines become obsolete in coming years, as the two allies announce they would boost defence cooperation with Japan to counter the growing Chinese threat.
Standing side by side with deputy prime minister Richard Marles, foreign minister Penny Wong and US Secretary of State Antony Blinken at the State department after annual AUSMIN talks in Washington on Tuesday (Wednesday AEDT), US defence secretary Lloyd Austin declared the US ““will not allow Australia to have a capability gap going forward”.
“We recognise where Australia is and where its capability begins to diminish and of course we will address that in the pathway we create,” Mr Austin said, leaving the details to be unveiled by the government in next year’s defence review slated for release early next year.
Australia is set to acquire eight nuclear-powered submarines as part of the AUKUS security pact agreed with the UK and US last year, which aren’t due to arrive until the late 2030s, after the navy’s current fleet of conventionally powered submarines become obsolete.
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Changing nation leaves Coalition behind
12:00AM December 7, 2022
The Morrison government lost the 2022 election on policy, leadership and socio-demographic grounds that, taken together, constitute an existential crisis for the Coalition and the Liberal Party that will not be solved merely by the normal cycle of political change.
The grim reality for the Liberal Party is its double loss – it lost on the core issues of the election and it lost on the structural trends changing Australian society and politics. The Coalition’s future is in doubt.
The essence of election 2022 is that it delivered a narrow Labor victory and a devastating Coalition loss. The Coalition lost 18 seats, 10 to Labor, six to the pro-climate action teal independents and two to the Greens. The Liberals have multiple vulnerabilities. They are weakened in the capital cities, with their metropolitan seat numbers falling from 33 at their 2007 election defeat to 19 seats at their 2022 election loss.
In the 151-strong House of Representatives, Labor has 77 seats, a tight majority, while the Coalition has been reduced to 58 seats – its lowest seat share in the house since the 1946 election.
The ALP election review released this week – while realistic about the challenges facing Labor – calls the poll “a realignment election for the Liberal Party”, a persuasive conclusion.
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Amateur fossil hunters unearth elasmosaur in Queensland
By JAMIE WALKER
10:12AM December 7, 2022
They’re calling it the Rosetta stone of Australian palaeontology – the first intact fossilised skeleton of a 100-million-year-plus elasmosaur to be unearthed, shedding new light on one of the most intriguing creatures to have lived in prehistoric times.
The find was made by amateur sleuths in outback Queensland and created a stir of excitement among scientists who had searched in vain for a complete set of petrified remains.
The stunted skull of the long-necked marine reptile, which existed alongside the dinosaurs, had never been recovered still attached, allowing researchers at Queensland Museum to better understand what the elasmosaur must have been like when it plied the vast inland sea that once covered the interior of the continent.
Part of the plesiosaur family of fish-eating predators, boasting a streamlined body and paddle-like limbs, it would have been quite the sight at up to 15m long, with a mouth full of interlocking crocodile-like teeth.
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https://www.afr.com/policy/economy/economy-rebounds-5-9pc-out-of-pandemic-20221207-p5c4c9
Economy rebounds 5.9pc out of pandemic
Ronald Mizen Economics correspondent
Dec 7, 2022 – 11.57am
The Australian economy grew 0.6 per cent in the September quarter to be 5.9 per cent larger through the year, a strong result coming off the back of the final wave of COVID-19 lockdowns in 2021.
The quarterly figure was slightly below market consensus but on par with the Reserve Bank of Australia’s most recent forecasts.
The latest Australian Bureau of Statistics national accounts data included a rollicking rebound in the 2021 December quarter that came after the economy contracted sharply during the final wave of COVID-19 lockdowns.
Looking ahead, the RBA is forecasting just 1.4 per cent economic growth in 2023, while Treasury has pencilled in growth of 1.5 per cent in 2023-24.
Treasurer Jim Chalmers labelled the annual economic growth a “strong result” that showed the economy performing solidly and withstanding headwinds from around the world, but warned of uncertainty ahead.
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https://www.afr.com/chanticleer/treasury-reveals-fresh-attack-on-franking-credits-20221207-p5c4kk
Treasury reveals fresh attack on franking credits
Franking credit crusader Geoff Wilson says he has uncovered a new federal Treasury attack on the $430 billion in franking credits sitting on corporate balance sheets.
Dec 7, 2022 – 7.42pm
Draft legislation aimed at closing a loophole in off-market buy-backs contains a powerful sleeper clause that will wipe out billions of dollars in franking credits that would normally be available for distribution to shareholders.
The clause was uncovered by fund manager and franking credit crusader Geoff Wilson as part of his review of the proposed legislation to stop companies distributing franking credits through buy-backs.
“The current government is in the process of destroying efficient capital formation in Australia by dismantling the franking system,” he says.
Wilson, who founded Wilson Asset Management, has begun a campaign against the proposed law by urging the 130,000 investors in WAM’s listed investment companies to make a submission to Treasury.
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https://thenewdaily.com.au/finance/2022/12/08/voice-an-economic-issue-kohler/
6:00am, Dec 8, 2022 Updated: 5:23pm, Dec 7
Alan Kohler: Why the Voice is an economic as well as moral issue
Some of the most egregious inequality in the world exists within Australia, writes Alan Kohler.
The first attempt at an Indigenous voice to Parliament was in 1934 – the Australian Aborigines League unsuccessfully petitioned King George V, with 1814 signatures, for the ‘Representation of Aboriginal people in Federal Parliament’. No dice.
Four years
earlier, in 1930, John Maynard Keynes published an essay in which he forecast
that in 100 years from then we’d all be rich and working three days a week, wondering
what to do with ourselves.
But in October, Australia’s 13.6 million employed people worked an average of
4.6 days a week, including part-timers.
What happened? How did Keynes get that forecast of plenty so wrong? After all, he was talking about 2 per cent average economic growth a year, and we’ve actually averaged 3.4 per cent.
The great economist didn’t account for distribution. The assumption that wealth and leisure would be evenly spread was wildly wrong.
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The five biggest corporate stuff-ups of 2022
Whiskey, casinos, and coal – these great sins were at the centre of some of the business community’s biggest missteps of 2022.
James Thomson Columnist
Dec 8, 2022 – 6.46am
As the captains of Australian industry rush towards the end of year, it’s a fair bet most are looking towards next year with a sense of trepidation.
Inflation sits at its highest levels in generations and soaring rates don’t appear to have had much impact – yet. Everyone knows a slowdown is coming, but exactly what it will look like is far from clear.
But before the calendar turns to January, it’s important our corporate leaders take stock of the year that was. And while most have spent the year in small-target mode, steering clear of deal-making and keeping their powder dry for what’s coming, there’s been no shortage of moments that have left Chook Roast shaking his head.
Without any further ado, let’s hand out the Drumstick Awards for Poor Corporate Behaviour.
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Eat, shop and be merry. But the party is about to end
By Shane Wright
Updated December 7, 2022 — 4.25pm first published at 4.23pm
It may be as good as it gets for the Australian economy.
The national accounts show consumers have, despite high inflation and the Reserve Bank’s warnings, been having a jolly good time perhaps with the knowledge that the situation is going to get tougher in the not-too-distant future.
The economy expanded by another 0.6 per cent in the September quarter thanks almost solely to Australian households.
Expenditure by households lifted by 1.1 per cent in the quarter to be a stonkingly good 11.8 per cent up over the past 12 months.
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Indigenous voice to parliament is an affront to democracy
Chris Merritt
5:05PM December 8, 2022
On November 30, Anthony Albanese stood in the House of Representatives holding a copy of a report that he said contained 280 pages of detail about how the proposed Indigenous voice to parliament “will operate”.
It can only be hoped this was a rhetorical lapse. If not, and the Prime Minister actually meant what he said, the voice will be more deeply flawed than previously believed.
If Albanese implements the report he displayed in parliament, the problems will extend well beyond the fact that it would be a race-based national institution embedded in the Constitution.
It would be an anti-democratic abomination.
If this plan goes ahead, everyday Australians who happen to be Indigenous will have no control over the new institution. It will be representative in name only.
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Get ready for the economic hangover from a blinder 2022
Australia is heading for a major turning point, as a post-pandemic spending binge is replaced by the cold, hard reality of high inflation and rising interest rates.
Ronald Mizen Economics correspondent
Updated Dec 9, 2022 – 4.28pm, first published at 3.00pm
The Australian economy is heading for a major turning point as the warm afterglow of a post-pandemic spending binge is set to be replaced by the cold, hard reality of high inflation and rising interest rates.
The economy’s quarterly report card out this week – the national accounts – flagged the Christmas season could be the “last hurrah” for spending before consumers succumb to higher mortgage costs, rising rents, soaring food prices and larger utility bills.
Such a change would come after a phenomenal year in which the jobless rate fell to a 48-year low of 3.4 per cent and wages showed the first solid signs of growth after a decade of stagnation. Almost half of private-sector workers got an average pay rise of 4.3 per cent in the three months to the end of September – the biggest in 10 years.
Unshackled from lockdowns and guarded by vaccines, households spent less on furniture and more on dining out as retail sales surged. And strong commodity prices appear set to deliver Treasurer Jim Chalmers a Christmas miracle – a budget temporarily back in balance.
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Why next year’s global recession will be severe
A global recession next year will pose challenges for many asset classes including shares and illiquid investments that have not yet adjusted to much higher risk-free rates.
Christopher JoyeColumnist
Dec 9, 2022 – 12.00pm
Investors need to face up to the reality that a global recession is likely next year, which will crush corporate earnings and substantially increase default rates among high-risk borrowers.
Since the start of the year, our models have been forecasting a US recession with a high degree of confidence, commencing in 2023.
Examining the duration of recessions in the post-World War II period, our chief macro strategist, Kieran Davies, finds that they normally run for almost 12 months during high inflation shocks, which is longer than the eight-month interval for recessions experienced during low inflation times.
Inflation-induced recessions are also worse for US equities than low-inflation downturns. In real or inflation-adjusted terms, our analysis suggests that the S&P500 has typically declined by 23 per cent in high inflation episodes compared to an 18 per cent loss in the alternative.
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The hard times are coming for the Australian economy
Ross Gittins
Economics Editor
December 9, 2022 — 11.39am
It’s clear the economy’s started slowing, with the strong bounceback from the lockdowns nearing its end. That’s before we’ve felt much drag from the big rise in interest rates. Or the bigger economies pulling us lower, which is in store for next year.
To be sure, the economy’s closer to full employment than we’ve been half a century. But limiting the decline from here on will be a tricky task for Anthony Albanese and, more particularly, Reserve Bank governor Philip Lowe.
The Australian Bureau of Statistics’ “national accounts” for the three months to the end of September, published this week, showed real gross domestic product – the nation’s total production of goods and services – growing by just 0.6 per cent during the quarter, and by 5.9 per cent over the year to September.
Focus on the 0.6 per cent, not the 5.9 per cent – it’s ancient history. Most of it comes from huge growth of 3.8 per cent in the December quarter of last year, which was the biggest part of the bounceback following the end of the second lockdown of NSW, the ACT and Victoria.
Since then, we’ve had quarterly growth of 0.4 per cent, 0.9 per cent and now 0.6 per cent. That’s the slowing. Quarterly growth of 0.6 per cent equals annualised growth of about 2.5 per cent. That’s about the speed the economy was growing at before the pandemic, which we knew was on the weak side.
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Portrait of a politically fractured nation
12:00AM December 10, 2022
Australia is becoming a more fractured nation – loyalty to institutions, religions and political party is in decline. People are less ready to follow authority figures. And the 2022 election was a watershed with the major parties winning only two-thirds of the primary vote. National politics is at a threshold moment.
Either the major parties will hold the line and resist the trend or our democracy in coming decades will change shape in ways we will hardly recognise. Centrifugal division looms as the possible future.
Anthony Albanese’s government is important in its own right. But it is also important because it will help to decide the future of majority government and the structure of politics. Despite Labor’s 2022 election victory, its vulnerability is on display – Albanese’s primary vote was only 32.58 per cent, less than a third of the electorate and the lowest ALP primary vote for about 90 years, since the early 1930s.
Labor won on a shrinking vote. That’s unsustainable. Something must give in coming years – either the vote increases or Labor needs partners to help it govern. It will be one or the other.
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Labor has headaches, but Liberals have the real brand problem
The middle-class base of the Coalition has become more socially progressive and less religious over time, and a change is needed to win over young voters.
Nick Dyrenfurth Researcher
Dec 7, 2022 – 11.23am
Shortly before the historic re-election of Daniel Andrews’ Victorian Labor government for a third term, an overseas centenary anniversary passed with little local comment.
At the mid-November 1922 British general election, although victory went to the Conservatives, for the first time Labour surpassed the divided Liberal Party, reducing the latter to third-party status. The Tories dominated British politics for the next four decades, yet this realignment led to Labour becoming their main electoral rival.
These events were later chronicled in George Dangerfield’s influential 1935 book, The Strange Death of Liberal England. In its pages, Dangerfield argued that the Liberals had ceased to be a party of government owing to “four great rebellions” before World War I: the Tories’ opposition the Parliament Act 1911 (removing the House of Lords’ ability to veto money and other public bills; the threat of civil war in Ireland; the rise of the suffragette movement; and a more militant trade unionism).
A century on, are we witnessing the strange death of Australian liberal conservatism? It is improbable that the Liberals will cease to exist or become a third party (and indeed the Nationals performed well at this year’s federal and Victorian ballots).
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Labor heads into the new year with a burst of energy
Voters are so far positive about the Albanese government, even though its power bill relief and other policy initiatives tend to lack political razzmatazz.
Laura Tingle Columnist
Dec 9, 2022 – 5.29pm
There has been more than just a touch of apprehension within the Albanese government in recent weeks about whatever deal it was going to land on energy prices.
It’s not just that working out what arms of federal and state government policy might actually deliver such a price cut in a non-inflationary and equitable way is complicated, but it is also the sense that, almost inevitably, public expectations of what relief might be delivered will not be met.
The longer things have gone on, the more difficult it has become. Voters have been hearing daily for weeks that the government is going to do something about their power bills.
Government ministers have been trying to set expectations, constantly emphasising how complex the issues are.
But it’s hard to believe that the take-out from all the talk about lower energy bills has not been the expectation that your energy bills might actually fall from their current levels; in fact, all the government can really hope for is that consumers prospectively get lower bills than they otherwise would have some time next year.
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Looking back in hatred? Be careful not miss the future
Columnist and communications adviser
December 11, 2022 — 5.00am
In the social media era, hate is the most unifying, satisfying and endlessly renewing social experience our animal brains can access. So when a public figure is in a hate-spiral, it’s almost impossible for them to dig their way out. Witness the Sussexes, Donald Trump or our most recent ex-PM.
Yes, I too love to hate. I watched the first episode of Harry & Meghan. I gobble down articles about the couple’s narcissistic charity forays. I groan at their melodramatic demands for privacy, delivered via six episodes of intimate footage of their family. I chuckle at cruel take-downs and share them with an overseas friend. Oceans apart, these articles are our chief means of connection.
And I am reminded by the algorithm that I also enjoy a good cringe over Trump. Insane Clown President, as US gonzo Matt Taibbi titled his book on the 2016 election, was always an easy target, with his orange pouffe hair and staccato intelligence.
But when Twitter blocked the former president’s favourite means of communication as the 2020 poll approached, it raised a question. Did Trump have to be removed from Twitter because he was poisoning the minds of his supporters? After all, he had other channels for that. Or was the real threat to democracy the impulse to overthrow a sitting president, if even just technologically and just on Twitter?
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COVID-19 Information.
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https://www.afr.com/world/asia/how-xi-s-great-covid-19-china-pivot-is-actually-going-20221208-p5c4nj
How Xi’s great COVID-19 pivot is actually going
Experts and even China’s own health authorities are predicting 90 per cent of the country’s 1.4 billion people will become infected.
Michael Smith North Asia correspondent
Dec 9, 2022 – 10.28am
Three years after a mysterious, respiratory illness emerged at a Wuhan wet market, what may be the final chapter in the COVID-19 pandemic is now playing out in the country where it started.
As Xi Jinping implements an abrupt about-face in his “war” against the virus, China is bracing for a wave of COVID-19 infections that will dwarf anything that took place in Wuhan in early 2020.
Experts and even China’s own health authorities are predicting 90 per cent of the country’s 1.4 billion people will become infected. The number of COVID-19 deaths now depends on a last-minute scramble to vaccinate the elderly and the vulnerable and prepare the country’s under-resourced hospitals for an influx of patients.
For Xi, there was no other choice but to roll back the world’s most excessive restrictions which had kept millions prisoners in their homes for months and was slowly eroding China’s decades of economic success. Even the strongman leader’s ability to implement social controls impossible in democracies such as Australia was no match for the highly contagious omicron variant.
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‘Immunity is declining’: Expert warns of Christmas COVID wave
Andrew Hobbs 11-Ded, 2022
Immunity from COVID-19 is declining in Australia, with an expert saying hospitalisations of people with the disease will peak over Christmas.
“There’s more COVID in circulation, but our immunity to infection has declined,” Professor Nancy Baxter from the University of Melbourne says in an interview on ABC.
She says hospitalisation rates are now at 3000 in the current wave.
“It isn’t finished peaking in terms of hospitalisation. Unfortunately, we’re going to be seeing that around Christmas time. So it’s going to be a lot of pressure on the hospital system right at Christmas time.”
Baxter says wearing masks would help but there is social pressure not to wear them.
“A mandate would help and masks definitely help in terms of reducing transmission. That’s not going to happen. I think we just need to accept that and move on.”
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Climate Change.
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https://thenewdaily.com.au/finance/2022/12/05/inflation-climate-alan-kohler/
6:00am, Dec 5, 2022 Updated: 38m ago
Alan Kohler: In a warming world, inflation targets need to rise
Central banks need to start thinking seriously about raising inflation targets because of climate change.
Global warming is inherently, inescapably, inflationary, so when the countries that have 2 per cent inflation as their formal target get inflation down to 3 per cent, will they cause a global recession for the last 1 per cent, when it’s not caused by excess demand but by climate change?
We’re talking about the United States, Europe, Japan, UK, Norway, Sweden, Switzerland and South Korea, all with 2 per cent targets.
At least Australia’s Reserve Bank has a flexible target of 2 to 3 per cent, but the same principle applies: When inflation in this country is down to 4 per cent, will the RBA really bring about recession and an even greater housing crash than we’ve had already to get it under three?
The most direct and obvious problem is energy prices. While the marginal cost of renewable energy is zero, which means it tends to be deflationary, the transition from fossil fuels is going to take at least a couple of decades, especially in some parts of the world, and in the meantime the declining scale of coal and gas will push their prices up.
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Plibersek kicks off biggest nature law overhaul in two decades
Jacob Greber Senior correspondent
Dec 8, 2022 – 10.01am
Environment Minister Tanya Plibersek has vowed to accelerate approvals for renewables and housing projects while imposing a new water constraint on unconventional shale gas and forcing business to show how they are helping meet Australia’s 43 per cent emissions target.
In the most wide-reaching overhaul of the nation’s habitat, flora and fauna protection laws in more than two decades, Ms Plibersek said the government would next year introduce legislation to establish an independent “tough cop on the beat” Environmental Protection Agency charged with policing businesses, landowners and developers.
While environmental groups welcomed the government’s move to toughen nature laws, Labor will very likely need the support of Greens and independent Senator David Pocock who are demanding a more explicit climate trigger as well as outright bans on new fossil fuel projects. Senator Pocock will also insist on significant additional funds for nature conservation.
The laws will also likely trigger protracted negotiations with businesses, who are concerned over the degree of ministerial oversight of the new EPA, as well as potential conflicts between jurisdictions.
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Finally, laws with teeth to reverse decline of nature
12:00AM December 9, 2022
In Brisbane on Thursday, federal Environment Minister Tanya Plibersek announced the most sweeping and wide-ranging reforms to Australia’s national environment laws and policies in a generation.
As part of a comprehensive response to the review of the environment laws undertaken by former Australian Competition & Consumer Commission chairman Graeme Samuel for the Morrison government, Plibersek announced the establishment of a strong and independent national environment protection agency, modelled on the US example, with a remit to take the politics out of environmental decision-making and rebuild trust and confidence in the application of our environment laws and policies.
The establishment of the new EPA, backed by its own legislation and reporting to the federal parliament, is only one of many important reforms that will become the centre of public debate as these announcements are translated into legislation that will be considered by parliament well into next year. The existing national environment laws, the Environment Protection and Biodiversity Conservation Act 1999, are universally loathed, with no friends in business, the environment movement, among the scientific community and even within government itself.
It is noteworthy and illustrative that both the Business Council of Australia and the Australian Conservation Foundation welcomed the reforms announced by Plibersek.
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Power bill blowout to ease by $230 in Albanese deal
Phillip Coorey Political editor
Dec 9, 2022 – 6.26pm
The forecast blowouts in energy bills will be slowed drastically by 12-month caps to be imposed within days on black coal and gas, leaving the average household $230 less worse off than it otherwise would have been.
These “savings” for low- and medium-income households will be boosted by another 10 per cent as they will also be eligible for $3 billion in electricity bill discounts to begin in April next year.
The amounts and details of these discounts, to be co-funded by the states and the Commonwealth, will vary from state to state, in accordance with their electricity prices, and will be worked out over the summer by state and territory treasurers and energy ministers.
Prime Minister Anthony Albanese said the discounts would be administered by state governments in the form of reduced energy bills because this would help lower inflation, of which energy prices were a key driver.
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Experts question if renewables will keep the lights on
Mark Ludlow Queensland bureau chief
Updated Dec 9, 2022 – 6.51pm, first published at 5.22pm
Energy experts said it would be harder for the new capacity mechanism to deliver reliable supply into the grid to avoid blackouts by excluding coal and gas, saying there will be major challenges when the grid hits more than 85 per cent renewables.
While federal Energy and Climate Change Minister Chris Bowen championed the new capacity mechanism as a victory for renewable energy, it still remains unclear how it will work in practice with several states like NSW and Queensland running their own reliability programs.
Grattan Institute’s energy program director Tony Wood said there was no doubt it would be harder for a capacity mechanism to work without coal or gas.
“Of course, it will make it harder. What they are proposing will make it harder to achieve outcomes,” Mr Wood told AFR Weekend.
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Royal Commissions And The Like.
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Hundreds of aged-care homes to be shamed in new rating system
By STEPHEN LUNN
10:30PM December 8, 2022
Hundreds of nursing homes across Australia will receive just one or two stars in a new five-star aged-care rating system after falling short of acceptable standards on measures such as staffing levels, food quality and the use of physical restraints.
And in a sector looking after some of the nation’s most vulnerable citizens, just 1 per cent of the 2671 residential aged-care homes across the country will receive a five-star rating.
The ratings, to be issued to aged-care providers on Friday, reveal almost two in three facilities, 59 per cent, were given three stars and 30 per cent four stars. But 1 per cent of homes face being told they have a one-star rating and 9 per cent two stars, both considered below standard. Those facilities have not been named but will be in coming weeks when the ratings are published on the My Aged Care website.
Against the backdrop of Anthony Albanese promising to “fix the crisis in aged care” as a key election pledge, federal Aged-Care Minister Anika Wells called on providers who own facilities with low ratings to improve them and not make excuses.
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National Budget Issues.
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https://www.afr.com/politics/federal/i-m-announcing-a-70b-budget-christmas-present-20221204-p5c3gi
I’m announcing a $70b budget Christmas present
There’s no official end of year fiscal update in 2022, but five weeks after the budget the news is getting better – not because something happened, but because an unlikely thing didn’t happen.
Chris Richardson Economist
Dec 4, 2022 – 10.30pm
Good news everyone: I’m announcing a $70 billion Christmas present for the nation.
Pretty good, huh?
I’m the one telling you because it’s only been five weeks since the last budget was brought down, meaning the usual official pre-Christmas update for budget nerds won’t happen this year.
So allow me.
Although a range of risks are swirling (most notably China’s slowdown), the budget news is getting better fast.
That’s because Treasury assumed something silly in the budget, with key commodity prices seen taking a dive so epic that it would draw gasps of approval from a World Cup crowd.
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Soaring coal delivers Chalmers a Christmas miracle
Ronald Mizen Economics correspondent
Dec 4, 2022 – 10.30pm
Soaring iron ore, coal and natural gas prices are set to add $58 billion to tax revenue over four years and deliver Treasurer Jim Chalmers a Christmas miracle – a federal budget bottomline temporarily in balance.
But while a boon for exporters, high commodity prices are driving domestic inflation, placing huge strain on household budgets, and forcing a major intervention in the energy market by the Albanese government.
NSW Treasurer Matt Kean on Sunday pushed back against a plan for states to introduce a cap on coal prices, suggesting the federal government had the power to impose a cap without the states.
“Our legal advice is that they do have the powers to cap coal prices if they want to go down that path,” Mr Kean said.
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https://www.rba.gov.au/media-releases/2022/mr-22-41.html
Media Release Statement by Philip Lowe, Governor: Monetary Policy Decision
Number 2022-41
Date 6 December 2022
At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 3.10 per cent. It also increased the interest rate on Exchange Settlement balances by 25 basis points to 3.00 per cent.
Inflation in Australia is too high, at 6.9 per cent over the year to October. Global factors explain much of this high inflation, but strong domestic demand relative to the ability of the economy to meet that demand is also playing a role. Returning inflation to target requires a more sustainable balance between demand and supply.
A further increase in inflation is expected over the months ahead, with inflation forecast to peak at around 8 per cent over the year to the December quarter. Inflation is then expected to decline next year due to the ongoing resolution of global supply-side problems, recent declines in some commodity prices and slower growth in demand. Medium-term inflation expectations remain well anchored, and it is important that this remains the case. The Bank’s central forecast is for CPI inflation to decline over the next couple of years to be a little above 3 per cent over 2024.
The Australian economy is continuing to grow solidly. Economic growth is expected to moderate over the year ahead as the global economy slows, the bounce-back in spending on services runs its course, and growth in household consumption slows due to tighter financial conditions. The Bank’s central forecast is for growth of around 1½ per cent in 2023 and 2024.
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There are worrying parallels inside the policymaking world today with the flawed New Deal thinking that led central bankers to let the inflation genie out the bottle in the 1970s.
Adrian Blundell-Wignall Economist
Dec 6, 2022 – 9.00pm
Arthur R. Burns was the Fed Chair who got it all wrong and let the inflation genie out of the bottle. Paul Volcker had to put it back when he became Chair in 1979 – a difficult and costly task.
Burns reflected on how he erred – a real mea culpa in his Per Jacobsson speech just before Volcker became Chair. Volcker was there and listening.
Parallels between the things going on back then and what we see today are concerning – particularly the ideas that current US interest rates are getting close to the right level (with its echoes here in Australia) and that a brace of economists want to raise the inflation target above 2 per cent (to 3 per cent or even 4 per cent).
The 1950s to the mid-1960s were a period of remarkable price stability, strong productivity growth and rising family welfare. However, the second half of the 1960s saw a strong rise in inflation, well before the temporary oil price effect added to it in 1974.
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How to tell when there are cracks in your strategy
The market downturn of 2022 will have many asking themselves if their strategy is up to scratch. But switching strategies isn’t always the solution.
Jeremy Chunn Contributor
Dec 5, 2022 – 3.25pm
A market downturn like we’ve seen in 2022 will have many investors asking themselves if they are losing confidence in their strategy. And maybe it’s a good question.
Plenty of portfolios go out of shape over the years, but sharply rising interest rates have hurt portfolios designed for income as harshly as those designed for growth.
“Hopefully, you have a reasonable idea of what you are expecting from your portfolio,” says Morningstar director of manager selection Aman Ramrakha. “Chances are for year-to-date 2022 it hasn’t delivered.”
Depending on expectations for returns, Ramrakha says the question becomes: “Do I need to make a change or am I still consistent with what my strategy is?”
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The last thing Philip Lowe is owed is your sympathy. Or my kid gloves
Economist
December 6, 2022 — 5.09pm
Another Tuesday, yet another increase in mortgage rates. Already livid at the Reserve Bank of Australia’s governor Philip Lowe after 2.75 percentage points of increases in the past six months, this latest quarter-point rise will only sharpen mortgage holders’ pitchforks further.
The trouble is, this ire is somewhat misplaced. Not that you shouldn’t be ropeable. You absolutely should be. But not for the reason you think.
In recent years, the RBA has found itself under an unprecedented degree of public pressure. Normally meticulous in avoiding the limelight, the governor has found himself a deer in the headlights. And, despite suggestions to the contrary, much of it is of his own making.
Last year, I was seated at dinner across from a senior member of the Sydney business community. He leaned over to the person sitting next to him and introduced me as “the man who called for the RBA governor to be fired”.
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https://www.afr.com/policy/economy/this-could-be-as-good-as-the-economy-gets-20221207-p5c4gu
This could be as good as the economy gets
The post-pandemic economic boom is plateauing as Australians brace for the full weight of interest rate rises to hit in the new year.
John Kehoe Economics editor
Dec 7, 2022 – 5.38pm
The post-pandemic economic boom is plateauing as Australians brace for the full weight of interest rate rises to hit in the new year.
The national accounts show the solid 0.6 per cent economic growth over the three months to September 30 was back to around normal levels, even if it was slightly softer than anticipated.
Annual growth was an artificially high 5.9 per cent, reflecting the rebound out of lockdowns 12 months earlier.
Economists are now asking the same question that Peter Costello once asked prime minister Paul Keating.
“Is this as good as it gets?”
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RBA turns to Twitter, Google for household stress indicators
The Reserve Bank is getting more creative in trying to monitor just how much pain it is causing on main street, turning to Twitter to read the temperature of households.
Jonathan Shapiro Senior reporter
Dec 8, 2022 – 2.52pm
If anyone from the Reserve Bank of Australia logs onto Twitter, they won’t find a lot of love.
What they will find is an endless stream of meme accounts poking fun at the central bank for its wayward forecasts and its apparent desire to prop up the property market.
But it turns out the RBA, in particular its economics research team, is spending a lot of time on Twitter, and doing so to get ahead of the forecasting game.
What we’ve learnt from the December Reserve Bank Bulletin is that the central bank is experimenting with non-traditional data sources to detect early signs of financial stress among households and businesses.
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Income tax ‘to top half a trillion’
6:20PM December 8, 2022
The personal income tax take will surge to half a trillion dollars and account for half of all commonwealth government revenue in a decade, new analysis from the federal budget watchdog says.
The Parliamentary Budget Office research highlighted the risks of relying too heavily on one form of tax income, particularly in an ageing society with a falling proportion of working-age contributors.
The PBO’s Beyond the Budget report estimated that the average personal income tax rate would lift from 23.7 per cent in 2021-22 to 26.4 per cent in 2032-33 – the highest in records stretching back to 1961.
“Bracket creep has played an important role in fiscal consolidation after major downturns in the past,” the report said, noting that average tax rates and total tax revenue were allowed to move higher in the wake of the 1990s recession and the GFC, helping to improve the budget position.
“However, too much reliance on a single revenue source can generate risks to the budget,” it said. “Higher average tax rates can magnify the economic impacts associated with personal income tax. For some people, especially those on relatively low incomes, bracket creep can reduce workforce participation.
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Health Issues.
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Medicare overhaul needed to fix ‘broken’ health funding, report urges
December 4, 2022 — 9.00pm
Primary health care in Australia is funded by a broken model which, a new report says, discourages general practices from providing the care people with chronic illness need to keep them out of hospital.
A report by the Grattan Institute, which has been presented to the federal government’s Medicare taskforce, calls for a wholesale overhaul of Medicare and shift away from its current, fee-for-service arrangements to a blended funding model. The proposed new model would enable GPs to lead multidisciplinary teams of clinicians and prioritise the most complex cases.
The report challenges the view of the Australian Medical Association (AMA) and Royal Australian College of General Practitioners (RCGP) that there is a shortage of GPs, and says some work currently done by doctors could be safely carried out by other health professionals such as nurse practitioners, physiotherapists and pharmacists at a far lower cost.
It also calls for an additional 1000 clinicians to be employed in general practice over the next four years to support the work of GPs.
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What do Australians really want for Christmas? A new Medicare
By Peter Breadon and Danielle Romanes
December 5, 2022 — 5.00am
Many of us are stressed about wrapping up work commitments and getting the Christmas shopping done, but spare a thought for the people rushing to fix Medicare.
It’s a broken system that needs an overhaul, and there’s a tight timeline to work out what comes next.
The Albanese government was elected in May on a $1 billion pledge to do this. New Health Minister Mark Butler has established a taskforce and given them until the end of the year to come up with a plan.
It won’t be easy. Medicare was established four decades ago and has hit a mid-life crisis. While Medicare hasn’t changed much in that time, Australians’ health needs have transformed.
In 1984, one in 10 Australians was over 65. Now it’s one in six. Most people that age have at least one chronic condition, such as diabetes, and half have at least two. Younger Australians have rising chronic disease and mental health needs too.
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Drastic medical overhaul needed amid dire GP shortage, warns peak body
By Rachael Ward
December 4, 2022 — 7.41pm
General practice will cease to exist unless there’s a drastic overhaul of frontline medical services, the new head of Australia’s peak body for GPs warns.
Incoming Royal Australian College of General Practitioners president Nicole Higgins says she will spend her next two years advocating for dramatic change, with the organisation’s 40,000 members “struggling” due to diminished funding and workforce shortages.
“It’s not going to exist,” Dr Higgins said. “It’s dire. I’m really worried about what’s going to happen to general practice.”
The Mackay-based clinician has first-hand experience of what she calls the GP crisis, and says she is currently facing “very challenging decisions” about cutting appointment times so her practice of five years, which employs nine doctors, can remain viable.
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AMA warning on proposed private health insurance shift
The federal government launched a review into the sustainability of the health insurance model.
9:13PM December 6, 2022
Proposed changes to the way private health insurance works could see Australians at high risk of multiple or serious medical conditions excluded from policies in a bid to reduce costs to insurance companies, the Australian Medical Association has claimed.
Under the proposal, private health insurers would be paid an upfront lump sum to cover additional costs incurred from insuring high-risk people based on an average estimated cost, in a new system known as “prospective risk equalisation”.
This comes after the federal government launched a review into the sustainability of the current model, which compensates insurers for actual costs incurred by sharing the extra costs across all policyholders.
However, the AMA has firmly opposed any change to the current model, warning it could see both doctors and patients usurped of their “clinical autonomy”, with insurers having the final say on what patient care a person could “cost-effectively” access.
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Breakthrough concussion blood test ‘game changer’ for athletes
6:53PM December 7, 2022
A breakthrough in medical testing has finally made it possible to objectively test for brain injuries such as concussions using a simple blood test – a game changer for athletes and the elderly.
Doctors will soon be able to conduct a simple and quick blood test to determine whether a head injury has caused brain damage and internal bleeding by testing for the presence of two types of brain proteins.
The blood test, developed over two decades by US medical technology innovator Abbott and based on US Department of Defence research, can give a definitive diagnosis within 18 minutes.
The test has been approved by the Therapeutic Goods Administration and is expected to roll out across hospital emergency departments as early as next year.
“Basically, you shouldn’t be seeing any brain proteins in your blood … but with this test you can very quickly find out if the proteins are elevated or if they’re not,” said Beth McQuiston, expert neurologist and medical director of diagnostics at Abbott.
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International Issues.
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CNN cuts hundreds as US news industry prepares for dark winter
Jeremy Barr and Elahe Izadi
Dec 4, 2022 – 1.49pm
CNN has cut hundreds of employees in a cost reduction effort that highlights the financial challenges facing a range of US media companies as the country’s economy teeters towards a possible recession.
The cuts began on Wednesday (Thursday AEDT) and affected mostly paid commentators.
“It is incredibly hard to say goodbye to any one member of the CNN team,” CNN chief executive Chris Licht wrote in a staff memo obtained by The Washington Post, describing the cuts as a “gut punch”.
Chris Cillizza, who joined CNN as a politics reporter and editor at large in 2017, confirmed to The Post that he has been laid off.
Susan Glasser, a CNN global affairs analyst, also said that she was “one of many” part-time commentators affected by the cuts. Rachel Metz, a senior technology writer, said she was “devastated” to have been laid off on Thursday.
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https://www.afr.com/markets/debt-markets/us-inflation-on-track-for-downside-surprise-20221201-p5c304
US may need a recession to get inflation under control
David Bassanese Columnist
Dec 4, 2022 – 9.40am
By far the biggest question facing investors in the new year is whether the United States economy needs to go into recession to get inflation under control.
If US inflation miraculously falls over coming months, the US Federal Reserve won’t need to push the US economy into recession, and we’ve likely seen the bottom in equity markets. But if inflation remains stubbornly high, the US central bank would have no choice but to crunch the economy further, meaning what we’ve enjoyed in recent weeks is yet another bear market rally.
As outlined in a recent speech by Federal Reserve chairman Jerome Powell, US inflation can effectively be broken down into three components: goods inflation, housing services, and non-housing services.
The good news is that goods inflation finally seems on the way down, as last year’s COVID-19 related surge in demand has begun to ebb. So-called core goods account for around one third of the US private consumption expenditure deflator excluding food and energy, or the ‘core PCED’, which is the Fed’s preferred underlying inflation measure.
Core goods prices were flat over the two months to October, bringing down annual core goods inflation from 5.6 per cent to 4.6 per cent. Annual core goods inflation peaked at 7.6 per cent back in February.
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‘Wage inflation? What wage inflation?’ ask workers
Hand-wringing among policymakers about wage-price spirals is at odds with the experience of most North American workers.
Rana Foroohar Contributor
Dec 6, 2022 – 7.29am
Economic policymakers and business leaders worry a great deal about wage inflation. Average workers, not so much. That’s because real global monthly wage growth – which reflects the purchasing power of wages once cost-of-living inflation is considered – actually fell to negative 0.9 per cent in the first half of the year.
That is the first time since 2008 that real global wage growth has been negative, according to a new report by the International Labour Organisation.
While inflation in areas such as food and fuel hits the poor in every country hardest, the comparative decline in real versus nominal wages has been sharpest in the rich world. Among advanced G20 countries, real wage growth in the first half of this year declined to minus 2.2 per cent, whereas growth in emerging G20 countries slowed but remained positive at 0.8 per cent.
Among rich countries, North America has been particularly hard hit; average real wage growth in the US and Canada fell to minus 3.2 per cent in the first half of the year. No wonder the hand-wringing about wage-price spirals among policymakers is so at odds with the actual experience of most North American workers.
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Ukrainian drones strike air bases hundreds of kilometres inside Russia
By Andrew E. Kramer, Michael Schwirtz and Marc Santora
December 6, 2022 — 11.22am
Kyiv: Ukraine executed its most brazen attack into Russian territory in the 9-month-old war Monday, targeting two military bases hundreds of kilometres inside the country, using unmanned drones, according to the Russian defence ministry and a senior Ukrainian official.
The senior official said that the drones were launched from Ukrainian territory and that at least one of the strikes was made with the help of Ukrainian special forces operating close to the base, who helped guide the drone to the target.
The strikes signalled a new willingness by Kyiv to take the fight to bases in the heart of Russia, raising the stakes in the war, and demonstrated for the first time Ukraine’s ability to attack at such long distances. Shortly after the attacks on the bases, Russia sent a barrage of missiles streaking toward Ukrainian cities.
The Kremlin said the weapons launched by Ukraine were Soviet-era jet drones and were aimed at bases in Ryazan and Engels, about 300 miles (480 km) from the Ukrainian border. It said that its forces had intercepted the drones, and that “the fall and explosion of the wreckage” had “slightly damaged” two planes, killing three servicemen and wounding four others.
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What happens when a dictator’s ‘red line’ meets the people’s ‘red line’
Political and international editor
December 6, 2022 — 5.00am
Twenty-two-year-old Mahsa Amini was killed by Iran’s so-called morality police, apparently for wearing her headscarf incorrectly. It was 81 days ago that she died in detention.
Ever-tightening enforcement of the law was a priority for President Ebrahim Raisi. In July, he called on “all state institutions to enforce the headscarf law”. It was a regime “red line”.
Today, the headscarf – or hijab – law is not being enforced any more. Many women in Iran are walking the streets of major cities uncovered and unimpeded. Even reportedly going unharassed through passport control.
Raisi is saying that the regime’s strict Shiite Islamic values are enshrined in Iran’s Constitution, “but there are methods of implementing the constitution that can be flexible”, according to state-run media. And the country’s parliament and judiciary are working on potential revisions to the law, according to Attorney-General Mohammad Jafar Montazeri. “We are working on the issue of hijab quickly and trying to employ a wise solution,” he said on the weekend.
What changed? The women of Iran, the young people of Iran, even the national football team of Iran, stood up. The callous murder of Mahsa Amini was the people’s “red line”.
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‘Culture of deception’: Trump’s company found guilty of tax fraud
Ben Protess and Jonah E. Bromwich
Dec 7, 2022 – 9.11am
New York | Donald Trump’s family real estate business was convicted on Tuesday (Wednesday AEDT) of tax fraud and other financial crimes, a remarkable rebuke of the former president’s company and what prosecutors described as its “culture of fraud and deception”.
The conviction on all 17 counts, after more than a day of jury deliberations in Manhattan’s state Supreme Court, resulted from a long-running scheme in which the Trump Organisation doled out off-the-books luxury perks to some executives. They received fancy apartments, leased Mercedes-Benz cars, even private school tuition for relatives, none of which they paid taxes on.
The Manhattan District Attorney’s Office, which led the case against two Trump Organisation entities, had previously extracted a guilty plea from the architect of the scheme, Allen Weisselberg, the company’s long-serving chief financial officer.
Mr Weisselberg, one of the former president’s most loyal lieutenants, testified as the prosecution’s star witness, but never implicated Mr Trump.
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https://www.afr.com/world/europe/this-is-what-it-will-cost-to-rebuild-ukraine-20221207-p5c4dc
This is what it will cost to rebuild Ukraine
The West needs to ensure that Ukraine survives and then thrives as a prosperous and democratic nation. Backing Kyiv and financing reconstruction will be less expensive in the long run than allowing Vladimir Putin to prevail.
Martin Wolf Columnist
Updated Dec 7, 2022 – 12.07pm, first published at 11.39am
Ukraine has survived the onslaught of its brutal foe. It has humiliated the Russian army and regained much lost territory. These are huge achievements.
But the war is not over. On October 10, Russia launched a new phase, with its destruction of civilian infrastructure. Its aim now is to break the will of the Ukrainian people. This, too, must fail.
The principles of postwar European life are at stake: borders may not be changed by force and citizens may not be prevented from choosing those who rule them. In addition, if Russia were to win, it would sit on Europe’s eastern border under the rule of a revanchist tyrant.
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US defence spending is huge, but it’s probably nowhere near enough
Despite evidence from the war in Ukraine and China’s growing belligerence toward Taiwan, US defence spending shows it is sleepwalking into a decisive decade for geopolitics.
Bret Stephens
Dec 7, 2022 – 2.12pm
Last week, the United States Air Force unveiled its first new strategic bomber in 34 years – a boomerang-shaped stealth plane called the B-21 Raider that may ultimately cost taxpayers some $US200 billion ($298 billion) – and the country barely noticed. Also last week came reports that China’s nuclear warhead stockpile had doubled since 2020 and could reach 1500 by the mid-2030s, closer to parity with the United States and Russia.
This also went mostly unnoticed. Maybe everyone was too busy freaking out over Elon Musk’s takeover of Twitter.
President Joe Biden says the US has entered a “decisive decade” when it comes to geopolitics. He’s right. But even amid the war in Ukraine and China’s growing belligerence toward Taiwan, we mostly seem to be sleepwalking into it. The administration trumpets its promises to defend the free world. But it isn’t yet willing to provide sufficient means – a dangerous mismatch in an era of authoritarian adventurism.
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Ukraine strikes inside Russia; little room for Moscow to escalate
The strikes could pose a challenge for the Western allies, which are determined not to be drawn into a shooting war with Russia.
Andrew Kramer
Dec 8, 2022 – 8.00am
Flame and dense smoke billowed over a Russian airfield on Tuesday after what appeared to be a third drone strike in two days by Ukraine at a military base on Russian soil, signalling a bolder phase of Ukrainian attacks enabled by longer-range weapons and unconstrained by fear of reprisal.
After nine months of Russian bombardment of their towns and cities, Ukrainians cheered the taste of payback and the demonstration that their side could now reach deep into Russia, theoretically capable of hitting Moscow if it chose. The assaults also showed millions of Russians for the first time that they, too, might be vulnerable.
Ukraine’s new long-range striking ability came into focus on Monday with attacks on air bases some 480 kilometres from the nearest Ukrainian territory, demonstrating the ability to evade Russian air defences and hit with precision.
Both the Russian government and a senior Ukrainian official, who spoke on the condition of anonymity, said the attacks were carried out by Ukraine using drones.
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Why Putin’s thugs target Ukraine’s energy resources
Military leader and strategist
December 7, 2022 — 11.53am
In May 1943, a specially trained Royal Air Force bomber unit conducted a raid that breached two major German dams in the Ruhr Valley. The “dam busters” attack resulted in the destruction of hydroelectric power stations, mines and factories and killed around 1600 civilians. It was designed to reduce German wartime production in the critical Ruhr region. RAF planners also hoped the raid would draw German military resources away from the front line.
Daniel Yergin wrote in his Pulitzer Prize-winning book The Prize that energy, especially oil, has become “a commodity intertwined with national strategies and global politics and power”. The inter-war era and World War II saw the maturation of energy as a tool of warfare. The Americans conducted meticulous studies in the 1930s of attacking electrical power systems from the air. The German invasion of the Soviet Union had as a primary objective the capture of the Caucasian oil fields. The allies in Europe relentlessly denied German sources of energy through blockades and strategic bombing.
In the Pacific, Japanese thrusts into South-East Asia often aimed at the oil fields in the East Indies. The allied response was a calculated submarine campaign that attacked Japanese tankers, and largely destroyed imports of oil into Japan by 1945.
Since then, attacks on hydroelectric plants, electricity generation stations and distribution systems have been conducted in Korea, Vietnam and Iraq. Largely, these were focused on reducing civilian morale, degrading industrial production and influencing national leaders. Targeting electrical systems in the Iraq War also focused on cutting power supplies to air defence radars. However, as Lawrence Freedman and Efraim Karsh wrote about the conflict, “the aspects of its campaign most directed against Iraq’s economic and political structure (i.e electric power) seems to have been the least relevant to ultimate victory”.
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Executions and a coup: Germany foils the Reich’s Day X
Katrin Bennhold and Erika Solomon
Dec 8, 2022 – 1.58pm
Berlin | The plan was to storm the German parliament, arrest lawmakers and execute the chancellor. A prince descended from German nobility would take over as the new head of state, and a former far-right member of parliament would be put in charge of a national purge.
To facilitate the coup, the electricity network would be sabotaged. Satellite phones to communicate off grid had already been bought.
That is what German prosecutors and intelligence officials say a nationwide far-right terrorist network was plotting before 3000 police officers and special forces fanned out across the country on Wednesday (Thursday AEDT) to raid 150 homes and arrest 25 suspected co-conspirators.
They included an active duty soldier, a former officer in the elite special forces, a police officer and at least two army reservists.
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China’s ‘decoupling’ from the West will transform financial markets
Emma Rapaport Markets reporter
Dec 8, 2022 – 5.43pm
China was top of mind for investors in 2022, and Lazard’s head of asset management believes its dominance is set to continue, including China’s decoupling from the West in a fashion that has the potential to alter the course of financial markets.
Lazard’s Evan Russo highlighted President Xi Jinping’s tightening grip on power, securing a historic third term at the 20th party congress in Beijing, as a clear signal China is “going its own way”.
He said in an end-of-year letter to clients that investors should prepare for a “massive shift” as China turns away from globalisation and looks inwards.
“One of the key issues for the financial markets over the past few years has been whether the divergence between China and Western countries will be temporary or permanent,” he said.
“Following China’s 20th National Congress of the Communist Party in October, where President Xi Jinping was appointed to an unprecedented third term, we think it is clear that China is going its own way.
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China’s COVID gamble could be a recipe for disaster
Senior business columnist
December 8, 2022 — 11.58am
Xi Jinping has taken a major gamble with the health of China’s population and its economy in ditching the “zero COVID” policies China has pursued for nearly three years.
The success, or otherwise, of the decision to ease the harsh restrictions and the attempt to re-open China’s economy will also have implications beyond China’s borders.
China’s authorities have blinked in response to the protests against their COVID policies and the continuing slowdown in its economy, with the announcement on Wednesday of a series of measures that represent a major about-face on its approach to COVID even as new infections are running at about 30,000 a day.
There will no longer be widespread testing, with only those working in highly sensitive workplaces such as homes for the elderly, healthcare or primary schools needing to provide proof of a negative test before entering their workplace. No longer will people have to show negative test results to attend public venues or use public transport.
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How will China turn its economy back on? The world is about to find out
By Keith Bradsher
December 9, 2022 — 7.32am
For months, investors and CEOs waited anxiously for China to ease up on its COVID restrictions, which burdened the economy and were out of sync with the rest of the world. Stock markets rallied on mere rumours of policy changes. Companies warned that “zero COVID” was hurting business.
Now that China has finally started rolling back its strict mix of mass testing, lockdowns and quarantines, its economy is entering a delicate period when it will face a set of challenges that do not fit neatly with other countries’ experiences during the pandemic.
Spending by consumers is unlikely to reawaken swiftly after being smothered for so long, analysts say. China faces a severe downturn in housing and must race to vaccinate more of its population, especially seniors. China’s factories, the motor of the country’s commerce with the world, confront weakening demand from key trading partners like the United States and Europe, both of which are staring down possible recessions.
The road map for the next several months is highly uncertain.
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A decision for the ages as US awaits President’s call
Early next year Joe Biden will have to make a decision that no other US president has had to make: whether he is too old to run for a second term. These are the potential contenders to take his place.
December 10, 2022
Early next year Joe Biden will have to make a decision that no other US president has had to make. The oldest President in history will need to make a call on whether he is too old to run for a second term in the White House in 2024.
It is a judgment that will shake American politics either way. If Biden decides not to run, it will unleash a new generation of ambitious but raw Democrat contenders to take his place, none of whom have anything like Biden’s experience or stature.
If he does decide to run again in 2024, there will be more than a few nervous Democrats praying that Biden can hold it together mentally and physically for four more years, making him 86 when he leaves office.
Right now that seems like a long way off. Biden has just turned 80, but he is an old 80. He shows his age more than any other president.
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Russia trying to obtain ‘hundreds of ballistic missiles’
Dan Peleschuk
Dec 10, 2022 – 4.47pm
Kyiv | The United States announced new military aid for Ukraine on Friday (Saturday AEDT) and vowed to disrupt Russian ties with Iran, which a British envoy said involved Moscow seeking hundreds of ballistic missiles and offering unprecedented military support in return.
Tehran and Moscow have denied Western accusations that Russia is using Iranian drones to attack targets in Ukraine, where officials warned on Friday of a winter-long power deficit after repeated Russian attacks on its energy infrastructure.
Two senior Iranian officials and two Iranian diplomats told Reuters in October that Iran had promised to provide Russia with surface-to-surface missiles as well as more drones.
White House national security spokesman John Kirby told reporters Washington was very concerned about the “deepening and burgeoning defence partnership” between Iran and Russia, and would work to disrupt that relationship, including on drones.
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‘It can go horribly wrong’: NATO chief fears Ukraine conflict could spread
By Dan Peleschuk
December 10, 2022 — 1.15pm
Kyiv: The United States has announced new military aid for Ukraine and vowed to disrupt Russian ties with Iran, which a British envoy said involved Moscow seeking hundreds of ballistic missiles and offering unprecedented military support in return.
Tehran and Moscow have denied Western accusations that Russia is using Iranian drones to attack targets in Ukraine, where officials warned of a winter-long power deficit after repeated Russian attacks on its energy infrastructure.
The additional US aid announcement came as NATO secretary general Jens Stoltenberg expressed worry that the fighting in Ukraine could spin out of control and become a war between Russia and NATO.
“If things go wrong, they can go horribly wrong,” Stoltenberg said in remarks to Norwegian broadcaster NRK.
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The urgency of Republicans leaving Donald Trump behind
12:12PM December 8, 2022
I’ve never met Rep. David Joyce, a moderate Republican from Ohio, but he seems to be an honest and honourable man. In a recent interview, he talked frankly about the midterm elections. “We lost,” he said. “And we lost because of some of the arguments that were being made and some of the candidates that we had.”
Mr. Joyce heads the Republican Governance Group, which consists of nearly 50 House Republicans who believe that Congress should be a functioning institution. He views this group as a counterweight to some of the more extreme elements of the Republican caucus, such as Colorado Rep. Lauren Boebert. Moderate Democrats see him as someone with whom they can do business.
Still, Mr. Joyce cannot bring himself to break with Donald Trump, despite the former president’s recent dinner with two notorious anti-Semites and his remarkable demand to suspend the Constitution. “I will support whoever the Republican nominee is,” Mr. Joyce told George Stephanopoulos.
In ordinary circumstances, this statement would be unremarkable. But current circumstances are anything but normal. To make sure that readers understand the stakes, here is a post from Mr. Trump on Truth Social from over the weekend:
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David.
