The Kouk's top 40 hits and misses

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.

  1. Australia's daily GDP is a little over $4.3 billion.
  2. Every 21 seconds, $1 million of GDP is created.
  3. In 2014, there will be, in net terms, around 600 new jobs created each day.
  4. Approximately every two and a half minutes, employment rises by one.
  5. The price of the average basket of goods and services purchased by the average household rises by 0.008% a day.
  6. If consumer spending on restaurant and take away meals halved in 2014 and nothing else changed, Australia would record its first recession since the early 1990s.
  7. Turnover of Australian dollars in the foreign exchange market will be approximately $25 trillion in 2014.
  8. In 1980, the median house price in Sydney was $70,500.
  9. 410 people will die each day in 2014.
  10. In 2013, around 1.25 billion litres of wine was produced.
  11. In 2014, there will be approximately 35,000 greyhound races in Australia. The total distance run by all of the dogs in these races will be approximately 98,000 kilometres.
  12. 1.55 million chickens are slaughtered every day.
  13. The Abbott government will borrow approximately $70 billion in gross terms in 2014.
  14. Before his last test innings, Don Bradman's batting average was 101.39.
  15. Approximately 185,000 new houses will be built in 2014.
  16. There have been over 1.89 billion views of Gangnam Style on youtube.com.
  17. One in every 588 Australians is currently in prison.
  18. The Howard government may yet have presided over a recession in 2000-01. The latest national accounts estimates show that GDP recorded zero GDP growth in the December quarter 2000 which was followed by a drop in GDP of 0.4% in the March quarter 2001. Watch for revisions.
  19. In 2011-12, 1.469 million tonnes of waste paper and cardboard was exported, with a value of $241 million.
  20. The Whitlam government had zero net government debt when it was sacked in November 1975.
  21. Over $400 million in cash is withdrawn from ATMs every day.
  22. There has been a 155% increase in the number of people aged 85 and over in the past 20 years.
  23. The number of people over the age of 115 is unchanged, at zero.
  24. Agriculture, forestry and fishing makes up 2.2% of Australia's GDP. The electricity, gas and water sector is larger.
  25. 92.4% of the prison population is male; obviously 7.6% is female.
  26. The last time Australia recorded a current account surplus was in the March quarter 1975.
  27. The household sector generates 12.4 million tonnes of waste each year.
  28. Aboriginal and Torres Strait Islander people make up 27.4% of the prison population.
  29. The Australian government has not borrowed money from overseas since 1987.
  30. Women earn 64% of the average male's wage and salary income.
  31. If Gina Rinehart earned no income, she could give away $60 million a day during 2014 and still have a billion left on new year's eve.
  32. Over 26 million cubic metres of concrete was made in 2013.
  33. Prior to the pink batts insulation scheme being introduced, there was one house fire for every 765 insulation installments. With the pink batts scheme, there was one fire for every 6,158 installations.
  34. The imprisonment rate for people born in Australia is 209.2 people per 100,000. For people not born in Australia, the imprisonment rate is 81.8 people per 100,000.
  35. Over the last 40 years, the total increase in inflation has been 762.5%.
  36. John Howard is the only Treasurer to deliver simultaneously deliver double digit unemployment, inflation and interest rates.
  37. Australia's population increases by one every 1 minute and 18 seconds.
  38. Collingwood will have an incalculable number of unfair umpiring decisions go against it this season.
  39. The average annual income for a male in Sydney in 1982 was $18,350.
  40. Total prize money for the Melbourne Cup will be $6.2 million in 2014.
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THE LATEST FROM THE KOUK

The RBA has the tools to fix the economy, but is reluctant to use them

Thu, 05 Dec 2019

This article first appeared on the Yahoo Finance web site at this link: https://au.finance.yahoo.com/news/rba-tools-reluctant-042742904.html

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The RBA has the tools to fix the economy, but is reluctant to use them

The Reserve Bank of Australia has made a range of serious policy errors over the past few years, and the Australian economy is weaker because of those mistakes and misjudgments.

Not only is the RBA on track to miss its inflation target for six years, and perhaps longer, the persistently high unemployment rate in concert with record low wages growth is the result of the RBA’s tardiness in cutting interest rates because of its textbook obsession with house prices and household debt.

It is a mistake that has cost the economy tens of billions of dollars in lost output; employment is many thousands of people below what could have been achieved; and all the while wages growth hovers near record lows undermining the wellbeing of the workforce. What’s worse, the RBA seems to have thrown in the towel on trying to meet its inflation target, even though that target was confirmed a month ago in the recent update of the Conduct of Monetary Policy between the RBA and Treasurer.

In this context, Deputy Governor of the RBA, Guy Debelle, gave a fascinating speech earlier this week on the topic of employment and wages.

Household wealth is booming: What this means

Mon, 25 Nov 2019

This article first appeared on the Yahoo website at this link: https://au.finance.yahoo.com/news/household-wealth-booming-200022930.html 

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Household wealth is booming: What this means

$500,000,000,000.

In other words, half a trillion dollars.

That is approximately the amount Australian household wealth has increased since the start of July 2019, with house prices surging, the Australian stock market moving higher, and savings increasing.

The bulk of the gains have occurred via rising house prices, which according to CoreLogic, are up over 5 per cent in less than five months. This move in house prices has added around $360 billion to the value of housing and is driving the rebound in wealth. At the same time, the level of the ASX has risen by around 2 per cent with a further $40 billion being paid out in dividends. This allows for the recent pull back on prices as new banking scandals are exposed.

In these conditions of rising wealth, the household sector is getting a serious financial reprieve, despite the ongoing weakness in wages and the still very high level of unemployment and underemployment which afflicts almost 14 per cent of the workforce.

The good news is that this wealth creation is likely to spark a rise in household spending growth once the gains are widely acknowledged in the community and then feed into consumer sentiment. This is most likely to show up in the first half of 2020, after the usual lags work their way through the economy. History shows that when we consumers experience growth in our wealth, we are more inclined to lift our spending.

Earlier this year, RBA researchers Diego May, Gabriela Nodari and Daniel Rees found that:

“When wealth increases, Australian households consume more. Spending on durable goods, like motor vehicles, and discretionary goods, such as recreation, appears to be most responsive to changes in household wealth”.

We saw this, in the reverse, in the period from the middle of 2017 to the middle of 2019 when Australia-wide house prices fell by 10 per cent, crunching wealth levels. It was no surprise that during this period, household spending growth slumped. The retail sales component fell to its weakest since the early 1990s recession. Consumer spending and confidence was not helped by the coincident weakness in wages growth and the policy mistake of the RBA which refused to cut official interest rates, even though the economy was mired in a low inflation, low growth and falling wealth climate.

Thankfully, common sense has since prevailed at the RBA and it has cut interest rates three times since June.

Demand for housing has also lifted with shrewd first home buyers taking advantage of favourable affordability and investors also stepping back in after the May election saw the return of the Coalition government and the demise of Labor’s proposal to reform negative gearing tax laws. The current wealth surge unfolding now is occurring at a time when there is also a sharp decline in the debt-servicing burden as interest rates fall. This has the dual effect of freeing up cash flows for some consumers and allows other to accelerate their debt repayment.

For the moment, the labour market remains weak and wages are still stuck in the mud. These will constrain any near term lift in household spending, but the wealth lift will be vital for sparking a pick-up in consumption, probably in the new year when the effect is more widely observed and entrenched.

It adds to the scenario where 2020 is looking like a better year for the economy with bottom line GDP growth set to hit 3 per cent in the second half of the year.  If the wealth effects build further over that time and business investment and infrastructure spending continues to lift, the economy in 2020 just might register its strongest growth rate in a decade.