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Global and domestic economic news and stats

Latest news

Welcome

FYI Strategic Economics, the new Year 12 Textbook, is available for purchase. See for further information.

Drop me an email with feedback or a question!

NEWS IS NOW TAGGED UP STORIES ON A BLOG

Up to date news stories, tagged according to topic and sub topic for easier review, is now available at http://matthewparsons.com/econews


Budget, budget, election, go

Don't miss the latest IMF report on Australia or the OECD latest report


  • Unemployment - 5% latest ABS december 2018
  • Inflation - 1.8% latest for the December 2018 Quarter
  • MYEFO - must read here - particularly for the revenue update and surplus projections pdf download
  • mining investment - the mining companies are beginning to commence some new projests for the first time since the peak of the investment boom ABC news
  • Exchange rate - some suggest may be headed to 60 cents this year ABC news
  • Monetary policy - evenly balanced between going up and going down - must read Lowe Speech.transcript
  • Global economy - must read gold from Lagarde at the IMF with a good historical overview of the multilateral institutional framework Transcript from the IMF
  • Global economy - excellent report from the World Bank Global Economic Prospects - Darkening Skies

Unemployment down to NAIRU

October 2018

Excellent must read RBA speach by Guy Debelle

Excellent must read analysis of final budget outcome for 2018 - see Budget website for PBO analysis


Budget 2018

Well ScoMo had the third budget tonight, which gave back half the tax uplift from the commodities price bounce and the end of tax losses being used up by corporates from the GFC. A contractionary budget, with a small surplus (wafer thin) a year earlier, but trying to lock in tax cuts even beyond the estimates and projections in the budget documents!

Fiscal policy graphs from EcoStats

Some key reading

In more mundance news around the traps

  • the RBA has left the target cash rate at 1.5% and signalled no likely move in the medium term, and the move when it occurs is likely up (anyone surprised?)
  • unemployment stays at 5.5% in Mar (Feb got adjusted to 5.5%) - so we do have record jobs growth, but record low wages growth
  • BOGS up to $1.5b surpluls in March ABS

2 Apr

I am hard at work on the 2019 HSC textbook which will be available for Term 4. If you are interested in this one, do drop me an email!

Some recent readings for teachers and students from around the world


26 Feb

Some absolute gold has been published recently by the IMF in relation to Australia - read the originals as well as the Gittins commentary.

  • Article IV consultation paper in relation to Australia IMF report
  • Selected issues paper which includes outstanding articles on BOP movements and Australia's linkages with China Selected issues report
  • Gittins does the summary of the IMF BOP article SMH article
  • Gittins on the IMF view on Australia's foreign debt SMH article

14 Feb

Some economic news as a distraction from the politics in Canberra.

Brasil updates


Welcome back to the new school year! 2018

Some interesting times across the holidays - below is a range of resources clustered somewhat by Topic for teachers and Year 12 students to brush off the cobwebs.

Topic 1

Topic 2

Topics 3 & 4 - Issues and policies

Year 11


26 November

Some economic news worth a read


15 November

With the HSC done and dusted, some observations first, and then some news from around the economic world.

First the 2017 exam, and some observations and thoughts

  • less predictable the perspective to make exams less predictable influenced this paper, as well as influencing the Business Studies paper. Less predictable can mean departing from a pattern of question frequency, combining cross topic elements, and less anchoring to learn to constructs in the formulation of extended response questions
  • no graphs... graph models (ie protection graphs, ADAS, Phillips, Lorenz or foreign exchange graphs) were not present in section 1 and section 2 of the paper. At all. Departure from 2016 (3 graphs), 2015 (2 graphs), 2014 (2 graphs), 2013 (3 graphs)
  • no tables in MC answers for the last couple of years several questions have had answers in a tabular layout to decrease reading difficulty (apparantly), ie 2013 (9), 2014 (8), 2015 (5), 2016 (3), 2017 (0)
  • 2 MC questions on one content area again in the unpredictable space, q2 and q18 both addressed public goods
  • less predictable some different formulations in multiple choice from what had been seen previously - with the message that one needs to consider novel/different ways for content to be assessed rather than track the modality and approaches of past papers. For example consider
    • q5 (not directly indicating micro reform but referencing AS increase),
    • q12 (an ordering question in relation to income shares, with four elements in each option),
    • q15 (select the year in which the calculation answer is x),
    • q17 (net errors and omissions, rather than core BOP items, being used analytically),
    • q19 (algebra elements in table formulation of a multiplier question),
    • q20 (exchange rate question mixing USD per AUD, and AUD per USD). Moral of the story, in internal assessment consider crafting different/not previously seen methods of examining the content
  • comments on shorts and essays to following

And in economic news


26 October

Some interesting things happening after a quiet 2 weeks on the economic news and policy front:

  • Fiscal policy excellent piece, a little retrospective, but engages with the question of the extent to which (small) the Fed Fiscal policy has been responsible for the period of uninterupted growth SMH
  • Fiscal latest Treasury speech on Australia's Economic and Fiscal Outlook
  • Fiscal and political constraint Turnbull's uni funding cuts killed in Senate and company tax cut also in trouble
  • Environment policy we have no clean energy target but a NEG. so what's a NEG? | SMH
  • Issues > Inflation inflation for Sep qtr in and yearly inflation down from 1.9% to 1.8% due to offset reduced grocery prices and increased electricity prices ABS 6401 | ABC online
  • Issues > unemployment and Policy > Labour Markets Note there has been a significant reduction in the proportion of employees on EAs compared to awards, as companies try to reduce costs by negotiating lower pay and conditions or let EAs terminate and employees revert to lower award conditions. SMH Woolworths article | background
  • Policy climate Treasury Sec John Fraser warns banks and households in relation to debt buildup and the risk with interest rate moves given historically low wages growth SMH
  • Policy Major new 5 yearly Productivity Commission Report to pair with the Intergenerational Report in relation to economic reform and productivity. Summary at SMH, report at Shifting the Dial - Productivity Commission, but note that it also recommends a carbon price and is critial of current environment policy
  • External stability - exports China's pollution crack down sees industries close for periods with adverse implications for iron ore and coal exports SMH
  • Wages growth, wages growth, where for art thou wages growth? with the return to surplus conditioned upon bracket creep as a result of wages growth, and the RBA concerned about household consumption and debt servicing with record low wages growth it is becoming a front of mind policy issue SMH - government holding its breath over wages growth, are wage rises coming?
  • Unemployment lowers to 5.5% in September, just above the NAIRU, but where is the wages growth pressure? ABS 6202, SMH | where the new jobs are - SMH
  • Minimum wage, what minimum wage? interesting piece in relation to the number of people in Australia for whom the national minimum wage is not a lived reality SMH
  • External stability crisis a current example with Venezuela - must read
  • IMF and wages growth IMF is beginning to get concerned about low global wages growth and would you believe are recommended MORE government intervention in the market and an increase in minimum wages

  • The passing of Holden need to note the impact of tariff cuts, subsidy uncertainty, and the impact of the high AUG during MIB ABC online | News.com | Historical piece from ABC | CNN | worker perspective

1 October

Welcome to the new HSC year! Here's a roundup of worthwhile reading both for HSC 2017 and HSC 2018.


1 September

Well it's the downhill stretch post trials, time to get some good reading in to access those high marks, and here is a selection. Note that the domestic economic agenda is not exactly white hot at the moment with the possibly unconstitutional same sex marriage vote, and the possibly unconstitutionally elected parliamentarians.....

Brasil update resources

Interesting Year 11 financial markets regulation


8 August

Some interesting reading to sharpen the mind towards the end of the course and the HSC

  • Global economy excellent overall perspective piece from The Economist in relation to changes and trends in the global economy
  • RBA monetary policy on hold retaining the record low 1.5% set in August 2016. Checkout the latest Quarterly Statement on Monetary Policy
  • RBA education resources the RBA are investing in these again directed towards high schools, with some short publications and also film of the recent day at the RBA for economics teachers. Be sure to check them out at the RBA Education tab on their website These are going to be added to over time.
  • Global economy the BRICs are dead - time for a new acronym of the the TICKS. Excellent FT article
  • Brasil excellent overview from EY with some good summary material in terms of the policy settings and outcomes in the former BRIC EY publication Also see the excellent update from The Conversation Further information can be obtained by Googling Santander's economic briefs which are excellent.

27 July

Some things to take a look at one the run in to trials

  • Inflation numbers out yesterday have inflation at 1.9 headline and underlying 1.8%. ABC coverage | SMH | SMH - the forecasters got it wring
  • Monetary policy excellent speech again from the RBA Governor yesterday The RBA and Monetary Policy
  • exchange rates and international competitiveness with the AUD breaking 80%, that slows net exports little, increases imports, slows the economy, which makes it more difficult for the RBA to return to their announced long term neutral level of interest rates. SMH coverage on the currency
  • mining export boom after the mining investment booms, we are now entering the mining export boom. Check out the huge floating LNG platform worlds largest FLNG in Australia
  • Eurozone update Greece moves to a new bond issue - first since the crisis Guardian coverage
  • Inequality and the pendulum swing away from new liberalism Shorten positions Labor to focus on inequality movement at next election SMH article. ScoMo replied that no problem here, but oLowe in the speech yesterday acknowledge that income inequality, in the long term, had worsened in Australia. Gittins on the neoliberal demise

18 July

A news update - been out of action with shoulder surgery, but here's a selection around the world leading into the trials


16 June

News on the environment, and lower unemployment (6-18 months after target cash rate dropped to record low of 1.5% in August 2016....)

Contribution to growth 12 months to March 2017


7 June

Interesting day with GDP number out later. Other news while you wait!


4 June

Big week this week with CAD and GDP numbers and passing the Netherlands

Some MUST READ resources for all teachers and students reflecting on policy, micro, monetary and fisal in recent history


28 May some worthy readings from around the world


And some post budget musings...


Budget night 2017 - another three word phrase. Fairness, opportunity, security







26 Apr 2017

Welcome back to a new term, with lots happening with the budget frolics.


10 Apr 2017

A roundup of reading for the holidays

  • Government intervention excellent Gittins piece on why politicians are addicted to economic success SMH article
  • Topic 4: monetary policy why the RBA is stuck between a rock and a hard place. Drop rates to encourage growth, but only to fuel a bousing bubble....ABC online
  • Topic 4: micro excellent Gittins piece on where reform has gone. SMH article
  • Topic 4: Fiscal policy Why the tax cut will really not deliver jobs and growth ABC online | Gittins on Jobs and Growth
  • Topics 2 & 3 - external stability A breakdown of the Australian net foreign debt position SMH article
  • Topics 3 & 4 - labour market policy former RBA governor Fraser weighs in on the cut to penalty rates ABC online
  • Yr 11: Financial regulation why regulators are losing sleep over the housing bubble ABC online
  • Topic 1: international division of labour how China built factories by buying those in the west, dismantling, and then shipping to China SMH article
  • Extension: Australia's labour market Gittins explores why it is not quite as simple as price floors when intervening in the labour market SMH article
  • Labour market 11 & 12 underempployment is the highest it has been in 40 year SMH analysis

16 Mar 2017

Ok, time for an update with the new unemployment data out, the US raise interest rates, and everyone is cruising into half yearly exams.


10 March - A Brasil update and roundup

1 Mar 2017

Boom - the growth boomer in the December quarter comes in at 1.1% on the back of a jump in the terms of trade, increased export volumes, and increases in household consumption. ABC Online. Annual growth to Dec 16 is a very strong 2.4%. Australia avoids technical recession.

Contributions to growth


28 Feb 2017

Well the term is in full swing, and much happening with BOP data, and with GDP data to be announced tomorrow.

  • Topic 2: BOP: December trade numbers are the best in 40 years as the export boom is entered, investment boom almost unwound, and terms of trade on an unexpected turnaround. Absolute must read to understand changes beyond the scope of the textbooks. ABC online | Business Insider Read it again folks, CAD for the Dec 16 quarter was only 0.9% GDP! UBS suggest on way to CA surplus, which CBA suggested back in 2012 as a possible result in this part of the minerals export story.
  • More news tomorrow following the GDP update to see if the export kick is enough to keep us out of technical recession.

11 Feb 2017

  • Gruen gold Excellent speech by Dr David Gruen, Department of the Prime Minister and Cabinet that elegantly addresses the impact of the mining investment boom, and the process of the rebalancing of the Australian Economy Speech transcript must read | Also read Gittins on the transition that incorporates the Gruen analysis Gittins SMH
  • Lowe gold RBA keeps interest rates on hold and Lowe delivers an outstanding speech on the current policy settings, achievements of the Australian economy, and some challenges ahead Speech transcript must read
  • Three in a row - the IMF summarises Australia the article IV consultation is just finished, and the IMF document provides a fantastic summary, and example of economics writing, for students and teachers. Download the pdf and enjoy
  • Future for the Aust economy Michael Janda of the ABC looks at the tea leaves of the RBA statement on monetary policy ABC online

2 Feb 2017


25 January 17

Inflation number out Year to 31 December 2016 only 1.5% - below target. SMH | ABS data


24 January 17 - Happy New Year

Back on deck after 5 weeks in South Africa, Tanzania and Zambia which certainly gives a perspective on economic development and trade negotiations - but more on that later.

We have Trump in the House, Baird depart, the TPP a lame duck, the Aussie dollar firming with concerns over Trump's plans for the USD, and a hard BREXIT with adverse implications for UK and global growth. Challenging and interesting times ahead - at least Australia does not yet have to cope with "alternative facts "."

FIRST UP - A NEW BALANCE OF PAYMENTS RESOURCE

Here is a link to BOPMAN which you can use in class, which is an interactive character based introduction and explanation of the balance of payments. It has visuals, audio, and some activities. I would be very interested to hear your feedback.

BOPMAN: the adventures of an economic superhero

More news updates in the coming days folks. I am also in the process of making sure invoices have gone out for 2017.


Holiday news update

  • Topic 2: FTAs the demise of the TPP with Trumps's Executive Order - Peter Martin reflects that that may not be a bad thing. Good discussion of the actual export and import impact of Australia's FTAs. Peter Martin
  • Topic 3: Exports tourism set to fill the hole left by mining investment ABC online
  • Topic 2: Exchange rate whereto the AUD? Trended up on higher commodity prices, and Trump desire for a lower USD, but a global trade war may have negative implications SMH article
  • Topic 2: Balance of payments Australia records a trade surplus on the back of higher coal prices ABC online | ABS data
  • Topic 1: Brasil excellent WSJ article on the underlying causes of the reversal in Brasil's economic fortunes
  • Topic 1: Globalisation excellent piece on globalisation and income inequality from Stiglitz
  • All topics: Global growth IMF revises global growth upwards in a Trump era, but warns on protection and volatility ABC online
  • Topics 3&4: Economic growth immigration levels have masked Australia's economic decline despite the quarter century of unbroken growth ABC online
  • Topics 3&4: Australia The Murphy's law forecast for the Australian economy in 2017 ABC online | Also take a read of Gittins' analysis in relation to the impact of knowledge and rocks on economic growth Gittins
  • Topics 3&4: Unemployment ticked up in December to 5.8% ABC online | ABS stats
  • Topic 4: Environment policy Australia's environment policy continues to be somewhat messy and evolving, a good summary of current position and what 2017 may hold from the ABC online
  • GFC 10 years on a reflection nice piece from the SMH looking back, and considering the continuing implications as nations struggle with growth even 10 years later SMH article
  • Trump: bleak economics An analysis of Trumponomics by leading economists SMH

19 December

Well results are out, and holidays are in - here's an update from Zanzibar in Tanzania where I am on holiday.


7 December

GDP growth so the number is out, and the number is soft with -0.5% growth for the September quarter, and year to Sep Qtr only 1.8%. ABC online


5 December

A big week, with the September quarter GDP numbers due out Wednesday, and with softness in the CAPEX numbers some are beginning to wonder about whether the quarter will be a negative GDP outcome.

Some other articles around the world of interest


23 November



And its Trump.


28 October

Some updates on key stats for the HSC


16 October

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


6 October

  • 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


16 September

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


9 September

GDP, cash rate, and the departure of Stevens. Some gold in the leadup to the exams


30 August

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


14 August

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


28 July

Inflation lowest in 17 years with year to June 2016 coming in at only 1.0%


14 July

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



27 June

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...




29 May

The election rolls on, GDP data out this week which should be interesting




17 May the budget unpacking...




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.

EssayMagic




8 May news updates

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.


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


25 February 2016

GDP growth 3% average strong GDP growth data for the December quarter on the back of a lower AUD and a decrease in the household savings rate. ABC online | Excellent Gittins analysis | Peter Martin

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

Brasil gold

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

Cash rate remains at historical low 2% as RBA plays wait and see. Stevens. Latest quarterly Statment of Monetary Policy provides excellent domestic economy summary. | SMH

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:


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.


15 December

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!


10 December

Unemployment down November down to 5.8% from 5.9%. ABC


2 December

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


30 November

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

Gold: Stevens speech excellent speech from the Governor in relation to long term growth trends and factors Transcript His earlier speech is also excellent.

Tariffs and dumping: protection Australia imposes new tariff on reinforced steel dumped in Australia by Korea, Singapore, Spain and Taiwan. ABC AM

Micro reform: Harmer Fed government response to Harmer report is out, and endorse approach other than the "effects test" which may have actually enhanced competition ABC AM | SMH

Globalisation: Greece continues to stagnate years of austerity measures and no real hope in sight ABC AM


18 November

Unemployment officially drops to 5.9% SMH, but many commentators are wondering about the data.Stephen Long at the ABC

FTA's next trade negotiation on Turnbull's radar is Europe SMH. Note also that DFAT already has a Euro page up.

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


10 November

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 drivers 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


4 November

Cash rate stays at 2%. SMH article

30 October

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

18 October

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

Mobile stats

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 res 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


Previous news stories

See the news archive for previous stories


Historical Key stats

Numbers are for year ended 30 June (GDP, Budget etc), or as at 30 June (inflation, unemployment etc).

First column is mining investment (%GDP), then economic growth, fiscal policy, GDP, internal stability numbers (unemployment and inflation) and then monetary policy. Note that during MIB1, mildly contractionary fiscal policy and tightening monetary policy to control inflationary pressures caused by mining investment boom (somewhat offset by higher dollar). GFC sees large fiscal policy and supporting monetary policy, With resumption of MIB2, monetary policy tightens, and fiscal becomes contractionary. After peak of mining investment boom, monetary policy is loosened (counter cyclical), however fiscal policy is pro cyclical (ie the stablisiation work is being done by monetary policy).

GDP is Yearly Chain Volume Measure ABS 5206 Table 34.




MI
% GDP

EcG
% GDP

Bud
$ bil


Bud
% GDP

Une
%


Infl
%

Cash Rate
%

MIB1
             
2002 1.8 4.0 -1.1 -0.1 6.5 2.8 4.75
2003 1.9 3.0 7.4 0.9 6.0 2.6 4.75
2004 2.2 4.0 8.0 0.9 5.5 2.5 5.25
2005 2.4 3.2 13.6 1.5 4.9 2.5 5.50
2006 3.0 2.8 15.8 1.6 4.8 4.0 5.75
2007 3.5 3.8 17.2 1.6 4.3 2.1 6.25
2008 4.0 3.7 19.8 1.7 4.2 4.4 7.25

GFC
             
2009 4.0 1.9 -27.0 -2.1 5.9 1.4 3.00
2010 4.2 2.1 -54.5 -4.2 5.2 3.1 4.50

MIB2
             
2011 5.6 2.5 -47.5 -3.4 4.9 3.5 4.75
2012 7.2 3.9 -43.4 -2.9 5.2 1.2 3.50
2013 7.7 2.6 -18.8 -1.2 5.7 2.4 2.75
2014 7.0 2.6 -48.5 -3.0 6.0 3.0 2.50
2015 6.2 2.4 -37.9 -2.3 6.0 1.5 2.00
2016 3.5 2.8 -39.6 -2.4 5.8 1.0 1.5
2017 2.0 2.1 -33.2 -1.9 5.7 1.9 1.5
2018 1.7 2.9 -10.1 -0.5 5.4 2.2 1.5
   
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Table of key stats

Economic growth annual 1.8% Sep 19
Economic growth qtrly 0.4% Sep 19

Internal stability
Unemployment 5.1% Dec 19
Inflation 1.8% Dec 19
- Underlying inflation 1.5% Dec 19
- RBA target cash rate 0.75% Dec 19

External stability
Terms of trade (% change yr +8% Sep 19
TWI from RBA 58.5 Jan 20
Household savings ratio 4.8% Sep 19
Net foreign debt %GDP 59% Sep 19
Net foreign liabilities %GDP 49% Sep 19

BOGS %GDP 4.2% Sep 19
NPI %GDP -2.6% Sep 19
CAD %GDP -1.6% Sep 19

Fiscal policy
Underlying cash outcome %GDP
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20 est budget
2020/21 est budget
2021/22 est budget
2022/23 est budget
1.7%
-2.1%
-4.2%
-3.4%
-2.9%
-1.2%
-3.0%
-2.3%
-2.4%
-1.9%
-0.5%
0.0%
0.3%
0.3%
0.4%
0.2%
20b
-27b
-55b
-48b
-43b
-19b
-48.5b
-37.9b
-39.6b
-33.2b
-10.1b
-0.7b
5.0b
6.1b
8.4b
4.0b