February 08, 2018 Edition.
Trump continues to astound with this week with a State Of The Union Speech which was both long and to my ears pretty nasty. Late last week he released a secret document saying that the Dems had contrived to have the FBI investigate some aspects of the campaign – just as they had done with their claims on the Hilary e-mail server. Pure politics but shows how worried they are about Mueller and his probe!
In passing this new US Strategic Posture to focus on China and Russia (rather than terrorism) is a pretty big deal I believe and pretty worrying.
Brexit has descended into farce with official papers revealing it will be either bad, very bad or terrible economically. Great work Mrs May!
In OZ Mr Turnbull has gained a new senator from Family First and Mr Shorten is working to go more to the left than the Greens as he loses members to the citizenship saga and wants to keep the seat(s) from them!
He is even thinking of cancelling the Adani mine in Qld. Qld workers less than impressed! As a counter the Libs are going into weapons exporting . What next?
On Global Markets we will know the answer by the time you read this:
February 3 2018 - 12:59PM
· Lu Wang, Elena Popina and Sarah Ponczek
They've faced threats before: swollen valuations, a stagnating economy, stretches of declining earnings. Now investors are dealing with a new menace, and it's wreaking more havoc than anything in two years.
It's the US bond market, where the biggest jump for interest rates since March has bulls questioning the staying power of an equity advance now seven months from being the longest ever.
So drastic is the runup in yields that it's knocking stocks down during a period when analysts are pushing up earnings estimates four times faster than any time since 2012.
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Here are a few other things I have noticed.
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Major Issues.
Australia debates value of electric vehicles while China pushes ahead
Kirsty Needham
Published: January 27 2018 - 12:32AM
When Hong Dan, 26, bought her first car six months ago, the choice to go electric was simple.
First, in pollution-conscious Beijing, getting a licence plate for an electric car is easier than a petrol car.
Beijing's annual quota for conventional tail-pipe licence plates was more than halved this year, from 90,000 to 40,000, and the capital is among seven major Chinese cities to restrict conventional licence plates. Would-be drivers wait years in an annual lottery.
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Australia to become major defence exporter under $3.8b Turnbull plan
Adam Gartrell
Published: January 29 2018 - 12:15AM
Australia is set to become one of the world's top 10 defence exporters under an ambitious $3.8 billion government plan.
The new defence export strategy to be released by Prime Minister Malcolm Turnbull on Monday aims to put Australia on par with major arms-exporting countries like Britain, France and Germany within 10 years.
The government believes the strategy will create new jobs and bolster Australia's troubled defence manufacturing industry, which struggles to sustain itself based on Australian Defence Force needs alone. A big boost in exports will insulate local manufacturers from the peaks and troughs - sometimes called the "valley of death" - of domestic demand.
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- Opinion
- Updated Jan 28 2018 at 11:45 PM
Why super funds need to start looking more like the banks
by Jeremy Cooper
I know it might not be the best time to be saying this, but Australia's super funds need to become a bit more like banks in one important respect. The super system needs to be able to make more concrete promises about the income members are going to get in retirement. When they retire, most people want something like a 'retirement pay cheque' for the rest of their lives. Yet this is precisely what super funds currently can't offer them. Funds can't make that sort of promise because they don't have the capital to back it if things don't turn out as expected.
So rather than a lifetime retirement pay cheque, the mainstream retirement income product is an account-based 'income stream'. While these products are flexible and have other advantages, they leave retirees exposed to the risk of running out of money. This is a structural problem for super and it's a big shortcoming for an otherwise world-class retirement income system.
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- Updated Jan 29 2018 at 9:34 AM
Crucial SMSF wealth transfer conversations you need to have
by Ben Smythe
With intergenerational wealth transfer no doubt a hot topic of conversation (for the children) over the Christmas break, an important question is how you deal with this issue within a self-managed superannuation fund (SMSF) structure.
For many people, super will represent a significant part of their overall wealth. So with increasing complexity around estate planning, and what you can retain in super on your death, passing on your super wealth via your SMSF will require some careful planning.
First, it needs to be a joint decision if there are multiple members in the SMSF. In most cases there will be a husband and wife trustee structure, and on the death of one of them the "control" of the SMSF will probably move to the remaining trustee. While the control of the ongoing operations of the SMSF will more than likely move to the remaining trustee (subject to the trust deed and constitution for corporate trustees), the treatment of the death benefit could well fall outside the powers of the remaining trustee.
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Killer robots used by unethical enemies will threaten Australia, army chief warns
David Wroe
Published: January 29 2018 - 12:15AM
Artificially intelligent drones that can kill on their own will increasingly pose a challenge to Australia's values as they potentially give a military edge to foreign enemies who have no ethical qualms about using them, the Chief of the Australian Army has warned.
Lieutenant-General Angus Campbell told Fairfax Media there would be countries and groups such as terrorist organisations that would have lower ethical standards than Australia about using such robots. Australia's military and its broader society would have to think about how it deals with these adversaries, he said.
"There are countries that do not have, let's say, the ethical foundations upon which we seek to build and employ our military capability," General Campbell said. "Technology in and of itself can allow a range of systems, without a human in the loop, to be developed. That is possible now and it is possible into the future in more sophisticated ways.
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Banks slash coal loans by 50 per cent as investor pressure mounts
Clancy Yeates
Published: January 28 2018 - 8:51PM
Australia's big banks slashed loans to fossil fuel companies by almost a fifth in 2017, including a 50 per cent drop in their coal mining exposure, new analysis shows, as investors and regulators ramp up pressure over climate change risks.
ANZ Bank, National Australia Bank, Westpac and Commonwealth Bank's combined loans to coal miners slumped by about $1.5 billion, or more than 50 per cent per cent, according to analysis of bank disclosures from environmental finance group Market Forces.
The analysis also showed declines in lending to oil and gas extraction and coal-fired power stations. On an underlying basis, the figures suggest a decline of 18.5 per cent in the big four's fossil fuel exposure.
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How banks might win back our trust
Clancy Yeates
Published: January 28 2018 - 5:52PM
It’s no secret that public trust in banks is battered and bruised, but recent figures underlined just how hard it may be for banks to win back their reputations.
Only one in three people trust the banking industry, according to figures from the industry's peak body this month. There was a tiny improvement from 31 per cent six months ago to 32 per cent today, but the result is pretty stunning when you think these are businesses entrusted with our savings.
Granted, the same survey showed a higher 56 per cent of us trust our own bank, as opposed to banks in general. People mistrust plenty of other industries too (the media, for one) and the measures of bank customer satisfaction are quite a bit higher still.
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The top five oil and gas trends for 2018
Cole Latimer
Published: January 28 2018 - 4:23PM
This year will be the year of the oil and gas revival, as prices lift performance and major projects come online.
While Australia is increasing its focus on securing domestic gas supply, it is taking a greater role globally and evolving the industry.
Wood Mackenzie Australasia oil and gas leader Saul Kavonic has outlined the five trends that will mark LNG growth in 2018.
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NSW number one, but housing retreat threatens top spot
James Robertson
Published: January 29 2018 - 12:15AM
For the 14th quarter running NSW's economy has been judged Australia's powerhouse, according to CommSec analysis.
But soft spots in the state's housing market may be the first sign in years that its economic dominance may be peaking.
The quarterly CommSec State of the States report aims to determine how each state's economy is performing by using decade averages across eight measures of economic performance.
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Consider higher capital gains tax before you invest
Daryl Dixon
Published: January 29 2018 - 12:15AM
While attention is currently focused on the possible impact of negative gearing tax changes on property prices, investors also need to consider the impact of higher capital gains tax bills on future investment decisions for all asset classes.
Presumably, future gearing and gains tax changes will apply to all new investments with investments held at the time of the change protected by grandfathering provisions.
Labor's proposals exempt newly constructed real estate from the gearing changes but not from a 50 per cent increase in capital gains tax liabilities. This plan will favour geared investments in newly built properties over the purchase of all other asset classes, including equities, commercial and existing properties.
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Australian dollar tipped to slide back to 70 US cents
Netty Ismail
Published: January 29 2018 - 10:33AM
The Australian dollar's longest rally in 18 months is bringing out the bears.
The Aussie is poised to go into reverse as the Federal Reserve keeps raising interest rates, while the Reserve Bank of Australia leaves borrowing costs at a record low, said James Athey at Aberdeen Standard Investments in London, who is adding to his short positions. Schroder Investment Management Australia, which is also short, said the Aussie is likely to trade closer to 70 US cents than 80 cents in 12 months.
The currency has advanced for seven straight weeks as the US dollar has slumped and rising prices for commodities such as iron ore have bolstered the outlook for Australia's exports.
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ANU student reveals location of US military bases
Sally Whyte
Published: January 29 2018 - 6:56PM
A 20-year-old Canberra student says he hasn't been contacted by fitness tracker Strava or any military or intelligence agencies since he revealed over the weekend that the app's publicly available map showed US military bases in the Middle East.
Nathan Ruser, who is about to start his third year studying international security with a double major in Middle Eastern studies at Australian National University, tweeted on Sunday that data from Strava "looks very pretty, but not amazing for Op-Sec. US bases are clearly identifiable and mappable".
The Strava app tracks users' running or cycling habits, including collecting GPS data showing where users have been active. Last year it released an updated "heatmap," which shows 3 trillion points of latitude and longitude, and, inadvertently, activities of military personnel across the world.
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Decline in strike action linked to slow wages growth
Anna Patty
Published: January 30 2018 - 12:01AM
The failure of many Australian workers to get a real pay rise has been linked to a decline in industrial action, including strikes.
The findings follow the Fair Work Commission's decision last week to stop Sydney train workers from taking industrial action including restrictions on overtime and a one-day strike on Monday because it could damage the economy.
The analysis by Australia Institute Centre for Future Work think tank shows there has been a 97 per cent decline in industrial action from the 1970s to the present decade. Across Australia, there were 106 industrial disputes in the first nine months last year, close to a postwar era low.
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Why changing Australia Day would be good for the economy
Michael Pascoe
Published: January 30 2018 - 5:39AM
So the January 26 crisis passes for another year, the status quo warriors no doubt pleased with their spirit defending the symbolism of an event 230 years ago, an event most Australians don't know is related to Australia Day.
Those who want the date changed also should be pleased as their argument gained more traction. One political party has climbed aboard. More importantly, the young – the future – are increasingly on their side.
The tide seems to be turning, but it's slow. The reactionaries can be relied on to dig in, making change a bigger issue than it need be, creating an issue for many who didn't previously have one. Fodder for the fringe cringe.
Note: I reckon this is a great idea!
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Turnbull government MPs ridicule claims of 'looming backbench revolt' over electric cars
Nicole Hasham, Mark Kenny
Published: January 29 2018 - 11:45PM
A Liberal MP purportedly leading the charge against increased taxpayer support for electric cars says there is no looming backbench revolt, as other Liberals dismissed divisions over the issue as "nonsense".
Craig Kelly, the chair of the Coalition's energy and environment committee, played down ructions despite having warned that electric vehicles have a bigger carbon footprint than conventional cars - a view that has since been rubbished by the expert who created the website upon which the assertion was based.
Environment and Energy Minister Josh Frydenberg this month kickstarted debate on electric vehicles in an interview and opinion piece for Fairfax Media, saying the right preparation, planning and policies would allow Australian consumers to benefit from the transport "revolution".
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Australia could be world's healthiest nation, says innovation plan
James Massola & Adam Gartrell
Published: January 30 2018 - 8:33AM
Australians could be the healthiest nation on earth, with the longest life expectancy, if the government pursues a "national mission" that harnesses genetic and precision medicine innovations, according to a new 2030 innovation blueprint.
Innovation and Science Australia chair Bill Ferris, who will release the blueprint alongside Innovation Minister Michaelia Cash on Tuesday, has also backed the Turnbull government's ambitious new Defence Exports Strategy, which aims to catapult Australia into the top 10 of global arms exporting nations.
That plan drew a furious response from charities and NGOs on Monday, including World Vision, Save the Children and Gun Control Australia.
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Doomsday Clock ticking but prediction remains difficult
Tom Switzer
Published: January 30 2018 - 1:51AM
For seven decades, the Chicago-based Bulletin of Atomic Scientists group has kept a symbolic device called the Doomsday Clock. Its purpose is to warn humankind about the prospects of apocalypse. At the onset of the Cold War, in 1947, the clock was set at seven minutes to midnight. Midnight, of course, means the moment we're all annihilated. Ever since, the minute hand has yo-yoed between two and 17 minutes before catastrophe. It wavers in accordance with the judgment of prominent scientists and strategists about the state of global order. For instance, the clock's hand was pushed forward to two minutes to midnight in 1953 when the US and the Soviet Union conducted atomic tests; it was pushed back to 17 minutes to midnight in 1989 when the Berlin Wall fell.
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Overvalued housing puts economy 'at the precipice': Industry Super Australia
Unsustainably high housing prices put Australia's economy 'at the precipice' of a once-in-a-century bust if global borrowing costs rise more than 150 basis points, warns Industry Super Australia, the peak body for industry super funds.
Housing prices in Melbourne and Sydney rose to nearly seven times average weekly earnings last year from four times in 2000 even as real bond yields - a proxy for lending costs - more than halved, and a country of highly-indebted households would suffer if interest rates rose, ISA's chief economist Stephen Anthony said.
"In the 2000s it has gone ballistic, to a point where it looks unsustainable," Mr Anthony told The Australian Financial Review.
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- Updated Jan 30 2018 at 8:00 PM
Labor targets IR, minimum wage in cost-of-living battle
Labor has drawn the battle lines for a pre-election, cost-of living contest by promising fatter pay packets through the reduction of employers' workplace bargaining rights and a boosted minimum wage, in contrast with the government's plan to cut company tax.
Prompting warnings from business he could jeopardise Australia's economic and jobs recovery by targeting industrial relations laws introduced by the previous Labor government, Bill Shorten flagged changes to enterprise bargaining laws to empower workers, and an increased minimum wage, possibly with the introduction of a so-called living wage to stop people falling below the bread line.
The Labor leader also vowed to go after private health insurers over their annual fee hikes, labelling them "big multinationals" and "big profitable companies" whose business model was no longer acceptable.
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Over 200 defects: New Age fighter can’t shoot straight
- Rory Callinan
- The Australian
- 12:00AM January 31, 2018
Australia’s futuristic new joint strike fighter can’t shoot straight and has scores of other deficiencies ranging from cybersecurity and software to its bomb-aiming mechanisms potentially breaching rules of engagement.
The issues are highlighted in an assessment of the F-35 Lightning II’s development program by the US Department of Defence’s Director of Operational Test and Evaluation.
The OT&E’s annual report, released earlier this month, warns the testing of the aircraft — critical for the aircraft to be at war-fighting capability — could be delayed.
Australia is buying 72 of the F-35As from Lockheed Martin in the US at a cost of about $17 billion with the expectation the planes will be fully operational in 2023. The first two aircraft came off the production line in 2014 and are being flown at the F-35A pilot training centre in Arizona.
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Contested skies: our uncertain air superiority future
30 Jan 2018
Description
Since the end of the Cold War, Western air power has dominated the skies, but that’s rapidly changing.
Peer competitors and armed non-state groups alike have been seemingly so impressed by Western air power that they’re developing their own. Our use of the skies is now contested, and we now need to be able to counter potential adversaries’ use of the air.
Australia appears well placed for this emerging challenge, given our extensive air, maritime and land combat re-equipment plans. However, those plans, and the new major systems being acquired under them, originated more than a decade ago, when America was palpably the unipolar power.
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Scientists say CHIP is the new heart attack risk we'll all have to deal with
Gina Kolata
Published: January 30 2018 - 10:54AM
It has been one of medicine's most vexing questions: Why is it that most people who have heart attacks or strokes have few or no conventional risk factors?
These are patients with normal levels of cholesterol and blood pressure, no history of smoking or diabetes, and no family history of cardiovascular disease. Why aren't they spared?
To some researchers, this hidden risk is the dark matter of cardiology: an invisible but omnipresent force that lands tens of thousands of patients in hospital each year. But now scientists may have got a glimpse of part of it.
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Economic growth and stalled wages: Dawn may break in fool's paradise
Ross Gittins
Published: January 31 2018 - 1:29AM
So, no train strike in Sydney because unionists were ordered to keep working by the Fair Work Commission. Is that good news or bad? Depends on the point from which you view it – but don't assume you have only one of 'em.
And if your viewpoint's from somewhere in Victoria, don't assume it's a matter of little relevance to your own pay packet.
A 24-hour train strike would have caused great inconvenience to commuters and disruption to many businesses – which is precisely why the unionists were ordered to abandon their strike. Thank goodness. Damage averted.
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Achieving the Coalition's defence target is difficult
Nicholas Stuart
Published: January 31 2018 - 12:15AM
Defence has been back in the headlines this week but the focus, this year, isn't the services themselves. It's industry, because that delivers a far larger political bonus for the government.
Despite appearances, it's actually quite difficult to spend huge sums of money on the military.
Achieving the Coalition's target – allocating two per cent of GDP to the services – is difficult. Focused spending takes effort. Simply putting people in uniform costs roughly $9 billion a year, and then there's another $2 billion for civilian staffers. But you can only pay people so much and, without distorting the market even more significantly, we've reached that limit. Besides, soon the politicians will be complaining (again) that they're not getting enough.
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Bankruptcy surge chills mortgage market
- The Australian
- 3:36PM January 30, 2018
James Kirby
A surge in personal bankruptcies across Australia suggests an extended trouble free period in the mortgage market could end abruptly in the months ahead.
New figures released yesterday show a 6.1 per cent jump in bankruptcies over the last year: The figures contrast sharply with very recent mortgage market indicators showing mortgage delinquency levels had actually been improving.
Bankruptcies were declining nationwide in 2014 and 2015 but now they are lifting in every state: The latest 6.1 per cent jump is an acceleration of a 4.7 per cent year-on-year lift a year earlier.
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Australia’s inflation rate at 0.6pc in December quarter
- James Glynn
- Dow Jones
- 12:37PM January 31, 2018
Australian consumer prices rose 0.6 per cent in the fourth quarter of 2017, and were up 1.9 per cent from a year earlier, the Australian Bureau of Statistics said.
Economists had expected consumer prices to rise 0.7 per cent in the quarter and 2.0 per cent from a year earlier.
Core inflation rose by 0.4 per cent in the quarter, compared with the 0.5 per cent expected by economists. Core inflation was 1.9 per cent higher from a year earlier.
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Lack of inflationary fuel leaves RBA stuck in neutral
The RBA would want all its ducks lined up before starting the laborious process of beginning to turn the good ship Monetary Policy around. Yes, the governor has explicitly said the next move in rates will be up. But as with every punch line, it's all in the timing. And Wednesday's disappointing consumer price inflation data was not the thing to get the crowd excited.
"The Australian economy appears locked in a low inflation environment where the sectors that are experiencing modest inflation, particularly around tobacco, housing and health, are mostly offset by disinflationary pressure of the competitive squeeze in consumer goods," Westpac's Justin Smirk summed up.
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Withdrawal warning as pharmacy codeine ban takes effect
Kate Aubusson, Aisha Dow
Published: January 31 2018 - 6:17PM
A hidden group of Australians are about to discover they have a serious drug dependency as the national ban on over-the-counter codeine takes effect on Thursday.
Experts supportive of low-dose codeine becoming prescription-only have warned a small proportion of people who regularly use the painkillers could experience withdrawals.
Medicines containing the opioid codeine, including Nurofen Plus, Mersyndol and some cold and flu tablets, will now be available only via a doctor's prescription.
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Market momentum has never been higher but the risk of a crash is high
Marcus Padley
Published: January 29 2018 - 2:25PM
I wouldn't want to scare you but have you seen a chart of the Dow Jones or the S&P 500 index recently? The RSI or Relative Strength Index, a technical indicator used by chartists to measure the speed and change of price movements, is at record highs.
In the technical world the RSI goes from zero to 100 and if a stock has an RSI below 30 it is described as "oversold", and if the RSI is over 70, it is described as "overbought".
While individual stocks are quite volatile and can regularly appear as oversold and overbought, an index like the S&P 500 index, which represents the average of 500 stock prices, is, by definition, not volatile and rarely becomes either oversold or overbought.
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Big surge in opposition to Adani, new polling reveals
James Massola
Published: February 1 2018 - 8:30AM
A growing majority of Australians now oppose the construction of Adani's huge Carmichael coal mine, while environmental groups are ramping up pressure on Bill Shorten and federal Labor to rule out support for the project.
A poll of 3312 people, conducted by pollsters ReachTEL on January 25 and commissioned by the Stop Adani Alliance, found 65.1 per cent of Australians opposed or strongly opposed Indian mining company Adani building the new coal mine in Queensland.
The figure represents a 13.2 per cent rise - from 51.9 per cent - in opposition to the project compared to March 2017. Significantly, the latest poll found an outright majority of Nationals (55.3 per cent), One Nation (52.9 per cent), Labor (75.6 per cent) and Greens (94.2 per cent) voters all oppose the mine.
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As world power shifts away from the seas, Australia could get caught in the wash
Catherine McGregor
Published: January 31 2018 - 5:56PM
The arrival of the British fleet into Botany Bay in January 1788 epitomised the maritime supremacy of the greatest naval and trading nation that the world had ever known.
Having lost its American colonies, Britain had looked further afield for new prisons, to the colony of NSW. Likewise, the lofty pines of Norfolk Island were considered an ideal source of masts for the Royal Navy, which over the preceding two centuries had allowed Great Britain to eclipse Spain, the Netherlands and then France as the global superpower.
British maritime supremacy is not synonymous with mere naval power. Rather maritime power is comprised of the entire array of commercial freedoms, constitutional liberties and mercantile framework of a nation. Confluence of these conditions in a handful of states, throughout history, has given the decisive advantage to maritime powers over so called "continental" powers.
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Australian cancer rates to soar by 2040
One in 18 Australians are expected to have been diagnosed with cancer by 2040, new research released by the Cancer Council Australia predicts.
Belinda Tasker
Australian Associated Press February 1, 20189:57am
The number of Australians either living with cancer or who have survived the disease is expected to soar to nearly 1.9 million by 2040.
Cancer Council Australia says our ageing population and better survival rates will help push the number of people with a history of cancer up by 72 per cent from the 1.1 million today.
About 134,000 people are expected to be diagnosed with cancer this year alone.
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World-first blood test to diagnose dementia
- The Australian
- 5:00AM February 1, 2018
John Ross
Australian scientists have helped develop a world-first blood test that can detect Alzheimer’s disease decades before symptoms of dementia emerge.
Researchers say the new examination, based on a Nobel prize-winning procedure developed decades ago, is “as good as if not better” than the far more expensive, invasive and painful tests used today.
Team member Colin Masters, of the University of Melbourne’s Florey Institute, said it could pick up signs of the disorder in people in their 50s. He said typical Alzheimer’s sufferers started experiencing mild cognitive impairment in their 60s, and full dementia did not appear until they reached 70 or 80.
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Dismal, but no disaster. How the BusinessDay economic panel sees 2018
Peter Martin
Published: February 3 2018 - 9:33AM
The Reserve Bank board will confront a cheerless outlook when it meets for the first time this year on Tuesday.
The latest Fairfax Media Scope economic survey predicts barely adequate economic growth of 2.7 per cent, growth in living standards (real net disposable income per capita) of just 1.8 per cent, and barely any real wage growth.
The surveyed economists see further slides in housing investment and Sydney home prices, a sharemarket whose price growth will struggle to keep pace with continued low inflation and an Australian dollar that will remain stubbornly high at 75 US cents.
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Unhappy delusion: Life's less expensive than you think
Ross Gittins
Published: February 3 2018 - 9:14AM
Ask any pollie, pollster or punter in the pub and they'll all tell you there are no political issues hotter than the soaring cost of living. But this week the Australian Bureau of Statistics issued its consumer price index for the December quarter.
Oh no. It showed prices rising by 0.6 per cent in the quarter and a mere 1.9 per cent over the year to December.
That's a soaring cost of living? What are these guys smoking? Has the government got to the statisticians? Or do the bureaucrats sit in some office in Canberra making up the numbers?
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- The Australian
- 12:00AM February 3, 2018
David Rogers
Surging bond yields have the potential to cause a sharp downward correction in global equities.
But while highly priced growth stocks and “bond-like” real estate, utilities, healthcare and infrastructure stocks would be particularly vulnerable in that scenario, it would create a great opportunity for investors to buy cyclical and value stocks, says Nader Naeimi.
The head of Dynamic Markets at AMP Capital — he helps manage about $180 billion worth of financial assets for Australia’s biggest-listed fund manager — sees a “perfect storm” brewing in the flagship US bond market as less central bank bond buying, looser fiscal policy, US interest rate increases, tightening labour markets and synchronised economic growth put upward pressure on yields.
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Ben Schneiders
Published: February 3 2018 - 5:48PM
Many Australian workers face a "significant shock" to wages and job prospects due to the impact of automation and technological change, says jobs website Seek.
In a submission to a Senate inquiry into the "Future of Work and Workers", the company’s chief financial officer, Geoff Roberts, warned of a hollowing out of mid-level jobs in Australia.
Unease about the use of robots and automation to replace human workers has been on the rise amid a climate of flat wages and digital upheaval.
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Eryk Bagshaw, Peter Martin
Published: February 3 2018 - 9:20AM
The federal government should only give tax cuts to companies who give their employees higher wages; this period of wage depression is one we had to have and the decimation of the union movement has left workers without collective power to demand pay rises.
These are some of the conclusions of the BusinessDay Scope economic survey, released on Saturday, which asked 26 of Australia's leading economists for their opinions on the year ahead as the economy endures an unusual paradox: a period of exceptionally high employment growth, coupled with historically low wage rises.
The situation has left politicians frustrated and some economists puzzled, with only the most optimistic - Sarah Hunter from BIS Economics - pencilling in a wage rise of above 2.5 per cent by the end of this year among an average of 2.2 per cent, just a fraction above the forecast rise in inflation of 2.1 per cent.
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Peter Martin
Published: February 4 2018 - 12:48AM
This week, 58 of Australia's leading economists countenanced what would once have been unthinkable: government intervention to support quality journalism.
Throughout most of modern history, news has been provided by the free market. Readers, listeners and advertisers have paid for it, and on the whole they have received a good service.
The main state-run news organisations have been broadcasters such as the ABC and SBS in Australia and the BBC in Britain. But they have been as much about entertainment as news. News, especially news delivered by newspapers, has been regarded as too sacred to be delivered by governments.
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- The Australian
- 12:00AM February 3, 2018
Alan Kohler
Australia’s last recession, now 28 years ago, was famously deliberate, designed to crush three unwanted breakouts — the current account deficit, wages and the property market — through the blunt-force trauma of unemployment.
The next one will probably be an accident — these days central banks do anything to avoid recessions, including negative interest rates and printing money. What’s more, it looks a very long way off.
By the way, that recession in 1991 did the job, of course, but it led quickly to the Reserve Bank getting independence so it wouldn’t happen again.
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National Budget Issues.
Federal budget could be a 'poison pill', Deloitte Access Economics warns
Eryk Bagshaw
Published: January 29 2018 - 12:15AM
A Turnbull government "battlers budget" risks undermining economic stability, a leading economic forecaster has warned, as the government lays the ground work for personal income tax cuts this year.
"Here we go again, a government lagging in the polls looks set to leave behind a poison pill," said Deloitte Access Economics partner Chris Richardson.
"Labor did it with spending in 2013, the Coalition with tax cuts in 2007, and now 2018 looms as a 'battler's budget' of tax cuts."
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Don't do it Malcolm - you have to be better than that!
Malcolm Turnbull and Scott Morrison are on a roll, with the economy set to be their greatest chance to win next year’s election. However, the latest Deloitte Access Economics quarterly business snapshot warns that their planned “battlers’ budget”, though looking politically attractive, would be a huge economic mistake.
Chris Richardson, the chief economist at Deloitte, is warning the Government not to make the mistakes made by previous governments of caving in on sound economic policy to simply win an election.
He fingers Labor in 2013 with spending giveaways and John Howard in 2007 with tax cuts pre-election. He says if this is tried again to lift the Government’s standing in the polls, it would be a big mistake. “Here we go again, a government lagging in the polls looks set to leave behind a poison pill,” Richardson lamented.
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PM accepts ratings agency 'timely warning'
Prime Minister Malcolm Turnbull says the government's primary goal remains bringing the budget back to balance.
Updated 29 January, 2018
Malcolm Turnbull says a global ratings agency has delivered a "timely warning" on the need to repair the federal budget.
While Standard & Poor's confirmed Australia's top-tier triple-A credit rating last week, the global ratings agency also left the outlook on negative.
This reflected S&P's view of the "significant uncertainty" around the ability of the budget returning to surplus in the early 2020s as repeatedly promised by the government.
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Tax expenditures: Follow the money - it won't make you communist
Peter Martin
Published: January 31 2018 - 11:30PM
Anyone would think I'd gone communist. Along with John Howard.
As soon as the Treasury released its tax expenditures statement last week, I and others who reported it were accused of wanting to ape Eastern Europe, of going "Peak Orwellian".
"The author has raised an interesting concept, everything belongs to the government and one has no individual rights or assets," wrote one of my kinder correspondents.
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Age pension: 90,000 lose payments as new assets test bites
- Tony Kaye
- The Australian
- 12:00AM January 30, 2018
The new assets test has become an acid test for many who were receiving a part age pension.
Almost 90,000 individuals and couples around Australia who previously received a part age pension payment completely lost their entitlements in 2017 as a result of the federal government’s changes to the pension assets test rules.
In addition, hundreds of thousands of individuals and couples who were previously receiving a full pension have had their payments reduced. The revised pension assets test rules also mean many Australians who had based their retirement income stream on receiving a part age pension in the future should seek out professional advice urgently to re-evaluate their financial position.
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Health Budget Issues.
Hooked for 30 years: the changing faces of Australia's drug misuse
Kate Aubusson
Published: January 28 2018 - 12:00AM
Lisa Maher was sitting at the bottom of a stairwell of a block of flats in Cabramatta on a Friday evening in 1999. She was filming three people as they injected heroin.
At about 6.30pm, a family with two young children came home.
"They had to step over us and walk through the spoons and drugs and needles everywhere and they were apologising to us."
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Rare disease medicine changes offer clarity
MEDIA RELEASE MONDAY 29 JANUARY 2018
Proposed changes to the provision of medicines for rare diseases should bring greater certainty for people with these conditions, the Consumers Health Forum said today.
The Health Minister, Greg Hunt, in announcing the Government’s response to a review of the Life Saving Drugs Program, says patients will be better supported by the proposed new process for listing drugs on the program.
“We welcome these changes which include expanding criteria for the consideration of funding for medicines which both extend a patient’s life and improve quality of life for the patient,” the CEO of the Consumers Health Forum, Leanne Wells, said.
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$1.3 million: The lifetime cost of each young Australian diagnosed with cancer revealed
Esther Han
Published: January 30 2018 - 12:15AM
Sophie Martyr was just 13 years old when she learnt she had brain cancer and was asked to make a decision about whether she wanted to have children in the future.
To some, it's an obvious choice. For Sophie, feeling shaken and coming to grips with the months of chemotherapy and radiotherapy ahead, the last thing she wanted was another surgery and her first answer was no.
"I knew the treatments would damage my ovaries, but at 13, you're not thinking about fertility and babies, and I wanted to avoid another surgery," said Sophie, now 20 and in remission.
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Make health premiums affordable: poll
AAP / 30 January, 2018
A majority of voters still believe the federal government should do more to make private health insurance more affordable.
The result of 83 per cent in the latest Essential poll follows Health Minister Greg Hunt's decision to approve a 3.95 average rise in premiums from April.
Sixty per cent of the 1028 people surveyed over the weekend still believe health insurance isn't worth the money, while 79 per cent think the government should cap rises at the level of inflation.
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Sleep doctors asked to justify Medicare billing
- The Australian
- 10:55AM January 30, 2018
Sean Parnell
The Department of Health has asked 79 sleep doctors to justify their level of Medicare billing amid concern over high service volumes that have already led a specialist to repay $2 million in rebates.
The Australian understands the department, in a targeted compliance effort, is writing to respiratory and sleep medicine specialists who made the most claims against two Medicare item numbers.
The sleep doctors will be given a checklist for claiming those item numbers and encouraged to voluntarily acknowledge any incorrect claims. The department has said it will continue to monitor doctors and, in a veiled threat, audit individuals or refer them for practitioner review where necessary.
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- Updated Jan 30 2018 at 10:42 AM
Health Minister Greg Hunt backs genomics as 'great personal passion'
Heath Minister Greg Hunt said the government would prioritise emerging medical research on genes and their functions, as he backed an innovation report designed to make Australia the healthiest nation in the world by 2030.
Innovation Science Australia chairman Bill Ferris said a new focus on the emerging medical discipline of genomics could help in earlier diagnoses for Australians, as well as better prevention strategies and new treatments for rare diseases.
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Labor would push up premiums: Hunt
- The Australian
- 3:56PM January 30, 2018
Rachel Baxendale
Health Minister Greg Hunt has seized on Bill Shorten’s failure to rule out slashing the private health insurance rebate, warning that Labor policy will make premiums unaffordable for people on middle and low incomes.
The Opposition Leader told the National Press Club today that Labor was working through “a number of options” to reform the private health insurance system, and did not rule out changes to the rebate.
“Twice, Mr Shorten refused to rule out slashing or abolishing the private health insurance rebate,” Mr Hunt said.
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Shorten seeks lower private health bills
Bill Shorten says a Labor government will not accept premium price rises to private health cover. (AAP)
The federal opposition leader says the cost of private health cover is too high and a Labor government would look at ways to cut bills.
Updated 30 Jan 2018
Bill Shorten has put private health insurers "on notice" that a Labor government would not accept premium rises of a similar scale to recent years.
But the Labor leader, who laid out his plans for 2018 in a speech to the National Press Club on Tuesday, did not specify how he would deliver cheaper premiums.
"If you want to go to a barbecue and talk to a stranger, have a whinge about your private health insurance bill - you will make a friend straight away," Mr Shorten said.
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Feds back free meningococcal vaccine
Cathy O'Leary | PerthNow
February 3, 2018 4:00PM
TWO weeks ago there was no funding for a vaccine that protects against four strains of meningococcal disease — but by yesterday there were pledges from both sides of politics.
Federal Health Minister Greg Hunt announced the vaccine Nimenrix would be added to the National Immunisation Program by July, to protect children against the A, C, W and Y strains.
Currently, babies can get a free meningococcal C vaccine but parents have to pay for the ACWY and B strain vaccines.
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- Updated Jan 30 2018 at 6:21 PM
Private health insurers slam Bill Shorten 'cheap shot'
Private health insurers have fired back at labor leader Bill Shorten's attack on the sector's recent premium hikes, calling it an unsurprising, cheap shot
"As the Opposition leader he is perfectly entitled to vent his frustrations, but in doing that he should open the door for some meaningful dialogue," said Mr Fitzgibbon.
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Bill Shorten commits to keeping private health insurance rebate
Fergus Hunter
Published: January 31 2018 - 10:02AM
Opposition Leader Bill Shorten has ruled out abolishing the private health insurance rebate if Labor wins the next election.
In an agenda-setting address on Tuesday, Mr Shorten had warned private health funds about their growing premiums and record profits while benefiting from $6.4 billion in government rebates.
Health Minister Greg Hunt quickly fired back at the Opposition Leader, criticising him for keeping the door open to ending the rebate and warning that its abolition would drive up the cost of living for regular people.
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Health insurance premiums ailing as rebates recede
- The Australian
- 12:00AM February 1, 2018
Sean Parnell
The health insurance rebate has been eroding at a rate of one percentage point a year since the former Labor government imposed restrictions, saving taxpayers billions of dollars but only adding to the impact of premium increases on members.
While the Coalition has maintained those restrictions, the reform package announced by Health Minister Greg Hunt in October, combined with yesterday’s CPI figures, will slow the erosion to 0.5 per cent this year.
Bill Shorten put the future of the rebate back on the agenda this week in a National Press Club address.
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Real problem with private health insurance
- The Australian
- 12:00AM February 2, 2018
Adam Creighton
The problem with private health insurance is that it’s not particularly private and doesn’t entail much insurance.
It was good of Bill Shorten to allude to problems in health policy this week. However unfair he thinks the outcomes are, they can’t be sheeted home to anything vaguely resembling a genuine private health insurance market.
The government shovels about $6.5 billion a year at the sector via premium rebates, which make the sort of subsidies the old car industry used to get look miserly.
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- Updated Feb 2 2018 at 11:00 PM
How to deal with junk health insurance
Shorten backtracks on health insurance
Matthew Donnellan, managing director of a medical mobile phone app called Whitecoat, has a message for people angry that their private health insurance fund is making them pay high out-of-pocket costs: Get used to it and go online.
Donnellan says up to 85 per cent of people do not even ask how much they will pay out-of-pocket for surgery until they are admitted as inpatients. By the time they are in hospital for a shoulder reconstruction or retinal surgery it is too late to start haggling over the bill.
But he says from September his app, a joint venture with insurers NIB, Bupa and HBF, will allow patients and GPs planning a course of treatment to know in advance roughly how much a particular surgeon or hospital will charge out-of-pocket against a specific health insurance policy.
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International Issues.
Steven Mnuchin's big mouth reveals holes in his economics training
The open-mouth operations by US Treasury Secretary Steven Mnuchin that made currencies ricochet and forced President Donald Trump to clarify his support for a "strong" US dollar exposes an administration that is learning economic management on the fly.
Mnuchin's off-the-cuff remark that a "weaker [US] dollar is good for us as it relates to trade" broke the tradition of US treasury secretaries going back to Robert Rubin who, in the 1990s, invoked the "strong" greenback as good for America.
"The Treasury secretary is really in over his head on broad macroeconomic issues," Yale University economics professor and former Morgan Stanley Asia chairman Stephen Roach says. "Clearly, he did not have a deep appreciation for the historical role that our US Treasury secretary plays in providing a rhetorical anchor for the US currency."
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Donald Trump’s lawyers fear US President can’t handle the truth under Mueller questioning
- Toby Harnden
- The Times
- 1:30PM January 28, 2018
Lawyers for Donald Trump are confident he was not involved in any collusion with Russia but fear his presidency is in danger because he is “incapable of telling the truth”. Trump’s private legal team is working overtime to persuade him that he should not agree to be interviewed by Robert Mueller, the special counsel whose investigation began with allegations of collusion but has spread into almost every aspect of his presidency.
“They believe it would be legal and political suicide,” said a senior Republican with close ties to the White House. “Mueller wants to get his scalp and the clearest path to that is catching President Trump in a lie, perhaps on a peripheral matter.”
On Friday, the president dismissed as “fake news” a New York Times report that in June he tried to fire Mueller, a month after sacking James Comey, the FBI director, but was thwarted by his White House legal adviser, Donald McGahn.
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Melania Trump’s office slams ‘false reporting’ in wake of Stormy Daniels allegations
- AP
- 11:46PM January 27, 2018
The office of first lady Melania Trump has hit out at “false reporting” over speculation about marital strife in the White House.
Mrs Trump’s spokeswoman, Stephanie Grisham, took to Twitter on Friday to blast “flat-out false reporting” about the first lady that has emerged in recent days.
“BREAKING,” she wrote. “The laundry list of salacious & flat-out false reporting about Mrs. Trump by tabloid publications & TV shows has seeped into ‘main stream media’ reporting.” Grisham added that Mrs Trump is focused on her family and role as first lady, “not the unrealistic scenarios being peddled daily by the fake news”.
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'Skilful powerbroker': Finnish president wins landslide re-election
Raine Tiessalo
Published: January 29 2018 - 7:51AM
Helsinki: Sauli Niinisto was re-elected as Finland's president without recourse to a runoff - a first since the post has been settled by popular vote.
The 69-year-old former finance minister won the election with 62.7 per cent backing, surpassing the 50 per cent needed to avoid a second vote. His closest rival, Pekka Haavisto of the Greens, who ran against Niinisto in 2012, had support of 12.4 per cent and conceded defeat, YLE said. Turnout was 66.7 per cent.
"Finland is a great country - it's the most stable country in the world," Niinisto told his supporters in Helsinki. "Better to be small and stable than large and fractured."
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'We have a different perspective': Julie Bishop distances Australia from US on China, Russia threat
Fergus Hunter
Published: January 29 2018 - 11:28AM
The Turnbull government has distanced itself from a central theme of the Trump administration's new national defence strategy, which defines growing Russian and Chinese military might as greater threats than terrorism.
The American strategic outlook, unveiled earlier this month by Defence Secretary Jim Mattis, elevates "inter-state strategic competition" as the administration's primary focus and outlines Russia and China as authoritarian and revisionist powers seeking to challenge the US, undermine free and open economies and grow their militaries.
But Foreign Minister Julie Bishop on Monday said neither country posed a military threat to Australia – a statement at odds with Defence Minister Marise Payne, who recently said Australia shared "similar concerns" to the US on national security threats.
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'We are all Davos men now': Free trade triumphs despite Trump's trade tantrums
Jessica Irvine
Published: January 29 2018 - 12:00AM
Stuffed with sausages, sunburnt and, let's be honest, a little bit smashed from a day of drinking too much in the sun, Australians were flopped on their couches relaxing when President Trump took the podium at the annual meeting of the World Economic Forum in the snowy Swiss resort town of Davos.
Amid fears the world's Tweeter-in-Chief would unleash a new global trade war, ushering in a new era of protectionism, Trump instead delivered a more statesmanlike speech, declaring: "America First does not mean America alone".
Which shouldn't really have surprised anyone. For all his rhetoric about helping the "lost generation" of middle income Americans, pre-presidential Trump would have not looked out of place amid the chalets, jets and glittering cocktail parties of Davos. Only he would never have been invited, considered too "gauche" – and probably not rich enough – to take seriously.
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- Updated Jan 30 2018 at 10:09 AM
Four ways Donald Trump could alter the rules-based global order
by Gideon Rachman
The "global rules-based order" is a yawn-inducing phrase but it means something important. All countries in the world, bar a few rogue states, deal with each other according to an agreed set of legal, economic and military rules.
Ignore or overturn them and confusion and conflict break out. Some non-western countries have long believed that the phrase is little more than a cloak for US global domination. Since America effectively wrote the rules, it was assumed that the whole system must be biased in favour of the US.
But Donald Trump does not see it that way. The US president thinks that clever foreigners have manipulated the international system, so that America now trades at a massive disadvantage and is forced to accept hostile rulings by international tribunals. When it comes to security, Mr Trump complains that America spends billions giving cheap protection to ungrateful allies. He is demanding change.
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Donald Trump tells Piers Morgan he is a stable genius
Published: January 29 2018 - 12:26PM
London: US President Donald Trump says he is a stable genius and that he eats good quality food.
When asked by presenter Piers Morgan about his health and some perceptions that he was insane and physically unfit, Trump said: "I am a stable genius."
When asked about eating burgers and drinking Coke, Trump said: "I eat fine food, really from some of the finest chefs in the world, I eat healthy food, I also have some of that food on occasion ... I think I eat actually quite well."
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Donald Trump declares 'new American moment' in State of the Union address
Trump claims 'extraordinary success' in first year
by Julie Hirschfeld Davis and Michael D Shear
Speaking to a joint session of Congress, Trump hailed what he called the "extraordinary success" of his administration's first year, and sounded notes of unity and inclusion, steering clear of the nationalist rhetoric, political attacks and confrontational tone that have been his calling cards both as a candidate a commander in chief.
"Tonight, I call upon all of us to set aside our differences, to seek out common ground, and to summon the unity we need to deliver for the people," Trump said to raucous applause from many Republicans, as Democratic leaders who have bitterly criticised his policies and rhetoric sat stone-faced in their seats.
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Trump's speech felt familiar despite troubled times
Susan Page
Published: January 31 2018 - 4:21PM
Washington: He bragged about the achievements of his administration so far and proposed ambitious legislative initiatives ahead. He hailed ordinary Americans who had done extraordinary things and called for new sense of national unity.
In other words, the most unconventional president in modern times, governing at a time of historic turbulence, delivered a conventional State of the Union that with some policy tweaks could have been given by any number of his recent predecessors.
The most remarkable thing about President Trump's first State of the Union address on Tuesday night may be that it wasn't particularly remarkable. That, and the fact that the most perilous challenge he faces went unmentioned.
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German minister warns Israel it faces growing frustration in Europe
Published: February 1 2018 - 6:37AM
Tel Aviv: German Foreign Minister Sigmar Gabriel warned Israel on Wednesday that it faced growing frustration in Europe amid concern for the future of a two-state solution to the Israeli-Palestinian conflict.
Gabriel adopted a markedly different tone to that of US Vice President Mike Pence, who on a visit to Israel last week embraced President Donald Trump's December 6 announcement that his administration recognises Jerusalem as the capital of Israel, and that it will move the US Embassy to the city.
"With regard to the Palestinians and the Iran question the Americans are taking your side more clearly than ever before. But is this really only a good thing?" Gabriel said in Tel Aviv.
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As strongmen steamroll their opponents, Donald Trump is silent
Published: February 2 2018 - 7:09AM
Cairo: When it comes to securing a second term in power, Egypt's president is leaving little to chance.
Potential rivals in the March election have been sidelined, jailed or threatened with prosecution. The news media is largely in his pocket. On polling day, Egyptians will have a choice between President Abdel-Fattah el-Sisi and one of his most ardent supporters — an obscure politician drafted at the eleventh hour to avoid the embarrassment of a one-horse race.
As he cruises toward victory, el-Sisi need not worry either about foreign censure: President Donald Trump, who has hailed the Egyptian leader as a "fantastic guy," and most other Western leaders have been largely silent.
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Republicans release secret memo accusing Russia investigators of bias
Published: February 3 2018 - 6:28AM
Washington: Republican congressmen have released a previously secret memo in which they accuse senior officials at the FBI and the Justice Department of bias in the early stages of the Russia investigation.
The House Intelligence Committee made the so-called Nunes memo public on Friday, local time, after a tense week of pleading from senior national security officials not to disclose the classified details.
"A lot of people should be ashamed of themselves and much worse than that," Trump said on Friday moments after he declassified the memo.
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Explainer: What is the Nunes memo?
Chris Zappone
Published: February 3 2018 - 7:19AM
Even as questions about Donald Trump's ties with Russia mount, there is a coordinated effort among Republicans to use information to undercut the credibility of US law enforcement and intelligence. The latest chapter is a memo designed to cast doubt on investigation into Trump's links with Moscow.
What is the memo?
The memo, written by Republicans on the House Intelligence Committee, overseen by Chairman Davin Nunes, is a document that alleges FBI and Department of Justice has a bias against Donald Trump in its Russia probe. The controversy for Democrats, the FBI and others is the fear that this document cherry picks facts to discredit the non-partisan FBI to cast it in a negative light. There is also the concern it could put lives at risk related to intelligence connection.
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Tony Walker
Published: February 2 2018 - 11:00PM
Here's some advice for Malcolm Turnbull ahead of his visit to Washington later this month for talks with Donald Trump: remember the Goldilocks and Three Bears Rule when dealing with American presidents.
Turnbull should strive to be "not too hot" and "not too cold". He needs to be "just right" in his interactions with a president who is by far America's most unpopular relative to his peers after one year in the job.
Businesslike is the word one might apply to circumstances in which Australia needs to calibrate its relationships with its security guarantor and its principal trading partner in a rapidly-shifting strategic environment in which China is rising faster than anticipated.
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Nick O'Malley
Published: February 3 2018 - 9:44PM
Anyone following the investigation into the Trump campaign's possible collusion with Russia will learn next to nothing from reading the so-called Nunes memo, and yet its release is significant, if only because it demonstrates how far the Republican Party is willing to debase American democracy in support of Donald Trump, and how weaponised conspiracy-mongering has crept from the fringes to the heart of American politics.
The memo is named for Devin Nunes, the Republican chairman of the House Intelligence Committee that is ostensibly conducting its own investigation into the Russia allegations. Nunes is a loyal Trump soldier who made his name during the endless Congressional investigations into the Benghazi scandal that found absolutely no wrongdoing on behalf of Hillary Clinton, but nonetheless served its purpose admirably.
"Everybody thought Hillary Clinton was unbeatable, right? But we put together a Benghazi special committee, a select committee. What are her numbers today? Her numbers are dropping," the congressman Kevin McCarthy told Fox News in a moment of inadvertent candour.
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I look forward to comments on all this!
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David.
