Investing in high-voltage transmission lines
When, in the midst of the pandemic, the Economic Society of Australia invited 150 of Australia’s keenest young thinkers to come up with “brief, specific and actionable” proposals to improve the economy, amid scores of ideas about improving job matching, changing the tax system, providing non-repayable loans to businesses and accelerating telehealth, two proposals stood…
Negative interest rates explained
A week ahead of Thursday’s budget update, it finally happened. Instead of the government paying to borrow in a way that would add to the burden on the budget (as has happened since time immemorial) it actually got paid to borrow. Think about that. Investors with millions of dollars to lend went to the Australian…
Bitcoin: 3 reasons why this rebound is different
Bitcoin is back. Three years after the bubble that inflated its value from US$5,000 to US$20,000 in less than three months burst in spectacular fashion, plunging more than 80%, the cryptocurrency is again on the verge of a record high. In recent days it has been trading above US$19,000, up from US$10,000 in October and…
Melbourne petrol prices lift; Used car prices up;
Melbourne petrol prices lift; Used car prices up Credit card lending falls; ‘Lowflation’ Petrol Prices; Used car prices; Private Sector Credit; Inflation Fuel prices: The national average price of unleaded petrol fell by 3.3 cents to 118.9 cents a litre (c/l) last week according to the Australian Institute of Petroleum. Metropolitan prices declined 5.2 cents…
The transition to renewable energy
Australia’s electricity system is undergoing unprecedented change arising from the proliferation of renewable energy generation, with South Australia and parts of the National Energy Market (NEM) already reaching the highest level of renewable penetration in the world. While such rapid transition is positive for our decarbonization efforts, our exiting grid system is not designed to cope with…
Why zero interest rates are here to stay
It’d be wrong to interpret last week’s Reserve Bank decision to cut its cash rate to 0.10% as an emergency response to the COVID crisis. The implication would be that once the pandemic is controlled the economy will return to something like the pre-crisis “normal” and the ultra-low interest rates will end. In reality, in…
Is a flood of liquidity entering markets?
As interest rates creep lower and asset-buying programs expand, contrarian investors have been steamrollered by liquidity and momentum. Yet abundant liquidity and plausible storytelling can only sustain markets for so long, and every story needs an ending. We prefer to leave expensive technology businesses to others, while focusing on neglected long-duration businesses with proven earnings…
Investing in aged care and childcare almost pays for itself
In the absence of an official analysis of the impact of the budget by gender the National Foundation for Australian Women has this morning published its own gender analysis of the budget, across multiple dimensions. It finds the government has invested heavily in things that will mainly benefit men, including apprenticeships and traineeships (two-thirds of…
Savings at petrol pump. Used car prices lift
Savings at petrol pump. Used car prices lift Petrol Prices; Used car prices; New vehicle sales; Services; Inflation Fuel prices: The national average price of unleaded petrol rose 1.3 cents to 116.5 cents a litre last week according to the Australian Institute of Petroleum. Inflation: The Melbourne Institute inflation gauge rose by 0.1 per cent…
Keating is right the RBA should do more
Former prime minister Paul Keating isn’t alone in wanting the Reserve Bank to do much more to ensure economic recovery. In an opinion piece for major newspapers he has said it ought to be directly funding government spending rather than indirectly by buying government bonds from third parties. But we think there’s something else the…
