Blog

Mon, 17 Feb 2014  |  

In 2012-13, average earnings for a worker in paid employment in Australia were approximately $57,000 for the year.

On those earnings, the income tax plus the Medicare levy was approximately $10,925.

The tax refund to News Corporation reported in today's AFR, as it won a legal battle "from a series of paper shuffles between subsidiaries", as the AFR's Neil Chenoweth put it, was $882 million.

This $882 million from "paper shuffles" is equal to the income tax paid, including the Medicare levy, for around 80,700 workers on average incomes.

Just sayin'.

Mon, 17 Feb 2014  |  

There are lots of people who spend $2,000 each year and more going to concerts, plays, movies and the opera. But is the cost of these tickets dead money or money well spent?

That few thousand dollars no doubt provides a good dose of inspiration and entertainment in the delights of Carmen, One Direction, Mary Poppins, The Summer of the Seventeenth Doll, Hamlet and a mix of the Hollywood blockbusters and fringe movies that are always a bit quirky.

Most who spend a chunk of their hard earned cash on any such array of cultural fulfillment will no doubt think it money well spent.

But is it?

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

My house price bet with Tony Locantro - an update

Mon, 01 Apr 2019

This article first appeared on the Yahoo Finance web page at this link: https://au.finance.yahoo.com/news/aussie-property-crash-looking-even-unlikely-heres-021138614.html 

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My house price bet – I’m very happy and getting ready to collect

I recently made a bet with Tony Locantro, Investment Manager with Alto Capital in Perth on the extent to which house prices would fall over the next three years.

Just to reiterate, the bet centred on Locantro’s view that prices would drop 35 per cent or more by the end of 2021 from the peak levels in 2017, a forecast that looked absurdly pessimistic given the raft of factors that influence house prices over the course of years.

For Mr Locantro to win the bet, house prices measured by the Australian Bureau of Statistics on a quarterly basis in either Sydney, Melbourne or for the average of the eight capital cities would need to fall by 35 per cent or more from the peak levels by the time the December quarter 2021 data are released. The ABS released the latest residential property price data last week which presents an opportunity to see how the bet is unfolding, admittedly with three years to go until it is settled.

As everyone knows, house prices are falling in most cities, reversing part of the boom over several decades.

Get ready for a cash rate cut in April

Mon, 25 Mar 2019

This article first appeared on the Yahoo Finance website at this link: https://au.finance.yahoo.com/news/get-ready-cash-rate-cut-april-193244245.html

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Get ready for a cash rate cut in April

The data is in and it is compelling.

The Australian economy is faltering and the risk is that it will weaken further if nothing is done to address this decline.Not only has there been recent confirmation of a per capita GDP recession – that is, on a per person basis the economy has been shrinking for two straight quarters – but inflation is embedded below 2 per cent, wages growth is floundering just above 2 per cent, house prices are dropping at 1 per cent per month and dwelling construction is in free fall.

Add to this cocktail of economic woe an unambiguous slide in global economic conditions, general pessimism for both consumers and business alike and a worrying slide in the number of job advertisements all of which spells economic trouble.Blind Freddie can see that there is an urgent need for some policy action. And the sooner the better.For the Reserve Bank of Australia, there is no need to wait for yet more information on the economy.

It has been hopelessly wrong in its judgment about the economy over the past year, always expecting a growth pick up “soon”. Instead, GDP has all but stalled meaning that inflation, which is already well below the RBA’s target, is likely to fall further.In short, no. It is not like a 25 basis point interest rate cut on 2 April and another 25 in, say, May or June will reignite inflation and pump air into a house price bubble.

Such a claim would be laughable if there are any commentators left suggesting this.