Henry Thornton News&Views No 31
This week we are starting with some of the more interesting parts of sporting life, and we provide some helpful suggestions. First there is the problem of finding a new coach for Essendon. At first we were worried but Mrs Thornton quickly found a solution. The obvious replacement is our former Prime Minister, Scomo, who is adept at multitasking. He has shown that he can cover portfolios as diverse as health and finance so incorporating a coaching gig at Essendon should be a doddle.
I note an interesting phenomenon in the AFL competition. As more players in the original (men’s) competition weep publicly there is a total absence of players in the AFL women’s engaging in such public displays of emotion. Could we be witnessing a significant human evolutionary change? Maybe the cause of it is Climate Change?
Recently we were shown a large pod of women footballers, in a brutal battle to score, and none of them seemed to be crying.
And, at season’s end Carlton! lead all the way against Melbourne then lost by 5 points in the last seconds. Then against Collingwood lost by ONE point with 11 seconds to win. Aaaargh! Please read the final summary of ‘Net zero’ by Robin Batterham and Richard Bolt. (The final article in this weekly edition.) If you are influential find them and offer to find a way to set up a large scale project to start the B@B project in Australia. ------------------------------------------------------------------------------------------- AFR, Saturday and Sunday, 20-21, P1, Various front page items, ‘Soft landing’ was the largest and most cheerful item. Below are the other items, but no crying. · ‘Hey big spenders’. · ‘Hopes Australia can avoid recession are rising as supply chain ease, oil prices fall and business keeps hiring. · ‘Zombie Apocalypse. · ‘The China wild card. · ‘Coal rush puts iron ore in the shade’.
P2, Various further items. Best of these ‘Morrison’s jokes are no laughing matter for PM.’ ‘Anthony Albanese has upbraided Scott Morrison for using social media to joke about his five secret ministries, saying it was no laughing matter.
‘As London Financial Times’ joined the criticism of Mr Scottison, saying his ‘power grab’ was a warning to all democracies, Mr Morrison argued he was not belittling his actions by posting memes on social media in which he was photoshopped in various roles, including as head of the NRL’s Cronulla Sharks’.
‘Mr Morrison office said he had ‘always had a good sense of humour’. And ‘He did all the posts himself’ the office said’.
P4, ‘RBA cash rate could peak around 3.1PC, economists say’. ‘National Australia Bank chief economist Alan Oster puts the odds of the Reserve Bank pulling off a soft landing for the economy for the economy at 60-40 – although not if it takes the official rate well above 3 per cent.
‘Goldman Sachs’ top forecaster Andrew Boak has pencilled in a 25 per cent chance of a recession, and van Guard’s Alexis Gray thinks a recession in the next few years is a 50-50 proposition.
‘Macquarie Bank economist Justin Fabo says it really depends on what one means by soft’. (Cleary the best proposal.)
P 12, Phillip Coorey ‘Democracy and Legacy Trashed’. ‘By secretly appointing himself to five ministries, Scott Morrison has isolated himself from his peers.’ You bet.
P 15, Ronald Mizen, ‘The firmer path to a soft economic landing’. ‘Central bankers are battling price rises but the jobs market is red hot.’ ‘Like passengers aboard a long-haul flight skirting a hurricane, everyone strapped into the Australian economy is feeling tense and hoping for a soft landing amid a lack of food and a global inflationary storm.’
P 16, Michael Smith in Tokyo, ‘Is China losing battle to reboot?’ ‘COVID lockdowns, heatwaves and a debt-ridden property sector mean spending up might not be enough to save this time’.
‘China’s post-omicron rebound has fizzled out and the prospects for near-term growth are poor. (Julian Evans-Prichard, Capital Economics.)
P 18, Tom McIlroy and Michael Read, ‘Australia risks losing out in the skills race.’ ‘As unemployment drops to a historic low, next months job’s summit needs a solution for the country’s failing visa system. ‘Migration expert and Sydney University associate professor Anna Boucher says overseas net migration to Australia needs to be scaled up and agrees the system has become overly complex. ‘The Coalition did try a visa simplification process, but clearly it wasn’t sufficient because it’s still an incredibly complex web of visas and sub-visas and bridging bases.’ AFR, Monday 22, P 11, Three writers, ‘Crimea attacked make war real for Russians’. This is a lovely article for the average Urianian reader.
‘A series of Ukrainian attacks in Crimea, the Black Sea peninsular that President Vladimir illegally annexed from Ukraine in 2014, is punctuating that narrative.
‘And as Ukrainian attacks about in the strategically and symbolically important territory, the damage is beginning to put domestic political pressure on the Kremlin, with criticism and debate about the war, …, and underscoring that even what the Russian government that considers to be Russia territory.’. …
Crimea is where tsars and Politburo chairman kept vacation homes, and where Mr Putin is said to have built a palatial, multibillion-dollar estate. As home to Russia’s Black Sea Fleet, it also helps Russia exert control over the sea, including a naval blockade that has crippled Ukraine’s economy.’ AFR, P 13, Monday, Matthew Cranston, ‘Central banks zero in on wage presses’. ‘Sustained wage growth in the US risks holding inflation well above the Federal Reserve’s 2 per cent target range for the next two years, according to recent data and a growing list of economists and market Pundits.
‘This, they say, will force the central bank to push interest rates higher than pricing , and expose bull market investors to a possible near term correction.’ ‘AFR, P 22, Monday, Tom Richardson, ‘Inflation, Jackson Hole shadow on earnings’. ‘Investors are jockeying for position ahead of a key week of corporate profits, capped by a speech of Jerome Powell at Jackson Hole, Wyoming, on the outlook for inflation and interest rate sittings.
‘On Friday, Mr Powell is expected to reiterate the Fed’s hawkish outlook and hose down a two-month rally in risk assets stoked by bets that US inflation reaches 8.5 per cent in July. ‘In Australia, shares are set to fall today after rising energy prices and bond yields applied the brakes on Wall Street’s rebound ion Friday.’ AFR, P 30, Monday, James Thompson, ‘Markets give Fed the middle finger’. Inflation, the Fed said, remained ‘unacceptably high’, and recent falls in oil and other commodities could quickly be reversed. 'Supply chain disruptions would take a long while to resolve. And over, ‘there was little evidence to date that inflation pressures were subsiding ‘ and inflation ‘would likely stay uncomfortably high for some time’. AFR, P 38, Monday, The AFR Review, ‘Immigration boost be easy call for summit’. ‘Next month’s Jobs and Skills Summit needs to achieve a genuine consensus between unions and business to restore the broken enterprise bargaining system. The summit must progress the productivity agenda Australian needs, to reverse the lost decade of sluggish real wage growth without feeding into inflation and sacrificing the nearly 50-year low jobless rate. …
‘Anthony Albanese says needs to focus on productivity so that wage increases are not eaten up by inflation.’ AFR, P1 and P8, Tuesday, Jonathan Shapiro and James Eyers, ‘Super to fund nation building’. Federal Treasurer Jim Chalmers has laid down a new agenda for the $3.4 trillion superannuation sector that he hopes will steer part of its vast pool of capital towards nation-building investments and clean energy.
‘Dr Chalmers, claiming victory for Labor in the super wars, told a round-table of business leaders in Sydney overseeing $3 trillion in investment capital that super played a role ‘investing in our national priorities’ and ‘addressing some of our most formidable economic challenges’.
‘Two interesting paras: · ‘We see trillion of dollars in working capital and government budgets, and there is an obvious need for investment, particular in areas like housing and energy; and · ‘We are up for reform and new ideas’. AFR. P 4, Tuesday, David Marin-Guxman, ‘Wages in enterprise agreements grow 3.2pc’. ‘Wage growth averaged more that 3 per cent in new collective agreements lodged for approval in the first two weeks of July, almost entirely driven by non-union deals’. I must mention that another agreement was a deal allowing 10 per cent to raise wages. AFR, P4, Tuesday, Andrew Tillett, ‘RAAF undeterred by Chinese aggression’. ‘Beijing’s air defence in the south China are not impregnable and Australian surveillance planes continue to operate as usual in the region despite China’s recent dangerous interception of a RAAF aircraft, the head of air force says.
‘Air Marshall Robert Chipman confirmed there had been a ‘recent spate of unsafe incidences’, featuring Chinese aircraft and urged Beijing’s pilots to show greater professionalism’. ‘AFR, P 27, Tuesday, Cecile Lefort, ‘China easing adds to investors investors’ recession fears.’ ‘Rate cuts by China failed to save regional sharemarkets from losses yesterday as investors were beset with global growth and the prospect of more policy tightening before the Jackson Hope gathering of central bankers’.
Lot’s of gloomy stuff in the markets and many places are running worried. AFR, P 1 and P 4, Wednesday, John Kehoe and two others, ‘Don’t divert super into risky plans’. ‘Dr Chalmers declared the ‘superwars’ were over at the annual on Monday, Superannuation Lending Roundtable hosted by the AFR and packaging multiannual , claiming victory for Labor in bipartisan support for compulsory superannuation.’
AFR, P16, Wednesday, Szu Ping and Tim Wallace, ‘UK inflation to hit 19pc, Citi cautions’. Well, this is a surprised announcement, and makes a bad look for Boris Johnson. Is this his farewell party? Or something even more evil?
AFR, P 28, Wednesday, Alex Gluyas, ‘Why relief rally looks over’. Another scary assertion, with some variability.
‘Strategists have cautioned that the recent recovery across equity markets was temporary and shares will likely continue to pull back as the global economy deteriorates in the face of rising rates and elevated inflation.’ (With UK rates at 19 per cent, this seems like a no brainer.)
AFR, P 42, Wednesday, Edmund Tadros, ‘PwC gives partners 10pc raise, keeps top spot’. Ouch! This will quickly be copied and the ‘pay’ that must be at 3 per cent will be busted. The first printed para: ‘PwC has retained its position as the nation’s largest consulting firm, with income increasing 17 per cent, or $400 million, to $2.8 billion for the 2021-22 financial year.
‘The strong performance prompted the firm to raise partner pay by 10 per cent and to increase staff pay by 9 per cent.’ The average equal is 17 per cent!? Someone’s maths seems poor!
AFR, P 1 and P 6, Thursday, David Marin-Guzman and two after, ‘Unions push sector-wide pay claims’. Unions will push for the job summit to endorse sector-wide bargaining rights that allow workers to strike across multiple employers to lift pay, in a proposal previously attacked by business as a return to 1970s-style bargaining.
‘The Australian Council of Trade Unions wants employers to agree that sector-wide agreements are crucial to lifting real wage growth and resurrecting the collective system, which it argues is no longer suitable for small workplaces or low-played workforces.’
And so it goes on. Sadly PwC will not be part of the 10 per cent, or is it 17 per cent game. Three to five per cent is perhaps acceptable, but next week should tell the tale
AFR, P1 and P46, Thursday, Anna Bligh, ‘Shaping the future’. ‘Digitisation and the carbon challengers are the fastest changes Australian’ have faced. The summit and the white paper that follows must set out how the nation copes with them. ‘Big things are happening in our economy. The shifts are seismic and exponential , and they are happening with a velocity without precedent and they are affecting every industry and every aspect of our lives.
‘We are hurtling at pace toward a digital and decarbonised economy. These two big forces present us with opportunities to be seized and pitfalls to be avoided.’
This is my recognition of the article to the week. Well done Anna Bligh. AFR, P 12, Thursday, Stephen Stapczynsci and David Stringer, ‘Nuclear is Japan’s new path green path’. ‘Japan is planning a dramatic shift back to nuclear power more than a decade from the Fukushima disaster, aiming to restart a sweep of idled reactors and to develop new plants using next-generation technologies.
AFR, P 12, Thursday, Tom Balmforth, ‘Ukraine marks the day of defiance.’ ‘What we see now is a grinding war of attrition. This is a battle of wills. (Jens Stoltenberg, NATO Secretary-General.)
AFR, P 47, Thursday, Robin Batterham and Richard Bolt, ‘Net zero will be a huge task – but it is also an achievable one.’ The authors of this article adopts a ‘modelling engine chooses the lowest-cost technology pathways that reach net-zero ‘ within various constraints.
‘Our results are not forecasts because the future will be what Australia makes it. But they are valuable illustrations of what could happen. All our scenarios suggest renewables will be the dominant energy source. An immense amount of new infrastructure will be needed, and must be built at breath-taking speed.
‘Our use of land and sea will undergo extensive change. We will also we will have to convert to electric and efficient vehicles, appliances and industries at an unprecedented speed and scale.
‘For example, reaching net zero domestic emissions will require the installation by 2030 of about three times the production capacity of today’s National Electricity Market. ‘To fully decarbonise domestic and export emissions, it will take far more NEMS. Our analysis also suggests that we can substantially lower emissions from forestry and agriculture but not enough to supply offsets to energy, transport and industry.’ _________________________________________________ I do not have the time, and in reality the mental training, to follow the whole article, but it has the whiff of something very important to me.
Here is my main question. Who is going to persuade all relevant governments (each capturing the senior politician), business mogul’s and professors. Robin and Richard, you have provided a wonderful approach to a very difficult problem that must be solved if ‘net zero’ is to be by all important nations.