The Aussie political economy -

 
Topic moved from The Lounge by dthead on 17 Feb 2022 16:42
  don_dunstan Oliver Bullied, CME

Location: Adelaide proud
Newspoll to be released tomorrow has the LNP at 46 and the ALP at 54 two-party preferred.

Seems unlikely that ScoMo will go to an election this year...

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  don_dunstan Oliver Bullied, CME

Location: Adelaide proud
Kristina Keneally, a Labor politician who constantly fails upwards, didn't get the memo from Albo that they were supposed to be on a 'buy Australian' kink - Daily Mail;

Kristina Keneally has been accused of 'hypocrisy' for selling products sourced from China to raise election funds just two weeks after Labor launched its 'buy Australian' policy.

The shadow home affairs minister has made a website called 'the BS Report' where she records statements from Scott Morrison that she believes are false or deliberate lies.  

In a bid to raise money for the upcoming election, Senator Keneally has also set up an online store to sell $34.99 water bottles, $29.99 tote bags and $19.99 mugs and iPhone cases emblazoned with quotes that poke fun at the Prime Minister.


These include his 2019 comment that electric vehicles would 'end the weekend', his insistence that 'I don't hold a hose, mate' while in Hawaii during the bushfires and Joe Biden's quip 'that fella down under' after forgetting Mr Morrison's name in a joint press conference.

But some of the product descriptions say 'sourced from China', prompting critics to accuse Labor of hypocrisy after it launched a flagship policy to boost Australian manufacturing.

Labor's Buy Australian Plan, announced earlier this month, aims to 'maximise the use of local workers and businesses' by making sure Government contracts are offered to Australian companies first.

On the BS Report store, the description for a water bottle with the quote 'that fella down under' said 'blank product sourced from China'.

But on the same product with the quote 'end the weekend' - which Senator Keneally advertised on Twitter - the source had been removed and replaced with a slash.


  don_dunstan Oliver Bullied, CME

Location: Adelaide proud
Inflation has been running hot in the United States for most of the year at around 4% but the latest figure from last week puts it even higher at 6%. They're blaming transport and supply chain problems as well as higher energy prices. There's all sorts of supply problems going on globally at the moment resulting in manufacturing being crippled - only recently Opel announced the closure of its main German plant because they can't get chips for their cars - DW.

The last time inflation was that high in the USA we had 15% mortgages in Australia (1990). I think its safe to say we're in a period of inflationary break-out like the 1970's. We haven't had rapid interest rate increases in a very long time, who knows how people will cope given we have a very large private and public debt load.
  Carnot Minister for Railways

Inflation has been running hot in the United States for most of the year at around 4% but the latest figure from last week puts it even higher at 6%. They're blaming transport and supply chain problems as well as higher energy prices. There's all sorts of supply problems going on globally at the moment resulting in manufacturing being crippled - only recently Opel announced the closure of its main German plant because they can't get chips for their cars - DW.

The last time inflation was that high in the USA we had 15% mortgages in Australia (1990). I think its safe to say we're in a period of inflationary break-out like the 1970's. We haven't had rapid interest rate increases in a very long time, who knows how people will cope given we have a very large private and public debt load.
don_dunstan
It all feels a bit early to mid-1970s:  Big shortages of housing materials, oil crisis, American and then Australian political upheaval, embarrassing pullout of allied troops from a war-torn country, Interest Rates start heading North, stagflation...
  don_dunstan Oliver Bullied, CME

Location: Adelaide proud
It all feels a bit early to mid-1970s:  Big shortages of housing materials, oil crisis, American and then Australian political upheaval, embarrassing pullout of allied troops from a war-torn country, Interest Rates start heading North, stagflation...
Carnot
I think sometimes its a confidence thing as much as anything - the Anglo-sphere is currently experiencing an existential crisis of sorts.

At the current very cheap mortgage rate of 2.2% you'd be paying $2,654 per month on the average Sydney/Melbourne mortgage of $700,000 - but if rates went to just 10% (not even the full tote of 15% in 1990) you've be looking at $6,143 per month. That will keep a lid on the capacity of the RBA to increase rates because the money being sucked out of the economy by house repayments will be immense (assuming they can be paid at all).

There's a lot of endemic problems coming back to bite us right now, it's going to be interesting to see how the government manages them.
  Mr. Lane Chief Commissioner

It all feels a bit early to mid-1970s:  Big shortages of housing materials, oil crisis, American and then Australian political upheaval, embarrassing pullout of allied troops from a war-torn country, Interest Rates start heading North, stagflation...
I think sometimes its a confidence thing as much as anything - the Anglo-sphere is currently experiencing an existential crisis of sorts.

At the current very cheap mortgage rate of 2.2% you'd be paying $2,654 per month on the average Sydney/Melbourne mortgage of $700,000 - but if rates went to just 10% (not even the full tote of 15% in 1990) you've be looking at $6,143 per month. That will keep a lid on the capacity of the RBA to increase rates because the money being sucked out of the economy by house repayments will be immense (assuming they can be paid at all).

There's a lot of endemic problems coming back to bite us right now, it's going to be interesting to see how the government manages them.
don_dunstan

They are now tipping rates to go up next year even though the RBA originally said rates wouldn't be going up for some years. The RBA will be under political pressure to keep them low as long as possible, but if they keep them too low for too long we could face a rapid surge in inflation.

Australia mostly escaped the GFC and the COVID recession, could it all be coming back to bite now?

Meanwhile the housing market continues to defy expectations and shows no sign of slowing.
  don_dunstan Oliver Bullied, CME

Location: Adelaide proud
It all feels a bit early to mid-1970s:  Big shortages of housing materials, oil crisis, American and then Australian political upheaval, embarrassing pullout of allied troops from a war-torn country, Interest Rates start heading North, stagflation...
I think sometimes its a confidence thing as much as anything - the Anglo-sphere is currently experiencing an existential crisis of sorts.

At the current very cheap mortgage rate of 2.2% you'd be paying $2,654 per month on the average Sydney/Melbourne mortgage of $700,000 - but if rates went to just 10% (not even the full tote of 15% in 1990) you've be looking at $6,143 per month. That will keep a lid on the capacity of the RBA to increase rates because the money being sucked out of the economy by house repayments will be immense (assuming they can be paid at all).

There's a lot of endemic problems coming back to bite us right now, it's going to be interesting to see how the government manages them.

They are now tipping rates to go up next year even though the RBA originally said rates wouldn't be going up for some years. The RBA will be under political pressure to keep them low as long as possible, but if they keep them too low for too long we could face a rapid surge in inflation.

Australia mostly escaped the GFC and the COVID recession, could it all be coming back to bite now?

Meanwhile the housing market continues to defy expectations and shows no sign of slowing.
Mr. Lane
The only reason why we escaped recession was because they spent something like $700,000,000,000 to stimulate the economy - and even then many small businesses went broke. That's got to have an impact further down the track, no two ways about it. The trouble with Keynesian type stimulus is that it simply doesn't work; in the United States (for example) since 2020 there has been three rounds of stimulus, the latest being Biden's $1.9 trillion program - and they simply don't work in the long term. Ultimately the money gets spend (the rich tend to save it and the poor spend it) and then things return to normal shortly thereafter.

Who knows what will happen to the housing market, we are certainly seeing a boom in my part of the world despite the fact that we traditionally evade that hysteria that envelopes Sydney and Melbourne. Interest rates ARE going up actually, the Big Four have been quietly raising fixed-term mortgage rates but there's been no formal fanfare about it in the media. Westpac for example has raised fixed term mortgage rates no less than three times in the last month - what do they know that we don't?
  Mr. Lane Chief Commissioner

It all feels a bit early to mid-1970s:  Big shortages of housing materials, oil crisis, American and then Australian political upheaval, embarrassing pullout of allied troops from a war-torn country, Interest Rates start heading North, stagflation...
I think sometimes its a confidence thing as much as anything - the Anglo-sphere is currently experiencing an existential crisis of sorts.

At the current very cheap mortgage rate of 2.2% you'd be paying $2,654 per month on the average Sydney/Melbourne mortgage of $700,000 - but if rates went to just 10% (not even the full tote of 15% in 1990) you've be looking at $6,143 per month. That will keep a lid on the capacity of the RBA to increase rates because the money being sucked out of the economy by house repayments will be immense (assuming they can be paid at all).

There's a lot of endemic problems coming back to bite us right now, it's going to be interesting to see how the government manages them.

Australia mostly escaped the GFC and the COVID recession, could it all be coming back to bite now?
The only reason why we escaped recession was because they spent something like $700,000,000,000 to stimulate the economy - and even then many small businesses went broke. That's got to have an impact further down the track, no two ways about it. The trouble with Keynesian type stimulus is that it simply doesn't work; in the United States (for example) since 2020 there has been three rounds of stimulus, the latest being Biden's $1.9 trillion program - and they simply don't work in the long term. Ultimately the money gets spend (the rich tend to save it and the poor spend it) and then things return to normal shortly thereafter.
don_dunstan

I am sort of undecided on it to be honest. On one hand I agree that you can't just stimulate forever and that it will end in tears at some point, on the other hand I think the US does need a major infrastructure overhaul. So for me it is not the stimulus that is important but the actual infrastructure that will be built that will be beneficial for decades to come.

This guy I watch a lot of and he is definitely on the anti-Keynesian side and presents some compelling augments. Essentially he believes the quickest way out of recession is to allow the economy to deflate and correct early, rather than try to prolong the stimulus. Also crashes will be less dramatic if you do not inflate booms with stimulus to prolong them. He is even against minimum wages in that he believes they keep people out of work and artificially inflate prices.

I am undecided, but open to all arguments.



https://www.youtube.com/watch?v=X3L0_pjRdcs
  don_dunstan Oliver Bullied, CME

Location: Adelaide proud
The Commonwealth Bank joins the other banks in hiking fixed mortgage rates for the third time in a month - Broker News:

CBA has hiked all of its fixed rates, the third such rise in just six weeks. The cheapest prices the lender will now offer for fixed rates is 2.49% for one year and 2.59% for two years – both rates that had previously been priced at 2.34%.

The biggest increase was in three-year and five-year fixed, with those rates going up 30 basis points to 2.99% and 3.39% respectively. The four-year rate rose by 20 points to 3.09%.

It continues the trend of fixed rate rises that has been seen across the Big Four since it became clear that the Reserve Bank of Australia (RBA) was abandoning its commitment to a cash rate rise in 2024.

Meanwhile global markets are in a panic after the announcement of the rapid spread of the 'Nu' COVID19 variant - ZeroHedge;

British authorities think it is the most significant variant to date and have hurried to impose travel restrictions on southern Africa, as did Japan, the Czech Republic and Italy on Friday. The European Union also said it aimed to halt air travel from the region.

"Markets have been quite complacent about the pandemic for a while, partly because economies have been able to withstand the impact of selective lockdown measures. But we can see from the new emergency brakes on air travel that there will be ramifications for the price of oil," said Chris Scicluna, head of economic research at Daiwa.

As a result, what was initially just a 1% drop in US index futures, has since escalated to a plunge of as much as 2% with eminis dropping the most since September, at one point dropping below 4,600 after closing on Wednesday above 4,700 as a post-Thanksgiving selloff spread across global markets amid mounting concerns the new B.1.1.529 coronavirus variant - which today will be officially called by the Greek lettter Nu - could derail the global economic recovery.

Probably more lock-downs inevitable - but I guess we're getting used to them by now. Oil has already responded by dropping $5 a barrel in anticipation of global lock-downs. I've read that the biggest problem with Nu is that the existing vaccines are really quite ineffective against it (as low as 30% or less). Perhaps my predictions last year about this thing staying with us forever is coming true...
  don_dunstan Oliver Bullied, CME

Location: Adelaide proud
Australia records its second-worst GDP print in 47 years - a contraction of 1.9% -  News.com.au

That headline gross domestic product figure was described by economists as “ugly” but does not constitute a recession – two consecutive quarters of negative economic growth – given GDP was up 0.7 per cent in the June quarter and up 3.9 per cent through the year.

The worst slump during the pandemic was the June quarter of last year, when GDP plunged 6.8 per cent after shrinking 0.3 per cent the previous quarter, putting the nation in official recession.

Unsurprisingly, domestic demand drove the latest fall, with household spending plummeting in the states hit hard by prolonged lockdowns.

It crashed 8.4 per cent in NSW, Victoria and the ACT, compared to the rise of 0.7 per cent in all other states, detracting 2.4 percentage points from GDP.

Treasurer Josh Frydenberg said the figures confirmed the enormous economic cost of lockdowns, but they were better than market expectations.

All the sugar hit from the $700 billion big spend has now long since faded into history and it's the hang-over now. Hopefully it's just the lock-down states that are dragging us backwards and we can recover quickly - those lock-downs are definitely wreaking the private sector where-ever they've been in force though.
  michaelgm Chief Commissioner

I’ve never heard of this member previously, take a bow. Brilliant.

  Carnot Minister for Railways
  don_dunstan Oliver Bullied, CME

Location: Adelaide proud
Greens Senator Lidia Thorpe makes a fool of herself again:
https://www.abc.net.au/news/2021-12-02/greens-lidia-thorpe-apology-sexist-comment-hollie-hughes/100668108
Carnot
That woman is an idiot. And she gets three hundred grand a year for being there.
  don_dunstan Oliver Bullied, CME

Location: Adelaide proud
Prior to the COVID19 thing most of the growth in jobs in Australia was being provided by the public sector - an explosion in people relying on the government to pay their wages. In many ways the pandemic saved us from having to deal with the fact that we're creating a socialist economy dependent on taxation and spending to keep us going.

  lsrailfan Minister for Railways

Location: Somewhere you're not
Greens Senator Lidia Thorpe makes a fool of herself again:
https://www.abc.net.au/news/2021-12-02/greens-lidia-thorpe-apology-sexist-comment-hollie-hughes/100668108
Carnot
Some people have no dignity whatsoever, Adam Bandt should really haul her over the coals, but he won't, because he himself has no clue.
  Carnot Minister for Railways

Greens Senator Lidia Thorpe makes a fool of herself again:
https://www.abc.net.au/news/2021-12-02/greens-lidia-thorpe-apology-sexist-comment-hollie-hughes/100668108
Some people have no dignity whatsoever, Adam Bandt should really haul her over the coals, but he won't, because he himself has no clue.
lsrailfan
I would like Senator Jordan Steele-John to personally show Lidia Thorpe the exit door and to tell her to never come back:

  DirtyBallast Chief Commissioner

Location: Banned
Greens Senator Lidia Thorpe makes a fool of herself again:
https://www.abc.net.au/news/2021-12-02/greens-lidia-thorpe-apology-sexist-comment-hollie-hughes/100668108
Some people have no dignity whatsoever, Adam Bandt should really haul her over the coals, but he won't, because he himself has no clue.
I would like Senator Jordan Steele-John to personally show Lidia Thorpe the exit door and to tell her to never come back:

Carnot
If Thorpe said that then yes, she needs to be dealt with, no question.

I wonder if you will be equally enraged at what Tudge allegedly did, kicking a woman?
Education Minister Alan Tudge stands aside amid abuse allegations, PM tells parliament - ABC News
  lsrailfan Minister for Railways

Location: Somewhere you're not
Greens Senator Lidia Thorpe makes a fool of herself again:
https://www.abc.net.au/news/2021-12-02/greens-lidia-thorpe-apology-sexist-comment-hollie-hughes/100668108
Some people have no dignity whatsoever, Adam Bandt should really haul her over the coals, but he won't, because he himself has no clue.
I would like Senator Jordan Steele-John to personally show Lidia Thorpe the exit door and to tell her to never come back:

If Thorpe said that then yes, she needs to be dealt with, no question.

I wonder if you will be equally enraged at what Tudge allegedly did, kicking a woman?
Education Minister Alan Tudge stands aside amid abuse allegations, PM tells parliament - ABC News
DirtyBallast
@ Dirtyballlast indeed, if it is indeed proven that Alan Tudge has done these things, he should be booted from the Parly! IIRC I think that this fellow has form on the board when it comes to behaviour!
  Carnot Minister for Railways

Tudge needs to know that actions have consequences.  He's demonstrated a lack of character, temperament, and integrity.  Time to go.
  don_dunstan Oliver Bullied, CME

Location: Adelaide proud
Michael West writes about the horror show that is the data emerging from our economy showing the worst economic performance in sixty years:

The quarterly national accounts provide invaluable data on the state of Australia’s economy. Yesterday’s are the worst set of outcomes since the Australian Bureau of Statistics (ABS) began tabulating this series in 1959, when the prime minister was Robert Menzies. That’s based on Australia’s historic data, or comparison with other developed countries, or both.

Clearly, the Covid pandemic has affected many industries and affected several data sets. But it does not explain Australia plummeting down virtually all global tables. Given Australia’s low rates of infections and deaths, we would expect Australia to have risen in the rankings rather than tumbled.

In fact, most of the declines have been evident well before Covid, including Australia entering a per capita recession in early 2019.

Treasurer Josh Frydenberg said yesterday that “the Australian economy is recovering strongly”. The data does not support this.

In summary:
  • Worst economic growth on record;
  • Annual GDP growth now ranks number 38. During the GFC we were number one.
  • Wages as a percentage of GDP lowest ever at 47%;
  • Household consumption down 5% year on year;
  • Manufacturing still in decline in Australia, the lowest in the OECD at 5% of GDP.
  don_dunstan Oliver Bullied, CME

Location: Adelaide proud
Not really a specific Aussie thing but has anyone been watching what's happening with Cryptos in the last few days? It's turned into a blood-bath:

  Heihachi_73 Chief Commissioner

Location: Terminating at Ringwood
Treasurer Josh Frydenberg said yesterday that “the Australian economy is recovering strongly”. The data does not support this.

In summary:
  • Worst economic growth on record;
  • Annual GDP growth now ranks number 38. During the GFC we were number one.
  • Wages as a percentage of GDP lowest ever at 47%;
  • Household consumption down 5% year on year;
  • Manufacturing still in decline in Australia, the lowest in the OECD at 5% of GDP.
don_dunstan
But how good's the cricket?™

- Scott Morrison, former Treasurer, current Prime Minister of New South Wales "I don't hold the treasurer's job mate"
  Carnot Minister for Railways

CLP Senator from the NT got on the beers and into some biffo at this year's Christmas party:
  freightgate Minister for Railways

Location: Albury, New South Wales
Is it me or is the government falling apart ?
  Graham4405 The Ghost of George Stephenson

Location: In exile
Is it me or is the government falling apart ?
freightgate
I can't tell from here if you're falling apart, but the Government isn't travelling too well.

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