Australian economy rebounds from Covid shock but bumpy recovery still ahead, RBA chief says | Reserve Bank of Australia

Australia’s economy rebounded in the September quarter but the Reserve Bank governor is warning the recovery from the pandemic will be uneven, bumpy and protracted.

Gross domestic product through the year fell by 3.8% as a consequence of the most significant economic shock since the Great Depression according to the latest national accounts released by the Australian Bureau of Statistics.

But Australia’s economy grew by 3.3% in the September quarter, which is the largest quarterly increase in GDP since 1976.

A rebound in consumption was a key driver of the September result. Household consumption increased 7.9% in the September quarter, which is the largest rise in the 60-year history of the national accounts.

But given consumption fell by 12.5% in the June quarter, the recovery remains partial. In annual terms consumption remains down 6.5%.

Appearing before federal parliament’s economics committee just before the national accounts were released by the ABS, the Reserve Bank governor Philip Lowe said Australia had “turned the corner and a recovery is under way”.

Given the coronavirus was suppressed, and restrictions were being eased, the bank was expecting GDP growth to be “solidly positive” in both the September and December quarters, “and then, next year, our central scenario is for the economy to grow by 5% and then 4% over 2022”.

But Lowe warned there were significant risks in the economic outlook. Positive growth forecasts should not “hide the reality that the recovery will be uneven and bumpy and that it will be drawn out”.

“Some parts of the economy are doing quite well, but others are in considerable difficulty,” Lowe said. “And even with the overall economy now growing solidly, it will not be until the end of 2021 that we again reach the level of output recorded at the end of 2019”.

Lowe said the unemployment rate remained at 7% and was likely to be above 6% in two years time. Underemployment remained a problem, and wages growth was likely to remain subdued.

He said Australia was faring better than many other countries but he stressed there were no guarantees the positive trend would continue. Australia was likely, Lowe said, to experience a run of years with “unemployment too high and wage increases and inflation too low, leaving us short of our goals”.

The Morrison government seized on the positive September quarter result. The treasurer Josh Frydenberg said the September quarter result showed “the economic recovery is under way – the economic recovery that every Australian has worked hard for”.

“The Australian economy is showing remarkable resilience, but this is due to the achievements and to the sacrifices of millions of Australians across the country,” Frydenberg said.

Asked whether the escalating trade war with China would have a dampening impact on recovery, Frydenberg acknowledged the diplomatic row was “very serious” but he said consumption was a bigger contributor to the return to growth than the performance of exports.

The ABS reported that imports of goods and services rose 6.5% in the September quarter, while exports of goods and services fell 3.2%. The slump is attributable to international travel restrictions, and reduced demand for commodities, but the ABS reports the detraction from net exports in the quarter was the largest since the September quarter in 1980.

The latest national accounts also show households are continuing to save. Australia’s household saving-to-income ratio declined from a record high recorded in the June quarter, but the measure remains “elevated” according to the ABS, at 18.9%.

Labor said the government needed to desist from self-congratulation, given the risks in the economic outlook, and given the structural issues sitting behind the September quarter result.

The shadow treasurer Jim Chalmers said wages and living standards were stagnant and consumption remained weak – conditions that had “defined the economy for most of this government’s tenure”.

“A recovery in GDP is a good thing, but it will mean nothing for many Australians if it’s not accompanied by a substantial improvement in the jobs market as well,” Chalmers told reporters.

In question time on Wednesday, the Labor leader Anthony Albanese asked why the government was “congratulating itself” and “using marketing slogans” – like “the comeback” – when close to 1m people were unemployed and 1.4m were underemployed.

Frydenberg said: “The only person who is disappointed in today’s national accounts is the leader of the opposition”.

Ahead of Wednesday’s result, the Organisation for Economic Co-operation and Development warned Australia not to withdraw fiscal and monetary policy support before the recovery from the economic shock associated with the coronavirus pandemic is “well entrenched.

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Deutsche Bank sees ‘slightly above average year’ ahead with most of the earnings comeback priced in

Traders work the floor of the New York Stock Exchange.


(This story is for CNBC Pro subscribers only.)

Deutsche Bank is calling for a strong earnings comeback in 2021, which should lift the broader market to about an average gain since a lot of this recovery is expected.

The Wall Street firm just released its 2021 year end price target of 3,950, an 8% jump from Thursday’s close. Deutsche Bank also raised its 2020 earnings estimate for the S&P 500 to $141 from $133 per share and its 2021 earnings estimate to $194 from $173 per share.

Deutsche Banks’s 2021 earnings estimate implies earnings growth of 38% next year.

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Full indicative selection order and pick-swap updates ahead of the National Draft

The trade period shook up the draft order significantly as it always does and that has continued in the following weeks with teams allowed to exchange picks right through to draft night.

Yesterday, Brisbane sent picks 66 and 68 to Collingwood for pick 70 in a move that gives the Lions some more cushion for Academy players.

In a trade that raised eyebrows on social media, Gold Coast traded pick 27 to Geelong for a future third round selection that could be as low as 60 next year.

Their justification was that they weren’t going to take the pick to the draft anyway and wanted to get something for it, though the AFL system allowing such a lopsided traded is something that potentially deserves further scrutiny.

The Suns also traded pick 37 to Sydney for Carlton’s future third round pick.

GWS sent picks 29 and 52 to the Bulldogs for pick 26, Adelaide traded 56 and 63 to Fremantle for a future fourth round pick.

The Crows also sent pick 66 and its future fourth round pick to Brisbane for pick 63.


1 Adelaide Crows
2 North Melbourne
3 Sydney Swans
4 Hawthorn
5 Gold Coast Suns
6 Essendon
7 Essendon
8 Essendon
9 Adelaide Crows
10 GWS Giants
11 North Melbourne
12 Fremantle
13 GWS Giants
14 Collingwood
15 GWS Giants
16 Collingwood
17 Richmond
18 Melbourne
19 Melbourne
20 GWS Giants
21 St Kilda

22 Adelaide
23 Adelaide
24 Hawthorn
25 Brisbane
26 GWS
27 Geelong
28 Melbourne
29 Western Bulldogs
30 North Melbourne
31 Carlton
32 Fremantle
33 Western Bulldogs
34 Sydney
35 Port Adelaide
36 Richmond
37 Sydney
38 Carlton
39 North Melbourne
40 Adelaide

Tune in at 7pm AEDT on Wednesday, December 9 for the AFL Draft on SEN, powered by Tyrepower.

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Americans warned of ‘rough times’ ahead as COVID-19 deaths and hospitalisations hit new high

The United States has recorded its deadliest day in the pandemic so far with health authorities reporting over 2,800 COVID-related deaths and hospitalisations rise above 100,000 in a single day.

The US now has more people in hospital with COVID-19 now than at any point before in the pandemic amid warnings the death toll could rise to almost 450,000 there early next year.

The news comes as the head of the US Centers for Disease Control and Prevention (CDC) warns the coronavirus crisis is likely to get even worse there over the next few months, before vaccines become widely available.

The COVID Tracking Project reported the number of COVID-19 hospitalisations in the US topped 100,000 for the first time on Wednesday.

Meanwhile health authorities reported nearly 200,000 new cases.

More than 270,000 Americans have died from COVID-19 to date.

Centers for Disease Control and Prevention director Robert Redfield fears the number of COVID-19 fatalities in the US could reach 450,000 by February.(AP)

During a livestream presentation hosted by the US Chamber of Commerce Foundation on Wednesday, CDC director Robert Redfield called for stricter adherence to safety precautions such as wearing face coverings, social distancing and good hand hygiene.

“The reality is that December, January and February are going to be rough times,” Dr Redfield said.

“The mortality concerns are real and I do think unfortunately before we see February, we could be close to 450,000 Americans that have died from this virus.”

Hospitals filling up with COVID-19 patients is reducing care for people needing treatment for other ailments.

Rural and suburban hospitals were particularly affected, threatening their economic viability, Amesh Adalja, a senior scholar at the Johns Hopkins Center for Health Security, told MSNBC on Thursday.

“There’s no end in sight because there’s so much community spread,” Dr Adalja said, warning that the pandemic could force hospital closures.

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Liberty Financial under scrutiny ahead of float over promised loan

While Liberty is a hot float hopeful, market watchers are concerned about some of the group’s disclosures in its prospectus, including its omission of some key legal matters and the number of related party loans, totalling $322 million to related party shareholders.

The Age and The Sydney Morning Herald can reveal that Liberty is involved in a bitter court dispute over the ownership of the second largest mortgage broker in Australia, Macquarie-backed Connective Services, which has not been disclosed in the prospectus.

The Supreme Court of Victoria heard last year Liberty had promised to provide an $81.67 million loan to a company called Slea Pty Ltd, which is owned by a senior Liberty staff member. Slea owns a stake in Connective Services.

Slea is suing Connective Services alleging it was oppressed as a shareholder by having its holding in Connective reduced through a series of transactions. Liberty is not a party to the case but is funding the court action. The court has heard the promised loans are to help Slea buy out the majority owners of Connective Services.

The Slea court case has hampered efforts by the largest mortgage aggregator in Australia, AFG, to buy Connective for $120 million. AFG is waiting for the court matter to be resolved before pressing ahead with its acquisition.


The promised loan is not specifically referenced in the Liberty prospectus nor is the legal matter despite Slea’s case being funded by Liberty to the tune of $13 million so far. Sources who declined to be named due to confidentiality reasons suggested that Liberty had not disclosed the case in its prospectus because it was not a party to the matter.

In October 2019, a senior Liberty executive told the Supreme Court the loan had not been documented by Liberty, but was through a verbal agreement.

A spokesman for Liberty said it was concerned about misinformation based on false assumptions being spread about the company and emphasised that Liberty was not a party to the litigation. He said it was not appropriate to comment on ongoing litigation and that information about the case was available through published judgments.

“We also deny that Liberty has any undocumented loans. Loan contracts that are relevant to the Liberty Group have been thoroughly reviewed. The offer document sets out matters that are required to be disclosed to new investors,” the spokesman said.

Liberty insists the loan was not documented because while it was offered it had not been accepted.

Liberty’s ongoing stoush with the tax office relating to its previous structure is revealed in the prospectus but the group did not explicitly state that it related to four years of tax returns.

According to documents filed by Liberty in the Federal Court, the ATO imposed an income tax and shortfall interest charge on Liberty’s accounts over four years from 2012 to 2015.

Their prospectus also relays the tax office’s concerns about the structure of Liberty, which includes a trust company. Any change to its taxation structure could eat into future dividend payouts. Liberty does relay a range of adverse tax scenarios in its prospectus as part of its key risks in the prospectus.

Liberty says in its offer document that if it loses the tax fight and ends up footing the tax bill, its “founder group” will forgo dividend payments to ensure there is no loss to Liberty.

The group has brushed off concerns about the impact of COVID-19 on loan deferrals that have hurt lender earnings throughout the sector. Its prospectus shows loans in more than 31 days of arrears were 9.55 per cent of customers, or an increase from $373 million in June 2019 to $1.119 billion in June 2020. That said, the percentage of loans over 90 days in arrears across its portfolio is low at 2.27 per cent, including COVID-impacted loans.

Liberty has found itself in other legal tussles before, including a stoush with Macquarie in 2015 that was settled out of court.

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Fast trains on the wish list ahead of Queensland’s delayed budget

“A south-east Queensland fast-rail network is one of the critical pieces of infrastructure needed to ensure our region continues to grow and thrive.”

Cr Schrinner said he hoped to see the “first real signs” of the state government’s commitment to work with the council to investigate a regional fast rail network in the budget.

The Property Council of Australia Queensland wants the government to introduce land tax concessions for build-to-rent projects.

“[Current] taxation arrangements mean that build-to-rent projects do not stack up against traditional build-to-sell projects in Australia,” executive director Chris Mountford said.

Build-to-Rent generated $11 billion in new housing projects in the UK during its first six years.

Both the New South Wales and Victorian governments have introduced a 50 per cent land tax concession and will waive foreign taxes for build-to-rent projects.

Unions want the budget to focus on secure jobs for Queensland workers.

Queensland Council of Unions general secretary Michael Clifford called for upgraded and new industry-linked training facilities, more manufacturing and infrastructure programs, and for the government to meet its promises to hire more frontline workers.

Amanda Rohan from the Chamber of Commerce and Industry Queensland, said she was hoping for a business-friendly budget, including a complete waiver of the COVID payroll tax deferral obligations to cushion the blow when JobKeeper ends in March.

CCIQ is also hoping for payroll tax reform, funding for business education programs and incentives for businesses to invest in technology to reduce operating costs.

Mining and resources companies are hoping royalty rates are not changed in the upcoming budget.

The Queensland Resources Council chief executive Ian Macfarlane called for “continued stability” in coal, metals and gas royalties.

Last year’s budget hiked gas royalties from 10 per cent to 12.5 per cent to raise $476 million over four years, although the complex scheme was revised in October to be calculated on the volume of gas produced and include a sliding rate scale.

Mr Macfarlane said the industry wanted support for apprentices, manufacturing and better health services in mining regions, such as Blackwater and Moranbah.

Paramedics called for the government to deliver on its election commitments for more ambulance resources, with United Workers Union ambulance member Rachelle Owen saying officers were on the frontline during the pandemic.

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Mike Tyson squares up to Roy Jones Jr ahead of no-knockout bout in LA | Ents & Arts News

Boxing legends Mike Tyson and Roy Jones Jr have weighed in ahead of their bout on Saturday night, which will see no judges, a no-knockout rule, and no official winner.

The eight-round exhibition match will take place at the Staples Centre in Los Angeles as part of a three hour pay-per-view live broadcast, and sees both men back in the ring after extended periods of time away.

During the weigh in, Tyson, 54, tipped the scales at 220 pounds, while his opponent, Jones Jr, 51, came in at a lighter 210.

Plexiglass separated the pair as they squared up

Despite facing a barrage of criticism since the announcement of the bout, it has reportedly drawn in record pre-fight sales.

Tyson, a former heavyweight champion of the world, last fought in 2005 when he lost to Kevin McBride – raising eyebrows about his ability to get back in the ring – while Jones Jr, who once held seven belts simultaneously, was still fighting in 2018.

The fight itself will be solely for entertainment purposes. With judges (and fans) absent from the arena, it means the match will have a “no-knockout” rule and will not record an official winner.

However, the rule that the fighters cannot knock out their opponent does not seem to have got through to Tyson, who says he is “coming at” Jones Jr.

He told reporters in LA: “I’m pitching punches and everything else is up to Roy. I’m coming at him. He doesn’t have to worry about me. If I’m running anywhere I’m running right at him.

“Maybe I don’t know how to go easy. I don’t know. I don’t want to say the wrong thing. I don’t want the commission mad at me.”

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It is not only Tyson and Jones Jr on the bill for the event, which is being run by social media platform Triller, with 23-year-old YouTube star Jake Paul taking on former NBA player Nate Robinson, 36.

The pair, as well as two others, will fight on the undercard in a six-round bout.

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White House trade advisor Navarro says trouble ahead if lawmakers don’t act on COVID-19 stimulus

White House trade advisor Peter Navarro urges lawmakers to pass coronavirus relief legislation. (Andrew Harnik/AP Photo)

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UPDATED 6:35 AM PT – Thursday, November 26, 2020

White House trade advisor Peter Navarro said lawmakers need to “act now” on coronavirus stimulus legislation. While speaking to reporters on Wednesday, he called on lawmakers on both sides of the aisle to put aside their differences to pass a stimulus package.

“The administration has done a very good job up to this point,” he stated. “We are facing, however, a chasm ahead for millions of Americans unless there can be a bipartisan ‘come to agreement moment’ on these core elements.”

Navarro went on to stress the need to save small businesses, noting if those are lost then they are not coming back. With many states reporting an increase in cases, business owners have expressed their concerns that they will be unable to survive another round of lockdowns.

Restaurant owners reported spending thousands of dollars in modifications to adapt to local and state requirements to feed guests outside only to have many major cities like Los Angeles adopt new policies forcing them to close anyway.

Navarro said despite the stalemate, Congress needs to focus on three major components: the Paycheck Protection Program, relief checks and unemployment compensation.

The White House trade adviser said he anticipates a second term for President Trump and the administration will continue on the path for strong economic recovery.

RELATED: Outdoor dining ban moves forward in L.A. County despite decision being based on scarce data

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Naples united in grief ahead of Napoli Europa League clash

“I have cried for only a few people in my life, and Diego is one of them,” Autiero said.

In the evening more fans thronged to the stadium ahead of Napoli’s Europa League game against the Croatian team Rijeka, to be played behind closed doors due to the coronavirus, chanting “Diego, Diego” and other anthems to their idol.

Napoli’s Lorenzo Insigne looks on as a picture of Maradona is beamed to an empty Stadio San Paolo before the Europa League clash with HNK Rijeka.Credit:Getty

News of Maradona’s death on Wednesday drew thousands of stunned Neapolitans into the evening streets in defiance of a coronavirus lockdown, and the grief showed no sign of abating as day broke.

“Yesterday the entire city of Naples died, together with Argentina,” said Lorenzo Rubino, 26, who wasn’t even born when Maradona played for Napoli. “I hadn’t cried since my mother’s death two years ago.”

Maradona came to Naples, a city suffused with sun and superstition, in 1984 when he was 23 for a then world-record $7.5 million contract. Over the next seven years, he helped perennial underdogs Napoli to their only two Serie A titles and their sole major European trophy.

Six years later, when Maradona’s Argentina met Italy in Naples at the 1990 World Cup, some of the home fans did the unthinkable and cheered for the South Americans.

Fans gather outside the Stadio San Paolo, which some have already suggested be renamed in Maradona's honour.

Fans gather outside the Stadio San Paolo, which some have already suggested be renamed in Maradona’s honour.Credit:Getty

When he was flown in by helicopter for his official presentation, 75,000 people packed into the stadium to see him. Thereafter, match-day was the highlight of many peoples’ lives.

“Dad did not come to the hospital when I was born because he stayed at the stadium until the end of the game to watch Diego play,” said Teresa De Lucia.

City mayor Luigi De Magistris has called for the city stadium to be renamed in honour of Maradona.

“He loved Naples and through football he wanted to let the world know what Naples is, a city full of humanity, full of heart, energy and imagination. A volcano for better or for worse,” the mayor told RTL radio.

Fans immediately gathered outside the stadium when news of Maradona's death broke overnight Wednesday local time.

Fans immediately gathered outside the stadium when news of Maradona’s death broke overnight Wednesday local time.Credit:AP

In other Europa League matches Friday (AEDT), forward Nicolas Pepe put himself back in manager Mikel Arteta’s good books with the opening goal in a 3-0 win at Molde to all but assure his side’s place in the knockout stages.

The Ivory Coast international, sent off for a headbutt on Leeds United’s Ezgjan Alioski and criticised by Arteta last weekend, produced a fine finish in the 50th minute, shortly after striking the crossbar with a superb curling effort.


Arsenal, disappointing in a drab first half against the Norwegian side they beat 4-1 at home, doubled their lead five minutes later when Reiss Nelson converted a precise low cross.

Substitute Folarin Balogun, 19, made it 3-0 to the visitors with his first goal for the club, moments after coming on to silence the few home fans that were allowed inside the stadium.

Elsewhere, Italian powerhouses AC Milan were held to a 1-1 draw at Lille while Sparta Prague thrashed Celtic 4-1 after conceding an early goal at home.


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The ‘world’s loneliest elephant’ given warm farewell at Pakistani zoo ahead of long-fought relocation

With music, treats and balloons, friends of Pakistan’s only Asian elephant threw a farewell party for the animal ahead of his relocation to Cambodia following years of campaigning by animal rights activists.

The plight of Kaavan, a 35-year-old bull elephant, has drawn international condemnation and highlighted the woeful state of Islamabad’s zoo, where conditions are so bad that a judge in May ordered all the animals to be moved.

Kaavan is set to be flown to a wildlife sanctuary in Cambodia on Sunday, said Saleem Shaikh, a spokesman for Pakistan’s ministry of climate change, following months of veterinary care and a special training regime to habituate the elephant to a huge metal crate he will travel in.

But before flying out, the capital’s animal lovers said goodbye, with performances from local bands who serenaded Kaavan ahead of the mammoth move.

“We want to wish him a happy retirement,” said Marion Lombard, the deputy mission leader for Four Paws International – an animal welfare group that has spearheaded the relocation effort.

The Islamabad Zoo, where Kaavan has lived for decades since arriving from Sri Lanka, was decorated with balloons for the occasion and banners wishing the animal well.  

“We will miss you Kaavan,” read one of the signs.

With music, treats and balloons, friends of Kavaan threw a farewell party for the animal ahead of his relocation.

AFP via Getty Images

Kaavan’s plight was given a boost over the years by American pop icon Cher, who publicly campaigned for the elephant’s relocation and called the decision to move him one of the “greatest moments” of her life. 

Zoo officials have in the past denied Kaavan was kept in substandard conditions or chained, claiming instead the creature was pining for a new mate after his partner died in 2012.

But Kaavan’s behaviour – including signs of distress such as continual head-bobbing – raised concerns of mental illness.

Activists also said Kaavan was not properly sheltered from Islamabad’s searing summer temperatures, which can rise above 40 degrees Celsius. 

Kaavan’s mate Saheli, who also arrived from Sri Lanka, died in 2012.

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