Australia’s dismal vaccination rate is undermining what was a great scorecard for the economy that emerged over the first half of 2021.
Since the start of 2021, the economic news was stunningly good. Not only relative to the forecasts and expectations of all economists, but in absolute terms with the unemployment rate falling, wages growth picking up, the stock market and house prices hitting record highs and business conditions and consumer sentiment tracking at or near record highs.
It has been obvious for many months that the Morrison government’s dithering, missteps and errors in obtaining enough COVID-19 vaccinations, was a huge risk to the health of Australians and was a major risk to the economic outlook.
Few economists have both the global and local experience of Stephen Koukoulas. He is an economic thought leader in his role with his business, Market Economics. Stephen is often driving the debate on housing, consumer spending, investment strategies, interest rates and budget policy. This month we got his thoughts on economic sustainability.
Few economists have both the global and local experience of Stephen Koukoulas. He is an economic thought leader in his role with his business, Market Economics - and in this video he notes that the farm sector has been one of the hidden stars of the economic recovery from the 2020 COVID recession. It's a good news story.
The September labour force data show the impact of the recession on jobs, hours worked and unemployment. It is bad news. Depressing in many ways to realise that there are 937,400 Australians unemployed, a further 1,538,800 underemployed and that since the onset of Covid-19, the workforce participation rate has dropped by 1.3 percentage points as people have given up looking for work.
COVID-19 has sparked massive changes in banking and finance, not least because of the deep recession impacting the economy.
Among the changes that have been witnessed in finance, the so-called responsible lending laws have been relaxed to make it easier for a borrower to get a loan. In addition, around $35 billion has been withdrawn from superannuation accounts as the government has encouraged people to pull out cash from their superannuation savings to cover the costs of being unemployed or working fewer hours during the COVID-19 recession.
Economist Stephen Koukoulas says the economy needs money poured into private sector pockets so they can spend, invest and most importantly hire.
“So I would be looking at policies that make sure the economy is growing strongly enough so that in a reasonable amount of time we get that unemployment rate back to where it was pre-Covid,” Mr Koukoulas told Sky News.
August’s unemployment rate came in below expectations at 6.8 per cent, largely propped up by wage subsidy schemes which mask the actual rate. “It was only ten months ago that it was five per cent, it’s difficult and a lot depends on how the health crisis goes. “But for here and now it’s about jobs.”
Market Economics’ Stephen Koukoulas says immigration intake has “slowed to a trickle” and with it much of the demand for new houses and infrastructure.
Economist Stephen Koukoulas says “there is no confidence at all” in any projections about the unemployment rate amid the coronavirus pandemic.
Australian economist Stephen Koukoulas says the Reserve Bank of Australia’s emergency cash rate cut would help businesses and homeowners already “well off economically in this crisis”.
Central banks and governments around the world are scrambling to keep economies afloat as the coronavirus contagion sweeps across the globe. In Australia the RBA is poised to announce its next move on Thursday. Economist Stephen Koukoulas speaks to ABC News.
Anyone can have a ‘good time’ if they borrow and spend like the proverbial drunken sailor, but as we all know, such action is not sustainable. It cannot go on forever given that one day the money will run out and the debt will have to be repaid.
Our expert economist and social commentator Stephen Koukoulas explores the question of how sustainable is our super with an aging population.
Amid the economic fall-out from the drought and bushfires and the unfolding problems associated with the coronavirus, the Australian housing market is seeing further strong price gains, a tight rental market and a turning point in new construction.
Things are brewing in the housing market: Having been hit hard under the weight of a property glut, record low wages growth, tighter credit from the banks and the Reserve Bank refusing to cut interest rates despite troubling economic conditions, house prices around the bulk of Australia fell sharply from around the middle of 2017 through to the middle of 2019.
A Labor win in the election will mean big changes in a number of key policy areas – negative gearing rules will change as will refunds of franking credits and capital gains tax concessions.
This will have important implications for investors, financial planners and the economy. Investment in new dwellings is likely to get as boost, as will shares in companies not paying the previously appealing 100% fully franked dividends.
The election looms large and which ever side wins, they will be confronted with an economy growing below trend, low inflation and a global backdrop where conditions are weakening.
Will the promises being made now need to be refined?
The housing market has hit the wall.
After years of unrelenting strength, house prices are dropping. Not by much, at this stage, but the heat in the Sydney market in particular, has suddenly turned cold.
The fascinating and scary thing is that the price falls are increasingly widespread.
The housing market has peaked with prices no longer growing. At the same time, auction clearance rates are lower and a solid pipeline of new supply – particularly apartments – will soon flood the market in a number of cities and regions.
The big question for business and individuals - how severe will the downturn be and what does it mean for the economy?
As we begin to wrap up another year, we asked one of Australia's premier and favourite economists Stephen Koukoulas for his fascinating take on 'What's HOT in the economy?'
More than qualified to comment as former Senior Economic Advisor to Prime Minister Gillard, and with over 25 years as a Chief Economist, 2016 looks set to bring some positives with consumer spending and tourism. Other areas of the economy have a more tumultuous outlook...
In this extract from his new book, Myth Busting Economics, Stephen Koukoulas discusses housing affordability and the difficulty of buying your first home or flat.
A pain point especially for young Australians, Stephen shares how buying a live-in house with a 10 year timeframe in mind is a smart investment, provides security and sets you up for life.
What will 2015 bring?
It is time to think about your business, your personal financial plans and how trends in the economy might impact you in 2015. Without understanding the intricacies of the economy, including what sectors will be strong, where interest rates might be going, what will happen to the Australian dollar or housing or consumer spending, there is a risk that an opportunity will be missed.
As 2014 draws to a close, it is time to think about your business, your personal financial plans and how trends in the economy might impact you in 2015.
Without understanding the intricacies of the economy, including what sectors will be strong, where interest rates might be going, what will happen to the Australian dollar or housing or consumer spending, there is a risk that an opportunity will be missed.
The Australian economy is creating jobs again.
The big questions are where? How many? And will it last?
Before we get to those sorts of specifics, it should go without saying, but the best thing to generate jobs and lower the unemployment rate is a growing economy.
Budget, Budget, Budget. That is the word occupying the minds of economist, CEOs, parents, working mums and students alike. But as the results from the commission audit are released, Stephen Koukoulas gives us an insight into just how the government will come up with these figures and his take on what this means for the average Australian.
In light of the humbug of the 'budget never returning to surplus unless we cut the tripe out of spending', I though it interesting to revisit the sensitivity of budget forecasting to small changes to the economic parameters.
House prices are moving into very dangerous territory.
They are rising so fast and are moving to a point where there is a very real risk of a situation that spills over to poor borrowing decisions, relaxed lending standards and financial market malaise that would threaten to end Australia’s multi-decade economic expansion.
Stephen Koukoulas is one of Australia’s most respected economists. His background covers the spectrum of economic insight - from his role as Chief Economist of Citibank to Senior Economic Advisor to the Australian Prime Minister.
In his latest article Stephen argues against the widely held belief that first homebuyers are being priced out of the market, showing us (and Bridie at The Guardian) that with a little frugality and some more realistic expectations, your first home isn’t just a dream.
in 2013, retail, housing and finance should do well, sparked by lower interest rates and still low unemployment. Construction should start to turn higher, but manufacturing and tourism may well remain soft. The strong Australian dollar will not help. Mining will remain hostage to the world economy and that is looking problematic with China slowing, Europe in recession and the US still fragile. Don't bank on the boom in mining continuing.
The new financial year kicks off on 1 July 2012 and having watched the economy and financial markets for more than two decades, these calendar benchmarks are a good time to take stock, look ahead and think about the issues that are likely to impact on businesses and personal finances.
Before doing that, there is no doubt that in the last month or two, there has been some great economic news in Australia.