Update for the HSC and latest news
So much has been going on over the holidays and this week. A new PM and Treasurer, replacement for the MDGs, key reports on the global economy and Australi by the IMF, and emerging economies continuing to have currency depreciations with the markets waiting for the Feds to raise interest rates.Updates, quotes and stats for the HSC <-- 11 pages of love!
ANOTHER FEATURE RELEASE - 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 resizes to the screen, which is great for projecting in class.
NEW FEATURE RELEASE
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
Time to look forward to the HSC with some updates and reading
- Brasil waxing and waning - super backgrounder and update | Brasil sinks into recession
- Brasil all fall down
- Australia's LNG projects may be in trouble with the much lower oil price
- Income distribution gets worse in Australia despite long run of growth - latest Gini
- Unemployment - more pressure on domestic steel industry
- Changes in the structure of the economy and jobs
- Forums effectiveness: G20 meeting in Turkey wraps up and global growth targets from Australian meeting looking unlikely
- Issue: Growth. Down to 2% to year to June, and only 0.2% in the quarter
- Protection: French farers protest again for more subsidies and assistance
- Australia not heading to a recession yet despite low growth
- It was actually defence spending that stopped a contraction in the June quarter
- AUD tipped to head down to 60 cents improving international competitiveness
- Good BBC backgrounder on the impact on towns of a lower iron ore price
- Globalisation and convergence: no, maybe a two speed global economy?
- Micro: Stevens speech on reform
- Fiscal: aghast, Hockey talking about tax cuts!
Trials season for some, post trials for others. Some quality reading to consider
- Budget thoughts ABC continues to report that some of the budget assumptions are looking up for Joe.
- Exports Iron ore shipments may be negatively impacted by recent explosion at Chinese port.
- Labour market mining boom may have masked slowdown in real wage growth - excellent explainer. Indeed the SMH reports that wages growth has been the slowest in at least 17 years.
- Exchange rates and exports falling exchange rate, and Chinese threefold revaluation of the Yuan, may yet have a silver living for exporters.
- Unemployment excellent piece on the impact of rising unemployment following the reduction in mining investment.
- Micro reform adrift with the government fixated on helicopter entitlements, and prolonging the vote on same sex marriage, the reform agenda grinds to a halt. Whilst we are thinking micro, a good update from the Productivity Commission in terms of the effectiveness of the current labour market structures.
- Unemployment - why going up less than expected good SMH piece considering some RBA analysis.
Cash rate stays at record low 2%. SMH
Fiscal policy: a bonus for Joe? Whilst tthe growth budget assumptions were very high, changes in other assumptions are aiding budget, including a better iron ore price and lower dollar than budgetted. Good overview.
Labour market draft report from Productivity Commission on industrial relations generally approves current labour market framework. Good piece from Martin in the SMH.
AUD and trade lower dollar proving good for exports - good overview of trends in BOGS.
Environment post carbon tax repeal excellent piece including graph on the changes in emmissions growth as a result of the repeal of the carbon tax.
Brasil - where is the growth now? Excellent overview and update piece from the Financial Times.
A range of general revision resources and updates on what is going on with economic growth, trade flows, and Brasil. Enjoy.
Some recommended reading and resources:
- Great piece on economic growth issues in Australia from ABC
- Hockey needs to redo his growth numbers – pronto
- Al Gore on Australia’s climate position
- Good short piece analysing the issues in relation to increasing the GST Impact of negative gearing
- Trade deficit has economist asking ‘is Australia still a developed economy?
- Australia’s trade deficit of $3.9b its worst on record
- Lower growth might be the new normal
- Tourism tipped to overtake coal as second largest export
- Update from the IMF and Wall Street Journal
- Brasil video update from December 2014 – excellent 24 minutes on Brazil Economy Facts, Population, GDP, Inflation
Inflation up to 1.5% for year to March 2015. ABC online
Global trade and TPP Excellent overview and interactive infographic from the Economist magazine
Unemployment numbers, up to 6.0% in Jun 2015 from revised 5.9% for May. ABC online
Cash rate stays at 2% in July. Business insider
Market surprised by unemployment numbers, down to 6.0% in May 2015. ABC online
Lots happening in the economics world, with largest ever nominal trade deficit for April (but the march quarter trade numbers were not so bad. And of course growth numbers are out with 0.9% for the March quarter, above expectations but still below trend growth
- ABC reports on the March National Accounts and the growth numbers
- SMH reports on disasterous trade data - but take care to note the large impact of storms in Newcastle that significantly impaired coal exports
- Gittins says Hockey's return to surplus not credible - a must read
Continuing to be some interesting post budget analysis on the budget measures and impacts
- Kohler: modern budgets are an exercise in spin a considered take on the effectievenss of fiscal policy and the impact of constraints Kohler
- income distribution highly regarded NATSEM modelling shows adverse income distribution impacts from combination of measures in the 14/15 and 15/16 Federal budgets. ABC online | SMH article
- rebalancing economy Excellent must read RBA speech on managing the transition in the economy. Transcript
- TPP analysis continues on the likely impact - who is it a good idea for? ABC online
- Dealing with ageing population Keating opines on an approach beyond super - a potential area for micro reform? ABC online
Monetary policy Minutes released from last meeting: must read on domestic conditions and considerations for monetary polcy. May minutes
Ok, so the dust has settled a little on the budget and now some analysis is appearing which we can look at and consider. Don't forget the context that the 2012/13 budget locked in spending increases in the forward estimate years which Hockey now has to fund, and he has the challenges of savings measures not passed by the Senate, and softer tax receipts as a reult of lower mining profits, lower corporate profits, and very subdued wages growth. Start with the Gittins summary and then consider the following:
- some suggest the Abbott/Hockey exhortation to have a go, backed by a very small tax cut, and actually a small concession with the bring forward of the investment deprectiation, will be short lived. ABC online. Cassidy is also separating the spin from the policy on the ABC. Jericho good analysis with graphs. And then Kohler asks Where's the infrastructure spend?
- The view from Treasury: whilst previous Treasury Secretaries delivered excellent post bugdget speeches with transcripts, new Treasury Secretary John Fraser instead gave an extended interview at a Grattan Institute function. A podcast is available is in worth a listen. The SMH wrote a small piece reporting the presentation. SMH article
- Gittins' take small measures and a media circus a must read
- counterpoint an alternative view from QIC (Qld govt investment) in relation to the fiscal settings that should be used at the moment in times of weak growth and rebalancing. Their summary on the budget is also quite tight and useful as a summary without the spin. Summary of the 15/16 budget You should also consider the Gittins' analysis of the need for a deficit cutting, yet stimulatory budget
- winners and losers good interactive display of the winners and losers from the budget
- the tradie love warning that the bring forward on deductions might have a larger impact than the estimate in the budget.
- paid parental leave a good summary on the strange policy turnaround, which will result in a better targeted system, but much less of a labour market impact than the original signature policy
Budget articles and resources:
- charts have been updated
- Summary from the government - excellent pdf and check the tables down the back
- Key thoughts: optimistic future growth and non mining investment assumptions make the future outcomes projected questionable
- Note that if one removes the distortion of the 8.5b grant to the RBA in 13/14, the 14/15 budget is actualy expansionary in stance
- Note that spending as a % of GDP in this budget is at the same level as during the Rudd stimulus years
- EcoQuiz - a revision tool with both true false questions and graph recognition covering topic 2 and shortly to cover other topics as well.
- EcoCalcs - mobile simulators for the maths in the course.
- Unemployment rises to 6.3% November numbers out, 6.3% and 12 year high. ABC analysis
- Cash rate stays at 2.5% ABC piece
- Stevens gold must read transcript of AFR interview, wide ranging and excellent background. SMH article summary
- the construction scaffolding metaphor for the IMF is supporting the financial stability of the global economy represented in the middle
- the bicycle pump metaphor for the WTO and trade blocs reflects their goal of increasing trade and financial flows (ie expanding the balloon of GDP within the bloc).
- the stethoscope metaphor for the World Bank reflects its focus on economic development and health, both in the non G20 and G20 economies.
- G20: is it effective: short ABC piece
- Cash rate: RBA leave on hold at emergency level of 2.5% since August 2013
- BOP - CAD widens: September trade deficit doubles to $2.3b driven by lower minerals prices ie lower TOT ABC news | AUD dives as a result: SMH
- Currency wars and the AUD: Aussie under pressure with new currency wars SMH
- Unemployment revised: ABS modifies seasonal approach in labour market stats and restates recent data ABC article
- Fiscal policy and G20 Shorten piece on tax policy and addressing TNC minimisation Shorten piece in SMH
- EU lowers growth forecast low growth levels will see an increase in unemployment in the medium term Fortune article
- Rates stay the same latest RBA decision sees rates stay at 2.5%. SMH article
- IMF lowers global growth forecast Eurozone softness continues to drag on global growth US ABC
- Final 2014 deficit numbers in large Final numbers in for the June 2014 fiscal year, with revenue softness and the RBA transfer driving a $45b deficit. SMH article
- Monetary policy: RBA minutes | Statement of Quarterly monetary policy – read the domestic economy material
- Brasil: may face 1970s style stagflation | Good overall update
- Fiscal policy: Gittins on income distn Taxes: Good Hewson piece on political constraint and fiscal policy
- Fiscal policy: Good short PM piece which has testimony from Glenn Stevens on economic policy
- Unemployment: Good Jericho piece with some graphs to take a look at
- Growth: RBA downgrades ec growth forecast
- Environment: impact of changes to RET target | International coverage | RET perspective | Impact on coal industry
- Perspective: good very short piece from Ken Henry as a reflection
- BOGS surplus up 50% in the March quarter.
- Labour market: business groups seek to reduce penalty rates
- Satirical take on the budget - happy!
- Monetary policy as the great distortion abates: further discussion on the implications of unwinding the central bank growth strategy
- Gittins: the budget is shifty note that whilst labour used the fiscal bulldozer, pushing spending to future years, Hockey is using somewhat of a virus strategy on cuts - small in the early years, but increasing significantly in year 4
- Education policy: uni fees expected to double as a result of deregulation of universties - of course, only if it gets through the Sentate (political constraints on economic policy)
- Income distribution adverse impacts of the budget from the SMH
- Real wages may fall good SMH piece from Nobel laureate in relation to continued impact of globalisation on Australia
- Mining Investment Boom research shows we are now past the peak, and the economy needs to rebalance into housing construction and infrastruture in order to sustain growth. Investment decline is faster than many expected.
- Fiscal policy Excellent ABC fact check that compares PEFO, MYEFO and the budget to see what has actually been going on with the numbers and the assumptions
- Winners and losers: excellent ABC interactive element. States and territories seek urgent meeting in relation to 80b cut from agreements on health and education
- Excellent article that addresses the different economic assumptions in PEFO. MYEFO and the budget - seems there is a little cooking of the books in order to pull a good news rabbit out of the Hockey Hat in future
- Must read Gittins piece and watch the video. Very very good.
- Good interactive element in relation to the major savings. Did anyone say foreign aid?
- Brasil's perfect storm: Dec 2013 Brasil deterioration Dec 2013 Economist
- Brasil's economic trap
- Brasil's non working year
- 2013/14 - $47 billion
- 2014-15 - $34 billion
- 2015-16 - $24 billion
- 2016/17 - $17.7 billion
Pre budget announcements running strong. Focus will be on families, tax cut for small business, spending on security and assisting telcos with metadata review. ABC AM
Is the approach pro-cylical? Interesting thoughts from Queensland academic in relation to the impact of current arrangements on fiscal policy SMH article
Cash rate with subdued wages and economic growth, the RBA moves on the low inflation data and drops target cash rate to lowest on record. SMH
Inflation at 2.3% underlying year ended March 2015 inflation numbers in, and stripping out volatility with movements in oil price sees inflation towards the bottom of the band SMH article Does this give the RBA scope to cut rates. This is also suggested by Steven's speech in New York, which is worth a read in full at the transcript
Environment auction early results of the first government auction to buy carbon pollution ABC online. This is a reverse auction, just like when the government issues bonds, where organisations make bids to the government in relation to the per tonne carbon price they will sell to the government in abatement.
Fiscal policy Hockey says no changes to health and education in the coming budget ABC Online. Curiously, with the reduction to revenues as a result of the declining iron ore price and the below trend growth, will be interesting to see the stance of the coming budget. And now the oppostion are doing what Abbott ruled out, actively considering policy options on negative gearing.
The real issues in rebalancing excellent piece from ABC in relation to the impact on local economies and individuals as a result of the ramp up, and then completion, of very large LNG projects. Excellent.
COAG and micro reform with the Feds view on Federalism kicking responsobility and funding to the states across the economy, the latest COAG meeting was, other than the agreement on domestic violence another wasted opportunity to focus on micro reform agenda
Policy IMF latest view on the Aussie economy. They clearly see the rebalancing growth agenda as tricky - will fiscal policy support it?
Well another term almost down, and looking forward to the next Fed budget with the state elections out of the way, and the intergenerational report and Harper report issued.
VCD XM Iron ore price continues to head south, but don't forget that volumes are substantially up ABC AM. And look at what is happening in high school education with a significant increase in Chinese students entering Australian High Schools earlier PM
Tax policy Re:think….. who thinks the spin up…. 200 page discussion paper launched with all items on the table, unlike the Henry Review of the tax system which had GST and negative gearining off the table. ABC AM | Hockey's position - interview
World Bank orgs and bodies suggestions Australian will sign up to China led Development Bank despite US objections ABC AM
Fiscal policy Business urges govt to be bold and reformist, and not necessarily contractionary in the coming budget ABC AM. Indeed, the Treasurer is now talking of a return to surplus as soon as possilbe in a distinctly changed narrative
Environment A view from the UK in relation to Australia's current approach on protecting the environment and responding to climate change issues ABC PM
VIP - TV series on dereg and micro reform ABC PM piece that foreshadows the Megalogenis piece interviewing past PMs. ABC PM. Watch Episode 1. Also note the emerging discussion on whether, and what, the further reforms are to do Jonathan Green
Must read on policy options Peter Hartcher in the SMH on the current effectiveness of monetary policy, and medium term availability of fiscal policy, as meaningful policy options to manage a downturn in Australia Excellent
Supply side and iron ore good overview of the supply side influences adversely impacting the iron ore price and BOGS ABC news
Labour market excellent fact check piece on the face of the Australian labour market ABC fact check
Globalisation pressures protests in the streets in Frankfurt as new ECB building opens ABC PM
Lower AUD and foreign real estate investment Estimates are now that 9% of the investor market in domestic real estate is foreign ABC pm
AUD and global factors nice piece from the SMH on the impact on the value of the AUD of the Fed deferring interest rate increases SMH
Globalisation impact on internal stability with the decline in commodity prices, and the winding down of investment levels from the Mining Investment boom, thousands of jobs are now being shed among mining companies and related businesses SMH
Unemployment 6.3% down as a result of a fall in participation rate. SMH
Policy levers sensational interview on AM with ex RBA board member. transcript and audio
AUD fluctuations and impacts nice summary piece on AM transcript
Ec growth speech excellent speech from the RBA, Australian Economic Growth – The How, What and Where: Christopher Kent, Assistant Governor (Economic). read the speech
GDP growth super super commentary from Greg Jericho in the Guardian. Excellent for Band 6+
Good news on CAD latest stats for Dec quarter shows CAD continues to improve
Cash rate remains unchanged at 2.25%. Media statement
Gold Gold Gold for Australia First speech from the new Secretary of Treasury. Must read, contradicts Abbott and Hockey and comments on policy history and challenges. Also see his performance to Senators
Effectiveness of monetary policy Animal spirits more important than rate reductions at the moment - good ABC piece on monetary policy as an instrument to manage the economy right now. | Jericho article
Brasil on the slide Wall Street Journal on the struggles of the Brasil economy.
Iron ore price impact: Good piece on the impact on the major miners.
Gittins on reform strong piece on what went wrong on the way to the budget and future implications.
Globalisation and shipping excellent backgrounder from the BBC on containerised shipping operations.
Fiscal policy circus strong ABC piece on the current state of policy making on the fiscal side. Not a great report card. ABC article
TPP - what is it again? Backgrounder on current status in relation to large, US lead, secret negotiations in relation to the Trans Pacific Partnership.
RBA minutes - must read excellent overviews of the domestic and international economic conditions - must read as the rates turn south. | SMH article. Also see Gittins piece
Monetary policy strength Super piece from Stevens' testimony at Fed Committee - impact on monetary policy may be weakened with lower consumer confidence - worth a read
Fiscal and micro reform Ex Treasury official says we might just need a recession in order to make people focus on reform and micro SMH article
Tax concessions - time to think…. Excellent piece from Martin on the range of tax concessions that need to come under attention - if the political will can be summoned. Martin article. In the same vein, a look at the last budget
Ec dev and global economy China moves to allay concerns that new development bank will compete with World Bank ABC article
Unemployment rate up 6.4% is the rate for January - pretty inevitable given the GDP growth numbers below trend (Okun's law). Now at a 12 year high
Fiscal policy Hockey muses - budget may never get back to surplus in the medium term SMH article
Domestic economic conditions excellent summary from the latest RBA Statement of Monetary Policy.
Inflation Gittins does it again with a great explanatory piece for students.
Forecasts looking ahead - a good primer on the coming year from Australia's leading economists. smh article
Trade deficit falls numbers are in for December quarter. In good economic news, Bureau of Statistics figures show the trade deficit declined 57 per cent in December to stand at just $436 million. ABC article
Inflation lower: Dec 14 data in showing inflation softer with lower oil prices, but note that underlying inflation is still running at 2.2% (trimmed mean). ABC article | Great backgrounder to the issues: worth reading
Welcome to 2015
Welcome back to 2015. Take a look at the following for mobile phone usage for you and your students. They can be accessed on your computer, or ideally on your mobile device and click the button on your mobile device to add to the home page of your (and their) device.
Contractionary fiscal policy problems HSBC economist begins to suggest that Hockey's fiscal program may be hurting growth when it is necessary to rebalance economy ABC
Myefo joy. Not. MYEFO released, and the government forced to significantly increase deficit forecast as a result of lower TOT, lower iron ore price, lower wages growth and subdued taxes. Partially offset with cuts to Foreign Aid - again. MYEFO documents
Some holiday reading, and best wishes to teachers and students for HSC results next week.
Must read from RBA on economy Excellent speech from Assistant Governor Christopher Kent on the business cycle
Environment Whilst Abbott did not want climate change at the G20, unavoidable given US/China deal, and now he is under pressure in relationship with China following FTA letter of intent. SMH article. Even Canada has pledged funds to assist the development of the developing world in an environmentally sustainable fashion - where is Australia?
Australia China FTA negotiations deal not signed - to follow in 2015 but details emerging SMH article. Also see the good analysis of who wins and loses. Good interview with Penny Wong on AM. Also hear Joyce on free trade
Growth in the Aust economy - prospects excellent must read from Gittins
Exports: milk to China next stop for Gina is milk to China, which will increase post FTA. piece from AM
Poster resource for topic 1
Please review the two posters on global bodies to print as A3 for your classroom or provide to your students in relation to Topic 1. They provide a way for students to better understand, and remember, the relationships and roles of the various bodies and organisations in the syllabus.
When discussing with your students
I hope you find these useful, and would welcome any questions or feedback you may have on hsceco.com.au
RBA monetary policy statement always excellent reading for Band 6 RBA quarterly statement
Warnings from some Morgan Stanley suggests stimulus may prove necessary to support growth in the Australian economy
Understanding the G20 excellent backgrounder with analysis from the ABC ABC The Drum
AUD on the slide dropping AUD following Republican win in the US down to lowest value in several years but good news for exporters
A lot happening at the moment, with G20, trade figures, unemployment figures reset, slow growth in the EU and currency wars.
Environment latest IPCC report adds pressure to government ABC PM
The end of QE Fed announces the end of QE (printing money), and the AUD drops one cent. Good overview from ABC PM
Fiscal policy govt increases fuel excise by tabled regulation rather than passage of law through Senate - tricky problem if the Senate vetoes in 12 months ABC PM
Inpacts of ageing population Excellent speech from Christopher Kent, Assistant Governor (Economic) at the RBA Ageing and Australia's Economic Outlook
Australia, China and US good short overview of changing relationships with Australia's increasing trade relationship with China ABC AM
China FTA negotiations excellent backgrounder about the real impact on domestic industry as a result of FTA processes ABC AM
HSC over for another year, bring on 2015. Subscription renewal emails will shortly be issued for the 2015 HSC year.
Structural reform excellent AM interview with Hockey in terms of monetary, fiscal and micro policy. Transcript and audio
BOP, X and AD China demand for steel slowing - excellent SMH article
Brasil Dilma wins a second term, but challenges remain. Good BBC piece
APEC: China hosts next meeting and shuts factories in order to try to get pollution under control ABC article
Gittins on Whitlam must read from Gittins on the period the Whitlam era
Inflation down to 2.3% repeal of carbon tax shows up in CPI data and lowers inflation to 2.3%, World Today article
RBA minutes last one before the HSC is out, read the minutes
China tariffs impact on Australia of protection policies of other nations - leading into the China FTA further discussions China adds coal tariff. ABC article
11 - 18 September
AUD slumps Dual impact of softer iron ore price and Fed tapering sees the AUD drop ABC article
Unemployment August number softens to 6.1%, although there is disquiet in relation to whether a record number of jobs were added during the month of August. ABC article
Lower global growth OECD lowers global growth forecast
Historical gold on policy Swan article which has link to Treasury letter. Highly recommend reading the linked letter from Treasury
Brasil, Brasil, into recession goes Brasil Brasil falls into recession: great for evaluations!
Mining tax gone Deal with PUP means the mining tax gone, but consider the income distribution impacts of changes to super (deferral and no top up payments for low income earners). ABC AM must read
Labour market Liberal senator calls for removal of penalty rates for young workers ABC news
Unemployment at 6.4% Headline number up, but be careful, the method of measurement in the survey changed a little so we really need to wait for some trend data. Checkout the youth unemployment levels though… Good Gittins piece | Good ABC article
Fiscal policy choices Gittins suggests that some of the harshness in the budget was Treasury advice ignored by previous government. Article
Gold: RBA quarterly statement on monetary policy RBA lower growth forecast, and as always, the domestic economy conditions chapter is mandatory band 6 reading. Statement
Interest rates on hold No surprises with the RBA keeping target cash rate at the same level since August 2013, but pressure is building for a rate increase. SMH article. Note commentary in relation to the heated housing sector and a need to control the uplift. Excellent piece on the decision making process being anything but easy at the moment. Good piece on AM
Drop in June trade deficit Australia’s seasonally-adjusted trade deficit narrowed by $320 million, to $1.7 billion, in June as lower imports and higher rural exports and volumes helped offset soft prices for iron ore and other minerals. SMH artricle
Labour shortage in 2030? Consulting group forecasts another labour shortage looming.
Budget status Legislative roadblock in the senate, Abbott may reconsider some of the Newstart elements, paid parental leave is on the backburner, but Hockey is looking for creative ways to find savings without needing Senate approval
Environment Gittins on how the renewable energy target affects the cost of living
Must read Gittins fiscal policy Fairer path to a balanced budget looks at the tax side as well as spending SMH article
Bank funding Aussie banks taking advantage of cheaper offshore wholesale debt markets to raise finance. SMH article
Labour market More than 200,000 Australians aged over 50 are now on the dole, new figures show, with the number of older Australians receiving unemployment benefits dramatically increasing in the past four years. ABC article
Risks to Aust growth OECD economist says Australia more vulnerable than before the GFC. ABC article
Currency wars Goldman Sachs analysis of impacts on RBA policy making of QE ABC article
Resources sector consolidation coming as a result of increased capacity and lower prices ABC article
Brasil central bank action US13b injection into economy by reducing bank reserve requirements
Inflation 3% inflation is out for the June Quarter, running at 3.0% headline and a little lower underlying. ABC report
Need for productivity lift Melbourne Economic forum this week continued the conversationon on the need for productivity lift to increase GDP per cap going forward. Good ABC short video Also consider the overview from Garnaut and for more advanced reading, the moelling
Understanding Chinese investment Excellent interactive tracker of Chinese investment in Australian and around the world.
BRIC development bank unhappy with the World Bank/IMF, the BRICS have now announced a $100b development bank. Guardian overview
Welcome back to term 3 - headed into the championship end for the HSC students.
Transcript of interview with RBA Governor the Australian had an extended interview with Glenn Stevens which is highly recommended reading for Band 5 and Band 6. Read the transcript. Commentary from the Australian
RBA minutes minutes of the last meeting will be available later today at the RBA minutes page.
Unemployment rises to 6% great analysis by the ABC including state breakdowns.
AUD decoupling from TOT Good piece from Kohler in relation to the upwards movement of the dollar despite the downwards movement of the terms of trade.
Stiglitz interview somewhat an extension resource, but always worth reading or watching an interview with Stiglitz which touches on the Australian and global economies. View the video and transcript.
Analysis of 9 years' HSC multi choice questions Enjoy and review this analysis of exams over the past nine years. You can also use this as an index to identify questions on particular syllabus topic areas to build up your skill. Open the pdf.
Super RBA speech Stevens' economic update makes excellent reading
Super Treasury speech Excellent analysis of the impact of the resources boom
Gittins comments on the Treasury speech, excellent reading from the SMH
Hope everyone is enjoying the holidays
Trade deficit slumps May results show almost $2b trade deficit as a result of falling iron ore price.
Impact of carbon tax Good piece on electricity pricing and an analysis of why prices are up - it might not be what you expect Gittins
Budget - not sustainable Detail matters says Gittins with a focus in the budget on cutting expenditures below sustainable levels in order to keep taxes to a lower % of GDP
When the mining boom slows Excellent Wall Street Journal piece on the impact on Australia mining towns of the boom bust cycle.
Income distribution Good piece from Andrew Leigh on Hockey's lifters and leaners
Efficiency in mining With lower iron ore price, efficency and productivity becomes more important BHP piece from PM
Mining sector impacts Excellent Gittins piece on how the continuing investment can have a subtracting impact on growth, and then the export phase of the mining boom (and the impact on imports). Recommended Band 6 reading.
March growth annualised 3.5% SMH with video. Economy expanded at a stronger-than-expected a seasonally adjusted 1.1 per cent in the March quarter, with an annual growth rate of 3.5 per cent. Gittins commentary
Well so much going on. Quarterly growth numbers are out today, monetary policy is in a long term holding pattern waiting to see the rebalancing of the economy, fiscal policy is on planet Palmer (although note that really it only has a $4b impact in 2014/15 at most), exports are storming along, the minimum wage announcement is today and the review of Micro Policy continues.
Distributional impacts NATSEM analysis confirms burden of the cuts fall most heavily on poorest families
And the senate?So how many budget measures will pass the Senate? Be careful, with the total cuts only worth 4b this year, even if the agenda is compromised the differential impact on the bottom line is not massive this year. However, as the cuts build in their bite, the real difference will be the need to address the structural deficit with tax reform in the near term - ie not to achieve tax cuts made possible by reducing the size and scale of government services and assistance. Labour only the pass the deficit tax on upper income earners. Excellent SMH state of play piece
Parky at it again in his last post budget breakfast, Parkinson again gives a gift to HSC economics teachers and students. Must read.
Gittins special An excellent look at the detail of the budget - the small impact this year etc. As shown in the graphs below, the bite is a long way away. So Swan back ended the spending, and Hockey back ends the cuts.
Gold must read Excellent Gittins analysis of the non fiscal drag of the budget, and Mike Carlton on the politics.
Income distribution These impacts must be carefully considered, see Allard's excellent piece on the income inequality impact, and Martin's analysis on the poor.
Winners and losers Great ABC interactive outline
Unemployment stays at 5.8% ABC reports unemployment stays at 5.8% in April
Pre budget follies Mark II The what's in, what's out games continue, however some decent analysis is emerging in relation to the nature of the challenge. Key takeaways: the audit only looked at the spending side (not the tax side), however the structural issue relates to the revenue side of the budget. Most of the Commission of Audit recommendations will never see the light of day. Excellent summary from Peter Martin.
Budget frenzy When is a tax not a tax? Pre budget silly season continues, however a couple of quality must reads at this point: ABC analysis and excellent 2 minute video, a strong analytic SMH editorial. Finance minister interview on ABC AM this morning
Issue: unemployment Concerns emerging in relation to the increase in youth unemployment - good piece from the ABC.
And lastly, the Commission of Audit is due out later today, but ABC AM had some leaks to discuss.
Pre budget frolics With the budget soon to be finalised for printing, waters are tested by the government on a range of measures, including changes to the pension age or a deficit levy on high income earners - reaction from the opposition and good Australian analysis. Note that the budget would return to surplus in the long term with the increasing impact of bracket creep (as wages increase with inflation, but the brackets for the marginal tax rates are not indexed). This was what the Swan government was counting on in the long term, and results in a long term increase in the average rate of personal income taxes.
Abbott and the audit The Commission of Audit will be released on Thursday, and Abbott is looking to share around the pain. Short Abbott video on addressing structural issues
Tariff policy and the end of the car industry Super piece from Four Corners tracing the reduction in tariffs on the car industry, and the impacts on individuals, firms and government. Must watch for year 12 students. View the video and transcript
China relationship Good SMH piece on the China relationship, both on the export and FDI side. Read article
AUD and fx Good Michael Pascoe piece in relation to the impact of the high AUD in controlling inflation and leaving space for the RBA to refrain from lifting interest rates, giving space for the transition from the mining investment boom to a housing construction boom as the engine of growth.
TPP - need to know Excellent BBC backgrounder on the TPP negotiations
Holiday update will be up shortly!
Welcome back to the new term everyone. Hockey struggles to finalise the budget, Obama struggles to get Asian countries on the line with the TPP, and some great four corners pieces.
Unemployment falls a lower participation rate and Australia's jobless rate falls. SMH article
FTA frenzy Abbott and Australian business entourage touring Asia to pursue and sign FTAs. One announced with Japan, signed with South Korea, and then onwards to China. ABC article | Great ABC piece: what is an FTA | ABC PM interview with Abbott | Band 6 extension
Monetary policy: interest rates unchanged overview of the language of the decision from Michael Pascoe
Gittins: is bracket creep a tax increase? Gittins highlights that the tax increase via bracket creep that is currently in the Treasury revenue forecasts is more regressive than an increase in the rate of the GST. Read the article
Budget ructions Hockey starts the sell in relation to the structural deficit and the need to reign in spending. This is partly because of election commitments to reduce carbon and mining taxes, add spending for parental leave, and make no new tax increases without taking them to an election. Means that modifications to the budget can really only come from the spending side, and even then, the projected increases are such that returning to surplus via cuts is unlikely in the short term. Australian: Hockey warns of budget pain. Good analysis from Macrobusiness
Gittins on budget choices Sometimes you have to stand back and see if you can get a perspective on policy making. Gittins provides a thought
Hockey on AM good interview on AM this morning with Joe Hockey
Gittins looking forward to the budget With the Abbott government's close relations with big business, we're still to see whether its reign will be one of greater or less rent-seeking by particular industries. So far we have evidence going both ways. Read more from the SMH. Also - don't forget that you can always use icognito in Chrome, or private browsing in other browsers, to access SMH content.
Hockey budget working to get support from the states to sell infrastructure assets as part of growth plans ABC PM
As budget season looms its good to have the basics on taxes understood in relation to policy settings. Article from the ABC.
How to get growth when the Fed budget will be contractionary? Hockey will attempt and likely succeed to convince states to sell assets to raise funds to invest in infrastructure with the carrot of keeping the company taxes that the newly privivatised business will generate for the feds. ABC article
IMF role and effectiveness IMF already involved in making loan to Ukraine, and check out the conditions attaching in terms of macro framework. Article from reuters.
G20/G8 effectiveness interesting with Russia expelled from G8 following Crimea expansion, and the BRICs warn Australia not to exclude Russia from the upcoming G20 summit. Article from SMH
Effectiveness of WTO China loses dispute at WTO in relation to export quotas on rare earth minerals required for electronics manufacture. Story from ABC
Fiscal policy and infrastructure spend some sobering thoughts from Gittins on the desire by Abbott to forge ahead as the infrastructure prime minister SMH article
Stevens speech Band 6 must read speech delivered in Hong Kong on global and domestic economies. Read the speech
BOGS updated data Don't forget that recent data means what is happening in the economy now - a good summary of recent trade movements from the ABC.
Medibank on the block Govt announces that they will sell Medibank - here's a way to fund the budget….. Estimated are around 4b.
Opposition perspective on budget ABC AM interview with Bowen worth a read and a reflect.
BOP and net foreign equity Gittins writes a great piece on history of BOP outcomes, and notes the ABS data from earlier in March that shows net foreign equity for the first time. Read the article
Fiscal policy Good article from Gittins on the realities around the mining tax.
Labour markets are different Gittins again on why the labour market is different - useful for year 11 and year 12
Australia growth picture Westpac thinks growth will remain below trend next year.
Fiscal policy Must watch interview with Ken Henry on the realities of tax and fiscal policy.
RBA speech on productivity, innovation and demographics Good speech for Band 6 from the deputy governor of the RBA - provides great perspective on the productivity imperative.
Unemployment stays at 6% Data out from the ABS - read the smh summary.
Post resources boom a perspective to consider, but bear in the mind that the resources export boom may last 20-30 years. ABC also writes about demand side issues for iron ore from China steel mills
Fiscal policy failure: the MRRT Remember the mining tax, and the poor miners? An interesting piece from the SMH on the profit position….
Fiscal policy needs tax reform Ken Henry, Chair of the Henry Tax Review, reminds us again that the blueprint for tax reform has been ignored, and the structural deficit in the budget remains to be addressed.
Income distribution ABC piece on the level of the newstart allowance and implications for health.
Monetary Policy Good Stevens interview on ABC PM on directionality of monetary policy
Deputy governor RBA speech today waiting for a great speech to be delivered and released today: Speech by Philip Lowe, Deputy Governor – Demographics, Productivity and Innovation – to the Sydney Institute, Sydney
Gittins must read summary of the ABS data At last some good news on the economy. This week's national accounts for the December quarter show the economy speeding up and, in the process, starting its fabled transition away from being driven largely by mining investment. Read the article
Chinese tourism investment Looking for the next investment boom driven by an increasing Chinese middle class? Tourism investment has already started - $4b+ in Qld on one development. Read the article Stevens on PM Good short interview with RBA chief on PM Story and transcript
Stevens on non mining investment Stevens (RBA) says mining investment reducing and business investment not yet responding - good report in SMH
Trade surplus again! Australia posted a large $1.4 billion trade surplus in January, its best in two-and-a-half-years. The nation exported $1,433 million more in goods and services than it purchased from overseas, which is the highest positive trade balance since August 2011. More from the ABC
5 March - BIG DAY FOR STATS
ABS release for economic growth sees Australia growing at 2.8% for the year ended 31 December 2013
Must read on CAD the Chief Economist at the CBA has written an outstanding piece on the history and likely future of the CAD or CAS in Australia.
Limitations on policy Gittins explores some of the increasing limitations on good micro and macro policy in the Australian political context
Economic growth and the environment Good piece on the current high level of smog in Beijing from the SMH.
Role of the World Bank: World Bank stalls 90m loan to Uganda as a result of anti-gay laws
Issue: unemployment: Excellent piece on where are all the jobs going - the impact of technology and globalisation on jobs
Welcome to our new student and teacher subscribers this week
G20 agreement: counterpoint Interesting ABC piece on why the G20 target is something that in reality will be ignored.
TPP thoughts Need to be careful with patents, and an update on the latest round of negotiations in Singapore
Issue: unemployment Note that the increase in unemployment to 6% somewhat masks an increase in the level of underemployment which is a key element for students to understand. Note that wages growth has been the lowest in 16 years
Topic 2: global inequality: Excellent video interview with the World Bank in relation to the importance of tackling poverty in delivering world growth.
External stability and exchange rates: A reasoned piece on different scenarios and the impact on the AUD - did someone say 66cents! Read the Deutsche Bank view in the SMH.
Economic issue: growth: Good Michael Pascoe piece on why the G20 growth target is not really a stretch in the Australian context, and is hardly a mandate for IR reform.
G20 summary from AFR: excellent video from the AFR - consider using private browsing or incognito browsing in Chrome in order to view.ABC AM coverage. Useful map of g20 members
Internal stability Australia's youth unemployment is on the rise. Also, review the statistics in this story about Bidwell
Micro reform: labour markets Productivity Commission tasked to review IR laws A Gittins' perspective on the Federal governent anti union push, with the Royal Commission
G20: TNC taxes: Good explanation from the SMH and the IMF in relation to the extent of tax shifting (legal) by TNCs.
Looking forward to federal budget Fiscal policy choices for Hockey - health, welfare and education pose tough choices for Hockey's first budget
G20 agree on global growth target lift The G20 finance ministers meeting has agreed to target a lift in global growth that is 2 per cent higher than current forecasts over five years. ABC coverage, Actual G20 Communique
The G20 and Australia must read Gittins piece on the G20 and its importance for Australia.
TPP discussions in Singapore US led Trans Pacific Partnership talks continue, which would be a trade bloc for 40% of GWP. Economist article and a good perspective on the global trade architecture. Good piece from the ABC
OECD warning on growth OECD warns that the world is facing an extended period of low economic growth without major reforms. Article from ABC. Read the OECD report
Hockey and running out of money Hockey says we are running out of money for Medicare etc. SMH article
Gold Briefing note from the IMF on the G20 talks in Sydney this weekend. Also note that the head of the IMF is on Q&A tonight.
Hockey on G20 Jobs and growth will be the focus for G20. Note that Finance Ministers, head of the Fed and IMF will all be in Sydney this weekend for meetings leading up to G20 meeting this year.
Trans pacific partnership Good overview of TPP progress from SMH, although must read Gittins fears on TPP from last year and also checkout the secrecy of the negotiations.
New FTA with South Korea good overview from AM, but be careful, it is not in force yet (later this year).
IMF contradicts Abbott on debt IMF study does not find linkage between debt as a percentage of GDP and decreased growth rates
Protectionism no cure for our woes - ABC piece arguing for productivity not protection, but concerns arising about distribution of income impact. Excellent Gittins piece on the role of government in job creation
Benefits of the boom squandered by bickering: why the mining tax debacle is a huge failure of economic policy.
Unemployment numbers: an outstanding explanation about how unemployment numbers are calculated by the ABS
Gates of protection emerge good Economist piece on how globalisation has paused a little - must read
RBA on the resources boom and the AUD Excellent speech delivered by Assistant Governor of the RBA. Transcript
ABC fact check on farm subsidies Short piece confirming Turnbull claim that our farmer's are among the least subsidised in the world
Employment shifting to services: great SMH piece with graphs on the structural changes in the Australian labour market.
Car tariffs in Australia: comparison of Australia's car tariff to other countries, and examples of impact on domestic car prices
Counterpoint on the decline of manufacturing: A historian in the SMH reflects on the impacts.
What now for Aust manufacturing?: 7:30 report considers the future of Australian manufacturing post auto makers - where are the sunrise industries?
Qantas seeking government debt guarantees: With no corporate welfare for Holden, Coca Cola Amatil and SPC Ardmona, and a senate that won't pass changes to foreign ownership restrictions on the airline, the Qantas CEO pleads his case for help.
IMF endorses return to surplus: IMF report agrees with fiscal contraction, but is concerned with softening growth with the decline in mining investment. Also suggests AUD is too high
Checkout the actual IMF report pdf - excellent for Band 6 students
Gittins cautions: 35,000 jobs is not that many to lose: "You think 35,000 is a huge number of jobs to be lost? It isn't. It's 0.3 per cent of all jobs, equivalent to about two months' net job creation in a normal year." Read the article | Gittins video: the end of Aussie made cars
Treasury analysis of past growth: From a speech by David Gruen at Treasury last year, this slide has a great exposition of contributions to growth in the Australian economy. Powerpoint file
Fiction of excessive wage growth Gittins brings some common sense to the debate.
Toyota follows Holden and Ford Another example of the difficulty of Australian manufacturing as Toyota signals end. Good piece from PM
Subsidies in ethanol - an analysis Report into ethanol subsidies finds not economic sense. ABC news piece
Gittins must read historic overview: Superb piece for students on the role of treasurers past, the economic conditions and the policy responses. Absolute must read and consider.
Gittins must read - Ross has a short outline of what he considers the top 10 economic reforms in Australia over the last 40 years. This is gold and must read for students - if they do not know what these are, time to go check them out
RBA quarterly statement on Monetary Policy: released Domestic econonic conditions analysis is always valuable. SMH analysis. The RBA also have revised upwards the pessimistic growth forecasts that were included in MYEFO by Hockey
Goods surplus 184m in Dec 2013 turning around a 250m deficit in November. ABS release 5368.0 - International Trade in Goods and Services, Australia, Dec 2013
Hockey speech to the Lowy Institute| ABC coverage - looking for individuals and businesses to more self reliant
Rebalancing the economy as mining investment reduces: great ABC piece on the growth challenges for the Australian economy. RBA chart of investment
Looking ahead to the budget - the implications of too contractionary a stance: whilst fiscal policy tightening is directionally correct, will Hockey cut more deeply than the economy requires?
Dumping - protection used to prevent: excellent AM piece on determination in relation to dumping of Italian tomatoes on Australian markets, and the likely regulatory response and overseas approaches. About Australia's Anti Dumping Commission
Monetary policy: excellent SMH piece on likely movements in interest rates having regard to slowing growth and rising unemployment
Problems ahead for the BRICs: excellent short video from CNN post Davos
Year 11 Teachers - A3 sheets on introduction material
Printing A3 summary sheets for students that link concepts, and provide small activities around definitions and key concepts are useful for students to consolidate understanding. Download powerpoint file for printing as A3
RBA leaves rates on hold: Good summary from ABC
Federal budget 2015: and it starts. With the new government determined to cut to return to surplus to honour election commitments, with a structural deficit (not enough taxes), and an economy slowing down after the peak of mining investment, a lower dollar causing inflationary pressures, and unemployment rising as a result of lower than trend growth, Gittins points out that economically speaking that approach is all wrong.
SPC Ardmona: government rejects request for $25m assistance
Pressure mounts on emerging nations to lift interest to combat tide of capital returning to US FT piece with Brasil central banker interviewed. Evidence of volatility introduced by globalisation and the efforts of policy makers to deal with volatility.
Argentina softeness will hurt Brasil as close trading partners. Also good discussion of use by emerging markets of US currency reserves to manage volatility Forbes
US drop tapering back again, now $65b per month, which in an increasingly globalised and interconnected world is seeing capital flight from other economies - several countries increase interest rates or try capital controls to address strong depreciation in their currencies.
CNN and the fragile 5
Unintended consequences | ABC
Great interactive graphic from the Economist on debt load (debt as %gdp) of various economies, with breakout of household, business and government debt. Interactive graphic
Australia, wages and unemployment: Reaction to Senator Abetz warning of wage explosion - nice historical context
Impacts of QE tapering: The US QE program continues to generate 75B stimulus each month, but the reduction (tapering) has seen significant capital flows to the US and away from other economies, resulting in pressure on the AUD, the Argentine peso, and the Turkish currency (where the government raised interest rates).
Government's welfare review: who are the targets, and what is the current spending pattern? Federal Government has announced that social welfare payments will come under the microscope as part of spending review.
Income inequality: Advance Australia fair? Maybe not. An Australia Day perspective
Hockey on volatility: Australia needs to spend within its means - but where will growth come from?
Relationship with China and the shift to tourism: Good NAB and McKinsey piece
Lower dollar and the inflation headache for the government
External stability in action: Argentina peso in major slump and government policy in trouble. Argentina to ease foreign exchange controls after peso slump
22 Jan: Dec qtr inflation up
Inflation release by ABC for Dec qtr - annual rate 2.7%.
Australia and participation rate: Employment agencies see despair as job seekers lose hope Participation rate fell 0.2% in Dec, and 30,000 fulltime jobs lost | Story on AM | Dollar dives on jobs number and lower growth
The labour market lost more than 67,000 full-time jobs over the past year as the unemployment rate remained at a four-year high of 5.8 per cent in December. Read more
IMF head Christine Lagarde warns of deflation risks. Must read in the context of why deflation is a very bad outcome and targetting small inflation is the best route
China and US in dispute at WTO in relation to high tech steel: More from BBC
A couple of excellent thoughtful opinion pieces from ABC in relation to the currency, and the looming fiscal challenges for Hockey with structural problems in the budget and a need to address the revenue side.
Cassidy on Hockey's challenge
Kohler on the need to raise revenue
Janda on future downward movements of the AUD
8 Jan 2014
SMH reports IMF will revise up their global growth forecasts in 3 weeks. Last forecast was global economy to grow 2.9 per cent year-on-year in 2013 and 3.6 per cent in 2014. That represented a downward revision of 0.3 and 0.2 from July estimates. Read article .
7 Jan 2014
Australia's trade deficit smaller than expected, driven mostly by a fall in imports.
BOGS -$118 million in November, better than -300 million expected. Exports just up, imorts down 1% (esp consumer goods, outbound tourism and cars reducing offsetting 9% increase in household electronics). Ore price and volume up, coal volumes down. Read article
17 Dec 2013
MYEFO coverage - crtical
Budget deficits forecast in MYEFO