Blog

Mon, 03 Mar 2014  |  

• Job ads up
• House prices up
• Home building approvals up near record highs
• Retail spending strong
• Company profits growth up over 10 per cent
• Government tax revenue stronger than expected
• Business conditions lifting
• ASX near 6 year high
• Exports booming
• Interest rates at record low
• Government demand no longer restrictive
• Aussie dollar low
• Non-residential construction up
• Inflation lifting to upper part of RBA target band

VERSUS

• Mining investment falling very sharply (but note above the other 90 per cent of the economy)
• Employment weak (but note above, the ANZ job ads)

I'll take the high road on the weight of that evidence.

Mon, 03 Mar 2014  |  

The Australia economy is significantly stronger than was forecast at the time of the release of the Mid-Year Economic and Fiscal Outlook in late December.

So says Finance Minister Mathias Cormann.

The Government Monthly Financial Statement for the six months to December, shows that tax revenue is flowing in to the government coffers at a 1.1 per cent faster pace ($1.754 billion in six months) than was forecast at MYEFO.

Encouragingly, the increase is quite broadly based.

Fri, 28 Feb 2014  |  

With today's $800 million borrowing from the Federal government, the total amount of gross borrowing has topped $50 billion - $50.65 billion to be precise - since the election in September last year.

The government has had to borrow to cover the existing deficit as well as to cover some of its decisions on 'border protection' and the $8.8 billion is spent on the reserves of the Reserve Bank of Australia.

The total amount of gross debt on issue stands at $300.6 billion, a record high and up some $27.4 billion since the election.

Wed, 26 Feb 2014  |  

Adam Smith, the father of economics, noted:

• "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from regard to their own interest".

So too Australian farmers.

Tue, 25 Feb 2014  |  

It seems most of the market has missed it, but the Australian dollar has already had its sell-off, dropping from 110 US cents in July 2011 to 86.60 cents just last month. The peak to trough fall is over 20%.

Down at around 87 or 88 cents was the time to get in because the pick up, back to around 90 cents at the moment, is just the start of trend that should see the AUD move back to 95 cents and then above parity.

Mon, 24 Feb 2014  |  

UPDATE 1.20pm, Canberra time:

Aussie dollar now 0.8945; US stock futures down 0.2 per cent, Chinese stocks down 2 per cent, European stock futures down 0.5 to 1 per cent. Market assessing the G20 growth objective as useless, meaningly and unreachable. Hot air swallowed by an easily plied few, but not the markets.   SK

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It's Monday morning and financial markets are passing their judgment on the G20 Finance Ministers and Central Bank Governor's meeting in Sydney over the weekend.

The headline grabbing quest for an additional 2 per cent economic growth over 5 years for the world economy has been met with nonchalant indifference. US stocks futures are a piddling 0.1 per cent higher, recouping a fraction of the 0.3 per cent fall that was registered on Friday; commodity prices are flat; and in what should be a super-charging development for the Australian dollar – stronger global economic activity – the Aussie is less than 0.1 per cent higher at 0.8980.

Fri, 21 Feb 2014  |  

The Abbott government just borrowed a further $800 million, which brings the cumulative total of gross borrowings since 9 September 2013 to $48.85 billion.

The Australian Office of Financial Management has indicated it will borrow a further $1.8 billion next week which will bring the amount of gross debt issued since the election to over $50 billion in just over five months.

Thu, 20 Feb 2014  |  

This article was first published in The Melbourne Review https://www.melbournereview.com.au/commentary/article/joe-hockey-treasury-or-trickery 

 

In the move to a budget surplus, how much is Joe Hockey's prowess as Treasurer and how much is trickery?

The Abbott government's chances of re-election in 2016 will be driven by the budget next year.

On 12 May 2015, Treasurer Joe Hockey will deliver his second budget and in doing so, he will announce that the budget is back on track, the Labor mess has been cleaned up and that for 2016-17 and beyond, there will be budget surpluses.

Fri, 21 Feb 2014  |  

Treasurer Joe Hockey and Employment Minister Eric Abetz must be delighted with the current structure of the industrial relations system and the degree of flexibility in the labour market.

Recent labour force data have confirmed a near text book degree of flexibility in wages. At a time when employment growth is softening and the unemployment rate has been edging up, there has been a slowing in the pace of wages growth.

Here are the facts.

Tue, 18 Feb 2014  |  

The $882 million tax 'refund' to News Corporation is a lot on money.

Browsing through the budget papers puts some context on what $882 million can buy.

THE LATEST FROM THE KOUK

Get ready for a February budget

Wed, 15 Aug 2018

This article first appeared on the Yahoo 7 Finance web site at this link: https://au.finance.yahoo.com/news/heres-need-get-ready-early-2019-budget-010743625.html 

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Get ready for a February budget

 An early budget is the likely scenario given the Federal election is set to be held in May 2019. The budget, which in modern times is usually delivered by the government on the second Tuesday in May, cannot be handed down during the election campaign which will be running hot if Prime Minister Turnbull sticks to his word and holds the election in May.

To allow the government to deliver its budget before the election is called, the most likely time for it will be in the period from mid-February through to early March.

With the constraint of the election timing, this timeframe for the budget would allow the government to ramp up its economic rhetoric and no doubt engage in a bit of a voter friendly strategy in an effort to gain some political momentum into the election campaign. This timing also means that soon after voters return to work and the real world after the summer holidays, they will be bombarded with budget news which, if the government is smart, will be portrayed as ‘good news’ and ‘vote for us’ as it struggles to remain competitive with the Labor Party.

How the way you pay for stuff is fixing the budget

Mon, 06 Aug 2018

This article first appeared on the Yahoo 7 website at this link: https://au.finance.yahoo.com/news/way-pay-stuff-fixing-budget-024912997.html 

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How the way you pay for stuff is fixing the budget

 Over the past few weeks, I have tried a little experiment with a few on my favourite small business retailers who, for what will be obvious reasons, will remain nameless.

For a range of smallish transactions of say $10 to $20, I deliberately made a bit of a fuss about paying with cash, rather than tapping with my card. Almost without exception, the proprietor, with a wink and nod, appreciated the use of cash, and passed a quick comment to the effect that “unfortunately, cash is rare these days”. I also noticed on a number of occasions the transaction was not rung up on the cash register, with the notes tucked into the cash drawer with no one other than me and the shop keeper aware of the transaction.

This got me thinking about an issue which has had me a little puzzled – the sharp improvement in the government’s budget position on the back of unexpectedly strong tax receipts. This extra tax revenue for the government appears to be an odd development given the sluggishness in the economy and consumer spending, and the ongoing weakness in inflation and wages, which over many decades have proven to be the driver of tax collections.

Rather than an unexpected pick-up in economic activity driving the revenue surge, it appears that technology, the decline in the use of cash and the greater use of cards accounts for the extra tax take.