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Fri, 14 Feb 2014  |  

The Abbott government borrowed a further $800 million today. This brings the amount of gross government debt issued since the election in September 2013 to $47.25 billion.

Allowing for the fact that some of this borrowing is in the form of short term T-Notes and covers bond maturities which means there is some double counting in the new borrowing total, the amount of total gross government debt has increased by $26.1 billion to $299.2 billion since the election.

Thu, 13 Feb 2014  |  

I was wrong.

The RBA is not going to hike interest rates in March after all, simply because of the persistent degree of slack in the labour market.

In my judgment, the stellar lift in dwelling construction, exports and consumer demand, all event from around the middle of 2013, would have been sufficient to kick in to solid employment growth by now.

Tue, 10 Dec 2013  |  

This article was first published on 25 June 2012 on marketeconomics.com.au 

Australia's net Government debt was $96 billion in June 1996. By June 2007, Australia had net financial assets (negative debt) of $29 billion. The Howard Government and the current Liberal Party point to this turn in the finances of the Government with pride and say it is a sign of good economic management.

To be sure, this is a significant turnaround but there are some interesting facts behind the issue of Government debt in the past 30 or so years.

Wed, 12 Feb 2014  |  

The Westpac measure of consumer sentiment dipped 3 points in February, to be back, more or less, to neutral. That is to say, consumers are neither optimistic nor pessimistic about the future.

While it is never possible to pin-point why consumers are happy or sad, the timing of the survey coincided with fires, SPC Ardmona, heat, an emerging market inspired drop in stocks and of course, some talk that the next move in interest rates might be up. The government also took the odd step of talking down the economy, inflaming the budget 'crisis' again and the need for spending cuts which, no doubt, is dampening sentiment.

Wed, 18 Dec 2013  |  

As is normal at this time of the year, economists are pretty much compelled to outline their main themes for the economy and markets in the year ahead.

I am not different so here we go.

Mon, 03 Feb 2014  |  

It is staggering that some who should know better reckon that the building approvals data for December were weak.

OK, the number of building approvals fell 2.9% in December in seasonally adjusted terms, but this must be viewed in the context of earlier readings.

Those readings show that the number of building approvals in the December quarter as a whole was the highest since 1994 and the second highest quarterly result ever recorded. Sound weak to you?

The ABS measure of the trend series has increased every month, including December, for two years to be at the highest level since 1994.

Dwelling construction is in a boom.

Making the outlook for the construction sector all the more positive is that non-residential building is explosive with quite phenomenal double digit growth over the second half of 2013.

Fri, 07 Feb 2014  |  

OPENING REMARKS TO THE SENATE SELECT COMMITTEE INTO THE ABBOTT GOVERNMENT’S COMMISSION OF AUDIT

Australia does not have a government debt or deficit problem.

According to Treasury numbers published by Treasurer Mr Hockey in the Mid-Year Economic and Fiscal Outlook in December, over the last 43 years of budget outcomes (the full data set), there have been 19 budget surpluses and 24 budget deficits.

Up until 2007-08, just prior to the collapse of the global financial system and the onset of the deepest recession in the industrialised world since the 1930s Great Depression, surpluses were a little ahead of deficits, 19 to 18. This suggests that the recent move to budget deficit is almost certainly nothing more than the long-run business cycle impacting on government finances.

Sat, 08 Feb 2014  |  

Over the summer break, while fiddling through data bases, reading and just being interested in things, I unearthed a few quirky bits and pieces about the Australian economy, people, sport and a few other bits and pieces. 

Only item 38 is open to any discussion, perhaps. Here are the top 40.

THE LATEST FROM THE KOUK

Podcast: The case for rate cuts, the wages conundrum and the end of QE

Tue, 19 Jun 2018

This is a thoroughly enjoying and I trust interesting podcast I did with the excellent Paul Colgan and the hugely knowledgeable David Scutt.

Click on the link: https://www.businessinsider.com.au/podcast-devils-and-details-stephen-koukoulas-2018-6

Paul and David do a regular podcast "Devels and Detals" on the economy and markets - I strongly recommend it.

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The case for rate cuts, the wages conundrum and the end of QE

Stephen Koukoulas is one of the few economists in Australia who believes the RBA should be cutting rates.

That’s where we start this week on the Devils and Details economics and markets podcast, with the conversation also covering the major central banking decisions from the Fed and the ECB this week, and the impact of the proposed changes to negative gearing on the housing market — which gained a lot of attention this week after the release of the report by RiskWise warning of the potential for severe unintended consequences in some geographical areas from Labor’s policy plans.

You can find the show on iTunes or under “Devils and Details” on your podcasting platform of choice.

 

The remarkably simple case for an RBA rate cut

Mon, 18 Jun 2018

This article first appeared on the Business Insider website at this link: https://www.businessinsider.com.au/rba-rate-cut-2018-6

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The remarkably simple case for an RBA rate cut

The performance of the Australian economy is a bit like my old report cards at school: “Doing reasonably well, but could do better”.

Unlike my approach to school work, which only impacted me, the current policy complacency is seeing unemployment rise, wages growth remain in the doldrums and our $1.8 trillion economy underperform. In the latest test of economic growth, the 3.1 per cent annual GDP growth rate for the March quarter was reasonably good.

It was close the long run trend and a welcome result given the performance of the economy in recent years.

Alas, it is probable that this 3.1 per cent growth rate will turn out to be a “one-off” spike, with some pull-back in the June quarter highly likely from a lower contribution to GDP from net exports, inventories and government demand. When the June quarter national accounts are released in early September, annual GDP growth is likely to slip back to around 2.7 per cent.