Coronavirus economic recovery: How we view jobs must change


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Embracing technological change is important for our economic recovery


Technological enhancements introduced on for the duration of the COVID-19 pandemic require to be recognised by the Federal government to restore the financial system, writes Professor John Quiggin.

Above THE Program of the 21st Century, Australia’s society and economy have gone through a process of radical transformation. Several elements of this method will be accelerated by the COVID-19 pandemic and the needed responses.

Regrettably, authorities responses so significantly have been a backward-wanting doc that normally takes practically no account of the transformation of the 21st-Century economic system by facts technologies, enable on your own of the radical improve in our situations produced by the COVID-19 pandemic. The Morrison Government’s COVID-19 Commission has been rightly criticised for its focus on fossil fuels. Regrettably, the Queensland Economic Restoration Technique is small improved

Technological modify, especially in data know-how and communications, has rendered the 20th-Century industrial financial state, focused on reworking most important goods into made products, obsolete. In its spot is an emerging expertise economy in which the capability to handle and use information will be vital.

In specific, the increase of a variety of kinds of remote function will lower the importance of transport and transportation infrastructure, which played the main job in the rise of the industrial economic climate. Information technology and distant work have played a important job in our potential to deal with the pandemic.

Environmental worries, of which the most significant relate to international warming, have created the have to have for a radical transformation of the energy sector. If catastrophic worldwide warming is to be prevented, the financial state have to be fully decarbonised by 2050. The leading sector in this respect is electricity technology, where the imperative is to close coal-fired electrical power era by 2030 in EU and OECD nations and by 2040 globally. In the training course of the pandemic, the use of coal-fired electrical energy has dropped sharply, though expense in renewables has risen.  

Finally, the dominant financial ideology of the late 20th Century, based mostly on current market-oriented reform, has proved unwell-suited to the requirements of the 21st Century. Recovery from the World wide Monetary Crisis was nonetheless incomplete when the pandemic emerged, necessitating a enormous increase in governing administration intervention to rescue the economic climate. In specific, wage growth remained sluggish and desire premiums ended up at or in close proximity to zero in most nations. A return to the disorders found as standard right before the GFC will not get area for some several years, if it at any time transpires.

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If we are to deal with our restoration from the pandemic, it is critically crucial for national and point out governments to re-analyze fundamental assumptions about how the economic system performs now and will work in the long term. The central target of this re-assessment should be on the radical adjustments implied by the pandemic for our financial state and culture.

These variations will be significantly acute in relation to wellbeing and social providers, schooling, the natural environment, tourism and recreation and in relation to the way we get the job done, such as the protection of employment, remote working and non-current market perform. 

But the Queensland Economic Restoration Approach shows no recognition of this. The strategy commences with a checklist of “traditional strengths” consisting mostly of industries that were main employers in the 20th Century, but are now peripheral in this regard.

In accordance to the 2016 Census, methods, producing and agriculture account for 11 for every cent of full work between them, in contrast to 13 per cent for wellbeing treatment and social assistance — the biggest solitary sector and the one most specifically impacted by the pandemic. The listing of rising strengths follows the identical pattern, focusing nearly solely on minerals and vitality.

https://www.youtube.com/look at?v=FjsGt8QNyaI

In the absence of a fully helpful vaccine, it is very likely that our wellness care sector will call for a significant growth, with a everlasting enhance in potential for public health and fitness features these kinds of as testing, screening and get in touch with tracing. We will also involve growth of a large vary of social services to deal with different forms of financial, social and psychological distress arising from the pandemic. 

Provided the probability of common university closures and the chance of long term lockdowns, the progress of initiatives to improve on the net learning, manage disrupted education and shield pupils and academics from pandemic health issues is of essential relevance.

Retail trade is also likely to go through radical transformation, which includes, for example, an accelerated change to on the net browsing and property shipping and delivery. The shift to distant working and on the internet provider supply indicates a fundamental realignment of our way of do the job and lifestyle, with interaction replacing vacation throughout a broad assortment of things to do.

These are just some of the challenges that want to be resolved in the context of a response to the recent crisis. So much, there is small indication that governments have recognised this.

Government and industry must act on renewable energy

John Quiggin is Professor of Economics at the College of Queensland and the writer of Zombie Economics and Economics in Two Lessons.

Digital infrastructure in post-pandemic era should be left to experts, not politicians

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Economic recovery post-COVID-19 looks dire without a healthy migrant population


Australia’s economic future will suffer post-COVID-19 if predicted falling migration numbers prevail, writes Abul Rizvi.

THE CORONAVIRUS crisis brings to an end 20 years of high migration to Australia. On current policy settings, net migration in 2020 and 2021 will be close to zero, if not in negative figures.

If significant numbers of long-term temporary entrants in Australia follow the Coalition Government’s instruction to “go home“, and are able to do so, net migration could be a very large negative. It is unlikely to recover quickly as border restrictions may only be gradually eased from 2021. History shows us net migration recovers only very gradually after a deep recession or depression.

Contrary to forecasts in the 2019 Budget, net migration in 2020 will not rise to 271,000 and average 268,000 for the period 2019-22. It was already falling in the second half of 2019 off a lower base.

The fertility rate will not rise to 1.9 babies per woman as forecast in the 2019 Budget — it had already fallen to 1.74 babies per woman in 2018. Early indications are that fertility fell further in 2019 and possibly below 1.7 babies per woman. The coronavirus crisis will push the fertility rate down further, as has been the case in past recessions, both in Australia and overseas.

Australia is looking at the biggest turning point in its population history — bigger than the Great Depression. But how far will net migration fall and what does that mean for Australia’s population future?

An estimate of temporary entrants by end December 2020

Including NZ citizens and visitors, there were 2.4 million temporary entrants in Australia at end-December 2019. This follows a steady growth for over 20 years.

Minister for Population, Cities and Urban Infrastructure Alan Tudge announced in early April 2020 that the number of temporary entrants had fallen to 2.17 million, with some visa categories falling while others increased.

There are a further 60,000 overstayers who are not included in the above figuring. The number of overstayers may rise as various temporary entry visa applicants – including over 100,000 onshore asylum seekers who have arrived on tourist visas in recent years – are refused but cannot depart Australia.

The key public policy question is what will happen to the 2.17 million temporary entrants in Australia at end-March 2020 by end-December 2020? 

I have prepared a detailed analysis of this with results summarised in Table 1 below:

Table 1: Temporary Entrants in Australia

*Bridging visa holders are onshore applicants for further visas yet to be processed. The estimated 279,000 bridging visa holders in March 2020 surpasses the previous record of around 230,000 (Source: data.gov.au Temporary Entrants in Australia, Visa Statistics and Media Release Home Affairs)

Key questions relating to Table 1 are:

  1. How many temporary entrants will either find a job or some other form of support?
  2. How many will become destitute because they resist leaving Australia for as long as possible, using up any savings they have and/or won’t have enough money to afford tickets to leave? 
  3. How many will be able to find flights and afford the skyrocketing ticket prices to get home?

Given the forecast weak labour market during the rest of 2020, a substantial portion of the 1.82 million temporary entrants forecast to be in Australia at end December 2020 are likely to be unemployed and reliant on charity to survive. If just over 70% are employed or have some form of support, including all remaining NZ citizens, that would still leave over 500,000 people reliant on charity.

At that level, it is likely governments will either assist people to depart or provide some form of social support to ease pressure on charities. The Morrison Government cannot continue to ignore an additional 500,000 people becoming destitute.

Net migration

Of the 612,000 forecast decline in the number of temporary entrants in Australia during 2020, only those who were in Australia long-term (that is, 12 months or more over the past 16 months) will be counted as a net migration departure. And that is only if they subsequently stay out of Australia for the following 12 out of 16 months.

The significance of this is that changes in net migration are how the ABS counts the contribution of immigration to population change in Australia.

Of the 485,000 forecast decline in the number of visitors in Australia during 2020, only a small portion will be counted as a net migration departure — perhaps as little as 5%.

In addition, there will be further arrivals of Australian citizens, existing permanent residents and new permanent residents (that is, people who secure a new permanent resident visa offshore and then travel to Australia if they can) over the rest of 2020. These people are not counted in the temporary entrant figures in Table 1 but are included in net migration arrivals.

On the other hand, it is highly likely the Government will cut back on formal migration and humanitarian programs from 2020, as governments have done so during each recession for the past 50 years. Moreover, there will be few, if any, additional temporary entrants for the rest of 2020 and perhaps also much of 2021.

The overall impact is likely to be a net migration outcome in 2020 – and possibly also 2021 – that is close to zero and more likely negative. This would particularly be the case if the Government decides to assist long-term temporary entrants who become destitute to leave Australia.

What does that mean for long-term population directions?

If the Great Depression and the recession of the early 1990s are any indications, both net migration and the fertility rate will remain low for the rest of the current decade.

While net migration will gradually recover after 2020-21, the combination of a weak economy and immigration policy settings that had already been driving down net migration in the second half of 2019, will ensure net migration in the decade of the 2020s will be well below that of the past 20 years.

    Source: ABS Cat 3222

The ABS’ Series B in Chart 1 reflects a fertility rate of 1.8 babies per woman and net migration of 225,000 per annum. It would result in the population growth rate steadily falling from 1.6% per annum (or over 400,000) to 0.8% per annum (or less than 350,000) by 2066. 

While the net migration and fertility assumptions in Series B are both significantly above those used in the 2019 Budget and in Treasurer Josh Frydenberg’s ten-year budget plan, even Series B is now totally implausible.

Series C in Chart 1 assumes a fertility rate of 1.65 babies per woman — most likely still on the high side. It also assumes net migration of 175,000 per annum — also on the high side if economic growth remains weak.

Net migration was around 180,000 per annum during the Abbott Government, even though immigration policy settings were highly facilitative; the low net migration outcome in those years was the impact of a weak economy and a weak labour market.

Series C would result in the population growth rate falling to 0.5% per annum (less than 200,000) by 2066 and natural increase becoming negative later in the century (that is, positive net migration would be needed to prevent the population going into absolute decline).

The zero net migration option would lead to Australia’s population peaking in the mid-2030s and then declining to 23.8 million by 2066, and continuing to decline after that at an accelerating rate.

In terms of population ageing (see Chart 2), Series B would see the portion of the population 65+ rising from 15.6% in 2018 to 20.9% in 2066.

Series C, with its more plausible fertility and net migration assumptions, would result in the portion of population 65+ rising to 23.0%. The zero net migration option – including fertility at 1.65 babies per woman – would lead to the population 65-plus peaking at around 30% by 2060. That would be around five percentage points higher than the current situation in Japan.

  Source: ABS Cat 3222

Drawing on the consensus research findings, a higher rate of ageing would, all other things equal, lead to lower employment to population ratio, slow productivity growth, weak private consumption and insipid levels of business investment.

That would be similar to the last decade when the working-age to population ratio of all developed economies had simultaneously been in decline. It would make it impossible for the Government to maintain its already quite unrealistic – and largely election-driven – forecast of real GDP growing at 3% per annum for the decade of the 2020s.

Forecast economic growth rates for the decade of the 2020s are likely to be closer to those used in earlier intergenerational reports — that is, 2% in the 2002 Report (Costello); 2.3% in the 2007 Report (Costello) and 2.5% in the 2010 Report (Swan). The 2.7% assumed in the 2015 Report (Hockey) also appears highly optimistic.

A faster rate of population ageing would also reduce per capita income tax, GST and company tax collections. At the same time, the ageing population would be putting upwards pressure on government expenditure, particularly health and aged care. The ongoing surpluses forecast in the 2019 Budget ten-year plan were silly to begin with and are now simply ridiculous.

The idea of repaying government debt, if not already a fantasy, would become a pipe dream.

It should be noted the decade of the 2020s will be the second successive decade in which the working-age to population ratio of all developed nations – plus China and Russia – will simultaneously be in decline.

In modern history, the developed world has never before experienced two successive decades of simultaneous population ageing.

For an open trading economy such as Australia, that represents a further obstacle to any return to positive per capita economic growth.

Abul Rizvi is an Independent Australia columnist and a former Deputy Secretary of the Department of Immigration, currently undertaking a PhD on Australia’s immigration policies. You can follow Abul on Twitter @RizviAbul.

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NSW-Victoria border closure is worth the economic pain


Victorian Premier Daniel Andrews’ decision on Tuesday to send metropolitan Melbourne back into lockdown, in response to surging COVID cases, will deal a further blow to hopes of a recovery in the state.

But like so many questions in economics, assessing these restrictions means looking at both costs and benefits. If you only look at the negative economic impact of tighter restrictions — and there will undoubtedly be many — you only get half the story.

Monday’s decision to shut the NSW-Victoria border is the most dramatic in a series of recent border closures by state governments trying to stop the spread of the coronavirus.

The last time this happened was the 1918-19 Spanish flu pandemic, also following an initial attempt by the federal government to have all states work together.

That border closure, put in place by NSW, was unsuccessful. NSW State Archives and Records reports that closing the border did not stop the Spanish flu gradually spreading throughout the state after it reached Sydney on a ship.

But regardless of how successful this closure is a century later, it’s clear there will be nasty side-effects for some parts of the economy.

NSW accounts for about a third of national economic output, and Victoria makes up just under a quarter. Closing off the movement of people between the states and having Melburnians stay home is undoubtedly a setback to the federal government’s plan to reopen activity, and Treasurer Josh Frydenberg has acknowledged it will probably cost jobs.

The pain from the border closure will be particularly acute for the already struggling tourism and travel industries, at a time when inter-state visitors brought a ray of hope after international tourism had ground to a halt.

Illustration: Simon Letch Credit:

Deloitte Access Economics reports that inter-state tourism is worth $39 billion in annual spending, about a quarter of the domestic tourism economy. “It’s a sobering outcome when the industry was starting to feel some optimism about travel and visitation returning,” says Access partner Adele Labine-Romain, pointing out South Australia and Tasmania’s sectors are particularly dependent on spending by inter-state travellers.

Business travel is another likely casualty, though much of this has already been replaced by Zoom meetings in recent months.

The border closure is also a further blow to the reeling aviation sector, given Sydney to Melbourne is also one of the world’s busiest air routes (or at least it was until the virus struck).

Less tangibly, the confidence of households and businesses may well suffer from the border closure and Melbourne’s lockdown. And such a hit could have a real influence on economic activity, because if consumers all tighten their purse strings at the same time, it makes a bad situation worse for businesses that depend on us spending money.

Even so, the closure of the NSW-Victoria border — and indeed the other state borders closed this year — do not mean all economic links are severed.

Trucks have continued crossing state borders for months, and the NSW government says freight will be given special treatment, as will people in border towns who have a permit. Industry is worried about the complexities of a permit system and the potential for delays, with the Logistics Council pointing out there are 7300 heavy vehicles that cross the NSW-Victoria border every day.

But these disruptions need to be seen against the much bigger economic benefit from containing the virus —which, without a vaccine, can only be achieved by restricting the movement of people.

For all the financial pain of the last few months, Australia’s economy has emerged in better shape from the pandemic than the experts were fearing in March.

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That track record is the result of moves to suppress the spread of the virus, which allowed the earlier-than-expected lifting of restrictions — until now in Victoria.

There is therefore an economic case for trying to protect this position in other states, including NSW, while doing what’s needed to contain the virus in Victoria.

And this is not just some theoretical argument cooked up by economists — there’s already early evidence of how fresh outbreaks can have real financial consequences.

ANZ Bank’s weekly data on customer spending on Tuesday showed Victoria lagging other states, which the bank put down to the recent surge in COVID-19 cases in Melbourne.

Closing the NSW-Victoria border will have real costs, but these should be compared with the economic and human costs we’d face from the virus spreading more widely in our two most populous and economically significant states. In that contest, a border closure looks like the lesser of two evils.

Ross Gittins is on leave.

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Avoiding an economic ‘cliff’ will require more spending


Just how much “fiscal space” a country has is a judgment call, but it’s safe to say Australia has a fair bit more up its sleeve. The same report said our projected government debt for 2021 as a share of the gross domestic product was about half the average for advanced economies.

But how far should governments go in propping up businesses and jobs that have been destroyed by measures to contain COVID-19? And when should we start to worry about the risks of taking on even more public debt?

So far, Australia’s economy has fared better than most in this crisis. The government rightly responded to the pandemic with one of the biggest stimulus packages in the world, relative to our size, which prevented much economic and social misery.

However, economists are still pretty gloomy when looking at what we’re facing in a few months’ time.

The sheer size of Australia’s stimulus effort, and the fact the spending is concentrated in the six months to September, means that removing it will have a big impact. ANZ Bank has even forecast the economy will shrink in the three months to December because of stimulus being withdrawn.

Business leaders are nervously awaiting this final quarter of the year, with National Australia Bank chief executive Ross McEwan last week supporting targeted packages to support the hardest-hit industries.

Illustration: Simon LetchCredit:

And Prime Minister Scott Morrison has indeed signalled there will be some targeted support for the sectors that have been forced to effectively close, such as aviation and international tourism.

The questions are how much extra support there will be, who will get it, and when does the downside of all that debt outweigh its benefit?

There are clearly limits on how much we can and should borrow, but the view of most market economists is we’re not there yet, especially in an era of ultra-low interest rates. More to the point, attempting to rein in debt through “austerity” would make a bad economic situation even worse.

Independent economist Saul Eslake says one of the key lessons of the aftermath of the global financial crisis overseas was the damage caused by withdrawing stimulus too early. “Germany, Britain and to at least some extent the United States tightened fiscal policy too early in 2010 and dealt their recoveries an unnecessary setback, and we don’t want to do that,” he says.

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ANZ Bank head of Australia economics David Plank, who is forecasting a budget deficit of $200 billion for the coming financial year, also says the debt being racked up is worthwhile. “I don’t think a deficit of $200 billion in 2021 is inappropriate. I think what would be inappropriate would be sharply withdrawing government spending,” he says.

Deloitte Access Economics partner Chris Richardson says that with official interest rates at rock bottom and unemployment high, it is a time for government spending to step into the breach. “A given dollar of government spending can do more good today than at any other time that Australians have ever known,” Richardson says.

Importantly, none of this is to say we should be writing a blank stimulus cheque, nor that every business can be saved. Further public spending to get the economy off a “cliff” is a far cry from what proponents of modern monetary theory advocate – expanding the money supply to finance government spending.

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It is also a sad reality that many businesses are likely to fail during this recession. It won’t be in the economy’s interests to have a series of so-called “zombie” companies – those that only survive because debt is extremely cheap, but are unable to invest.

Indeed, Eslake points out that part of improving Australia’s low productivity growth will involve allowing capital and labour to move to more productive uses. “We don’t want to adopt a suite of policies that inhibit the movement of labour and capital from low productivity uses to higher productivity uses,” he says.

Australia’s economy still faces a highly uncertain outlook as it tries to avoid the”cliff”, and there will no doubt be many hard decisions facing economic managers in the months ahead. But whether to provide more targeted stimulus to the economy should not be one of them.

Ross Gittins is on leave.

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Economic cracks widen, accountability vanishes – Alice Springs News


Just half a year into the Gunner Government’s four-year term, in May 2017, former Labor MLA and university law lecturer Ken Parish wrote: “The Gunner Government’s end of semester report card gives it a fairly miserable failing D grade in the subject accountability and transparency.” The government had significantly watered down very good recommendations by the Select Committee for Opening Parliament to the People. The most serious decision was to halve the available time for parliamentary scrutiny of the government’s Budget by the Estimates Committee from 60 hours to just 30. This is Part Three of an analysis by DON FULLER.

 

PICTURED is Treasurer Nicole Manison delivering the 2018 Budget: Cracks had begun to widen.

 

The two CLP MLAs, Lia Finocchiaro and Gary Higgins, were deemed to be the official “Opposition” and given the resources that accompany Opposition status, but the government reduced parliamentary oversight and scrutiny by allocating insufficient resources to other MLAs.

 

It rejected a key recommendation by the “opening Parliament” committee  that it give the Auditor-General the power to conduct performance audits on departments and agencies. This is a responsibility given to every other Auditor-General in Australia, except the NT. Territorians have no proper system at all for gauging departments’ efficiency or effectiveness in spending taxpayers’ money.

 

As departments and agencies are not legally required in the NT to report on their efficiency and effectiveness, most do not bother to do so.

 

In 2019-20 Commonwealth funding to the NT is estimated at $4,389 million. This is around 66% of the government sector revenue.

 

It is therefore surprising, as Mr Parish notes, that the Commonwealth has not required the Northern Territory to establish the appropriate standards of fiscal accountability that occur elsewhere in Australia.

 

Donghai Airlines promotion: Note the caption “Opening up Australia’s primitive secret exploration tour”.

 

In June 2018 it was reported that Donghai Airlines had begun operating flights between Darwin and Shenzhen.

 

The government claimed it was unaware that the owner had been named in court hearings over the alleged bribing of an official in Hong Kong.

 

The government was accused of failing to disclose the cost of the partnership to Territory taxpayers and for how long the agreement would run even though previous subsidy agreements between the NT government and private airlines involved “millions”.

 

This included the CLP Government giving Air North $700, 000 for the Darwin to Alice Springs link in 2015 and the previous Henderson Labor Government giving Jetstar $3m to establish an international hub in Darwin.

 

A further $2m was given to the airline in 2009 for marketing purposes. Jetstar cancelled the routes in 2013.

 

Mr Parish said he did not buy the Government’s line that the cost of the partnership is commercial in confidence information. These can be redacted: “We are entitled to information about how much of our money the NT Government is giving to it as an inducement to fly here.”

 

Further evidence of problems with accountability and transparency emerged in September 2018 when it was disclosed that a report by the Auditor-General found that the government had handed out billions of dollars in grants without proper record keeping and without a government-wide oversight procedure in place.

 

The audit found that while the government knew the oversight of the grant system was flawed, by 2018 an improved monitoring system had still not been implemented. It was still not clear what amounts were being paid and for what reason.

 

The Auditor-General stated that while she was unable to determine the total amount of money paid out since 2014 because of improper record keeping, it was expected to be in the billions of dollars!

 

The audit was conducted around the time that the Gunner Government was calling on the Commonwealth Government to provide more funding from GST revenue. At the same time, NT debt levels began to escalate to record levels.

 

The Auditor-General, Julie Crisp, reported: “Existing processes are prone to human error due to a lack of programmed [information technology] checks and oversight.

 

“Agencies experience difficulty reconciling grant activity with expenditure and there is an inability to generate meaningful reports on grants issued across the NT Government.”

 

Ms Crisp found the Department of Chief Minister — which administers a large portion of grant funding annually — did not have modern systems in place to monitor the grants.

 

This is a startling statement given the importance of government accountability and transparency involving taxpayer funding.

 

The then Deputy leader of the Opposition, Mrs Finocchiaro (pictured), called the audit “deeply concerning … particularly given the perilous state of the Territory’s budget and burgeoning debt levels.

 

“Territorians would expect that awarded public monies would be appropriately acquitted, and that grants and subsequent spending is monitored and reviewed.

 

“This report poses a series of further questions in relation to the Gunner Labor Government’s so-called open and transparent rhetoric, particularly in relation to spending by the Department of Chief Minister,” Mrs Finocchiaro said.

 

Amid increasing concerns about Government accountability and transparency the Northern Territory Office of the Independent Commissioner against Corruption (ICAC) was established on November 30, 2018.

 

Within a relatively short time, this office itself was involved in accusations of bias and incorrect process.

 

The Commissioner Ken Fleming QC stepped down from his role overseeing the investigation into the police shooting death of Indigenous teenager Kumanjayi Walker.

 

 

Mr Fleming had faced criticism that he could not approach the investigation impartially after saying at a protest rally in Alice Springs: “One of the most important messages today is Black Lives Matter. Anybody who says contrary to that is guilty of corrupt behaviour.”

 

Many were left wondering why Mr Fleming had been allowed by the Chief Minister to accompany him to Alice Springs in response to the incident, and were left asking whether the Chief Minister had a sufficient understanding of the role required by an independent head of the NT ICAC.

 

In a relatively short time after this event ICAC reported that whistleblowers faced reprisals in NT Government workplaces.

 

As a result the Commissioner flagged new guidelines for NT Government agencies. There was also a call for government managers to be at the forefront of substantial change needed to improve accountability and transparency responsibilities.

 

This suggests little had been achieved by the Gunner government in building an ethical, professional, responsible culture within the departments and agencies they were responsible for.

 

Where there has been an apparent disdain and dislike of such responsibilities at the highest level of Government leadership it is not likely that more junior members of staff will take these matters seriously.

 

Many are worried that this has been, and continues to remain, a major problem for government in the Territory.

 

It has also been reported in this context that serious allegations of “real corruption” within the NT Public Service have been reported to ICAC.

 

Speaking to ABC Darwin the NT’s first ICAC Commissioner said he hoped to launch broad investigations into some of the “really concerning” allegations, made through the ICAC website, as early as possible.

 

Mr Fleming believed it would quickly become clear that his office was under-resourced.

 

However, Northern Territory Treasurer Nicole Manison would not commit to providing more resources for the new anti-corruption body.

 

[ED – Just this week a painstaking investigation by the ICAC, setting a high bar for conduct of politicians, led to the resignation of the Speaker.]

 

Meanwhile major problems of budget management inexorably progressed towards the current record deficit.

 

By end of November 2018 commentators were pointing to a “grim outlook” with the annual deficit expected to surpass $1.5 billion. It is now said to be $7 billion.

 

In delivering the Mid-Year Financial Report to Parliament the Treasurer pointed to large cost blow-outs of more than $350 million in un-budgeted spending and operational expenses.

 

Nicole Manison justified this by claiming it was necessary to keep people employed in the construction industry.

 

However, the Treasurer seemed unaware of the impact such a Budget was likely to have on wider business confidence and private investment in particular, already in steep decline.

 

While this was due to the completion of the Inpex project, it was also noteworthy that private investment was down a further 15% from earlier projections.

 

Rather than considering the need to reduce very high levels of expenditure, particularly in un-budgeted, unplanned areas, Ms Manison attempted to deflect the blame on to the Commonwealth: “No Government has ever experienced the unprecedented reductions in GST that we have seen in the last two years,” she said.

 

“You can see the changes we’ve had with the GST … is having a big impact.”

 

Something had to happen: Enter in November 2018 the Fiscal Strategy Panel, chaired by John Langoulant (pictured, Linkedin), whose string of top position in the world of economy includes being WA State Advisory Council president and director at the Committee for Economic Development of Australia.

 

The Gunner Ministry appeared to have a limited set of ideas on what should be done.

 

The panel’s interim report released on December 14, 2018, confirmed that the Territory faced serious financial challenges and was in the unsustainable position of borrowing to fund recurrent activities and interest costs.

 

While the report acknowledged a reduction in the Territory’s GST revenue was an important reason for the financial position, importantly the report also criticised the Gunner Government for maintaining a culture of persistently exceeding approved budget targets due to un-budgeted and unplanned expenditure.

 

 

 

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BOJ’s Kuroda warns second-round effect of COVID-19 may dent economic growth



FILE PHOTO: Bank of Japan Governor Haruhiko Kuroda takes questions from reporters at the annual meetings of the International Monetary Fund and World Bank in Washington, U.S., October 18, 2019. REUTERS/James Lawler Duggan

June 25, 2020

TOKYO (Reuters) – Bank of Japan Governor Haruhiko Kuroda said there was a risk the second-round effects of the coronavirus pandemic may push down the country’s economy “considerably”.

“It is essential to maintain Japan’s financial system stability and accommodative financial conditions” to combat lingering risks to the economic outlook, Kuroda said in an online seminar on Friday.

(Reporting by Leika Kihara; Editing by Chang-Ran Kim)





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First step to economic recovery is a change in political thinking


A return to a solid publish-pandemic economic climate will call for our governments to rethink their political agendas, writes Professor John Quiggin.

FOR A Quick Minute in March and April all through the pandemic, it appeared as if our political course was capable of modify.

The Morrison Governing administration discarded several years of dishonest rhetoric about Labor’s response to the Worldwide Economical Disaster and embraced almost similar actions on an even larger sized scale. The National Cabinet appeared to offer you the probability of a co-operative federal program, changing the ritualised overcome of the aged COAG (the unlovely acronym for Council of Australian Governments). Labor typically lived up to the theoretical ideal of the “loyal opposition”, supporting the Government’s response in broad phrases though hard badly-believed out steps.

On the lookout to the upcoming, Primary Minister Scott Morrison seemed to sign a new method to industrial relations, creating on the remarkably effective collaboration in between Attorney-Common Christian Porter and ACTU President Sally McManus.

A pair of months on, it’s tough to consider it even transpired. The Government’s policy announcements have been a mixture of out-of-date financial pondering and tradition war vendettas. The restructuring of university expenses, with significant increases for the humanities, merged a slender and out of date concentrate on vocational programs (one thing that would be far better managed by elevated funding for TAFE) with foolish prejudices about Foucault and queer idea, ventilated by pro-govt commentators like Adam Creighton.

The announcement of massive subsidies for the construction sector was put together with the removal of JobKeeper for the childcare business. The initial announcement pandered to the commonly-held prejudice that the only “real” jobs are individuals of personnel in really hard hats and hi-vis vests, the fantastic greater part of whom are adult males. This idea has the absurd implication that the personnel who create educational facilities and hospitals have true work, but instructors and nurses do not.

This combine of procedures is especially foolish in a condition in which woman workers have dropped a lot more careers than gentlemen and exactly where the price of making or preserving jobs is much lessen in the hardest-hit sectors than it is in development, significantly massive scale infrastructure. Regular infrastructure projects expense about $1 million for each career designed and rely intensely on imported products.

By contrast, underneath latest conditions, we can produce or maintain careers in desperately required human providers, like childcare, for little far more than the expense of wages (possibly $100,000 for each occupation, having account of all on-charges).

In the meantime, equally important functions have been more fascinated in faction fights, driven virtually fully by private ambition and greed, than in any major pondering about the potential that awaits us when the latest limits on economic exercise are taken out. Labor has been consumed by the success of a slipping out between factional allies in Victoria, resulting in a massive dump of taped conversations and leaked texts. These communications are comprehensive of foul language and private vitriol, but display no fascination whatsoever in any variety of political aims.

In Queensland, the LNP device has turned on its parliamentary leader, with no clear method further than an try to reassert ability.

Actuality will bite soon enough. The JobKeeper plan is scheduled to conclusion in September. It’s now distinct that a unexpected “snapback” would be economically disastrous. That stage was built by Reserve Bank Governor Philip Lowe again in May well.

On the other hand, the plan simply cannot continue on indefinitely in its present-day kind. It operates only for men and women who held positions in March and whose employers in that position are eager and in a position to continue to keep them on. As time goes on, less and less of the unemployed will meet up with that prerequisite.

So, if a disaster is to be avoided, we will have to have some new and innovative thinking from our political leaders soon. At a minimal, we require to keep the premise underlying JobKeeper, that it is ultimately the responsibility of the nationwide Governing administration to keep whole work. This obligation was abandoned by the Howard Government on the assumption that market forces would produce a return to complete employment. Twenty several years afterwards, it is apparent this has not occurred and is not likely to.

Finding again to entire work will involve the abandonment of conservative prejudices in opposition to the general public sector and Labor’s nostalgia for an financial state dominated by male workers. That does not appear most likely at current. But who would have believed in early March that Scott Morrison would before long be applying the biggest fiscal stimulus in Australian record?

John Quiggin is Professor of Economics at the College of Queensland and the writer of Zombie Economics and Economics in Two Lessons.

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Persistently high layoffs suggest a slow U.S. economic rebound


Three months after the viral outbreak shut down businesses across the country, U.S. employers are still shedding jobs at a heavy rate, a trend that points to a slow and prolonged recovery from the recession.

The number of laid-off workers seeking unemployment benefits barely fell last week to 1.5 million, the government said Thursday. That was down from a peak of nearly 7 million in March, and it marked an 11th straight weekly drop. But the number is still more than twice the record high that existed before the pandemic. And the total number of people receiving jobless aid remains a lofty 20.5 million.

The figures surprised and disappointed analysts who had expected far fewer people to seek unemployment aid as states increasingly reopen their economies and businesses recall some laid-off people back to work. The data also raised concerns that some recent layoffs may reflect permanent losses as companies restructure their businesses, rather than temporary cuts in response to government-ordered closures.

The report is “telling us that the scars from the job losses in the recession will be longer-lasting than we expected,” said Gregory Daco, chief U.S. economist at Oxford Economics.

At the same time, Thursday’s figures may have raised as many questions about the state of the job market as they answered. Jobless claims generally tracks the pace of layoffs. But they provide little information about how much hiring is occurring that would offset those losses. In May, for example, employers added 2.5 million jobs — an increase that caught analysts off-guard because the number of applications for unemployment aid was still so high.

Some likely factors help explain why applications for jobless benefits remain so high even as businesses increasingly reopen and rehire some laid-off workers. For one thing, many businesses that deal face-to-face with customers — from restaurants and movie theaters to gyms and casinos — remain strictly limited to less-than-full capacity. Some of those establishments are still cutting jobs as a result.

Casinos in Louisiana, for example, can open at half-capacity. But Boyd Gaming Corp., which operates five casinos in the state, has informed 1,500 of its workers that with financial losses mounting, they could be laid off by early July.

And in some especially hard-hit sectors, like the hotel and travel industries, corporations are now slashing white-collar workers because their business remains far below pre-pandemic levels. This week, Hilton Hotels said it would cut 22% of its corporate global workforce — about 2,100 jobs.

Although consumer spending, the primary driver of the U.S. economy, is recovering from its low in mid-April, it remains far below its pre-pandemic level, according to data compiled by Opportunity Insights. That trend may be forcing changes at some companies that managed to withstand the initial shutdowns. AT&T, for instance, said this week that it plans to cut 3,400 technical and clerical workers over the next few weeks. It also plans to permanently close 250 of its Mobility and Cricket Wireless stores.

“We’re starting to see more job losses among higher-skilled positions that are harder to recall,” said Brad Hershbein, a senior economist at the Upjohn Institute.

And some states may still be clearing backlogs of applications from weeks or months ago.

Corinne Cook, who lives in Kissimmee, near Orlando, just received her first unemployment payment last week, after being laid-off from her job in mid-April. Cook, 28, moved to the area in September for an 18-month contract position as a 3-D modeler for Walt Disney, a job involving sculpting character prototypes that were printed on 3-D printers. She lost her job when the parks closed down.

She’s receiving the minimum state unemployment benefit from Florida, $125 a week, because the state has no record of her prior earnings in New Jersey, even though she said she has uploaded, mailed and faxed her documents from her job there. If her previous earnings were properly credited, her state benefits would more than double. She is grateful, though, for the extra $600 in federal unemployment benefits, which have allowed her to pay some bills.

Dealing with the state’s bureaucracy “was very stressful,” she said.

Daco of Oxford Economics said he still expects the June jobs report, to be released in early July, to show another hiring gain. But these figures will be particularly hard to forecast. Tens of millions of people may be flowing in and out of work each month, he noted, making it much more difficult to forecast where the job market is headed.

The jobs report for May had suggested that the damage might have bottomed out. The unemployment rate declined from 14.7% to a still-high 13.3%.

Even so, nearly 21 million people are officially classified as unemployed. And including people the government said had been erroneously categorized as employed in May and those who lost jobs but didn’t look for new ones, 32.5 million people are out of work, economists estimate.

Thursday’s report showed that an additional 760,000 people applied for jobless benefits last week under a new program for self-employed and gig workers that made them eligible for aid for the first time. These figures aren’t adjusted for seasonal variations, so the government doesn’t include them in the official count.

Other recent data have been more encouraging and suggest that the lifting of shutdown orders has sparked some pent-up demand from consumers. Most economic gauges remain far below their pre-pandemic levels, though, and some analysts question whether the recent gains can be sustained, especially if the virus were to surge back.

Last month, retail and restaurant sales jumped nearly 18%, the government said Tuesday, retracing some of the record plunges of the previous two months. Still, retail purchases remain a sizable 6% below their year-ago levels.

One key reason why consumer spending has somewhat rebounded is that government aid programs, from one-time $1,200 stimulus checks to $600-a-week in supplemental federal unemployment aid, have helped offset the loss of income for laid-off Americans. Yet nearly all the stimulus checks have been issued. And the supplemental federal jobless aid is set to expire July 31.

“Recently, some indicators have pointed to a stabilization, and in some areas a modest rebound, in economic activity,” Federal Reserve Chairman Jerome Powell said Tuesday in testimony to a Senate committee. Yet “until the public is confident that the disease is contained, a full recovery is unlikely.”

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