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The Economy

Growth

US will be the world's recovery driver in 2015, Goldies says

VESNA POLJAK 12:43pm The United States economy will carry the rest of the world next year, but the market is underestimating how fast the Federal Reserve will rack up rate rises once they start tightening in September, Goldman Sachs says.

Eco

Small businesses fearing a bleak future

12:24pm People may romanticise about going to the local shops but it appears few of us actually bother.

Economy

RBA's Heath warns mining investment decline a 'significant' drag

The Australian dollar remains above most estimates of its fundamental value, the RBA's head of economic analysis says.

12:17pm The decline in mining investment will be a "significant drag" on Australia's economic growth, even as exports of coal and iron ore provide a boost, according to the central bank's head of economic analysis.

Eco

Stamps could cost $1 a letter as Australia Post looks to stop bleeding

The volume of ­letters delivered has fallen 23 per cent over the past five years from 4.6 billion five years ago to 3.6 billion last year.

Patrick Durkin 7:25am The price of stamps could hit as much as $1 a letter under a radical plan by Australia Post to arrest $328 million in losses on letters, as the community stops sending mail.

Eco

Exploring Australia's shifting 'wealth effect'

Global ratings agency Moody's suggests the Reserve Bank may be relying on out-dated analysis.

Jonathan Shapiro Is the Reserve Bank under-estimating just how sensitive the consumer is to changes in house prices?

Economy

RBA governor Glenn Stevens weighs up tightening home lending standards

Tight-lipped: Reserve Bank governor Glenn Stevens.

PETER MARTIN The Reserve Bank is looking at measures to "stretch out the upswing" in the housing market, governor Glenn Stevens has confirmed.

Japanese investors flee recession by turning to Australia

Japanese economy is slowing down

Bianca Hartge-Hazelman Japanese investors have snapped up $21.7 billion in Australian assets at the fastest pace in nearly four years as the lure of higher relative interest rates and weakness in global growth heightens demand for local bonds and the currency.

Shares

China FTA wins won't happen overnight, warn analysts

Australian businesses will be free to open aged-care operations in China under the new agreement.

MAX MASON Australia’s newly-signed free trade agreement with China is expected to provide significant benefits to the domestic economy, but for listed companies the impact is likely to be felt over the longer term, say fund managers and analysts.

Economy

Would lending restrictions cool the housing market?

The Reserve Bank and Australian Prudential Regulation Authority have not specified what macroprudential policies they may choose for Australia, but economists reckon they will probably include brakes on lending to investors.

CLANCY YEATES There is a growing expectation regulators will soon introduce lending restrictions, known as "macroprudential" policies. But how much difference would this really make?

Minutes

RBA says house price jumps good for economy

Rising home prices are prompting households to spend, the RBA says.

The RBA said rising house prices were adding to household wealth at a time when wages were growing slowly, encouraging people to spend more money.

Shares

Lower profits, weaker market in 2015, predict fund managers

Leading fund managers are predicting a subdued market in 2015.

Bianca Hartge-Hazelman Some of Australia’s best-known fund managers name stocks that should do well in what’s predicted to be a sluggish 2015.

Economy

Who wins in Australia-China free trade agreement?

Chinese President Xi Jinping and Prime Minister Tony Abbott witness the signing of the declaration of intent on the Australia-China Free Trade Agreement.

MAX MASON Several Australian industries stand to benefit from the free trade agreement signed with China. Here’s a quick summary of some of the key winners.

Rates

RBA should cut interest rates to below 2%, says Credit Suisse

Reserve Bank governor Glenn Stevens has to balance overheated property markets in Sydney and Melbourne with the needs of the wider economy.

MARK MULLIGAN Credit Suisse has become the latest bank to call for more official interest rate cuts to support the struggling domestic economy.

G20's major commitment to nothing much new

G20 leaders watching a cultural performance of indigenous dancers that summit in Brisbane.

MICHAEL PASCOE It would be rather funny if global leaders weren't already trying to grow the global economy by as much as possible

Economy

'Entitlement mentality': Sickies costing employers $33b a year, survey finds

MISA HAN Employees are taking nearly 10 sick days a year, costing employers over $33 billion, a survey by an absence management agency finds.

Comments 167

Economy

House price growth to 'decrease markedly', says Saul Eslake

Economist Saul Eslake says the current slowdown in house price growth will continue into 2015, despite record low lending rates.

MARK MULLIGAN House price inflation will decelerate further next year, weighing on construction activity and household sentiment, as real wage and income weakness continues to hold back economic growth, according to a cautionary assessment from the closely-watched economist Saul Eslake.

University status comes at a high price

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ROSS GITTINS Academics know the fast-track to the top comes from the quality and quantity of their research, as evidenced by their publication records.

Comments 132

Economy

Falling oil price a free kick for Australian economy

Oil refinery

Stephen Cauchi The plummeting oil price - trading this week at four-year lows below $US80 a barrel - is a welcome and unexpected "free kick" for most of the Australian economy, according to analysts. And some are even predicting it could fall as low as $US65.

Mr Abbott, the world doesn't need another growth target at G20

Hosting world leaders: Prime Minister Tony Abbott with British Prime Minister David Cameron at an event in Sydney on Friday ahead of the G-20 meeting in Brisbane.

William Pesek Fact is, the G20 will struggle to meet current growth hopes, let alone elevated ones. Rather than obsessing over a nonsense target, Mr Abbott should be focused on making investments at home that will raise productivity and fuel innovation.

Multinational tax details to be kept secret

Tax

NASSIM KHADEM The OECD's head of tax has rejected calls to publicly release country-by-country breakdowns of taxes paid by multinationals, despite growing pressure from community and transparency groups.

Growth

World outlook darkens as investors fear Europe deflation

German chancellor Angela Merkel's standing with investors has plunged over her government's restrictive fiscal policies.

The world economy is in its worst shape in two years, with the euro area and emerging markets deteriorating and the danger of deflation rising, according to a global poll of international investors.

Victorian agriculture among winners from China free trade deal

Mandarins: Tariffs could be reviewed with China.

DARREN GRAY Key sectors of Victorian agriculture are likely to be among the major beneficiaries of the looming free trade deal with China, a market that has bought a booming amount of Victorian farm produce in recent years.

Property

Median asking price for Sydney houses tops $1 million

Sydney's median asking price jumped $10,600 in a week.

Sydney’s median asking price for detached houses topped $1 million this week for the first time as sellers raised expectations in a booming market.

Wages

Miners wages stall as resource boom fades

Wages for mining jobs rose just 0.2 per cent, a third of the national wage inflation rate.

MARK MULLIGAN Australian wage inflation remained subdued in the September quarter, held down by the slowest three-month growth in the mining sector in the history of the data series.

Economy

Consumer pessimism heralds 'disturbing' Christmas sales, Westpac survey shows

Not so merry Christmas? Some 38 per cent of respondents plan to spend less, and 50 per cent want to spend the same on gifts as last year, the survey found.

Stephen Cauchi Consumer confidence has improved marginally in November, but has nevertheless clocked up the longest bout of pessimism since the global financial crisis, the latest Westpac Index shows.And Westpac chief economist Bill Evans described prospects for Christmas as "disturbing", with 38 per cent indicating they will spend less on gifts.

Tony Abbott's G20: Don't mention the word 'inequality'

Gareth Hutchens dinkus Dinkus

GARETH HUTCHENS Someone handed me a document last week. This document was presented at the G20 Sherpa Meeting in Melbourne in June, which is a closed-door meeting.

Economy

Sydney house prices outstrip other cities in September

House price growth in Sydney was miles ahead of other Australian cities in September.

Stephen Cauchi Sydney's house prices continue to soar, with Australian Bureau of Statistics data showing a 2.7 per cent rise for the September quarter - nearly three times that of Australia's other cities.

Economy

Sydney house prices outstrip other cities in September

Stephen Cauchi Sydney's house prices continue to soar, with Australian Bureau of Statistics data showing a 2.7 per cent rise for the September quarter - nearly three times that of Australia's other cities.

Economy

Business confidence slips despite better conditions

Confidence among Australian businesses is sliding, despite what many report as an improvement in business conditions.

MARK MULLIGAN Business confidence continued to wane in October, although operating conditions surged, according to a survey by National Australia Bank.

CrossFit craze a free market success story

The CrossFit craze, booming in Australia and around the world, was founded by American Greg ­Glassman.

LIAM MANNIX In CrossFit’s laissez-faire free market, there are no rules, the strong prosper, the meek do not inherit anything and are destroyed.

Earth to Canberra: the tax review has been done

Michael Pascoe dinkus Dinkus

MICHAEL PASCOE Sunday must have been a slow news day – Tony Abbott’s parliamentary secretary, Josh Frydenberg, managed to get headlines for thinking that payroll tax is not a good and efficient way of raising revenue.

Trade minister Andrew Robb hopeful of signing China FTA soon

Trade Minister Andrew Robb.

Jared Lynch and James Massola A long-awaited free trade agreement between Australia and China could be signed soon.

We need to be smarter about closing the gap

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ROSS GITTINS We've been spending a lot for years without making much headway. So what should we do?

Comments 4

Economy

RBA sees subdued growth, warns Japan flows keep Aussie high

The central bank's policy makers are fretting over a disconnect between falling commodity prices, led by a more than 40 per cent drop in iron ore, and the currency.

The Reserve Bank of Australia said the nation's economy is set to remain subdued and warned Japan's monetary policy could spur flows that support the Aussie dollar "at a higher level than real economic fundamentals would imply."

Tax

Tax leaks: Amazon's Australian figures a mystery

Amazon founder and chief executive Jeff Bezos has demonstrated great determination in its increasing number of pricing disputes.

Neil Chenoweth Amazon’s first Australian accounts declare the online retail giant generated revenue last year of just $1.5 million, reports the Australian Financial Review.

ANALYSIS

Employment to population ratio paints a bleak jobs picture

In October and also in September only 60.5 per cent of the working age population was in a job - the lowest mark in 10 years.

PETER MARTIN The Bureau of Statistics has the jobs numbers back on track. It has reworked its seasonal adjustment process to remove the wild gyrations of recent months that had called into question the entire survey and produced a new set of numbers for October that it believes represents the truth - and they are  awful.

Leak reveals Future Fund and multinationals' secret offshore tax deals

PwC

Georgia Wilkins and Gareth Hutchens Directors of the Australian government's Future Fund as well as PricewaterhouseCoopers, Macquarie and AMP could be forced to face a Senate inquiry into tax avoidance following a global investigation into secret tax deals in Luxembourg.

Employment

Unemployment rate stays steady at 6.2 per cent

No surprises this time: The October jobs data came in as expected by economists.

MARK MULLIGAN Australia's job market grew slightly in October although the unemployment rate was unchanged at 6.2 per cent, according to the Australian Bureau of Statistics.

Tax leaks

Tax leaks: ATO vows to scrutinise multinationals

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GEORGIA WILKINS Australian companies including AMP and the Future Fund have been exposed by one of the biggest tax leaks in history for using Luxembourg to shift profits and avoid tax. 

Retail

How a European duchy makes tax bills disappear

Fedex has been revealed as one of the companies with a secret tax deal in Luxembourg.

Leslie Wayne, Kelly Carr, Marina Walker Guevara, Mar Cabra and Michael Hudson Pepsi, IKEA, FedEx and 340 other international companies have secured secret deals from Luxembourg, allowing many of them to slash their global tax bills while maintaining little presence in the tiny central European duchy, leaked documents show.

Retail

Why IKEA Australia's $1 billion in profits are mostly tax-free

It was not until 2013, after a decade of small profits, that IKEA finally wiped out the accumulated losses to put its Australian arm in the black after 30 years of booming sales.

Neil Chenoweth Despite reporting decades of miserable results, Swedish furniture company IKEA's Australian arm has earned an estimated $1 billion in profits since 2003, and almost all of it has been exported tax-free to Luxembourg and the Netherlands, reports the Australian Financial Review.

Nobel laureate Robert Merton warns Australian superannuation system is risky

Nobel laureate Robert Merton in Sydney.

James Eyers Nobel laureate economist Robert Merton says David Murray’s financial system inquiry must shift how Australia thinks about superannuation. He says the desire to maximise lump-sum balances at retirement is excessively risky; the focus should be on ensuring retirement income is enough to meet a desired standard of living.

Employment. How the Bureau of Statistics got it wrong

Peter Martin dinkus Dinkus

PETER MARTIN The Bureau of Statistics thinks it's got to the bottom of what's been wrong with its employment survey and it's bumped up the unemployment rate to compensate.

RBA leaves rates on hold

MARK MULLIGAN The Reserve Bank of Australia on Tuesday kept interest rates on hold at 2.5 per cent, as it again noted slack in the job market, rising house prices and concerns about growth in China.

Eco

Sydney, Melbourne propping up slowing housing market

MARK MULLIGAN House price growth continues to slow across Australia, and only three capital cities are posting increases, according to the latest monthly survey from RP Data CoreLogic.

Economy

Signs of animal spirits reviving as companies turn to growth

RBA Governor Glenn Stevens has signalled companies need to invest more again to boost growth.

Bianca Hartge-Hazelman Australian businesses could be starting to unleash their animal spirits as fresh data suggests that more companies are focusing on growth rather than cost cutting.

Eco

Small business confidence remains patchy

The NAB survey found that confidence among smaller companies slipped 1 index point, to 4, between the June and September quarter.

MARK MULLIGAN Confidence among small business operators remains patchy despite improving conditions, according to a private sector survey, which also found that larger stock market-listed companies are starting to feel more upbeat.

Crackdown on $1.5 billion illegal overseas gambling sector

The working group will provide recommendations for stamping out illegal betting, which may include requiring local internet service providers to block access to offshore bookmakers.

Patrick Bartley and John Stensholt The federal government and the Victorian government will announce a crackdown on the illegal offshore gambling industry, which is estimated to be worth $1.5 billion annually.

Travel

Asian markets give Australian inbound tourism a boost

International visitor spending is expected to rise by 6 per cent to $33 billion, with total spending including domestic tourism rising to $105 billion.

Jamie Freed A surge in the number of tourists from China, India and Singapore is expected to help drive strong growth in inbound tourism to Australia in the current financial year, says a new report from Tourism Research Australia.

Health

Nib set to beat policyholder growth target

Net margins in nib’s Australian health insurance will be improved in the current year, after the company slumped from its target in the 2014 financial year

Jessica Gardner The chief executive of health insurer nib, Mark Fitzgibbon, says the company will beat the 2 to 3 per cent growth in policyholders expected this year in the broader $19 billion sector.

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