This week’s Budget had something for everyone, designed with one eye on reducing cost-of-living pressures and the other on preparing for the election. But what about women? Harry Chemay asks.

The budget’s headline announcement was a non-means tested $300 energy bill rebate for all households, together with the 1 July commencement of the amended Stage 3 tax cuts announced in January. These measures, together with an additional 10% increase in Commonwealth Rent Assistance (following on from last year’s 15% uplift), form the core of the Government’s policies for providing wider cost-of-living relief.

Economists are focused on the potential inflationary aspects of these measures, debating Treasury’s forecast that sees headline CPI fall within the Reserve Bank’s preferred 2% to 3% target band during 2024-25. Inflation matters, as the Albanese government is making a political calculation with this Budget; that the inflation genie will indeed be back in its bottle by early next year, with lower official interest rates being an ideal catalyst to spark an election campaign.

But tucked away in amongst the Budget papers, generally shunned by the commentariat, sits another document, one that has the capacity to shape outcomes for half the population.

Women’s Budget Statement

The final Morrison Government Budget, delivered in March of 2022, was the first to incorporate a dedicated, stand-alone Women’s Budget Statement amongst the Budget Papers, following the establishment of a Cabinet Taskforce “to better coordinate, inform and address critical issues facing women in Australia.”

The Women’s Budget Statement is now a reporting mechanism to gauge the progress of the recently launched ‘Working for Women: A Strategy for Gender Equality (Working for Women)’ initiative<, the Albanese Government’s ten-year strategy “to shift the dial on gender equality for everyone, and to get things working for women in Australia.”

It has five priority areas of focus: gender-based violence, unpaid and paid care, economic equality and security, health and leadership, representation and decision-making.

Stage 3 tax cuts and the Battle for Middle Australia. But who is that exactly?

Addressing gender-based violence

The Women’s Budget Statement section on gender-based violence makes for uncomfortable reading. According to the Statement, just over one in four women (27%) have experienced violence or abuse by a cohabiting partner. And on average,

one woman was killed every 11 days by a current or former intimate partner in 2022-23, with 34 women killed during this period.

First Nations women are at even greater risk, with the rate of intimate partner homicide six times the rate for other women during 2022-23. Overall, 75% of specialist homelessness services clients who experience family and domestic violence are female.

In response, the Budget contains several measures aimed at tackling gender-based violence and its after-effects, the key one being a commitment of some $925 million over five years from 2023-24 to establish a ‘Leaving Violence Program’.

This program will help people leave relationships involving intimate partner violence, providing up to $5,000 in financial support together with referral services, risk assessments and safety planning. Funding will also be released from the Housing Australia Future Fund for crisis and transitional housing options for women and children experiencing family and domestic violence.

A newly established First Nations National Plan Steering Committee will assist in developing a standalone First Nations National Plan for family safety.

The Budget measures are not without criticism, though, with National Legal Aid, the body representing the state and territory legal aid commissions, expressing concern over ongoing funding for legal aid services, including representing women leaving family violence.

The level of funding beyond June 2025 is currently being assessed as part of the National Legal Assistance Partnership.

Wage outcomes remain gender biased

Another area where women still haven’t achieved parity with men is in economic and financial security. According to the Women’s Budget Statement, the gap in full-time average ordinary earnings is around 12%, or some $238 per week ($12,376 per year) on average as compared to men.

When total remuneration is compared, the gender gap increases to $26,393 per year on average, or some 21.7%, according to the Workplace Gender Equality Agency (WGEA).

The WGEA has recently started publishing gender pay gap data for private sector employers with 100 or more employees, capturing some 5,000 employers and almost 5 million employees. Its Pay Gaps Snapshot, released in February, paints a picture of progress in some sectors, particularly the caring economy, while change in traditionally male-dominated sectors has been slower, as the chart below shows.

Then there’s the issue of workforce participation, the ability for women to access employment, to the fullest extent of their skills, training, needs and preferences. Over the past 40 years, women’s workforce participation has lifted from around 45% in 1984 to be around 63% today, according to the Women’s Budget Statement.

The story is significantly less rosy for First Nation’s and refugee women, and compares poorly to the participation rate for males that sits around 80%, as the chart below indicates.

Combine the lower overall labour participation rate with the gender wage gap, which is itself driven by structural barriers to higher-income sectors (women represent around 15% of Australia’s STEM workforce), and the result is a persistent difference in economic outcomes and financial security.

Women, for example, made up only 35% of the clean energy industry during 2023, and for some roles, such as energy efficiency engineers, less than 10% of workers.

The Budget addresses some of these issues, with measures such as a Building Women’s Careers program to support women in accessing training in clean energy and construction. There is also more funding, via the Pathway to Diversity in STEM Review, to increase female participation in STEM and science engagement programs.

The capping of HELP indexation to the lower of the CPI or Wage Price Index will also assist women, who hold the majority of outstanding HELP debt.

Superannuation disparity

The structural equity gaps between women and men may appear superficial to some. However, the lever of time and outcomes between the genders diverge as retirement approaches.

The Women’s Budget Statement acknowledges the issue, noting that,

lower hourly and weekly earnings and lower wealth accumulation compound to produce lower superannuation balances and less economic security in retirement.

Simply put, having a fixed rate of employer super contribution applied across the gender pay gap can’t produce any result other than large imbalances in superannuation savings at the point of retirement.

How large? Using ATO data from 2020-21, the Women’s Budget Statement estimates the retirement savings gap to be around $64,000 for someone nearing retirement age (55 to 59), with a typical female super balance of $133,000, as compared to a male balance closer to $200,000, as the chart below indicates.

This system inequity has been well documented previously, including in modelling done by the Treasury in 2019. The study, which forecasts retirement balances out to 2060, found that

while future superannuation balances at retirement will continue to increase for both genders, women’s balances will continue to lag behind men’s balances.

The forecast 2060 outcomes suggest that both genders will end up with typical (i.e. median) super balances closer to $500,000 (in 2019 dollars) but that a gap of around 10% will still persist between the genders.

The report closed with an acknowledgement that: “as long as women continue to have lower labour force participation and incomes than men, they will continue to make up a higher proportion of those with lower balances in retirement.”

The announcement in March this year, confirmed in the Budget, of superannuation to be paid on Government-funded Paid Parental Leave (PPL), is thus to be welcomed.  This measure will be available to parents of babies born or adopted on or after 1 July 2025, when the super employer rate will be 12%. In 2022-23, some 66% of PPL recipients were women.

With PPL now extended from the previous 18 weeks, a mother on the full partnered entitlement of 22 weeks may experience an increase in super of around $4,250, or 1.15%, according to the Women’s Budget Statement.

Overall then, if the 10 year ambition of the ‘Working for Women’ strategy is realised, it may improve the safety, income-earning ability, career trajectory, health and retirement outcomes of Australian women. The ambition is grand, and the results will be heavily dependent on good execution, but

if successful one half of the population might no longer live with the prospect of being Australia’s Nouveau Poor.

The Nouveau Poor – gender pay gap, super inequality stretched in pandemic

This post was originally published on Michael West.

Inflation and cost of living are critical for Treasurer Jim Chalmers when he hands down the Federal Budget on Tuesday. But Michael Pascoe says he can kill two birds with one stone. 

If you had Jim Chalmers’ job on Tuesday night and could wave a magic wand that would bring the Reserve Bank’s inflation forecast for the new financial year down into its target band of 2 to 3 per cent, would you wave it? 

Too bloody right you would. The RBA board at its June meeting with a forecast of 2.9 per cent consumer price inflation for the year would have to be thinking about timing interest rate cuts, not increases. 

Short of ASIO naming shadow cabinet as a nest of Russian spies, interest rate cuts before next May’s election are at the top of the Labor’s political wish list. It’s a prerequisite for avoiding minority government – or worse.

The magic wand was mentioned twice by RBA econocrats during last Tuesday’s media lockup for the bank’s quarterly statement on monetary policy (SMP). It was explained that the SMP forecasts – what the board bases its interest rate decisions on – were made on the basis that the government’s energy rebates end on June 30, as presently legislated. 

Getting CPI down to RBA target zone

But if the rebates were renewed, hey presto, 0.3 would be knocked off the inflation guesses. 

Tuesday’s SMP forecast of 3.2 per cent CPI for the new financial year would become 2.9 per cent. The 3.1 per cent forecast of the bank’s “trimmed mean” inflation would be 2.8 per cent. 

The RBA would be back in its target zone, delivering what it is charged with delivering, honour restored, and Anthony Albanese could claim his government was delivering cost of living relief, contributing to taming the inflation dragon. 

Which is why extending the rebates should be a no brainer on Tuesday night. Otherwise you would question the Treasurer’s brain. 

Energy relief no brainer

As magic wands go, the Energy Relief Fund was cheap, costing the Federal Government $1.5 billion with the states and territories matching that. 

Originally billed as “targeted and temporary” relief for eligible families and small businesses, renewing the rebates for another year would still be temporary and certainly targeted – there’s an election.

The foreshadowed extra billions for social housing on Tuesday won’t be felt by the electorate for years, if at all. Energy rebates are immediate, their existence no doubt underlined by an advertising blitz at taxpayers’ expense. 

Engineering a lower CPI to take some pressure off interest rates also has quicker (i.e. pre-election) impact and necessary impact at that: despite keeping the RBA keeping its cash rate steady since November, monetary policy is still tightening, the last two hikes still working their way through the system. 

Without touching the cash rate, the RBA expects the percentage of total household disposable income being taken by scheduled mortgage repayments to rise from the present 10 per cent to 10.5 per cent by the end of the year – and that’s the percentage of household income increased by the Stage 3 tax cuts. 

The still-tightening monetary screws, miserable consumer spending, the Tax Office calling in debts it had let run during the pandemic and businesses using up the Treasury COVID largesse that had propped up balance sheets all promise rising business failures and bankruptcies this year – part of how the unemployment rate is supposed to rise to the 4.3 per cent the RBA wants. (https://www.thenewdaily.com.au/finance/2024/05/08/michael-pascoe-rba-inflation-employment )

In such an election year climate, renewing the energy rebates looks like the least Treasurer Chalmers might do. It would be a worry if he doesn’t use that wand.

Federal budget targets housing crisis amid backlash

This post was originally published on Michael West.

Lendlease ‘smoke and mirrors’ corporate shenanigans have come home to roost but there is still at least one big hit to come. Michael West reports on the transformation of blue chip stock and ‘market darling’ into ASX horror story.

Californian fraudster Sam Bankman-Fried kicked off his ill-fated billion-dollar empire in April 2019 and soon shot to fame as America’s 41st richest person. SBF the “crypto poster boy” was arrested in the Bahamas in December 2022, extradited to the US and indicted on seven criminal charges. Just last month, he was convicted on all charges, sentenced to 25 years in prison and ordered to forfeit $US11B.

The wheels of justice had spun quickly for SBF. Not so however for the local legends of Lendlease. Just one month before Sam Bankman-Fried commenced his ill-fated FTX venture, Lendlease filed its 2018 tax return with the Australian Taxation Office and the ATO was put on notice of fake tax deductions.

That was March 2019. The once revered blue chip had understated the gain on the sale of a stake in its Retirement Living business. It had ‘double-dipped’ on tax deductions. Indeed, it might have taken them 4 years but the ATO issued a draft ruling proving just that, on double-dipping in 2022. 

Meanwhile, Tony Watson, the tax adviser who had warned the Lendlease hierarchy about the illegality of the tax machinations, remains stranded and still awaiting action from regulators. Unable to talk sense into both the board and the executive of Lendlease, a frustrated Watson had turned whistleblower and approached the ATO with the double-dipping heads-up. 

His house and his livelihood on the line ever since, duking Lendlease and PwC in the courts – for doing the right thing – Watson faced the Senate economics committee this week and spoke of the “daunting prospect of being left alone” as a whistleblower and how establishing a “whistleblower commissioner” could be an important reform. “Someone who will stand with the whistleblower,” he put it.

Fmr PwC Partner & whistleblower Anthony Watson has told #SenateEstimates about the “daunting prospect of being left alone” as a whistleblower & how establishing a “whistleblower commissioner” could be an important part of reform
“Someone who will stand with the whistleblower” pic.twitter.com/TxxQ2grrSj

— stranger (@strangerous10) April 9, 2024

 

Before the crypto stitch-up was even a gleam in Sam Bankman-Fried’s eye, this journal had exposed the tax fraud by Lendlease in mid-2018. We have followed Tony Watson’s trials and tribulations ever since, while ATO officials have been having nice cups of tea with Lendlease, PwC and assorted lawyers trying to fend off the inevitable, a confession.

While the market has woken up to Lendlease’s accounting chicanery and its share price is in the doldrums, another hit to its once glorious corporate reputation would seem inevitable. That is – being outed as a big-league tax fraudster.

In its most recent financial statements, the property group finally fessed up in the minutiae of the notes to its accounts a ‘contingent liability’. That is, the ATO was auditing it. At stake is $260m of tax deductions, now probably $400m with interest, on the $1.7b in shonky tax deductions involved in the PwC structuring of the retirement village assets.

Naught to see here

Having previously, breezily, dismissed allegations of tax fraud as ‘speculative’ it now faces a conundrum. The same crew is still running the show but if an amended assessment from the ATO is handed down, the crew may have to restate ten years of wrong financial statements and pay a large sum of money; shareholders’ money naturellement.

They will be meted out the fiercest punishment at the elite segment of Australian financial markets … embarrassment.

There is little doubt the impending press release will attribute a ‘misunderstanding’ after ‘fully cooperating to resolve the situation with tax authorities’ but to be blunt, it should be framed as ‘busted for the biggest tax fraud in Australian history’.

The wheels of justice grind almost imperceptibly slowly in corporate Australia, if much at all, but the writing has been on the wall for many years. Lendlease, in this, is something of an ASX morality play.

From blue chip to blue movie

Back in the day it was one of the most blue chip offerings of all; it’s innovative staple-security structure, the brainchild of founder Dick Dusseldorf, drew global admiration, and enticed large investors, it’s savvy move into funds management and property trusts via the MLC and GPT acquisitions lent diversity, high earnings growth, sharemarket performance like few others, and a thumpingly good PE.

But then they got too smart for their pants, too fancy in ‘playing the market’, sucking investors into a disingenuous ‘reported earnings’ narrative that enriched the executives. For they’re riches were struck on ‘reported earnings’, fabricated earnings rather than cash in the door. Alas the market is finally onto it; the share price spliced by two-thirds in five years.

In an investigation of Lendlease’s financial statements here in July 2018, we revealed the smoke and mirrors which had made ‘reported earnings’ look so terrific but veiled the true picture of actual earnings.

What lies beneath – how Lendlease put a shine on its numbers

We found that, over the preceding eight years, from 2010, the company had booked $2.5 billion in non-cash profits. And in another escapade of financial bravado, management had sold the company’s retirement village assets into a joint venture with a Dutch pension fund, then promptly borrowed $400 million from the joint venture and kicked off a $500 million share buy-back.

That day in July, the stock was changing hands at $19.99 a share. Six months later, Lendlease shares plummeted after an earnings downgrade to the construction division. They closed yesterday (mid 2018) at $12.55 a share. Today they are changing hands at $6.50.

Again, in March 2019, further investigation here established:

• Over-enthusiastic asset revaluations of up to 83 per cent enhancing profits.
• A large proportion of reported profits are due to revaluations and reclassifications (around $2.5 billion in non-cash profits over eight years).
• Of the $426 million profit announced at the last interim, some $274 million came in the form of unrealised gains.
• Borrowings from joint ventures enhancing headline debt figures.

Abracadabra: Lendlease magic tricks come home to roost

Meanwhile, management under investment banker turned Lendlease CEO Steve McCann was busy ripping out massive bonuses, tens of millions of dollars, based on ‘reported earnings’, and these in turn were based on the smoke and mirrors of asset juggling.

If ‘markets go up and markets go down’ is an immutable principle for investors, then surely the two which follow it – ‘if it looks too good to be true, it probably is’ and ‘if it’s too complicated to understand, milk it and bail’ should be equally regarded by wary investors.

We look forward to justice for Tony Watson meanwhile. It is no cakewalk fighting the Big End of Town.

Lendlease whistleblower and lawyer Tony Watson – the law is failing to protect whistleblowers

This post was originally published on Michael West.

Seven years in the making, Parliament recently passed amendments to the Criminal Code Act that cover foreign bribery. They are intended to crush Australian companies engaging in corruption overseas. Will it work in places like Indonesia? Duncan Graham asks.

Hardly noticed except by corporate lawyers and this website, the changes to Australia’s criminal code are intended to address flaws in the old law which meant only seven individuals and three corporations in Australia have been convicted of foreign bribery in the past 25 years.

One legal firm claimed it “represents a fundamental shift in how corporations can be prosecuted for bribery in Australia.”

The change comes with a big stick – a fine of up to $27.5M.  Attorney General Mark Dreyfus called foreign bribery a “serious and insidious problem across the world… that  impedes economic development, corrodes good governance and undermines the rule of law.”

According to the Berlin-based organisation Transparency International (TI), there’s a lot more to graft than just losing money: It also helps “serious crimes like human trafficking and money laundering.”

Good move, poor timing. The get-tough message clashed with yet another plea by Canberra for investors to drop their cash in Indonesia, a country where graft is like eating sticky rice with fingers – messy but the only way to get replete.

The Moore Report on South East Asian trade unlikely to lead to more trade

Red-blooded investors in Indonesia thrived last century when corporates were casual and laws slack, while President Soeharto – the Republic’s king of corruption – was in total control.

The few savvy and adventurous Australian hustlers who found trusty partners and left envelopes in the right hands did OK – some even better. The rest of the projects turned into tombstones.

During Soeharto’s 32-year autocracy, the unwritten rule was a two-thirds investment in a project, though this didn’t preclude ticket-clipping. The other third went to the politicians and bureaucrats to get the show going with the right permits – or scuttle the project.

Soeharto set the standard for his followers by allegedly stealing up to US$35B from the public purse during his 32 years in power. He was never charged, and his son, ‘Tommy‘ still lives large on the spoils.

Joko Widodo – Mr Clean

Fast-forward to 2014, when Joko ‘Jokowi’ Widodo became president. TI’s  Corruption Perception Index (CPI) ranked Indonesia 107 out of 175 nations surveyed that year.

The new leader, not openly linked to the military, religion or the oligarchs, was seen as Mr Clean. He promised to back the Komisi Pemberantasan Korupsi (KPK- Corruption Eradication Commission.)

Brewed during the 2003 reformist zeal of starting afresh after the 1998 fall of dictator Soeharto, the independent KPK rapidly made an impact.  It was so efficient it became the nation’s most popular bureau applauded in the kampongs though not in the hillside villas squinting down on Jakarta’s pollution and overcrowding.

Within four years, the KPK was struggling with a backlog of 16,200 reported cases.

Its few well-publicised prosecutions had a 100 per cent success rate, guaranteeing the agency’s downfall.

In 2019 the Parliament withered KPK’s muscle and made staff civil servants. Protests were widespread but went nowhere. KPK Version Two continued until late last year when chair Firli Bahuri was found guilty of violating ethical standards by “engaging with a prominent suspect under investigation.”

In the past decade, President Jokowi has had the power and public support to honour his pledge. Six ministers have faced corruption charges and been sacked. The Wikipedia entry Indonesian politicians convicted of corruption has 44 entries.

They stole our gold mine!

The more things change…

Despite these actions, last year the nation’s Republic’s CPI rank tumbled from 96 to 110 out of 180 countries surveyed by Transparency International. The Jakarta Post commented, “Unless Jokowi makes a bold move in the coming months, the downward trend will continue in the next few years.”

While his administration is not seen as corrupt, his policies have facilitated the return of Indonesia’s corrupt ways of the past, or he has turned a blind eye to corruption by people in his inner circle.

Ethical investors were wary of Indonesia then and now. Coordinating Minister for Economic Affairs, Airlangga Hartarto, said that Australia’s total foreign direct investment in Indonesia had reached US$545.2 million in 2023.

Big? Not much – the $US1.1T market and the UK at $836B top the list for Australian investment. Keeping it in the ‘family’.

Our tiny trade with the archipelago is also not in the whiz-bang, high-tech, education, and health sectors we like to trumpet. According to Ambassador Kristiarto Legowo, it’s mostly in mining, metals, agriculture, hotels, and restaurants.

In Melbourne, President Jokowi urged Australians to invest in his country, help society and reap great dividends. There was no great rush for the fund transfer forms.

Reluctance to invest

The South China Morning Post asked, “What’s behind Australian investors’ reluctance to venture into Southeast Asia?” and found John Walker, a former executive at Macquarie Bank, to answer.

He reportedly said Ozzies with the wherewithal “just did not understand” Asia and other emerging markets. They suffered from “fear of the unknown” and preferred “neatly packaged opportunities in jurisdictions with familiar regulatory, financial, and political systems.”

He’s right. Boards charged with handling investors’ money wisely are rightly wary of countries with flawed legal systems – and the smarter heads will have done their research. 

Churchill Mining

An infamous casualty of  Indonesia’s capricious system was Churchill Mining, a British company with Australian links in 2008 claimed to have found “Indonesia’s second largest and the world’s seventh largest undeveloped coal resource” – an estimated deposit of 2.8 billion tonnes in the province of East Kalimantan.

All seemed to be going well until Isran Noor, the Regent of East Kutai where the coal was to be mined, revoked Churchill’s permits alleging licence forgery and illegal logging.  An Indonesian company then seized the project.

Churchill appealed, lost and was ordered to pay almost US$9.5 million in costs and arbitration fees. David Quinlivan, the former executive chairman of Churchill Mining, hasn’t responded to a request for comment.

Big stick or wet lettuce leaf – does it even matter?

Will the new legislation work? Maybe, but more to the point, if Indonesia and its neighbours in ASEAN want money from credible Western investors, they have to clean up their act – in part by following Australia’s aggressive lead.

Otherwise, they’ll have to shake their can in Saudi Arabia and China. But even these big lenders who don’t care too much about ethical issues seek security.

If Indonesia wants our money, Jakarta needs to ensure it’s safe. Jokowi’s successor Prabowo Subianto, a disgraced former general and former son-in-law of Soeharto, takes over the world’s fourth-largest nation in October.  He’s unlikely to fire on the corrupt – they’re his mates.

Australian investors – beware.

Indonesia elects a new President – more of the same or back to the past?

This post was originally published on Michael West.

In this final instalment of the Housing Hunger Games series, Harry Chemay identifies all policy culprits and all the fixes government can make to deliver more affordable housing for renters and first-home-buyers.

We’ve arrived at the concluding piece in this trilogy on Australia’s housing ‘Hunger Games’.

A mismatched duel between renters and hopeful first home buyers on the one side and residential property owners on the other, happiest when interest rates are low and/or prices are rising.

How happy? Just released Australian Bureau of Statistics data now sees household balance sheets collectively in excess of $15 trillion, of which almost $11 trillion is in ‘land and dwellings’. If the typical Australian adult now has the second-highest median wealth in the world (after Belgium), it’s mostly due to soil, bricks and mortar.

With Australians stuck in the private rental market for longer, the percentage of renters who become homeowners each year has fallen from 14% in the early 2000s to 10% more recently.

The impact of this delay in home ownership is crystalised by the Australian Institute of Health and Wellbeing (AIHW), an independent statutory Australian Government agency with a remit to maintain health and welfare data.

The AIHW’s housing data dashboard shows the changing rates of homeownership across time.

It reveals that for elder Millennials (born between 1982 and 1986), only 59% were homeowners when they were aged between 35 and 39.

By contrast, when they were aged between 35 and 39, some 69% of people born between 1952 and 1956 (the parents of Millennials) were already on the housing ladder.

Unsurprisingly, this trend results in a larger percentage of the population renting over time, with private market renting rising from under 20% in the early 1990s to over 30% today, while social housing rentals effectively halved over the period.

This delay in home ownership may not just be attributable to higher housing costs. Younger people pursuing more education for longer, then partnering and having children later in life, all play a part.

What is trickier to decipher is just how much of that delay is due to needing higher incomes for ‘adulting’ in the first place, specifically for secure and stable housing.

Irrespective, the effects will ripple all the way to retirement.

The Hunger Games of renting. Most liveable cities in the world or dystopian nightmare?

Australia’s housing obsession

That so many high-income households continue to rent into 2024 rather than moving into home ownership suggests many are being squeezed out of the property market by other, better funded buyers.

Economists call this a ‘crowding out’ effect, where a market becomes disrupted by excess demand from a few well-resourced participants, pushing up prices and precluding others of more modest means from competing for the supply on offer.

Speculating in existing residential property may keep a whole range of facilitators gainfully employed (real estate agents, conveyancers and property managers among them),

but it doesn’t meaningfully add to the nation’s ability to create, build and trade.

Put another way, the value of Australian residential property was around $10.7 trillion at the end of 2023. That is some four times the value of all the companies listed on the Australian Securities Exchange (ASX) at the time.

By contrast, the US residential housing market, at some AUD $73 trillion, is broadly equivalent in value to the combined NYSE and Nasdaq, the two biggest exchanges in the US.

If every Australian residential property were to be listed on an exchange, it would be bigger than every other stock exchange in the world, except the NYSE and Nasdaq.

This obsession with property does not, however, promote economic growth and longer-term national wealth relative to investments in productive capacity, innovative technologies (think Wi-Fi or renewable energy), labour-boosting capital expenditure, or the arts and entertainment sectors.

Can we build our way out?

There are two ways to take pressure off the housing market: build more dwellings or remove some of the excess demand.

The Albanese government’s approach so far has been to focus primarily on supply; particularly that of social and affordable housing.

That’s the impetus for the $10 billion Housing Australia Future Fund facility, the $2 billion Social Housing Accelerator, and an additional $2 billion in financing for more social and affordable rental housing through Housing Australia.

Housing Crisis: forsake the Future Fund Albo, you’ve already found a better build

Then there’s the National Housing Accord, with its ‘aspirational target’ to build 1.2 million well-located homes over 5 years from mid-2024, struck between the Commonwealth government, states, territories, local governments, institutional investors and the construction sector.

There’s just one problem with this aspiration; it’ll require the construction sector to complete 60,000 dwellings each quarter on average, a rate AIHW data suggests Australia has never achieved and is nowhere near at present.

The target will require a construction sector that has the necessary labour force, is financially stable and firing on all cylinders. The signs thus far have not been promising.

Reducing the ‘Crowding Out’ Effect

While waiting for all this new housing to materialise, the focus should be on the demand side.

Such measures need not create downward pressure on house prices, they only need remove the excessive and unfair purchasing power of a small number of investors.

In the main, these would involve policy measures already recommended but rejected or applied without any urgency by successive governments.

Ban SMSFs acquiring residential property

Under superannuation law, large super funds are not allowed to borrow to invest.  An exemption was, however, created for Self-Managed Superannuation Funds (SMSFs) in 2007. These are known as a Limited Recourse Borrowing Arrangement (LRBA).

According to ATO data, at the end of 2023 there was some $61 billion powered by LRBA loans. It was the fifth-largest SMSF asset during the 2021-22 financial year.

In 2014 the Financial System Inquiry (FSI) recommended that the LRBA exemption be removed, noting that it would help “fulfil the objective for superannuation to be a savings vehicle for retirement income, rather than a broader wealth management vehicle”.

The then-Abbott government did not accept the FSI recommendation, instead referring the issue to the Council of Financial Regulators, which has been kicking this can down the road since 2019.

As a result, prospective first homebuyers today may at any auction be bidding against SMSF trustees with borrowing capacity based on average fund balances of almost $1.5 million.

Removing the LRBA exemption for further residential property investing by SMSFs would be a small, yet meaningful, win for those wanting a first rung on the property ladder.

Global anti-money laundering initiatives

First homebuyer investors shouldn’t have to compete against criminals.

According to the regulator, AUSTRAC,

the laundering of illicit funds through real estate is an established money laundering method in Australia

And it applies to both local and overseas-based criminals.

Unfortunately, having established the key anti-money laundering legislation in 2006, which requires a vast range of finance-related sectors to identify clients/customers and report suspicious financial transactions to AUSTRAC, Australia has since been a laggard relative to the rest of the world.

There are now plans to bring a range of currently exempt high-risk professions, including lawyers, accountants and real estate agents, so-called ‘tranche-two entities’, into the fold.

World pressure ramps up, Australia finally moves on money laundering by lawyers, accountants and the property lobby

That Australia stands alongside China, Haiti, Madagascar and the US as the only nations not currently regulating tranche-two entities is not a badge of honour, and does genuine property buyers here no favours.

Reducing foreign holdings of residential property

There are long-standing limits for foreign nationals who wish to buy property in Australia, with the Foreign Investment Review Board responsible for vetting and approving such property transactions.

Historically, only newly constructed – ‘off-the-plan’ – residential dwellings were allowed, while established dwellings were off-limits to all foreigners except in limited circumstances (temporary residents and certain visa class holders).

The Turnbull government tightened the requirements in 2017, limiting the extent of foreign ownership in new housing developments to 50%, and applying a vacancy fee on foreign-owned residential dwellings left unoccupied, or unavailable for genuine rental, for at least six months a year.

The Albanese government’s bill to increase the vacancy fee passed both houses of Parliament just before Easter.

These measures (alongside attempts to curb short-stay rentals) could help reduce the number of dwellings left unoccupied, calculated at around 1 million properties (nearly 10% of the total housing stock) on Census night 2021, that might supply the private rental market.

Airbnb tax rort: why is the government subsidising holiday landlords?

Why the Hunger Games?

SMSF borrowing, anti-money laundering and unoccupied dwellings are the ‘low-hanging fruit’ changes that can and should be implemented, while the big-impact measures for general property investors, such as limiting negative gearing and/or capital gains tax concessions, remain in the ‘too hard basket’ for both sides of politics.

Left unchecked by neglect, wilful or otherwise,

Australia is at risk of turning into a nihilistic nation where the aim of the game is to ‘beggar thy neighbour’s children’.

Therein, one’s main financial objective is to opportunistically build wealth through property, accepting that, in doing so, home ownership will be less attainable for future generations.

Rather, to have a first home deposit ready for one’s own children, for each child, acting as the Bank of Mum and Dad and then some.

If everyone adopts that attitude, we will unironically end up in a housing Hunger Games, a ballad of songbirds and snakes.

Housing Hunger Games: negative gearing catching fire

This post was originally published on Michael West.

When dealing with the Liquorlands and Dan Murphys of this world, winemakers can be stuck between a rock and a hard place. The big retailers Coles and Woolworths maintain a strict pricing regime that squeezes suppliers from multiple angles. Zacharias Szumer investigates the liquor oligopoly.

Heading into the Easter long weekend, alcohol retail giant Dan Murphy’s has been reminding Australians of its “unbeatable offers”. “Found it cheaper? We’ll beat it,” reads one of the ads in the company’s trademark white and green colours.

However, industry sources say that suppliers effectively bear the cost of such lowest-price guarantees, which are forcing competitors to hide better-value deals. Meanwhile, some suppliers can be hard-pressed to pass on increased costs to the big retailers.

Who bears the cost of discounts?

According to one wine market source, online outlets like WineStar, Grays or Vinomofo will regularly get calls from winemakers or wholesalers asking them to put up the price of a certain product.

Callers will often frame their request in euphemistic, businesslike terms, the source says. For example: “Your margin expectations are a little bit low on this product”.

Sometimes, the suppliers simply ask the online wine seller to take down an offer.

Why? Because these online outlets are offering lower prices than the big retailers, such as Dan Murphy’s, Liquorland, BWS or First Choice – and thus the big retailers may be pushed to match or beat their price if they have a lowest price guarantee.

Nothing wrong with that, right? That’s competition in action.

The issue, according to the source, is that big retailers often have agreements with wholesalers and suppliers that stipulate that if they have to lower their prices to match a competitor, it’s the supplier who funds the difference.

This means that if the online outlet simply has lower overheads and can sell a product for less, the supplier has to ensure that the big retailers can sell it at that price, too – even if they can’t afford to.

Online outlets have been “forced to take off some product from their websites because it competes against some others,” the source said.

Apparently, the proliferation of online outlets offering “black market” or “mystery wine” deals is a direct result of this practice. These deals circumvent the issue by hiding brand names unless customers directly inquire about them.

A spokesperson for the Endeavour Group, which owns Dan Murphy’s and BWS, told MWM that in most cases the retailer paid for price-beat guarantees.

“We bear the cost of individual price beats at Dan Murphy’s except in a small number of instances where we have a prior agreement with a larger supplier. Small suppliers do not bear the cost.”

A spokesperson from Coles Group, which owns Liquorland, Vintage Cellars and First Choice, said that suppliers didn’t bear the cost of their price-match policies.

“As part of the First Choice Liquor Market price match policy, we have a commitment to match the price of an identical stocked liquor item at a competitor in the same state, on the same day and in-store. We fund this price match policy, not our suppliers.”

Easier to push prices down than up

While the big retailers may be happy to lean into their suppliers’ margins to push prices down, it can be another story when suppliers want to put their prices up.

In dealing with the big retail chains, small and medium-sized wine producers don’t have “anywhere near enough negotiating power to say things like ‘we need to put prices up,” says a senior Hunter Valley winemaker, who also asked to remain anonymous.

According to the winemaker, if a supplier asks one of the big retailers for a price increase, they will be asked to submit a detailed spreadsheet explaining exactly why the price rise is necessary.

Whether it’s the rising price of fuel, labour, transport or glass bottles – it all must be meticulously submitted for approval. Sometimes, “the big retailers just come back and say ‘No, we reject your price increase’”.

And even if the reason is found to be legitimate, big retailers will often warn suppliers that any price increase may lower sales to the point that they’ll have to stop stocking the product.

“They tell you if your product is at risk, and they give you an opportunity to do something about it,” he said, adding that this may mean spending additional money on promotion.

“We evaluate every request for a price increase carefully taking into account the highly discretionary nature of liquor spending and the need to offer the best possible prices to support sales and our customers in the high cost of living environment,” the Endeavour Group spokesperson told MWM.

“Price increases and decreases do not influence ranging decisions,” the Coles Liquor spokesperson said.

Skill up or dump the Big Two

“It’s very, very hard when you’ve got somebody not only saying ‘we will not be undersold’ but also ‘we will tell you if and when you can raise prices’,” says wine industry consultant Peter McAtamney.

McAtamney said he’s now telling his clients to avoid the big retailers altogether.

“If you’re a small player, you probably shouldn’t be thinking about doing business with these guys anyway … and that’s the way that I’m coaching all of my clients … to not have to rely upon the supermarkets.”

“When I originally said this, I had people walk out of the room, but it’s entirely possible today.”

However, if you’re a medium-sized wine producer, meaning you probably need the big retailers to sell off all your stock, “you will need to be highly skilled commercially,” McAtamney says.

Given the big retailers’ high level of business intelligence, a supplier really needs “sophisticated people” to deal with them, he said.

Uniquely Australian?

As mentioned above, Dan Murphy’s and BWS are both owned by the Endeavour Group (in which Woolies has a stake), while Liquorland, Vintage Cellars and First Choice are owned by the Coles Group.

Woolworths spun off Endeavour in 2021 but is still a major shareholder and “has significant influence over the Endeavour Group,” according to a recent Endeavour annual report.

Via a series of service agreements, Woolies helps Endeavour with logistics, loyalty programs and digital infrastructure for payments and data analysis.

Both Endeavour and Coles are now also competing directly with winemakers, producing and selling a wide range of ‘private label’ wines that appear to be independent brands until you read the fine print.

“They actually own wineries that are direct competitors to their suppliers,” McAtamney said. and added:

There’s no other wine industry on Earth where that happens.

“So, it’s a bit unique, and I frankly don’t quite know how to feel about it.”

A Senate inquiry into anti-competitive conduct in the wine industry’s retail sector was kicked off in 2016; however, parliament was dissolved before the inquiry produced a report.

Independent beer-makers captive to liquor majors, supermarket duopoly

This post was originally published on Michael West.

When dealing with the Liquorlands and Dan Murphys of this world, winemakers can be stuck between a rock and a hard place. The big retailers Coles and Woolworths maintain a strict pricing regime that squeezes suppliers from multiple angles. Zacharias Szumer investigates the liquor oligopoly.

Heading into the Easter long weekend, alcohol retail giant Dan Murphy’s has been reminding Australians of its “unbeatable offers”. “Found it cheaper? We’ll beat it,” reads one of the ads in the company’s trademark white and green colours.

However, industry sources say that suppliers effectively bear the cost of such lowest-price guarantees, which are forcing competitors to hide better-value deals. Meanwhile, some suppliers can be hard-pressed to pass on increased costs to the big retailers.

Who bears the cost of discounts?

According to one wine market source, online outlets like WineStar, Grays or Vinomofo will regularly get calls from winemakers or wholesalers asking them to put up the price of a certain product.

Callers will often frame their request in euphemistic, businesslike terms, the source says. For example: “Your margin expectations are a little bit low on this product”.

Sometimes, the suppliers simply ask the online wine seller to take down an offer.

Why? Because these online outlets are offering lower prices than the big retailers, such as Dan Murphy’s, Liquorland, BWS or First Choice – and thus the big retailers may be pushed to match or beat their price if they have a lowest price guarantee.

Nothing wrong with that, right? That’s competition in action.

The issue, according to the source, is that big retailers often have agreements with wholesalers and suppliers that stipulate that if they have to lower their prices to match a competitor, it’s the supplier who funds the difference.

This means that if the online outlet simply has lower overheads and can sell a product for less, the supplier has to ensure that the big retailers can sell it at that price, too – even if they can’t afford to.

Online outlets have been “forced to take off some product from their websites because it competes against some others,” the source said.

Apparently, the proliferation of online outlets offering “black market” or “mystery wine” deals is a direct result of this practice. These deals circumvent the issue by hiding brand names unless customers directly inquire about them.

A spokesperson for the Endeavour Group, which owns Dan Murphy’s and BWS, told MWM that in most cases the retailer paid for price-beat guarantees.

“We bear the cost of individual price beats at Dan Murphy’s except in a small number of instances where we have a prior agreement with a larger supplier. Small suppliers do not bear the cost.”

A spokesperson from Coles Group, which owns Liquorland, Vintage Cellars and First Choice, said that suppliers didn’t bear the cost of their price-match policies.

“As part of the First Choice Liquor Market price match policy, we have a commitment to match the price of an identical stocked liquor item at a competitor in the same state, on the same day and in-store. We fund this price match policy, not our suppliers.”

Easier to push prices down than up

While the big retailers may be happy to lean into their suppliers’ margins to push prices down, it can be another story when suppliers want to put their prices up.

In dealing with the big retail chains, small and medium-sized wine producers don’t have “anywhere near enough negotiating power to say things like ‘we need to put prices up,” says a senior Hunter Valley winemaker, who also asked to remain anonymous.

According to the winemaker, if a supplier asks one of the big retailers for a price increase, they will be asked to submit a detailed spreadsheet explaining exactly why the price rise is necessary.

Whether it’s the rising price of fuel, labour, transport or glass bottles – it all must be meticulously submitted for approval. Sometimes, “the big retailers just come back and say ‘No, we reject your price increase’”.

And even if the reason is found to be legitimate, big retailers will often warn suppliers that any price increase may lower sales to the point that they’ll have to stop stocking the product.

“They tell you if your product is at risk, and they give you an opportunity to do something about it,” he said, adding that this may mean spending additional money on promotion.

“We evaluate every request for a price increase carefully taking into account the highly discretionary nature of liquor spending and the need to offer the best possible prices to support sales and our customers in the high cost of living environment,” the Endeavour Group spokesperson told MWM.

“Price increases and decreases do not influence ranging decisions,” the Coles Liquor spokesperson said.

Skill up or dump the Big Two

“It’s very, very hard when you’ve got somebody not only saying ‘we will not be undersold’ but also ‘we will tell you if and when you can raise prices’,” says wine industry consultant Peter McAtamney.

McAtamney said he’s now telling his clients to avoid the big retailers altogether.

“If you’re a small player, you probably shouldn’t be thinking about doing business with these guys anyway … and that’s the way that I’m coaching all of my clients … to not have to rely upon the supermarkets.”

“When I originally said this, I had people walk out of the room, but it’s entirely possible today.”

However, if you’re a medium-sized wine producer, meaning you probably need the big retailers to sell off all your stock, “you will need to be highly skilled commercially,” McAtamney says.

Given the big retailers’ high level of business intelligence, a supplier really needs “sophisticated people” to deal with them, he said.

Uniquely Australian?

As mentioned above, Dan Murphy’s and BWS are both owned by the Endeavour Group (in which Woolies has a stake), while Liquorland, Vintage Cellars and First Choice are owned by the Coles Group.

Woolworths spun off Endeavour in 2021 but is still a major shareholder and “has significant influence over the Endeavour Group,” according to a recent Endeavour annual report.

Via a series of service agreements, Woolies helps Endeavour with logistics, loyalty programs and digital infrastructure for payments and data analysis.

Both Endeavour and Coles are now also competing directly with winemakers, producing and selling a wide range of ‘private label’ wines that appear to be independent brands until you read the fine print.

“They actually own wineries that are direct competitors to their suppliers,” McAtamney said. and added:

There’s no other wine industry on Earth where that happens.

“So, it’s a bit unique, and I frankly don’t quite know how to feel about it.”

A Senate inquiry into anti-competitive conduct in the wine industry’s retail sector was kicked off in 2016; however, parliament was dissolved before the inquiry produced a report.

Independent beer-makers captive to liquor majors, supermarket duopoly

This post was originally published on Michael West.

The Reserve Bank held rates this week, offering respite for mortgage holders. However, relief is nowhere in sight for the 30% of us who rent, especially in the cities. Harry Chemay outlines the challenge for policymakers.

If ever there’s an image no Australian politician would wish to see beamed around the globe, it must surely be that of exasperated young renters queuing down a city street, desperate for a shot at an inner-city apartment in what is supposedly one of the world’s ‘most liveable cities’.

That, however, is exactly how 2024 has started for the nation’s renters who make up some 30% of Australian households.

Theirs is now a Hunger Games-like existence; these are the ‘Katniss Everdeens’ of this tale, trapped in a dystopian private rental market, pawns in a much larger $10 trillion dollar game.

… with rents rising in the past two and a half years by as much as they did in the previous 13-odd years …

The malevolent ‘President Snow’ in this storyline appears to collectively be represented by residential property investors, developers, local councils (and the NIMBYs who pressure them), housing authorities and last but by no means least, governments, both state and federal, seemingly tinkering at the edges with little political will to make genuine inroads into Australia’s cratering housing affordability.

Squeezed renters turning on each other

The news for renters has only deteriorated since those January images.

February brought a report from the Australian Housing and Urban Research Institute (AHURI), showing that with home ownership becoming ever more tenuous, a larger proportion of higher income households are renting for longer.

The report highlighted that while households with incomes above $140,000 (in 2021 dollars) accounted for only 8% of private renters in 1996, by 2021, they made up 24% of the rental market.

With this extra purchasing power, and with median rents rising in the past two and a half years by as much as they did in the previous 13-odd years to now surpass $600 per week, it’s little wonder that higher-income renters are squeezing out those of more modest means.

The AHURI report confirms this, noting that in 2021 low-rent dwellings (with rents of $226 per week or less) comprised only 13% of private rental stock, compared to 50% in 2001 and 60% in 1996.

In short, to survive our housing Hunger Games, today’s rental Katniss must be an elite-level competitor, seeing off less financially capable participants along the way.

The run of bad news continued into March, with more recent analysis from PropTrack, a data firm owned by property platform REA Group, showing that affordability is now the worst it has ever been in its rental database extending back to 2008.

Vacancy rates sit around 1% nationally, with cities like Adelaide and Perth around half that at present.

According to PropTrack, almost no private rental properties are now considered affordable for the lowest income 30% of households.

Kohler’s lament

Australia’s escalating housing squeeze is cause for serious concern.

Alarm bells are being rung by some of Australia’s sharpest economic commentators, the most recent being veteran journalist, and evening news finance chart whisperer, Alan Kohler.

In a recent Quarterly Essay titled ‘The Great Divide – Australia’s Housing Mess and How to Fix It’, Kohler undertakes a forensic examination of this nation’s love-affair-cum-speculative-addiction with property, starting with the very first land sale in 1826.

The housing crisis we didn’t have to have, and how to fix it

The nub of Kohler’s argument is that house prices have now so thoroughly detached themselves from economic reality that it’s creating a nation of ‘haves’ and ‘have nots’, based purely on who can gain a foothold on the property ladder in good time (ideally before turning 40).

Kohler wistfully recalls that when he entered the property market, median house prices were roughly 3.5 times average weekly incomes, a ratio not too different from the experience of his parent’s generation, some 30 years prior.  

This ratio, he states, now sits closer to 7.4 times (based on the current average full-time wage of around $100,000).

Housing affordability picked off

The divergence between house prices and household incomes started accelerating markedly around the year 2000, as the below AHURI chart depicts.

 

Except it’s even worse than Kohler’s grim assessment.

According to property market data house CoreLogic, the national median dwelling value stood at $765,762 at the end of February.

Wages, however, are not quite $100,000 on average across all workers. Looking at the more representative median wages, the current full-time male annual income is around $93,000, while the female equivalent is around $83,000 (for details, read this).

Comparing apples-with-apples, the ratios of national median dwelling price to median incomes are currently 8.3 for males and 9.2 for females.

And what of Sydney, with its current median dwelling price of $1,128,155? Well, the ratios sit at 12.2 (males) and 13.6 (females) respectively.

Katniss truly does need to be bolder, more highly driven and courageous than her male counterparts to overcome the twin obstacles of a runaway housing market and a persistent gender pay gap.

May the odds be ever in your favour indeed.

——–

Editors note: This article is the first in a series on the housing crisis.

Dear Jim, how about a cool $5bil for housing, and lower rents, if you shut the Airbnb tax rort

This post was originally published on Michael West.

While millions of Australians feel the pinch of the cost of living crisis, the latest economic growth numbers from the Bureau of Statistics (ABS) confirms economy is doing alright vis-a-vis its global peers. Alan Austin reports.

The ABS numbers on GDP this week confirm that Australia’s Government appears to have been pulling the right economic levers at the right time.

Annual economic growth is now 1.55%, inflation is 3.40%, the jobless rate is 4.06%, and youth unemployment is 9.5%. These follow Treasury posting a healthy surplus last financial year of A$22.1B and all three global credit agencies affirming that Australia warrants triple A ratings.

Inflation recovery

Currently, the United Kingdom, Ireland, New Zealand, Norway, Sweden, Mexico, Austria and Estonia all have inflation above 4%; Iceland and Colombia are above 6%, and Turkey is above 60%. Argentina is the highest at 254%, China is -0.8%.

The ABS shows inflation to December 2023 in Australia was 3.38%, down from 8.44% one year earlier.

In just twelve months, inflation was cut by 5.06 percentage points.

The last time inflation was slashed by more than five per cent in one year was back in December 1991 when freshly-elected PM Paul Keating bragged that he had finally “snapped the inflation stick”.

The other significant inflation measure is the reduction from 6.12% in May 2022, when the Albanese Government was elected, to just 3.40% in January. That is among the best outcomes in the Organisation for Economic Development and Cooperation (OECD), the group of 38 advanced democracies.

Yes, it is true most Australians today would like more spending money. But when was it ever otherwise? Is this still a “crisis?”

Global comparisons

Within the OECD, there are four exclusive clubs. The first is the group of nations with overall jobless rates below 4.5% and youth unemployment below 10%. This club has ten proud members: Australia, the Czech Republic, Iceland, Israel, Japan, the Netherlands, Mexico, South Korea, Switzerland and the USA.

The second clique is those with inflation below 4% and positive wage growth. This group boasts 18 economies, including most of those in the above list, plus several more.

The third club comprises the stable growth economies, which recorded increases in gross domestic product (GDP) in every quarter of 2023 and positive annual growth for the year. There are just eight of these: Belgium, Mexico, Slovakia, South Korea, Spain, Costa Rica, the USA and Australia.

The fourth, even more select, is the clique of just five well-financed economies that have AAA credit ratings with all three global agencies and delivered budget surpluses in 2023: Denmark, Norway, Sweden, Switzerland and Australia.

Only one economy is a member of all four exclusive clubs – Australia. Switzerland is nearest but copped negative GDP growth in last year’s second quarter and ended the year with annual GDP growth below one per cent. South Korea, the USA and Mexico are also travelling well on most indicators but do not have triple-A credit ratings and are in deep deficit.

Looking beyond the OECD, only one other economy in the world comes close. Singapore has the top credit ratings, low inflation and low unemployment, but last year GDP went backwards in the first quarter, and it recorded a fairly deep budget deficit.

The mainstream media story

With Australia having the world’s standout economy based on measurable outcomes, you would think newspaper editorials and television analysis would be congratulatory, and the Opposition would be visibly supportive – and claiming credit for its constructive bipartisan participation in legislating such impressive reforms. You would be wrong.

Last Sunday’s Insiders on ABC TV focused primarily on analysis of the by-election outcome in Dunkley in Victoria’s south-eastern bayside suburbs.

MWM counted the following comments from the ‘experts’ on the Insiders panel and on video clips aired:

“people are really struggling”: 5
“experiencing a cost of living crisis”: 12
“troubling interest rate rises”: 4
“People are disgruntled”: 3
“Holding the Government to account”: 4

Hoping for some balance, we found none of the following positive observations:

“The Government has cut inflation from 6.1% when it took office to just 3.4% today.”
“Australia’s recent cost of living reduction is among the world’s best.”
“The Government has managed the economy relatively well.”
“Australia is back among the global leaders on most economic outcomes.”

The only positive comment on the economy was Patricia Karvelas’ grudging concession that “Labor is back in the economic discussion,” with no support from anyone else.

All four Insiders studio contributors came with a history of working for the anti-Labor News Corp or Nine Entertainment. They were ex News-Corp’s David Spiers and Patricia Karvelas, current Nine reporter Paul Sakkal, and Nikki Savva who is ex-News and now with Nine.

The commentary assumed that Labor was not up to the task of economic management and never would be, and that Coalition governments were the natural – and desirable – state of affairs.

The same was true for the ABC’s hours-long coverage of the Dunkley by-election count last Saturday night. Most commentaries reinforced those same narratives.

It is apparent that Australia’s pundits have very little clue about the actual economy. Studying published outcomes seems to be discouraged in Australia’s mainstream newsrooms. Making global comparisons appears absolutely forbidden.

Such is Australia’s doom.

---

Editor’s Note: Strip out immigration and real GDP per capita is down 1.1% under this government after 6 quarters of negative or flat growth.

This post was originally published on Michael West.

Alan Kohler’s recent Quarterly Essay is a valiant attempt to put the housing crisis into a historical and macroeconomic perspective and offer solutions. But he warns there are no quick fixes.

This post was originally published on Michael West.

Why are foreign investors so attracted to Australia? Why is the ASX being hollowed out by takeovers? A UBS research report has the answers. We consumers pay too much. Michael West reports.

This post was originally published on Michael West.

Big Australian companies once listed on the ASX are slipping into private hands at an alarming rate. Stephen Mayne explores what’s driving it and why it’s a worry.  

This post was originally published on Michael West.

Callum Foote has dusted off the accounting standards (AASB) and discovered that Shine Justice and its auditors PwC may not be meeting their obligations as a company listed on the ASX and as auditors,

This post was originally published on Michael West.

The Australian government is finally preparing to move ahead with the long-awaited second tranche of the country’s anti-money laundering regime, amid growing concerns about sanctions risk.

This post was originally published on Michael West.

The secretive Future Fund’s chair Peter Costello might not like it, but Freedom of Information requests are continuing to peel back the lid on the Fund’s massive overseas investments.

This post was originally published on Michael West.

A voters head to the polls in NSW, the cost of living crisis looms very large as a defining electoral issue. Households across the state have been feeling the crunch. In the final instalment of our series highlighting the similarities and differences in Labor and Coalition policies, Callum Foote looks at which party will do the most to address everyday expenses.

This post was originally published on Michael West.

As interest rates rise, much of the blame is lumped on Phillip Lowe. But contrary to popular belief, the Reserve Bank Governor does not make decisions all by himself. Callum Foote looks at the central bank’s board stacked with Liberal appointments from business and conservative think tanks.

This post was originally published on Michael West.

An investigation into Shine Justice has found accounting irregularities and a large gap between the law firm’s cash flow and the far shinier accounting numbers it presents to the market. Michael West reports.

This post was originally published on Michael West.

As inflation hits a 32 year high, signalling a rise in interest rates in February, bank shares rose on the ASX. Besides the prospect of fatter profit margins though, they are coining $102m a week from an obscure Pandemic stimulus measure. Callum Foote investigates.

This post was originally published on Michael West.

As the world is thanking Jacinda Ardern profoundly for her 14 years in New Zealand’s Parliament and more than five as prime minister, a large number of white male scribes have joined in a frenzy of extraordinarily bitter attacks. Alan Austin reports on her economic performance. 

This post was originally published on Michael West.

Pandemic lockdowns crushed Airbnb, Stayz and other short-term rental operators but the market has bounced back sharply, creating tensions in popular tourist destinations between councils, community groups and well-heeled property owners. Callum Foote reports on the case of ritzy Byron Bay. 

This post was originally published on Michael West.

Is Shine Justice being straight with the ASX over its profits from the $300m pelvic mesh class action against Johnson & Johnson? Michael West investigates an accounting and disclosure mystery.

This post was originally published on Michael West.

Brexit’s a dud. The UK economy has shrunk. Almost 17 million Brits live in poverty. And there are large lessons in it for Australia. Michael West reports.

This post was originally published on Michael West.

Union-brawling Qantas chief Alan Joyce has capitulated to pay rises of up to 33% over five years in a deal struck with the Aircraft Engineers’ Association. Michael Sainsbury with the scoop.

This post was originally published on Michael West.

Scott Morrison approved tens of billions of foreign takeover deals after secretly being appointed Treasurer last year, compromising Australia’s national interest. Michael West reports.

The Minerals Council of Australia has duped Energy Minister Madeleine King into repeating its highly inflated claims of how much taxes its mostly foreign multinationals members pay. Callum Foote reports on an $85b PR scam.

This post was originally published on Michael West.

Gerry Harvey avoids questions on questionable practices and opaque governance at the 2022 Harvey Norman AGM but said Harvey Norman had paid back JobKeeper.

This post was originally published on Michael West.

Rather than blaming victims, we must demand political action and stand with those who battle to remain healthy in our unhealthy food environment.

This post was originally published on Michael West.

The “Potpourri Budget” has something in it for everyone, including the fossil fuel lobby which has attracted another $3 billion in spending commitments.

This post was originally published on Michael West.

Income tax and company tax rates combined with the various indirect taxes have enriched the top end at the expense of low-income citizens.

This post was originally published on Michael West.