|Economic growth annual||3.3%||Jun 16
|Economic growth qtrly||0.5%||Jun 16
|- Underlying inflation||1.55||Sep 16|
|- RBA target cash rate||1.5%||Oct 16
|Terms of trade (% change yr||-10.5%||Dec 15|
|TWI from RBA||59.2||Sep 15|
|Household savings ratio||8.6%||Jun 15|
|Net foreign debt %GDP||62%||Jun 16|
|Net foreign liabilities %GDP||61%||Jun 16
|BOGS %GDP||-2.2%||Jun 16|
|NPI %GDP||-2.1||Jun 16|
|CAD %GDP||4.4%||Jun 16
Underlying cash outcome %GDP
2017/18 est Budget
2018/19 est Budget
2019/20 est Budget
Use the new site now!
New website version
I have been working hard on some improvements, and recoding to lift speed and make key interactions and visuals more obvious for teachers and students. Looks like we will have the new version available with the covers off next week - so keep an eye out!
If you want to take a sneak peek, be my guest, but bear in mind that code is changing so forgive the occasional dust!
And its Trump. OMG
- A good piece from Peter Martin on the negative implications for Australia
- Bop and the dollar with a lower AUD, Chinese investment in agricultural and tourism assets increases
Some updates on key stats for the HSC
- More monetary gold superb speech by new Governor Lowe. Must read. Inflation and monetary policy - direct from the horse's mouth!
- Inflation slight rise to 1.3% in the year to 30 September. However, note that underlying remains lower.
- Unemployment slight decline to 5.6%, however markets remain suspicious of data and are looking for longer term trends. ABC online noting participation rate decline | Excellent Ian Verrender analysis of underemployment
- Underlying inflation excellent Martin piece on underlying inflation levels Underlying remains beelow range
Welcome to the new term, and the end run to the HSC
Some interesting things to read
- Monetary policy gold here is the Hansard report of the Lowe speech at the House of Reps Economics Committee. Both the speech, and Lowe's answers to questions, are extremely useful for a deep understanding of the Australian economy and monetary policy PDF of committee
- Fiscal policy RBA pays 3.2b dividend to Canberra SMH - has to help the budget
- Ec growth & Fiscal & External stability Coal price has significant lift, with implications for exports, GDP and the budget SMH
- Effectiveness of fiscal policy questions being asked about the effectiveness of Australia's resource tax regime where massive LNG exports will not contribute to tax revenue for many, many years SMH
- Environment Good summary of the current position of Australian outcomes, Paris and implications ABC online
- Brasil update excellent piece from an Economist on what really what wrong in Brasil, and an excellent updater on current econonic growth and development outcomes Was it all her fault? | And finally, good to see the social programs have not yet been cut Good update
- Brasil IMF concluding statements from latest IMF consulatation on Brasil IMF update, and new Finance Minister statement to the IMF Statement
- Globalisation, trade excellent BBC piece on where we are at with global sentiment on free trade and protection, and the new normal at the tail of the globalisation growth wave BBC analysis: Why is globalisation under attack? | Note also that the WTO has lowered its forecast for global growth as well SMH article | Note that even the OECD are worried about lower global growth, and are recommending fiscal policy, but not in Australia for politicians Gittins laments
- Monetary policy no surprise, Lowe keeps the record low cash rate in his first meeting SMH article
- Ec objectives, and policy excellent must read Gittins piece on the Australian growth experience and the effectiveness of policy Gittins
Some fiscal policy updates, maybe at the bottom of the monetary easing cycle, and thoughts about free trade
- Unemployment down to 5.6% however the participation rate is down ABC online | At a three year low SMH
- Monetary policy SMH comments on a speech by new RBA governor and asks has easing stopped SMH | Importantly, read the speech! Speech transcript
- Constraints on policy Peter Martin looks at the first Turnbull year on policy impacts SMH
- Fiscal policy Omnibus bill delivers 6b in savings over 4 years, passed the Senate last evening SMH
- Economic growth good Gittins overview deconstructing current GDP numbers SMH
- Unemployment Gittins takes a look at youth unemployment in Australia following release of the OECD report. SMH | Also see Jericho's excellent piece about youth opportunity post GFC Guardian
GDP, cash rate, and the departure of Stevens. Some gold in the leadup to the exams
- Annual GDP 3.3% final numbers for 2016 growth has an impressive 3.3%. But note the analysis that suggests timing of some government spending made a large contribution in the June Quarter: ABC online Also read an excellent Gittins breakdown of the numbers
- Stevens AFR interview excellent reading from the transcript of the final AFR interview with outgoing RBA Governor Transcript Also see the Article
- Macro policy levers whilst Stevens has argued monetary policy is not the instrument for growth, Treasury restate their focus on cutting budget spending Treasury Secretary speech in London
- Monetary policy backgrounder excellent overview piece on the players at the RBA in a post Stevens' world ABC online
- Brazil updates | Still a shambles, | Policy returns to neo liberal after the interventionist excursion
Time for a roundup of post trial news as the new parliament kicks off in Canberra.
- Monetary policy as a blunt instrument great piece from Stephen Long in relation to the new two speed economy and the difficulty of the RBA setting one interest rate for the economy ABC online
- Here comes the resources curse Ian Verrender considers the impacts of the resources curse in Australia, and headwinds on the horizon ABC online
- CEDA overview: high quality analysis the economic and political context in Australia in 2016 Overview pdf file
- Protection policy counterpoint: An interesting counterpoint in relation to the impact on the Australian economy of FTA policy, distinct from the unilateral reduction of tariffs in the Hawke/Keating era Economists question FTA upside
- Fiscal policy and BRICs interesting piece in relation to the continuing fiscal challenges for the Australian budget position as a result of multinational tax arrangements Strong Gittins piece in relation to out need for foreign capital, and the political debates in relation to the levels of foreign ownership Gittins SMH
- Inflation targetting in the world of the new normal with the growth imppetus of globalisation retreating, and inflationary pressures abating after 3-4 decades of globalisation, Xenophon wonders whether a singular focus on inflation targetting may no longer be appropriate for the RBA Time for different RBA agreement?
- Unemployment issue and policy Sensational analysis from Jericho in relation to unpacking the apparantly good unemployment outcomes in Australia. Must read The Guardian
- Keen at it again Professor Keen goes early with a prediction of Australian recession, however the article is worth a read and consideration ABC online
- Business investment CAPEX cliff outstanding graph and analysis of the significant drop in overall CAPEX, and the lack of non mining business investment placed in a historical context Business insider
- Monetary policy is the RBA about to join the other central banks in a race to the bottom? Post GFC we avoided unconventional monetary policy the rest of the world adopted as the MIB had not completed - but what now? The Diplomat
- Issue: inequality measuring growth drag as a result of increasing income inequality in the Australian economy SBS online
- Issue: Economic growth Excellent overview article on the rise and fall of growth in the WA economy ABC online
- Monetary and fiscal policy interesting piece in relation to monetary policy, bank behaviour, and the need for growth Business insider
- Globalisation and inequality good update on current trends and overview The Guardian
Glenn Stevens gold must read last speech as an evaluation of the effectiveness of monetary policy in the last 23 years. Transcript of speech
Gittins piles on An interpretation and analysis of the Stevens' position Why Treasury are wrong and we should be borrowing
Inflation lowest in 17 years with year to June 2016 coming in at only 1.0%
A roundup of the interesting news during the holidays looking forward to the third term and trials.
- Unemployment: up to 5.8%, although an increase in full time jobs which is good to see SMH
- Impotence of monetary policy: Fed talks seriously of helicopter money ABC online
- GWP growth sluggish the new normal - has globalisation run out of puff as an agent of above normal growth SMH | Verrender opines on sluggish GWP growth - despite that resolution at the Aust hosted G20 meeting.... ABC online
- Economic objectives remember, GDP growth (economic development) is a different thing to GNI/cap growth (economic development) Must read Greg Jericho piece on decline of disposable incomes
- Balance of payments Services to the rescue! Especially education and tourism SMH | Also see Janda on the link between the potential credit rating downgrade and the current accoutn deficit ABC
Fiscal policy Must read Gittins critique on the Jobs and Growth flim flam of the 2016 budget SMH | Don't forget the IMF analysis of the Howard years Fiscal profligacy | Indeed economists suggest negative gearing would be a better focus than corporate tax cuts Peter Martin
- Economic growth: must read Outstanding examination of the paradox of GDP growth and GNI decline in Australia Business Insider | INdeed the looming challenges for growth and incomes suggest the election win was somewhat of a poison chalice ABC online
- Free trade agreements: the reality of the impact on AD excellent piece by Martin - the story may be more grwoth in imports than exports as a result fo FTAs. Great for consumers, not so much for AD, GDP and employment. Jobs and Growth? Martin
- Australia and the environment Great overall update piece from the SMH
A roundup of the interesting news from the last part of term as holiday and pre trial reading
- BREXIT as the growth engine of globalisation slows, income inequality widens, and a range of jobs disappear, the disaffected are angry and looking for change. Verrender from the ABC | Guardian | is globalisation ending?
- BREXIT and exports good news for Aussie agricultural exporters where Australia can now agree a FTA with the UK, increasing access for a range of products including wine
- Issue: unemployment excellent Jericho backgrounder on current state of play ABC online
- Policy: fiscal/microhow do each party say they will obtain growth, and what is the OECD saying about Australia? ABC Online
- Fiscal policy at what cost the surplus? An excellent analysis of the timing, and preparation for, the next external shock that must be weathered by the Austalian economy ABC online
- Policy: micro Gittins observes that the parties are essentially silent on micro reform, which with declining terms of trade, is the only path to higher economic development Gittins | while we're at it, check in on Gittins thoughts on the new normal SMH. Consider the symmetry between Australia on the tail end of the mining investment boom, and the globe on the tail end of globalisation....
3 June - GDP data good, but GNI......
A roundup of the interesting and worthy...
- 3.1% for year to March enviable GDP growth data our for the year to end March, but be careful - how much of this is GNI growth? Excellent ABC analysis | GDP/GNI - why does it matter
- ABS commentary always worth a read in the National Accounts to review the component contributions to changes in GDP Commentary
- Devil in the detail must read PM piece on getting into the detail on the National Accounts Living standards actually going backwards despite GDP growth
- Micro reform impact of structural change in the Australian economy - excellent AM example in Tasmania Forestry and tourism in Tassie | and wine as well
The election rolls on, GDP data out this week which should be interesting
- Gittins analysis on the plan... the 10 Year Enterprise Tax Plan is not the jobs and growth plan the Government suggests it is. Must read
- Structural deficit great piece on the budget deficit position - the only path back to surplus is on the back of wages growth and bracket creep.... includes a good explanation of the bond auction process
- Gittins on the election good piece on comparing policy positions consider constraints on fiscal policy
- Monetary policy comment on Stevens recent comments in relation to the impact of monetary policy
17 May the budget unpacking...
- Gold: Fiscal policy evaluation: Gittins evaluates the budget against the objectives of efficiency and income distribution Must read SMH
- Trickle down economics this underpins the 10 Year Enterprise Tax plan which is the centre of the budget - but does it work? Ian Verrender thinks not | Another analysis from The Age
- Limits of monetary policy central banks said to be thinking about helicopter money to achieve growth as monetary policy increasingly impotent Helicopter money: central banks give money to governments who give it to citizens
- Fiscal: tax policy Gittins analyses where the funding of the corporate tax cuts actually come from Hardworking Aussies to pay for the company tax cut
- Fiscal policy, labour market and income distribution Govt increasing subsidies in the nanny pilot Budget boosts the subsidy as only 60 families have participated at $35/hr for nannies
- Fiscal policy, labour market The PaTH internship in the budget, an analysis of the detail Jericho from ABC | Some lawyers suggest it may be illegal
- Fiscal policy One thing to consider is the budget assumptions, especially in relation to sustainable long term growth rates. The budget has a return to 3% growth, but is there a new normal emerging at the tail of the high growth globalisation era such that governments cannot rely on those growth rates (and therefore face lower wage growth, and slower bracket creep, impairing the slow march to surplus?). Lowe, RBA governor in waiting on the new normal | Forbes on the new normal | Bank of Canada on the new normal
- Monetary policy and the plan for jobs and growth JP Morgan sees a future cash rate at 1% as monetary policy the only counter cyclical policy tool at the moment ABC online
- Monetary policy power if we are in a low growth environment, do interest rate cuts help, and should the inflation target be lowered? Ex RBA governor Bernie Fraser muses
- Yr 11: financial market regulation Good short video element from SMH on who regulates our banks SMH
8 May new function release
Essay Magic One of the challenges for both students and teachers is in relation to deconstructing essay questions, and then considering what material to include, and how to structure, an essay response. Essay Magic is an interactive tool enabling essay question construction, which then indicates the way in which a response may be approached. This can then form the basis for conversation and discussion, rather than being prescriptive. It also has a break down of past HSC questions by syllabus topic.
8 May news updates
- Brasil micro woes Good short podcast on the policy environment and failings in Brasil Podcast and summary | Also note the developing post boom analysis from the New York Times the failure of micro policy impairs Brasil
- Monetary policy excellent piece from Martin on monetary policy and possibility of further interest rate cuts SMH
- Gittins on budget mandatory reading excellent positioning of the impact of the strange ScoMo budget - impact on ec growth in the short term is pretty much nil Must read article
- Budget: fiscal policy impact on income distribution and growth budget actually sees a reduction in Newstart payments despite both business and unions seeking higher Newstart payments as part of labour market policy Cuts to dole | Annabel Crabb on the ScoMo budget, that's not a budget, that's a plan ABC online | Ian Verrender looks at the delayed march towards a surplus.... ABC online
- About those tax cuts the ten year plan on corporate tax cuts sees a $48b budget impact ABC PM
- About that intern program... an unexpected part of the budget and labour market policy questions raised about internships
- "That's not a fiscal policy" Shorten channels his inner Crocodile Dundee and lays out a very different fiscal policy from the ScoMo meek budget ABC online the Shorten budget in reply speech | Coverage also from the SMH
- Fiscal policy: stepping back to see the bigger picture: excellent Grattan Institute piece taking a look at successive budget projections, and the standard against which fiscal policy should be judged three tests for the budget
4 May the Budget
Key thoughts and resources from a budget that really does not engage with the structural deficit. Don't forget the RBA lowered rates earlier in the day to the lowest cash rate in history, probably more to cool the dollar than an expectation that a 0.25% reduction would have a sigificant anti-deflationary effect.
- Budget overview pdf from the govt
- Martin from the SMH: A budget that calls for faith: budget does scarecely anything to the economy
- Cassidy: the election will be won or lost elsewhere as this budget seeks not to have large impacts in the short term
- Great overview in charts from the ABC
- Interactive from ABC on revenue and expenditure
- Budget Analysis from EY
28 April 2016
Inflation: deflation for the March quarter with inflation running at 1.3% for the year to end March 2016. ABC online
Fiscal policy quite good piece from Michael Pascoe in relation to current interplay between fiscal and monetary policyPascoe article
13 April 2016 wrap up
Well it's been an extraordinary time in a policy vacuum at the moment in Australia before the first Turnbull/ScoMo budget. So much has been on the table, taken off the table, and what remains is anyone's guess for the budget in a couple of weeks. Whilst every economist seems to agree we have a structural budget deficit, the government is determined to avoid tax increases because of political fallout, and they are fast signing on to trickle down economics with a cut to corporate tax rates supposed to increase GDP, increase employment, and therefore increase taxes. Well......
Some holiday reading
- VCD X&M - shifting to food taking advantage of the China FTA, and the process of industrialisation sees food producers on a mission in China AM article
- Impact of Aust protection policy last factory making fridges in Australia closes Electrolux stops making fridges also note that the OECD examines the implications for older workers
- Political constraint on environmental policy Grattan institute sees a future policy setting only when consensus is possible ABC AM
- Labour market unions signal penalty rates key ground for election strategy ABC AM, whilst wants cuts to penalty rates
- Turbull scare campaign the government focusses attention on the oppositions policies PM article
- COAG reject Turnbull' state tax thought bubble a very significant reform for the Federation had a very short shelf life indeed PM report on COAG
- Renewable energy Government announces new fund, but the govt body ARENA shifts from providing grant to seeking equity. PM piece
- That rising dollar Whilst the TOT has fallen, the AUD has recently seen 8 month highs which is somewhat impairing the rebalancing of the economy What can the RBA do? The impact of the lower dollar can be seen in the largest growth in manufacturing in a decade ABC AM. Of course it doesn't help that the ECB has cut central bank rate to zero.
- ScoMo takes personal tax cuts off the table times are different to Howard/Costello in mining investment boom mark 1 ABC PM
Worthy speeches to read
- Stevens: How do we withstand shocks?
- Dep RBA Governor Lowe: Resilience and Ongoing Challenges
- ScoMo Address to the Australian Financial Review Business Summit, Melbourne
- Treasury: the macroeconomic context
- Treasury: global context and touches on role of IMF
25 February 2016
Currency wars the AUD is firming as a result of the better growth numbers, slight rebound in commodities, and a slower tightening cycle in the US. Time for more jaw boning or intervention? ABC currency wars
Monetary policy Even though cash rate is stuck at 2%, banks are tightening arguing that funding sources are more expensive in foreign capital markets and increased risk Stevens assesses the reasons
G20 - effectiveness diminished in non crisis situation since the urgency of the GFC, getting the G20 to agree and drive change becomes more difficult G20 meeting in Beijing rejects stimulus push | FT reports on policy clashes within G20
- OECD Brasil update
- IMF Brasil update
- Congressional Research Service Brasil background
- EU research service paper - good short eco summary in the middle
- The rot at the heart of the Brasil economy
- Brasil stats resource - ecostats
- Rabobank short overview of the Brasilian economy | Short Economist piece
Trade deficit narrows the AUD as a shock absorber continues to assist the rebalancing of the economy with imports reducing and exports increasing. ABC news
18 February 2016
Unemployment up to 6%: lower growth environment sees unemployment rate tick up, although there are concerns in relation to the reliability of the ABS data all the way to the RBA.
Fiscal policy Turnbull and Morrisson rule out any changes to the GST, and the policy debate appears to have shifted to tax cuts in order to promote growth, which will generate taxes, in order to address structural fiscal deficit - sound like a good plan? Excellent analysis of the position
5 February 2016
Trade deficit blows out in January to fourth worst deficit. ABC
29 January 2016
John Fraser (Treasury) speech: The Australian Budget Context
28 January 2016
Welcome back everybody!
So, a range of useful reading to get back into the swing at the start of the year:
- Stevens' speeches (Nov/Dec) excellent for issues and policy
- Dec inflation low but higher than expected ABC online
- Russian economy suffering with the lower oil price BBC overview
- 5 reasons we are not headed for recession SMH article | Also, Gittins advises caution Ignore the gloom: the Australian economy isn't in bad shape
- TPP will barely benefit Australia SMH analysis
19 January 2016
Back from holidays and working through content updates for the last month. Unemployment has stayed the same, Brasil is in deep trouble, the USD strengthens, negatively impacting inflation and growth around the world, China slows, Brasil is in reverse. Standby for a range of goodness as we approach the new year. Matthew.
Happy MYEFO day although not so good news with deficits expanding as a result of softer iron ore prices and very slow wage growth. Numbers are updated on the right. ABC main points: Deficit: $37.4b in 2015-16, $33.7b in 2016-17, $23.0b in 2017-18, $14.2b in 2018-19 Iron ore price: Revised down from US $48 per tonne to US $39 per tonne GDP: Downgraded to 2.5 per cent, growing to 2.75 per cent in 2016-17. Note the downwards revision of the GDP growth forecast. A worthy read of the document for holiday reading.
Good luck everyone for the HSC results tomorrow!
Unemployment down November down to 5.8% from 5.9%. ABC
GDP growth: good news, led by exports, offset by declining private and public sector CAPEX, growth of 0.9% for the quarter, for the year 2.5% ABC news
This week: Sep quarter growth numbers are out - with business investment significantly decling, will be interesting to see the numbers
Two weeks out from MYEEFO and Deloitte's estimates are ugly reading for the government with softer revenues leading to larger budget deficits as far as the eye can see ABC Just In
Tariffs and dumping: protection Australia imposes new tariff on reinforced steel dumped in Australia by Korea, Singapore, Spain and Taiwan. ABC AM
Globalisation: Greece continues to stagnate years of austerity measures and no real hope in sight ABC AM
TPP in a nutshell from the BBC
Latest RBA minutes suggest that slow China growth is likely, commodity prices to remain sluggish, TOT to stay lower, depreciating dollar providing support to non mining exports, including significant growth in services exports being seen in the half year. SMH
Brasil update excellent update on Brasil from The Economist. Economic development may actually go backwards as a result of failure to address micro reform during the good times of the commodities boom. The Economist
Fiscal policy failure and LNG boom a good analysis of the actual tax impact of the massive investment in LNG assets in Australia during the mining investment boom SMH
Net Foreign Liabilities: Global investor conference in Darwin: evidence of the savings investment gap, the reason for high NPI debits and CAD. ABC AM
Gold Stevens speech: Stevens gives an excellent summary of where we are at and the dabs of future growth. Speech transcript
Fiscal policy Gittins notes that the current Federal discussion about tax proceeds on a revenue neutral assumption, which will not close the structural budget deficit SMH article
Environmental sustainability important CSIRO research to know about proving that protecting the environment can coexist with higher levels of economic growth ABC article
Case study Brasil excellent update on the emerging basket case of Brasil Economist article
Cash rate stays at 2%. SMH article
A bit of a wrap up for the start to the year:
- Inflation stays at 1.5% for the year to 30 Sept 2015. Still below the target range, and with retail banks increasing rates some are wondering if the RBA will lower interest rates in November ABC news
- BOP, TOT and X fall in oil, iron ore and coal prices impair Australian exports, worsen BOGS and may worsen CAD PM transcript
- Protection TPP cleared to pass parliament with opposition support PM piece
- AUD global impacts on the AUD: US Fed increasingly likely to increase rates in December sees the AUD softer AFR article. Some see the AUD at 65c by end of year. SMH
With the 2015 HSC done and dusted, best wishes to all for the marking and results.
Renewals will be emailed out to all teacher subscribers. We now have over 60 schools using the site, which is fantastic.
Best wishes to students, and the economy, for the year ahead.
Key things to make sure you check out
Ever wanted to see all the key stats for Australia easily? Read on!
Economic stats app (which you can use on your phones or computer): EcoStats.
Available at http://matthewparsons.com/further/ecostats.shtml.It is a web app, meaning that you must be online to access, and you always see the latest data without having to update the app. When hitting the link on a mobile device, you can then add an icon to your home page for use later (i.e. it is an icon on your phone). Please note that it is accessed from the link, not from the iTunes store, and works for computers, ios and android.
If you click on the visual display (i.e. the balls for each element of economic growth, internal and external stability), graphs are then available for each of the objectives.
If you use the app on a computer, it automatically resizes to the screen, which is great for projecting in class.
HSC revision questions by topic
Please checkout the revision tool addressing multiple choice and short answer questions from 2014 - 2008 by topic and sub topic within the syllabus. You can review both combined (to see what the distribution of questions were in the paper), or just MC or short answer. These are also obtainable, by subtopic, from within the syllabus tab for the HSC.Visit the trainer now
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