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Australian economy

Postby HBS Guy » 17 Jan 2013, 08:05

We ought to have a thread on the economy generally and here is a doozy of a post to start it off:

Months after Labor's mining tax, its carbon tax and its fourth successive budget deficit, Australia has been given the tick of approval by the world's biggest fund manager.

BlackRock is one of the world's most important buyers of government bonds, investing $US3.7 trillion worldwide. It says Australia's carbon tax and the mining tax have had at most a "marginal" impact on perceptions of the country's risk. More important has been the government's success in shrinking its budget deficit.

The fund manager's new sovereign risk update ranks Australian government bonds as the world's seventh least risky, up from 10th least risky three months ago.[My emphasis]

No other nation has managed to jump three places in the latest survey. The finding is at odds with a claim made by federal Coalition Treasury spokesman Joe Hockey last August that Labor was "adversely impacting Australia's sovereign risk profile".

BlackRock's Australian head of fixed income, Steve Miller, said Australia's position was "exceedingly strong" and strengthening.

"The plain fact is, compared to the rest of the world, and this is what we are doing, Australia's public debt position is very, very strong.


http://www.theage.com.au/opinion/political-news/economy-gets-big-tick-20130116-2ctw9.html#ixzz2I8gdqciE
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Re: Australian economy

Postby Lefty » 17 Jan 2013, 13:42

Yeah, Australian public debt is miniscule compared to most other developed nations. Hockey can flatulate all he likes but he's just a bullshit artist and his boss-who-evolution-forgot is just as thick as Newman when it comes to matters economic.
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Re: Australian economy

Postby Lefty » 17 Jan 2013, 15:36

As I was saying in the previous post.....

FEDERAL Opposition leader Tony Abbott has tried to link Labor's backflip on its promise to return the budget to surplus to a weak employment report.


Pretty thick huh? Listen to the reasoning....

"(A surplus) is not going to happen and they have failed their own test of economic management," he said.

"That's why we're getting the kind of economic weakness which we're currently seeing."

Shadow treasurer Joe Hockey said the data showed that business had no confidence.

"Retail hasn't got the confidence boost it was expecting in Christmas, manufacturing hasn't got confidence (and) the tourism industry hasn't got confidence," he told reporters in Sydney.

"Between the three of them, they're amongst our biggest employers."

Mr Hockey also tried to link the weak employment report to Labor's budget surplus backdown.

"There is not the confidence there and there won't be whilst the government continues to act deceptively when it comes to the surplus," he said.

The government had promised "come hell or high water" there would be a surplus.

"They misled the Australian people and we're going to see all that come to roost this year."

http://www.news.com.au/breaking-news/national/libs-blame-jobs-data-on-surplus-backflip/story-e6frfku9-1226555797452

Riiiiiiight - so it's all down to a loss of widespread confidence because the government has conceded that there is unlikely to be a surplus, and if they were to win and they squeeze the throat of the economy to try and wring out a surplus, business confidence would boom even as consumer spending shrank and unemployment rose. A statement of stupidity from a pair of stupids.

Retail is suffering from lower consumer spending as the great private credit boom that ran pre-GFC has slowed to a crawl and household savings have returned to more historically normal levels. Manufacturing and tourism have suffered from the effects of a chronically-overvalued Australian dollar - none of this has anything to do with what Abbot and Hockey are dribbling about.

But it does tell us much about what the fibs would be like as economic managers - useless morons who would be hilarious to watch if they weren't in charge of the levers of power, which results in them being stupidly dangerous to all of us.
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Re: Australian economy

Postby HBS Guy » 17 Jan 2013, 15:57

Consumer confidence has been ticking up, yet with the likes of all Lib premiers practicing austerity and sacking PSs all that is undone. Reckon soon CanJoh will be whining his GST collections are down, like, d’uh!
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Re: Australian economy

Postby Lefty » 17 Jan 2013, 16:06

Unsurprisingly, my poor old home state of Queensland - where Abbot's own stupid-is-as-stupid-does state level colleague is busily turning the place into scorched earth - contributed most of the weakness. :sad

Ok, better pull this irrigation in and hit the gym. See you later on :jump
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Re: Australian economy

Postby HBS Guy » 17 Jan 2013, 16:30

ACTING Employment Minister Kate Ellis has blamed an increase in the national unemployment rate on Queensland's conservative government.

Queensland's unemployment rate rose to 6.2 per cent while the national rate climbed to 5.4 per cent, the Australian Bureau of Statistics reported on Thursday.

The unemployment rate in Queensland stood at 5.5 per cent when the Liberal National Party's Campbell Newman came to power in March 2012.

Also in News today:

EMPLOYMENT: Jobless numbers rise as companies cut costs

JOBS: Manufacturing takes a hit

URANIUM: Newman touts mining boost for Qld

Mr Newman's time as premier has been marked by massive public sector job losses.

Ms Ellis said the data told a very sad story about Queenslanders.

"Regrettably, more than 22,000 Queenslanders found themselves out of a job this Christmas (while) across the rest of the country, jobs grew," she told reporters in Adelaide.

"Were it not for the Queensland job losses, the unemployment rate today would have actually fallen to 5.2 per cent rather than slightly rising."

Since the election of the Newman government, 65 jobs losses have been lost each day, Ms Ellis said.

"In contrast, since the federal government came to office, we have created more than 800,000 jobs. We've grown the economy by 13.2 per cent and labour productivity has risen by 6.5 per cent."


http://www.couriermail.com.au/news/quee ... 6555765959

Not just public sector job losses either. Well may CanJoh say Uranium mining will boost the state—he has fucked the state and needs to point to “Oh, shiny thing over there!” but it still won’t help the prick!
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Re: Australian economy

Postby HBS Guy » 17 Jan 2013, 17:48

ABS:

http://www.abs.gov.au/AUSSTATS/abs@.nsf ... enDocument

DECEMBER KEY POINTS


TREND ESTIMATES (MONTHLY CHANGE)
Employment increased to 11,541,500.
Unemployment increased to 653,800.
Unemployment rate steady at 5.4% from a revised November 2012 estimate.
Participation rate steady at 65.1%.
Aggregate monthly hours worked increased to 1,622.9 million hours.


SEASONALLY ADJUSTED ESTIMATES (MONTHLY CHANGE)
Employment decreased 5,500 (0.0%) to 11,538,900. Full-time employment decreased 13,800 to 8,112,500 and part-time employment increased 8,300 to 3,426,400.
Unemployment increased 16,600 (2.6%) to 656,400. The number of persons looking for full-time work increased 12,600 to 476,500 and the number of persons looking for part-time work increased 4,000 to 179,900.
The unemployment rate increased 0.1 pts to 5.4%.
The participation rate remained steady at 65.1%.
Aggregate monthly hours worked decreased 1.1 million hours to 1,623.5 million hours.
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Re: Australian economy

Postby HBS Guy » 20 Jan 2013, 08:55

http://grogsgamut.blogspot.com.au/2013/01/australias-unemployment-rate54-hello.html
THURSDAY, JANUARY 17, 2013
Australia’s Unemployment Rate–5.4% (Hello Newman)
Today the ABS released the December 2012 numbers, which now means the past 5 years encompasses only the Rudd/Gillard years.

The figures showed the seasonally adjusted unemployment rate shifting from 5.3% to 5.4%. The November figure was revised up from 5.2% to 5.3%, which sounds a big shift, but really it was just revised from 5.23% to 5.25%.
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Re: Australian economy

Postby HBS Guy » 24 Jan 2013, 07:05

Wow! A MSM hack actually tells the truth about our economy:

http://www.adelaidenow.com.au/news/opin ... 6559493733


I think it devalues the actions of Rudd/Gillard/Swan/Tanner a bit—one time Ministers have a bigger than normal effect on the economy is surely at a time of crisis like the GFC. I also think Swan has managed brilliantly at a time of lower than normal tax revenues. $130Bn of wasteful spending cut, Howardista waste. Using the carbon price mechanism revenue to triple the tax free threshold suddenly means a lot of people can re-enter the workforce, not having to pay tax really making part time work worthwhile.

The article also airbrushes the disastrous mistakes and irresponsibility of Howard and Costello, mistakes we are still paying for!

Some big Howardista waste left: kick off the Age Pension those with millions of dollars of assets but “little real income” ahuh yeah pigs bum and remove all the superannuation lurks and perks. Then NewStart and pensions could be increased providing further stimulus—parttime workers, pensioners and those on NewStart will spend all their income, not a lot of discretionary spending or ability to save there. This will be stimulus by the government cutting spending overall!

Need to rejig income tax so we get more tax revenue, then can boost the tax free threshold, boost NewStart etc. Costello and his stupid tax cut after tax cut funded by a credit fuelled boom still sets my teeth on edge! Neoconservative dickhead!

The problem of the high Australian dollar is pretty intractable—the $A is the fifth most traded currency! A reserve currency! The penalty of success, but one strangling manufacturing, education services exports (foreign students) and tourism plus harming primary exports.

If our services and products are going to be high priced then we should make them a quality worthy of that high price!

Agriculture—clean and green, no GMO. If GMO crap is phased out, if our agriculture is seen as clean and green price will be less problem to our overseas buyers.

Education services—if this sector produces the best training, if its graduates end up in the better jobs the sector will do well

Tourism—if this remains expensive, and it is going to be for a long time—then maybe we could look to cut taxes affecting overseas travellers or we look to providing short, value packed holiday experiences. Backpackers, the very bottom of the tourism industry is thriving and helps farmers who don’t think they need to pay decent wages to attract pickers etc—maybe this could be extended and ways found to relieve the backpackers of all that income they make :bgrin Get them to visit the GBR etc.

Manufacturing—“Lean” manufacturers are doing well. Traditional, hidebound manufacturing will decline and would decline regardless of the level of the $A. I wonder if a dislike of chinese manufactures could be capitalised on by making quality stuff here? China is not the answer to the survival of Australian manufacturers.

As a kid I remember getting a little toy car and I still remember Mum disdainfully saying “Japanese rubbish” (well, Japanse rotzoi :bgrin ) but you would not say that about Japan today but Chinese made stuff does not seem to improve. I make very sure not to buy food grown/packed in China! If we subsidise car makers we should get the best technology in return!
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Re: Australian economy

Postby mantra » 24 Jan 2013, 11:36

The problem of the high Australian dollar is pretty intractable—the $A is the fifth most traded currency! A reserve currency! The penalty of success, but one strangling manufacturing, education services exports (foreign students) and tourism plus harming primary exports.


I read somewhere that our high dollar is exacerbated because the US is continually printing of bank notes and investing here - couldn't find the link, but did find this. We suffer because of the US greed, corruption and mismanagement. We're linked to the US through an FTA and are in debt to them because they export more to us than we export to them. US manufacturing has improved considerably while ours has declined.

Fight fire with fire and start printing our own money.

The high value of Australia’s dollar is the biggest worry. The currency has mostly traded higher than its American counterpart since early last year. Once known for fluctuating with global risk sentiment, the Australian currency is now defying old patterns. Commodity prices, and thus Australia’s terms of trade (the relative value of exports to imports), have started falling. Yet since June the currency has risen about 10% against the American dollar (and in trade-weighted terms), and it now stands at around $1.05. Central banks and other foreign investors pouring money into Australian dollar assets are largely responsible. Foreigners now own nearly four-fifths of Australian federal government bonds. They are turning what was once a “commodity currency” into a safe-haven one.

Julia Gillard, the prime minister, says that the Australian dollar is likely to stay high “for years to come”. Australia’s central bank frets that this poses “important risks” for the economy. The currency has made casualties of manufacturers who can no longer export goods competitively. A recent report to Ms Gillard’s government calculated that over 100,000 manufacturing jobs had vanished since the start of the global financial crisis in 2007. Yet jobs are springing up elsewhere, especially in mining, health care and education. Australia’s unemployment remains steady at 5.2%.

Nonetheless Warwick McKibbin, a former central-bank board member, wants the bank to intervene and bring the dollar’s value down by printing money. The bank seems disinclined to follow his advice. Philip Lowe, its deputy governor, insists that the Australian dollar is not “fundamentally overvalued”.
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Re: Australian economy

Postby HBS Guy » 24 Jan 2013, 11:45

McKibbin is an idiot!

ATM the private sector—households and businesses—are saving not spending, the result of the credit fuelled spending boom 2001–7, a boom Howard & Costello cheered on with irresponsible spending and unsustainable tax cuts. Printing money will do what? Pay peoples’ mortgages? Nah, we adapt to what is happening and maybe use the foreign currency to invest overseas.

It is not just the US trying to devalue its currency! It is beggar thy neighbor out there! China too is playing funny buggers with its currency!

We are the world’s 12th largest economy! Doing something right! Now if Europe would just stop killing its economies with austerity!
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Re: Australian economy

Postby HBS Guy » 24 Jan 2013, 17:41

SA sitting on maybe $1Trn worth of shale oil:

http://www.adelaidenow.com.au/news/sout ... z2IpiY6XSB

Hope we don’t export it—a field can be drained very fucking quickly but use it as a feedstock for petrochemicals and cheap energy for high value manufactures.
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Re: Australian economy

Postby mantra » 24 Jan 2013, 17:53

HBS Guy wrote:It is not just the US trying to devalue its currency! It is beggar thy neighbor out there! China too is playing funny buggers with its currency!

We are the world’s 12th largest economy! Doing something right! Now if Europe would just stop killing its economies with austerity!


China has two currencies - one for national spending and one for international trading. We should establish something similar. It would enrich our economy and keep the bulk of the cash here. So many profits go overseas. We also need to do something about our trade deficit. Rein the banks in. They're investing too heavily in mining and the forecast isn't good. The majority of our trade debt is for mining equipment. When the mining companies liquidate we have to pay for the shortfall. I can't see realistically - looking at the bottom line, why mining is considered so good for the economy considering the destruction and debts they leave behind them.
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Re: Australian economy

Postby HBS Guy » 24 Jan 2013, 17:58

Maybe we should take advantage of the $A status and start writing contracts in $A not $US?
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Re: Australian economy

Postby Lefty » 24 Jan 2013, 20:42

Don't have a link but I think what McKibbin is reffering to is not issuing currency to be spent back into the economy but rather, issuing currency to satisfy the desire of a couple of dozen foreign central banks to hold reserves $AUSD. This is one of the things that keeps our dollar overvalued - foreign central bank purchases contribute to a (relative) shortage of $AUSD on global currency markets. McKibbin's suggestion was that if reserve banks in other countries are collectively keeping our dollar too high for our own good through their purchases, just "print" more $AUSD and sell them off to them. The foreign central banks get all the Aussie they want to hold, leaving enough of them available on the world currency market so that the price of our currency can come down a little. The $AUSD won't be inflationary, being locked up in offshore currency holdings rather than in domestic circulation.
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Re: Australian economy

Postby HBS Guy » 24 Jan 2013, 21:01

I know but then we are participating in devaluing our currency which will trigger more money printing in other countries to devalue their currency to suit. Don’t want us to trigger a real worldwide collapse of trade!

There are some advantages to a high $A—we can buy US/UK businesses cheap, we can buy technology cheap, stuff like that. I assume we have foreign currency holdings by the $billion, any use we can make out of them?
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Re: Australian economy

Postby mantra » 25 Jan 2013, 07:52

Left of Centre wrote:Don't have a link but I think what McKibbin is reffering to is not issuing currency to be spent back into the economy but rather, issuing currency to satisfy the desire of a couple of dozen foreign central banks to hold reserves $AUSD. This is one of the things that keeps our dollar overvalued - foreign central bank purchases contribute to a (relative) shortage of $AUSD on global currency markets. McKibbin's suggestion was that if reserve banks in other countries are collectively keeping our dollar too high for our own good through their purchases, just "print" more $AUSD and sell them off to them. The foreign central banks get all the Aussie they want to hold, leaving enough of them available on the world currency market so that the price of our currency can come down a little. The $AUSD won't be inflationary, being locked up in offshore currency holdings rather than in domestic circulation.


Sorry Lefty - here's the link..

http://www.economist.com/node/21560914

It makes sense to me. He blames Rudd for our high dollar because of his tax payer funded guarantee of all bank deposits up to a $1 million. At least these deposits are finally being reduced as term deposits mature. Perhaps eventually this will help our dollar. $250,000 is still a lot of money, particularly as foreign companies and countries can get around this easily with their multiple subsidiaries.

Turnbull also made sense when he said to cap the deposits at $100,000.

There are some advantages to a high $A—we can buy US/UK businesses cheap, we can buy technology cheap, stuff like that. I assume we have foreign currency holdings by the $billion, any use we can make out of them?


They have the purchasing power - we don't. I could be wrong, but that's what it looks like. It is hurting our manufacturing and exports.

I haven't heard a peep from Abbott, Hockey or Bishop. Abbott is talking austerity, but he is also talking about increased spending, but on what? Fully paid maternity leave for the wealthy as per their wage, removing means testing etc.?

How will Abbott deal with the high Australian dollar?
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Re: Australian economy

Postby HBS Guy » 25 Jan 2013, 08:31

Turnbull wasn’t being sensible. He said cap deposit guarantee at $25K. That would have seen lots of individuals withdrawing money above $25K from banks to deposit that in other banks and this, at the height of the GFC could have seen a rush started with one of the big four banks falling over. Imagine, GFC at its height, Lehmann Bros had just collapsed, AIG tottering and you see a long line of people withdrawing money! You would decide to do the same “just to be safe.”

We are one of a very few countries to have an economy that is well managed and growing. Foreign buyers of $A buy in huge amounts and would not be covered by the guarantee. Everyday more $A get bought than the size of our economy, that is the sort of buys being made. They buy $A because we are a stable, growing economy with interest rates higher than available elsewhere.

With a high $A WE have the purchasing power, we can tempt scientists and technologists (esp with the NBN being rolled out) and buy companies, investments, technology at low cost.
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Re: Australian economy

Postby HBS Guy » 27 Jan 2013, 13:06

Looks like tourism is doing pretty well from Chinese visitors:

http://www.smh.com.au/business/rolling- ... 2dc8i.html
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Re: Australian economy

Postby Lefty » 28 Jan 2013, 19:26

They buy $A because we are a stable, growing economy with interest rates higher than available elsewhere.


Yep, and it should be noted that our higher rates are not problematically high in the traditional sense of being in response to inflation (of which there is very little). From the point of veiw of Australian borrowers they are in fact, very low historically.

They are higher than other countries mostly because other countries economies collapsed during the GFC while ours did not, thanks largely to a solid and swiftly-implemented stimulus.
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Re: Australian economy

Postby HBS Guy » 04 Feb 2013, 13:17

Tweet by AFR:

Financial Review ‏@FinancialReview
Aust bucks global trend to rank equities above bonds in pension funds in a system now the world's fourth largest #ASX http://bit.ly/VDVJmQ


linked article behind paywall:
Australian pension funds have the highest allocation to shares and the lowest allocation to bonds in the world, according to asset consultant Towers Watson’s annual pension assets report.


http://www.afr.com/p/markets/aust_pensi ... ootmW1KnmN
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Re: Australian economy

Postby HBS Guy » 06 Feb 2013, 14:46

Abbott & Co are going to cause the mother and father of all recessions—be prepared!
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Re: Australian economy

Postby HBS Guy » 09 Feb 2013, 16:17

Peter Martin on why super subsidies (lurks and perks more like, due to those neocon morons Howard & Costello) need to be cut right out and how they will more than fund NDIS and Gonski.

Image

Notice some of top 10% still get all or part Old Age Pension, thanks to the Rodent!

Real money to be saved there! Go for broke Swanny, kick asset–millionaires off the OAP! Abolish negative gearing at the same time.


http://www.theage.com.au/opinion/politi ... 2e3jq.html


Meantime, productivity skyrockets:
http://www.tradingeconomics.com/austral ... 11.twitter
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Re: Australian economy

Postby Lefty » 12 Feb 2013, 21:29

Yep, Howard was the king of middle-class welfare!
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Re: Australian economy

Postby HBS Guy » 16 Feb 2013, 13:03

Very wise Tweet:

People would do well to pay attention to what is happening to TAFEs – a precursor to what will happen in public schools


And we are facing a skills shortage!

Only the rich will be able to send their sons to Uni (daughters will know their place!)
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