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"Who said that every wish would be heard and answered, when wished on the morning star?"
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Jeffrey Wilson
4.8K posts
Jeffrey Wilson
@JDWilson08
Director of Research and Economics at the Australian Industry Group. @The_AiGroup
East Fremantle, Perth (WA) شامل ہوئے Şubat 2016
800 فالونگ3.2K فالوورز
@IFM_Economist Vs the NRF's normal lending rates, $1b of interest free loans is <$100m p.a. of stimulus. Not zero, but a drop in the ocean against the fuel excise cut (only for three months for now, but annualised is 100x higher)
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@IFM_Economist It was inevitable once they started publishing votes a demand would be made to know who voted for what. Commence a new relationship as you intend to continue it.
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When in all likelihood the Non-RBA members of the Board voted against a March hike this seems long overdue and pretty light on.
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@stephendziedzic Gentle moments are increasingly rare in diplomacy, and shall get rarer still for a while yet I fear.
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File this under: genuinely charming things that only happen to Foreign Ministers when they visit Niue (population approx 1700)
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@IFM_Economist Proposition - how firms respond to the capacity utilisation question on activity surveys is fundamentally different from how economists/RBA understand capacity constraints (ie the output gap).
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NAB business survey sees condition off a bit and confidence up - but the survey was taken before the RBA hiked rates.
Interestingly capacity utilisation ticked lower as did labour costs, purchase costs and final product costs. These data are interesting in the context of the RBA forecasting a surprisingly strong near term inflation pickup.
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@IFM_Economist There's two divergence breaks here - one around 2015 when mining boom ended, another 2022 when pandemic ended. "Q: How did you go bankrupt?" "A: At first slowly, then all of a sudden".
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Interestingly Australia matched the US in real per capita growth from 1985 to 2000 when the dot com bust and GFC 2009 held the US back and mining investment boom pushed Australia forward. Until we faltered in the post-pandemic period.
Indeed it is evident that since 2010 Australia has become overly-reliant on population growth for economic expansion. The end of the first mining boom put Australia on a path we have not been able to change. And monetary policy alone certainly won't be able to alter it.
Alex Joiner 🇦🇺@IFM_Economist
Despite the US having better productivity outcomes than most this narrative has slipped in the post-GFC period (extending the below chart to current data). The question might be if AI can be the that can restore the long term rate of growth?
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@1finaleffort @MattCowgill Make that Freo then yes, yes it is.
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I’m so glad my parents fled their homeland (Lancashire) for the glorious sunlit uplands of Perth, Western Australia
Stefan Schubert@StefanFSchubert
In 2000, UK top 10% incomes were no 3 in the world, but they’ve since gradually fallen and are now behind the rest of the Anglosphere and northwestern Europe; just above Spain and Italy.
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@IFM_Economist This is the invidious policy choice our analysis reveals: Do govts continue labour market support but blow their budgets, or reimpose fiscal discipline but blow the labour market? My concern is no-one is talking about option 3 - return private sector hiring to normal strength.
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Interesting analysis from @JDWilson08 on the reliance of employment growth on government-aligned sectors by state. In 2023-24 Victoria sourced the vast majority of its jobs from these sectors but still had an unemployment rate above the ex-Victoria average.
Fiscal conservatism favoured by most economists (governments should seek to balance budgets at some point) comes with a clear risk to the labour market should the private sector not be able to take up the slack.
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@BenPhillips_ANU Migration is a red herring in terms of the rapid growth in house prices since late 2020. Yet also a convenient scapegoat that distracts from the underlying issues.
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@JDWilson08 Yes agree we do tend to overplay the role of migration on housing.
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ABS population growth on the way back up with annual growth rate increasing for 5 straight months. I'd have expected population growth to 'settle' at a lower rate than ~2% pa. If that were to continue current housing production rates look low.
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@BenPhillips_ANU The Q125 NOM was above trend (data below), but only by ~10k persons. Given long enough this will do it to housing demand, but not yet nor for a while. My concern is that the migration program is being unreasonably blamed for housing problems which are entirely homegrown.
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@JDWilson08 Yes I agree although if we stay at 2% adult pop growth housing needs will be much higher than previously expected (keeping in mind the 1.2m is just an aspiration not a number based on any ‘science’
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@JDMayger @stephendziedzic Yeah but in the Japanese context "limitless joy" totally makes sense doesn't it.
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@stephendziedzic The defence minister said he expressed his “limitless joy” to Marles.
I’d start dropping that into conversations but it’d normally sound sarcastic.
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Statement of the absolute bleeding obvious but Australia's decision to go with the Mogami frigate is a substantial win for Japan and its defence industry. One sign Tokyo is delighted: a Japanese official who tends towards rather dour pessimism sent me a rare🎉 emoji
石破茂@shigeruishiba
今般、豪州政府は、我が国の「もがみ」型護衛艦の能力向上型を豪州海軍の次期汎用フリゲートとして選定しました。豪州政府の決定を歓迎します。 今後、契約締結に向けて、官民一体となって取り組んでいきます。 The Australian Government has selected the upgraded Mogami-class frigate from Japan as the preferred platform for the Royal Australian Navy’s future general-purpose frigates. We welcome the Australian Government’s decision. Going forward, we will work together—across both government and industry—to move toward the conclusion of the contract.
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@SHamiltonian is right - tax reform that rules out spending reform isn't going to get very far.
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@SHamiltonian @IFM_Economist There was some defensive commentary about the historical trajectory of the tax/GDP ratio (something like "higher under Howard") that could do with a fact-check.
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@IFM_Economist @SHamiltonian Throughout his speech, it was presumed the budget was unsustainable due to the tax take being too low, rather than spending being too high. Not one question probed this. Are we accepting 30% of GDP as normal now?
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@SHamiltonian Will be interesting to see what this tax changes are specifically given there was an income tax cut ahead of the election, is that now somehow unsustainable before it has even taken effect?
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@BenPhillips_ANU Having read the expenditure weights for housing items for both CPI and the SLCIs just yesterday, I did know that. But will admit its a very niche professional interest.
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You’d never know it from the endless crisis talk but expenditure shares on rent today are lower today than 5 or 10 years ago (ABS CPI weights for rent) afr.com/property/resid…
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@SHamiltonian As I suspect the last Australian to officially obtain a major in "Economic History" (USyd '05, the year it was discontinued), this is a key and valid distinction. Knowing the interwar debates over free trade is not the same as understanding the impacts of the Tariff Act of 1930.
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@IFM_Economist @DannyDayan5 If five sixths of recent employment growth was govt funded (actual number for the year to Q324!), and you expect that cannot continue next year, you could validly conclude the LM is a lot weaker than headline U implies and about to become moreso, and thus cut at 4.0%.
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It would be unusual, but not unheard of, for the RBA to be easing rates when the unemployment rate is going down. It would have to be abundantly certain inflation is going where it wants. As for falling wages that may take off some inflationary pressure but productivity is the unknown there forecasts in that space are rubbery at best.
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To take the opposite side of the trade. If the RBA has indeed been wrong for some time then why would we entrust that RBA Board to make the decision to cut rates in February or otherwise? Better to leave it to the new Board.
And while being wrong, the labour market has remained tight as inflation has decelerated so where is the RBA's egregious error?
Besides the Bank not doing what you expect or think should happen doesn't necessarily make it wrong.
💧Michael West@MichaelWestBiz
Big 4 banks are betting the RBA is wrong on rates says @MichaelPascoe01 - we find out tomorrow #auspol michaelwest.com.au/big-four-banks…
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@BenPhillips_ANU @MattCowgill I think the broad proposition we have too much low density housing in the exurbs, and too little higher density housing in urban areas, and that this causes all kinds of social and economic problems, is fairly uncontroversial. And that's only corrected with higher build rates.
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@MattCowgill Btw not saying housing supply is not important but we do jump to quick conclusions on the rising market but go a bit shy on the reasons when things go down.
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Now that rents and house prices are flat/negative what does that say about the housing supply shortage narrative? Do we still need the 1.2m dwelling target (which was never going to be met)? abc.net.au/news/2025-01-0…
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@misha_saul @SHamiltonian @FinancialReview Not entirely, as most spending policies do cost now. The cost of this over the forward estimates is only those people who now won't have their last batch of HELP repayments come due in the next four years (ie those who exit repayment early).
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@misha_saul @SHamiltonian @FinancialReview I'll pay that on NDIS, fair, though options that meet the criteria are few and far between.
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