• Pete Jonson

Henry Thornton News&Views No 26

Updated: Jul 25

AFR Weekend, 16-17 July, P1, ‘The jobs wave.’

‘Unemployment is close to a 50-year low, skilled workers in hot demand and employers are battling to keep and lure staff. How to make the most of the boom.’


P4, Hannah Wootton and Tess Bennett, ‘Wanted: an extra 1.2m workers in the next four years.


The 1.2m includes 100K technology specialists, 20K solicitors and nearly 8K auditors by the end of 2026.


P 9, Matthew Cranston, ‘Call on Canberra to move faster on submarine fleet’.

‘Shared Australian investment in a new or expanded US shipyard would accelerate a fleet of submarines needed within the decade to better prepare for any China threat, US defence experts say’.


‘However, Defence Minister Marles, …said he preferred investments in Australian infrastructure.’


What is happening here? Infrastructure in general rather than floating infrastructure for defence? Please explain Mr Marles.


P 15, Malcolm Scott, ‘China’s GDP hit hard by long COVID’.

Much uncertainty, and certainly slowing Chinese GDP.


P 13, Ronald Mizen, ‘Riding the jobs wave’.

‘Booming employment is set to help Australia’s economy to a soft landing – even with higher interest rates’.


P 19, Tom McIlroy, ‘Covid crunch time, again’.

‘With about 4,500 Australians in hospital amid Omnicrom’s surge and the country on track on for 10,000 deaths, politicians and experts are trying to find the right path ahead’.


As already noted, large numbers in hospital seem to have a high recovery count. Is this true?


P 29, Christophere Joye, ‘Home prices on track for 20pc fall as rate rises bite’.

‘Thanks to the Reserve Bank of Australia’s extraordinary decision to hammer unsuspecting households with 125 basis points of mortgage rate increases in just two months, (likely to be from May 4 to July 6) ... Sydney house prices are falling at a 20 pe cent-plus annualised pace.’


‘Really? Problem is, starting point of 0.1 per cent was a long-standing ridiculously low number. The RBA is in a mess of its own making and is grappling with powerful but probably inadequate levels.


P 42, Editorial&Opinion, ‘Productivity will keep the jobs miracle alive’.

The gift of near full-employment has come early. Yet so has the flaw: as the economy starts to strain at capacity limits, inflation has arrived too.


‘RBA governor Phillip Lowe’s keenest wish had been to lock in a generational low level of joblessness by keeping monetary policy set lower for longer; a plan he was holding to in just four short months ago.


‘By May there was a sharp course change, rising rates to curb demand and slow the economy, and suppressing the inflation that has become the new number one priority.’

Will the economy produce modest wage increases and a happy outcome? Not bloody likely, dear reader. And watch the outcome, possibly ‘a terrible lost opportunity far too akin to the 1970s. Let the (Mr Hawke-like) summit have the conversation on stopping that from happening’.


The Weekend Aussie, 16-17 July, P 15, Paul Kelly, ‘Labor goes global in power struggle’.

‘Amid a deepening global energy crisis and rising prices, the Albanese government is doubling down on renewable energy as the centrepiece of its response, with its pending Climate Change bill designed to transform emission-reductions policy in Australia for the long run.


It is climate change action where the new Albanese government is leaving its early mark. It faces the immediate test of its election mandate in the parliament – a measure that seeks to lock in Labor’s more ambitious targets and entrench be law a new approach to emission-reduction politics and decision-making.


‘Climate Change and Energy Minister Chris Bowen calls his bill ‘simple but powerful’. It will underwrite the global campaign – in the Pacific, with the US and with the European countries - waged by Prime minister Anthony Albanese as proof of Australia’s repositioning on climate policy and as a weapon in national security and foreign policy.’ …


‘There’s a big message for the Coalition. Any pledge that it makes about a domestic climate policy will come at the costs of Australia’s strategic interests. The politics are being rewritten by strategy.’ …


The Weekend Aussie, 16-17 July, P 15 and P 16, Greg Sheridan, ‘Countering China’s influence at the Pacific forum.’

‘But the government needs to stick to what it promised Australians on climate and security’.

‘China got rebuffed, Australia got loved, America got involved.


‘That’s a good trifecta in a good week in South Pacific diplomacy.


‘And the Pacific Islands Forum just about held together.


‘But we shouldn’t lose sight of the fact that much South Pacific politics is pure fancy, many of our own national positions is natural flim-flam, American promise in this region is subject to significant scepticism, China won’t go away, and all our fundamental strategic problems remain.


‘But we shouldn’t be churlish. The Albanese government and Australian security have had a good week’.


Much further: ‘Albanese, Foreign Minister Penny Wong and all the Pacific leaders, in connivance with the Biden administration, gloried in selling the proposition that the wicked Morrison government neglected climate change, …


‘This characteristic is monstrously unfair to the Morrison government, not that anyone cares about that at the moment.’


AFR, 19 July, P1 and P 16, James Eyers, et al, ‘ANZ hits back on Suncorp fears’.

‘ANZ chief executive Shayne Elliot laid out big commitments to Queensland and argued technology has changed the competitive landscape in financial services, as he sought to bat away a wave of opposition to its proposed purchase of Suncorp Bank for $4.9 billion.


P2, Jennifer Hewett, ‘Why ANZ needs the Suncorp deal.’

‘Shayne Elliot is keen to emphasise the unique opportunity that the acquisition of Suncorp’s bank and its 1.2 million customers offers to Australia’s smallest big bank.’


P9, Andrew Tillett, ‘China warns ties at risk by Marles the ‘commander’.’

‘Chinese state media has warned that Deputy Prime Minister and Defence Minister Richard Marles is risking the repair of ties with Beijing with tough rhetoric, accusing him of positioning himself as ‘forward theatre commander’ for the United States military in the region’.


P 17, Jonathan Shapiro, ‘What the ANZ, Suncorp deal means for shareholders.

‘ANZ’s $4.9 billion purchase of Suncorp’s banking unit has created the nation’s third -largest home lender and deposit taker in what is the biggest local bank deal since Westpac bought St George in 2008.


‘But what does the transaction mean for the legion of ANZ and Suncorp shareholders’.

Not much it seems.


P 22, Adir Shiffman, ‘ANZ’s $4.5B MYOP plan was always a non-starter’.

‘Unusually, today’s column is about a deal that never happened – and always looked unlikely – namely the aborted sale of accounting software provider MYOB to Australia and New Zealand Banking Group.’


A gloomy negative assessment. If this is the right assessment, much ado about money, the CEO will be out of a job.


P 29, Karen Maley, ‘Why rivals are cheering Suncorp tilt’.

‘It’s a curious divergence of paths. The heavyweights at Commonwealth Bank, Westpac and National Australia Bank are rolling up their sleeves ahead of what promises to be one of the most vicious home loan turf laws ever seen.’


Here is my guess. Some or all of the big three will bid for Suncorp Bank and ANZ will be well out of the money. Again, the CEO is likely to be out of a job.


P 38. The AFR view, ‘Migration is the right fix for our worker shortages.’

‘The Albanese government must use the September jobs summit in Canberra as a platform for launching a genuine long-term, incentive-sharpening tax, workplace and productivity reform agenda.


‘Yet rather than waiting six weeks, the government needs to bring a greater sense of urgency to tackling nationwide chronic labor shortages. With unemployment at a 48-year low of 3.5 per cent and the number of jobseekers level-pegging with the number of job vacancies, state governments, led by NSW and Victoria have now joined business groups in urging immediate action to turbocharge skilled migration and speed up the entry of badly needed workers.


‘This follows the calls by business for a temporary two-year increase in skilled migration to 200,000 places a year to make up for the population lost due to the two years of international border closures during the pandemic…


‘It also needs to be recognised that in the post-pandemic world, there is a global challenge for talent, and Australia needs to get out there and compete effectively with other countries.’


P 39, Shuli Ren, ‘China is stumbling into its own destabilising mortgage disaster’.

‘It is spreading like wildfire. Home buyers in China are refusing to pay the mortgage on properties they have bought but their financially strapped developers can’t finish. Some say they will resume payments only when construction restarts.


‘The protest involved more than 100 projects developers as of July 13, up from 58 projects the previous day. …


‘In 2008, I worked at Lehman Brothers in New York and witnessed first-hand how the subprime mortgage crisis dragged down the venerable bank – and threatened the entire industry. This environment is starting to feel eerily similar.’


‘The Australian, July 19, P1 and P6, Ellen Whinnett, Al-Rob Camp, Syria, ‘I didn’t do anything wrong in Australia. I want to come home’.

‘An Australian jihadist locked up in a Syrian prison has begged forgiveness from his parents and asked to come home, saying he posed no threat to Australia’.


This is an horribly difficult issue. Australian people jailed in Syria have three categories. Least attractive for Australia is men, serious jihadists. Next is their women, less likely than men to begin behaving badly. Children are the best bet, with younger children have the best chance to become good Australians, provided they could find suitable Australian parents.


Each case is horribly hard, but if women jihadists are allowed to enter with their children, there is likely to be at least some nasty behaviour.


SPORT

Australia’s Cameron Smith has triumphed at the 150th Open Golf Championed Championship at St Andrews. He fell behind the leaders in the third round. He produced a brilliant finish to beat Rory MciLroy by one shot, coming from 4 shots down.


As Will Swanton said; ‘Cameron Smith has pulled off one of the great Australian sporting victories. With a heart as big as a Melbourne Cup runner and nerves of steel, in five hours of incredible sporting theatre at the home of golf, the little bloke from Brisbane fought back tears after conquering the British Open and said: ‘This one’s for Oz’.


In weekend Footy, Caaarlton! won the first quarter (by 3 points) but lagged to finish 5 goals behind. Trying too hard and making too many mistakes was my conclusion. 2022 is not the year for the Blues is my more general conclusion, but anything in footy can surprise others. The coach should tell the players to just ‘go for it’.


Other issues: ‘Push to cut Vice-Chancellors pay’; Aussie climate change threat is ‘a story of crisis’; The five-yearly State of the Environment … warns that increasing pressures from climate change, habitat loss, feral animals pollution and mining will accelerate the destruction of ecosystems and native species; the Review of the RBA is not yet received its leadership; Zelensky sacks his head of security; Since Vladimir Putin launched his illegal invasion of democratic Ukraine, claims of Russian war crimes have seemed barely credible; Greg Sheridan says ‘Only Trump can save the Dems from disaster.’


AFR, Thursday July 21, P 1, P2 and P 46, Ronald Mizen and Hanna Wootton, ‘Chalmers, Lowe back 2-3pc target’.

‘Treasurer Jim Chalmers, Reserve bank governor Phillip Lowe and business bosses have backed Australia’s 2-3 per cent flexible inflation target, …


In my view, 0-3 per cent, and perhaps in future -1 to 2 per cent would be worth trying.


P2, Jennifer Hewett, ‘Path to soft landing is narrow and prickly’.

‘Good stuff. Jennifer. But, like everybody else, the numbers are hard to read.


‘No increase until 2024.’


‘Now Dr Lowe is racing to get something like 2.5 to 3.5 per cent in the blink of monetary expansion, or is it contraction?


Does monetary expansion or correction keep inflation either expanded or contracted?

‘Gor Blimey, readers. Have you ever been as confused as you seem now.


Now we shift to P 46, where further confusion faces the experts. It is here that signs of clarity emerges, thanks to Stephen Anthony. Consider the final three paragraphs.

‘In our view it is best to steer clear of the shallow Canberra pool for a monetary view, and avoid any central bankers, given the high degree of groupthink that forms at gatherings like Jackson Hole.


‘A great country should be confident enough to engage in a free-ranging review of our monetary policy, as well as our prudential and fiscal policy. Only then can we be truly confident that our macroeconomic frameworks advice will be fit for purpose – a robust tool to raise our productivity potential.


‘An opportunity to reset monetary and fiscal policy operations could be missed here. We should watch in keen hope that this unique opportunity is not missed.’


Well done, Stephen Anthony. I have long believed that the RBA has become a centre for governor god-views, with no-one else daring opining a different point of view.


The Aussie, Thursday July 21, P2, Will Glasgow, ‘Beijing praises Wong, hints coal ban to end.

‘Beijing has praised Penny Wong for the ‘positive elements’ in her recent remarks on the Australian Chinese relationship, as the Xi administration indicated it will soon end a two-year ban on Australian coal.


P 10, ‘Sign of sensible rapprochement’.

‘China, no less than Australia, will benefit if authorities in Beijing lift their two-year ban on Australian coal imports. They should not stop there but should recognize the harm being done by the bans on Australian barley, wine, beef, lobster, wood and cotton.’ …


‘Chinese foreign ministry spokesman Zhao Lijian praise of Foreign minister Penny Wong on Tuesday hopefully signals a more positive mindset. He spoke of Australia ‘seeking common ground while putting differences aside when getting along with China and taking concrete actions to build more positive dynamics for improving bilateral relations’.


P 10 again. ‘RBA walks tightrope on rates, economic activity’.

‘Jim Chalmers unveiled the terms of reference for the review on Wednesday, promising it would be about, ‘renewing and revitalising the central bank, not revolutionising it’.

‘At the same time, Anthony Albanese waded in on the issue of interest rates, warning the bank not to ‘overreach’ in lifting to tame surging inflation’. …


‘While Dr Lowe admits a degree of over stimulus during the pandemic had contributed to the inflationary challenge, he defended the board’s ‘very strong insurance mindset’ during the unprecedented health crisis. But the review will have to examine how and why the board got it so wrong last year when it repeatedly assured Australians that interest rates were unlikely to rise until 2024.


‘That forecast prompted some homebuyers and investors to borrow big, further fuelling property prices.

AFR, Friday 27 July, P1 and P4, David Marin-Guzman, ‘ACTU: lift wages share’.

Unions will push to make lifting workers’ share of national income a key objective at the Albanese government jobs summit, signalling workplace rules that go beyond productivity to increase record low wage growth.


‘Australian Council of Trade Unions, secretary Sally McManus has also flagged that immigration would likely to be a ‘contested’ issue at the summit as unions fight to prevent employers returning to an open-ended visa system.’


In conclusion: ‘She said she was concerned some employer groups ‘won’t make it to the first hurdle. They are probably happy with things as they are at the moment. They don’t care that wages are flat-lining and will do whatever’s necessary to maintain the profit overhang’. {Sorry, folks. I cannot understand the last sentence.]


P7. ‘PM plays with fire on central bank’.

Prime minister Anthony Albanese is recklessly playing with fire by warning the Reserve Bank of Australia not to ‘overreach’ on increasing interest rates’.


P 15. Hans van Leeuween,’Truss has the numbers on Sunak to take the UK’s top job’.

I’m not so certain. So discussion suggests Mr Sunak has control of all economic issues and Ms Trush seems confused by economic issues. Time will tell.


On P 42, Paul J. Davies.

Former Chancellor of the Exchequer Rishi Sunak has pledged to overhaul insurance rules, free of European influence.


‘In a candidates’ debate last week, Liz Truss took an incoherent pop at the Bank of England’s inflation-fighting record, and mysterfyingly named the Bank of Japan as a inspiration.


The Aussie, Friday 27 July, P1 and P2, Will Glasgow, ‘Bejing fires up anti-AUKIS push.’

‘a new attempt by China to undermine Australia’s AUKUS submarine agreement with the US and Britain has raised fresh tensions with the Albanese government, which dismissed Beijing‘s escalation as riddled with ‘incorrect assertions’.


Fair go Mr XI, plenty of nations have submarines. We do not plan nuclear weapons, not unless there are nuclear threats.


Geoff Sheridan on P2 reported a comment by Ex-US security chief. He said ‘AUKUS ‘much more than subs’.


The retired Admiral, Mike Rogers, suggests ‘Canberra may need to look at interim cabilities before the nuclear subs arrive.


‘I think the acquisition of nuclear submarines is powerful, both in its war-fighting capability and the signals it sends. I applaud Australia’s willingness to make that sort of commitment and to speak about it so frankly’.


AWESOME

Scientists have studied an image of the oldest light in the universe to confirm its age of 13.8 billion years.


KULTURE

Fiona Prior enjoys the deliciously appalling ‘Official Competition’. More here.

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