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The Economy

Market eyes 6000 ahead of RBA meeting

BIANCA HARTGE-HAZELMAN 7:38am Australian shares are on course to smash through 6000 points on Tuesday amid better-than-even bets that the Reserve Bank will cut rates to 2 per cent.

The boom is about to go bust

Asset bubbles are putting retirement savings at risk.

BIANCA HARTGE-HAZELMAN 11:35pm One of the country's more bearish investment experts has warned baby boomers that their retirement savings are at risk.

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'No economic benefit' in further surge in house prices, economists warn RBA

Pumping house prices by cutting interest rates is doing nothing for the economy, leading economists say.

MARK MULLIGAN 7:29pm Further interest rate cuts risk intensifying dangerous imbalances already building in the economy.

House price metrics headed to new highs: Barclays

Barclays says there are no signs that house price increases are easing.

MARK MULLIGAN 11:02am House prices relative to income are close to historic highs in Australia, and it’s not just Sydneysiders stretching their finances to get into the property market.

Government urged to help as manufacturing fades

Australia is importing large numbers of workers with IT and engineering skills on temporary 457 visas in response to demand.

9:46am The federal government is being urged to use its May budget to boost the economy, after Australia's manufacturing sector shrank for the third straight month.

Bets mount on second RBA cash rate cut in two months

Economists tip fourth-quarter GDP growth, released on Wednesday, between 0.5 and 0.8 per cent.

MARK MULLIGAN The sluggish pace of Australia's economic rebalancing that has been confirmed in recent data could bring on a second cut in the cash rate in as many months on Tuesday.

Advances in statistical science mean we only need a census every 10 years

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ROSS GITTINS What's the difference between a census – a full count – and a sample survey? The census will always be superior, right? Not really.

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The gay pay gap: men earn less, but women earn more

Gay men are paid up to 18 per cent less than their heterosexual counterparts, a study has found.

MATT WADE A new dimension of workplace discrimination has been exposed: the gay pay gap.

Time for debate on superannuation tax, says Treasury Secretary John Fraser

Secretary of Treasury John Fraser during a Senate hearing at Parliament House in Canberra on Wednesday 25 February 2015. Photo: Alex Ellinghausen

CLANCY YEATES Generous tax breaks for superannuation and "middle-class welfare" must be debated as part of the government's attempt to fix deep-seated budget problems, new Treasury Secretary John Fraser says.

Why another interest rate cut is coming

Will the RBA announce another interest rate cut on Tuesday?

MICHAEL PASCOE Yesterday the Australian Bureau of Statistics ratified the Reserve Bank’s decision to cut interest rates and set the RBA up to do it again, perhaps as soon as Tuesday.

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Yellen defends Fed against Republican charges of bias

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Christopher Condon and Steve Matthews Janet Yellen was forced to defend the Federal Reserve against accusations that it's politically partial to the Obama administration and liberal groups during heated exchanges with Republican members of Congress.

China headed for soft landing, export-dependent Australia says

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Michael Heath and Enda Curran China's economy looks headed for a soft landing. At least that's what BHP Billiton and Australia's central bank chief Glenn Stevens are signaling 5,600 kilometres away. While China's growth has slowed, the best estimate of Aussie exporters and policy makers is that housing demand from the migration of rural Chinese to cities will help avert an abrupt further slump in expansion.

Weak capex numbers increase rate cut chances

The data were worse than market expectations of a total 1.6 per cent decline, and the Australian dollar dived about one-third of a US cent to about US78.60ยข.

MARK MULLIGAN The chance of a second cash rate cut as early as next week intensified on Thursday after fresh data showed imbalances in the Australian economy are worse than expected.

Milk wars: Caution, Kiwis, as Europe's cows finally come home

A big increase in European production will shake up the global market for dairy products.

MICHAEL PASCOE The global rush to cash in on China's rampant demand for milk has only just begun.

New fees, fines for foreign property investors

Buyers have pushed up auction clearance rates in Sydney and Melbourne.

Australia plans to charge fees to foreign nationals buying residential property and fine those who break foreign investment laws, in an attempt to improve housing affordability amid some of the world's highest property prices.

Construction slumps further in December quarter

With the end of the mining investment boom, the value of engineering works has slumped more than 12 per cent last year.

MARK MULLIGAN Building and engineering activity slipped again in the three months of last year as the wind-down in resources-related construction continued to drag on the Australian economy.

Interest rate cut chances increase as wage growth stagnates

The wage price index grew at its lowest annual rate in 18 years.

MARK MULLIGAN Wage growth has dropped to its lowest level since the current data series began in 1997, adding to chances that the Reserve Bank of Australia will cut interest rates again.

Israel becomes 20th central bank to cut rates this year

Mario Draghi, president of the European Central Bank

Vanessa Desloires A wave of monetary easing is sweeping the globe as countries fight the threat of deflation. Here's a list of all the central banks that have cut rates in 2015.

Capex data to shine a light on business sentiment

Part of the new training facilities for engineering apprentices at TAFE Illawarra's Wollongong campus. Picture by Greg Ellis.

MARK MULLIGAN Private-sector spending on plant and equipment should partly offset a further decline in resource-related engineering works and softness in non-residential construction, according to previews of this week’s all-important capital expenditure data.

Saul Eslake says interest rate cuts might be 'ineffective'

Saul Eslake predicts an increase in the median national dwelling price from an average $469,000 to $497,000 by the end of this year.

MARK MULLIGAN Lower interest rates may do nothing more than further inflate house prices, says economist Saul Eslake.

Australia Post profit falls 56% as letters business crashes

Australia Post

Patrick Durkin Australia Post is set to deliver its first ever full-year loss, after posting a $98 million first-half profit, down 56 per cent on the previous year.

The great first home buyer myth

The first home buyer hasn't been quite the endangered species he and she have been made out to be.

MICHAEL PASCOE You know the story about first home buyers squeezed out of the market, forever beaten at auctions, sometimes spun with an undertone of foreigners robbing “our children” of their birthright? It’s rubbish.

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Long-term employment trends: retired workers happy to put their feet up

Labour force

ROSS GITTINS The trouble with the way the media report developments in the labour market from one month to the next is that we don't get a sense of the major shifts that occur over time.

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Australia looking cheap as offshore bargain hunters move in

If you were buying out of Hong Kong, Australian property got cheaper in the past six months.

MICHAEL PASCOE If you happened to be paying in Hong Kong dollars, Sydney house prices fell by 10 per cent in the past half year.

Why retailers are struggling to pick up steam

In the vital Christmas month, retail sales grew by just 0.2 per cent.

MAX MASON The Reserve Bank of Australia has been one of the biggest cheerleaders in pushing for a recovery in retail spending to help fill that gap left by the tailing off of the resources boom.

RBA rate cut fans Sydney, Melbourne housing markets

Buyers have pushed up auction clearance rates in Sydney and Melbourne.

February's rate cut appears to be fanning flames in the already overheated property markets of Sydney and Melbourne.

Did the Fed just enter the currency war? Traders detect dollar angst

Traders' bets for the first US interest rate hike since 2006 may again be re-evaluated when Janet Yellen testifies before Congress next week.

Rachel Evans The minutes from the US Federal Reserve's meeting last month have foreign-exchange traders wondering whether the central bank's chairwoman Janet Yellen has joined the currency wars.

Unleashing the animal spirits of business

Despite the low Australian dollar, record low interest rates and a growth rate that if not sterling is still better than much of the developed world, business and consumer confidence remains subdued at best.

MARK MULLIGAN Despite the low Australian dollar, record low interest rates and a growth rate that if not sterling is still better than much of the developed world, business and consumer confidence remains subdued at best.

Toll deal signals expansion into Asia, says Trade and Investment Minister Andrew Robb

Under fire: Andrew Robb.

MARK MULLIGAN Wednesday's $6.5 billion tie-up between Japan Post and Toll Holdings should be the first of many services-sector deals to emerge as corporate Australia intensifies its integration into the Asian region, Trade and Investment Minister Andrew Robb says.

Car leasing tax break a yardstick for government's fiscal integrity

Sections of Parramatta road where parking is allowed on weekends may soon become clearways on weekends. Picture shows cars parked along Parramatta Rd, Leichardt, Sydney. 27th April 2013. Photo by Tamara Dean

MICHAEL PASCOE If all else fails, a Prime Minister desperate for a reboot instead of the boot could try running a government based on fiscal integrity.

Australia needs a recession to 'concentrate' political minds

Jeremy Lawson said it could take a recession to force politicians to tackle the country's shrinking income base while restructuring expenditure.

MARK MULLIGAN Australia might need a recession to focus political minds on the growing imbalances in the economy, according to a former Treasury official now heading insurer Standard Life's global economics team.

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Economy

A new RBA rate cut could spike property prices by 15%

Ultra-low interest rates would have an extreme impact on house prices, QIC has warned.

BRIAN ROBINS Residential property prices could spike by 15 per cent if the RBA is forced to cut rates to below 1.5 per cent, economists have warned.

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Economy

Gloomy outlook pushed RBA to cut rates, minutes reveal

The RBA remains concerned about overheating property markets in Sydney and Melbourne.

A deteriorating economic outlook sparked the latest interest rate cut, but the Reserve Bank remains concerned about the continued strength of house prices.

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Economy

Australian economy 'sliding down the precipice', says JP Morgan

JP Morgan says Australia has failed to make up the lag created by the plunge in mining investment.

STEPHEN CAUCHI The Australian economy is 'sliding down the precipice' due to 'glacial' reform efforts, with a weakness in domestic demand that was 'recession-like', according to a research note from JP Morgan.

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Rates below 2% won't help households and will inflate asset bubbles, economists say

Australian households could be caught out by asset bubbles if rates are cut below 2 per cent,  a growing number of economists and market analysts say.

BIANCA HARTGE-HAZELMAN Doubts are growing about how effective further rate cuts would be, with households tipped not to feel any more confident about the economy while the risks of asset bubbles grow.

Rates cut, ANZ, Fortescue Metals, IAG, Wesfarmers profits may push S&P/ASX 200 higher

All eyes will be on the S&P/ASX 200 with a big week in corporate profits reporting and growing expectations of anothe rate cut.

Bianca Hartge-Hazelman A huge week of company profits reporting along with growing expectations of another interest rate cut could get the Australian sharemarket off to a good start this week.

What the RBA can't say: the government is the problem

Prime Minister Tony Abbott and Treasurer Joe Hockey during question time at Parliament House.

MICHAEL PASCOE Yes, the Reserve Bank cut interest rates because non-mining investment is weaker than previously expected, but what the central bankers avoided telling the House of Representatives economics committee today or mentioning in the monetary policy statement last week is why it's weaker.

RBA waves red flag over 'very concerning' Sydney property market

SYDNEY, AUSTRALIA - FEBRUARY 13:  Glenn Stevens speaks at the House of Representatives Standing Committee on Economics on February 13, 2015 in Sydney, Australia.  (Photo by Daniel Munoz/Fairfax Media)

Gareth Hutchens and Max Mason The Reserve Bank is warning of “very concerning” developments in Sydney’s property market, where house prices are still running ahead of other capital cities despite the efforts of regulators last year.

Economy

Opera: The economic stimulus that lasts for centuries

Opportunity to enjoy the drama of the <i>Ring Cycle</i> helps lure high-skilled workers, boosting the local economy.

Simon Kennedy Building an opera house to stimulate an economy may be an odd idea - though not necessarily a bad one, as a new study shows.

Economy

RBA's Glenn Stevens: Why we cut interest rates

SYDNEY, AUSTRALIA - FEBRUARY 13:  Glenn Stevens speaks at the House of Representatives Standing Committee on Economics on February 13, 2015 in Sydney, Australia.  (Photo by Daniel Munoz/Fairfax Media)

MAX MASON Taking questions from federal politicians and school children in Sydney, RBA governor Glenn Stevens outlined the central bank's case for cutting the official cash rate to a record low and commented on key issues facing the Australian economy.

Growth

Sydney in driver's seat as new two-speed economy emerges

Sydney's economy is booming while the rest of the country remains sluggish

Vanessa Desloires A new two-speed economy is emerging, driven by a boom in construction while the resources sector winds down - and this time Sydney is the clear economic winner, ANZ research has found.

Eco

RBA's ability to influence interest rates has diminished, Glenn Stevens concedes during grim economic outlook

Reserve Bank of Australia Governor Glenn Stevens.

GARETH HUTCHENS The Reserve Bank says the rate of house price growth in Sydney is "concerning," it now expects economic growth to remain 'below-par' for longer than expected, and it believes unemployment will peak higher than first thought.

Eco

RBA Governor Glenn Stevens set for MP grilling on Australian dollar, interest rates, jobs

RBA Governor Glenn Stevens will address the House of Representatives Standing Committee on Economics at Club Central in Hurstville on Friday morning.

MAX MASON The Australian dollar and unemployment are likely to be in the spotlight as Reserve Bank of Australia governor Glenn Stevens steps up in front of federal politicians in southern Sydney on Friday.

Data

ABS chief David Kalisch: Don't take the employment numbers too seriously

The new head of the Bureau of Statistics, David Kalisch, wants several hundred million dollars from the government for an entire technology refresh.

PETER MARTIN The new head of the Bureau of Statistics has a disarming reply to people who complain that the bureau's unemployment data is unreliable. It's to not rely on it.

Economy

Unemployment in surprise jump to 6.4pc

The market is expecting a 6.2 per cent unemployment rate and 5,000 fall in job numbers.

MARK MULLIGAN Australia's unemployment rate surged to 6.4 per cent in January, making its surprise fall to 6.1 per cent in December short-lived.

Eco

Investment housing loans soar, and set to rise further after Reserve Bank's rate cut

10 Bowler Street, Hawthorn East

Gareth Hutchens and Clancy Yeates Loans for investment housing skyrocketed almost 20 per cent in the the year to December, and economists warn they will surge higher after the Reserve Bank's surprise interest rate cut to a record low last week.

Economy

ECB's stimulus program will help, but it's not enough, Pimco says

The European Central Bank's quantitave easing program will get underway next month.

MARK MULLIGAN Europe's €1.1 trillion ($1.46 trillion) quantitative easing program could help lift the eurozone's growth rate back up above 1 per cent, but won't be enough, the world's biggest fund manager says.

Economy

Consumer sentiment jumps to pre-budget levels on rate cut, cheap petrol, Westpac says

Leap in confidence: For the first time in a year there are now more optimists than pessimists when it comes to the economy.

MARK MULLIGAN Consumer sentiment picked up sharply in the first part of February, as cheaper petrol, a surging share market and the Reserve Bank of Australia's first interest rate cut in 18 months buoyed spirits.

Australian households pay different amounts to access national electricity network

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GARETH HUTCHENS Australian households are paying far more than people in comparable countries in electricity network charges, with huge discrepancies across different states, a new report has found.

Employment

Jobless fears drive caution at Genworth despite $172.7 million profit

Genworth Australia CEO Ellie Comerford believes conditions this year will be 'subdued' and is tweaking her outlook accordingly.

Ruth Liew Genworth posted a $172.7 million statutory net profit for the six months to December, due primarily to lower than expected claims and a strong housing market.

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