The media is psyched about Scott Morrison’s planned maximize in defence expending — apart from that it is really absolutely nothing additional than what we already fully commited to years ago
If you read the papers today, you’d be forgiven for pondering Scott Morrison was heading to announce a large raise in shelling out on unique new weaponry (“slicing edge”, “hypersonic”, “strike capacity”, and many others, and so on) to fight the seething menace of China.
“New missiles for defence in $270 billion arms build-up” claimed the AFR. “Scott Morrison shoulders arms to China in 10-yr,$270 billion strategy,” explained The Australian. “Australia to commit $270 billion setting up more substantial military to get ready for ‘poorer, much more dangerous’ planet” the ABC informed us. The usual suspects like Peter Jennings of ASPI were being exhumed from their bunkers to endorse the expending.
Fairfax journalists, at minimum, pointed out towards the conclude of “Australia to acquire ship-killing missiles and change focus to Indo-Pacific” that “this is not an maximize in Australia’s defence paying in actual conditions outside of the standing quo”.
“This is not about whittling away money,” Mr Littleproud said.
“We as Australian taxpayers have a proud record of having a safety net, and that’s what we provide to not only Australian farmers but to the individuals out there to have a safety net when things don’t go your way.”
Farmers welcome climate data spend
Wool grower Oliver Kay, who farms at Bungarby in southern New South Wales, questioned whether money should be spent teaching farmers how to develop business plans.
“Farmers should be doing that themselves already, that’s just a no brainer,” he said.
“So there’s no excuse for any farm business not to have clear plans for the path based on what’s happened previously.”
But Mr Kay welcomed the investment in an online climate data information service, which would likely draw on information from the Bureau of Meteorology, the CSIRO, and the Department of Agriculture.
Another $20 million dollars will be spent on drought research and development, and $15 million on natural resource management.
That could include grants for individuals and farmer groups to improve their local landscapes by maintaining ground-cover and improving soils.
South Australian pastoralist Gillian Fennell said the Government had “done business plans to death” and would have preferred to see money spent on improving farm and town water infrastructure.
“There’s no amount of business planning that will help you get rain out of the sky and help you get water onto your crop or your cattle or sheep,” she said.
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.
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.
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.
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.
FILE PHOTO: People wearing protective masks ride a lift at Times Square shopping centre, following the outbreak of the new coronavirus, in Hong Kong, China February 21, 2020. REUTERS/Tyrone Siu/File Photo
June 30, 2020
By Donny Kwok and Twinnie Siu
HONG KONG (Reuters) – Hong Kong’s retail sales in May slumped 32.8% from a year earlier, falling for the 16th consecutive month as the virus pandemic slammed the brakes on tourism and spending in the city.
Months of anti-government protest have also weighed on business activity in the Chinese-ruled financial hub, pushing many retailers to the brink of collapse.
Sales dropped to HK$26.8 billion ($3.46 billion), government data showed on Tuesday. They tumbled a steeper 36.1% in value terms in April and 42.1% in March.
In volume terms, retail sales in May plummeted 33.9%, compared with a revised 37.5% fall in April.
The government said the decline in May continued as inbound tourism remained at a standstill and job and income conditions were weak although the coronavirus situation had stabilised.
“The business environment for retail trade remains difficult amid austere labour market conditions and the travel restrictions in place,” a government spokesman said.
For the first five months of 2020, the value of total retail sales decreased by 34.8%, and 36.5% by volume, compared with the same period in 2019.
Hong Kong’s economy suffered its worst quarterly drop on record in the first three months of the year, while the city’s biggest retailer association has estimated that 15,000 retail stores will close by the end of the year.
Hong Kong’s tourist arrivals in May plunged by 99.9 from a year earlier to 8,139 visitors, the Hong Kong Tourism Board said, matching the same percentage drop in April.
The number of mainland visitors also fell 99.9% to 5,670. (https://bit.ly/2VwSHTZ)
Sales of jewellery, watches, clocks and valuable gifts, which rely heavily on mainland tourists, sank 69.7% in May, compared with a 76.7% plunge in April. Sales fell 67.0% for the January-May period.
Alberta Premier Jason Kenney says he’s recently been reading about former U.S. President Franklin Roosevelt’s stimulus-spending response to the Great Depression of the 1930s.
It’s likely a timely read, as his government faces the most severe contraction of economic activity and employment in more than a generation.
On Monday, Kenney and finance minister Travis Toews hoped to channel FDR with a plan to counter the province’s double-digit jobless rate and one of the largest economic contractions among Canadian provinces this year.
The Alberta Recovery Plan features $10 billion in new infrastructure spending and a tax cut to eight per cent from 10 per cent, that takes effect as early as Wednesday, in a bid to stimulate the province’s economy.
The approach, Kenney said, inspired in part by FDR’s attempt to stimulate the U.S. economy during the 1930s and also informed by a report written by a panel led by economist Jack Mintz. The panel also included former prime minister Stephen Harper.
“The $10 billion is not necessarily the maximum,” Kenney said of the spending package, adding that details of the infrastructure projects will be announced in the coming days.
Monday’s announcement seeks more provincial investment and incentives for industries, including petrochemical projects to diversify and support the energy industry, irrigation infrastructure to support the agriculture industry and potentially support for a high-speed railway link between Calgary and Banff being studied by the Canada Infrastructure Bank to boost the tourism industry.
The soon-to-be announced new incentives, new spending and cut provincial corporate taxes is an attempt to drive down the province’s unemployment rate and boost investment after the COVID-19 pandemic and the collapse in oil prices sapped business sentiment.
Every sector in the province took a significant hit during the pandemic and oil prices collapse. Toews said that oil production fell 25 per cent in the second quarter, while the value of non-residential building permits dropped 25 per cent. Meanwhile, retail sales are down 30 per cent and home sales are down 40 per cent since February.
A new Royal Bank of Canada forecast expects Alberta’s economy to shrink by 8.7 per cent this year — the second-worst performing economy in Canada after Newfoundland and Labrador.
“Most dramatically and sadly, more than 330,000 Albertans have lost their jobs. This amounts to the number of jobs Alberta’s economy added over the last decade,” Toews said, adding the official unemployment rate is 15.5 per cent but when the number of people no longer looking for work are counted, the real unemployment rate is closer to 20 per cent.
When the number of people not looking for work are counted, the real unemployment rate is closer to 20 per cent
Alberta Finance Minister Travis Toews
The NDP, the province’s opposition party, called the economic response to the pandemic a “trick” of trickle-down economics, while its leader Rachel Notley called the tax cuts an attempt to “speed up the rate in which he (Kenney) is handing out billions to big corporations.”
Given the current level of economic uncertainty in the province and in the global economy, it will be difficult to measure the effectiveness of the tax cuts on job creation, said Trevor Tombe, associate professor of economics at University of Calgary.
“It’s going to be hard to quantify the implications of any policy change right now,” Tombe said, adding that the province’s estimate of 55,000 new jobs created by the tax cut over the next four years “is not an implausible estimate.”
A rebound in employment is more dependent on global economic conditions than on the provincial economy, said Joseph Doucet, dean of the Alberta School of Business at the University of Alberta.
“It’s really, really hard to be definitive about numbers because we’re not in a regular or usual environment,” Doucet said, noting that the pandemic had upended economic expectations.
Alberta would also table an economic outlook later this summer that would provide a “frank” look at the province’s finances following the coronavirus-induced shutdown of the economy, Kenney said in an interview.
The province had previously planned to reduce corporate taxes to eight per cent from 10 per cent — a 20 per cent cut — over the next two years, but accelerated those changes in an effort to show companies interested in opening offices in Alberta that “the tax gap is real and it’s now,” Kenney said.
Other governments in Canada and elsewhere had previously promised to cut business tax rates but changed their plans as circumstances changed, Kenney said. As a result, those companies “talked to us and said, ‘Come back when you actually get to eight per cent’,” he said.
Business Council of Alberta president and CEO Adam Legge said many companies in the province are poised to lose money this year “and they’re not going to be paying tax anyway.”
“Alberta can be more highly competitive now. It’s more of a long-term piece than helping in a very down year,” Legge said.
NEW DELHI: Finance Commission chairman N K Singh said on Friday that governments needed to target reviving growth, and focusing on expenditure cuts or fiscal consolidation should not be a priority at a time when the Centre and states are battling the pandemic. While acknowledging that both the Centre and states are facing fiscal pressure due to a fall in tax revenue, Singh said that structural reforms will help rev up the economy faster and several steps had already been initiated. “This is not the time to talk of fiscal consolidation. This is the time in which the world believes that what needs to be protected is the expenditure over fiscal deficit and this is exactly what the Centre has done,” he said after a meeting of the Economic Advisory Council of the 15th Finance Commission. Singh told reporters that the panel, which has been tasked with devising the formula for sharing Centre’s taxes with states, was finding it difficult to decide the base year as the current financial year may not be best suited given the adverse impact of the pandemic. “Historically, finance commissions for making projections have used the year in which they make the award as the base year. This year, on account of extraordinary factors, using the current year in which we are as the base year has got many challenges,” Singh said, adding that various options are being considered. Finance commissions make their projections and decide the award of each state’s share after deciding the base year for calculations. Singh said the commission, which is to be submit its report later this year, will focus on improving the healthcare system and the infrastructure and had also set up a panel under Niti Aayog member Ramesh Chand to look into incentivising states that reformed agriculture. The first report of the panel, which has been implemented, has already seen the government offer additional borrowing space to states that amend APMC law. Asked about the suggestion of the GST Council borrowing from the market to provide support to states till the compensation cess is paid, Singh said that it was “kite flying” at the moment.
In return for extending the CERB, a spokeswoman for the NDP, Melanie Richer, said New Democrat MPs will vote in favour this evening of the supplementary spending estimates — some $87 billion in planned, primarily pandemic-related, government spending.
Only about $6 billion actually involves new spending; the other $81 billion has already been approved by Parliament.
Story continues below advertisement
Because the Liberals hold only a minority of seats in the House of Commons, they need the support of at least one of the main opposition parties to pass legislation and avoid defeat on confidence votes.
Any bill involving government spending is typically considered a confidence matter. A government that fails to win a vote of confidence in the Commons is deemed defeated, which would plunge the country into an election.
Federal government extends CERB by 8 weeks
Federal government extends CERB by 8 weeks
The NDP’s support for the supplementary estimates precludes that scenario for today at least.
“The prime minister says he has heard us and is extending support through CERB through the summer,” NDP Leader Jagmeet Singh said in a statement.
“This is what we were calling for in the short term. We’ll keep working to make sure help is there for Canadians who need it in the long term.”
Story continues below advertisement
Bloc Quebecois Leader Yves-Francois Blanchet also sounded Tuesday like his party would not vote against the spending estimates, although the Bloc has recently joined the Conservatives in demanding a full resumption of the Commons, among other demands, before supporting any government initiative.
“No one wants to send 20 million Canadians to line up to vote while we are still in the midst of a pandemic,” he said.
Trudeau announced Tuesday that the CERB will be extended to a maximum of 24 weeks instead of 16 weeks for people who lost their jobs or saw their hours slashed due to the pandemic.
The extension means the first cohort of applicants who signed up in April and were set to max out their payment periods in early July, won’t have to worry if they have no jobs to go back to over the summer or are unable to work because their health is precarious.
While the supplementary estimates seem poised to pass, there is still no resolution to an emergency aid bill that stalled last week without sufficient opposition support.
That bill included measures to deliver a one-time, tax-free benefit of up to $600 to Canadians with disabilities. It would also expand the wage subsidy program to include more seasonal workers and businesses and would impose fines or jail time on Canadians who deliberately defraud the CERB program.
Story continues below advertisement
At what cost? The financial impact of extending CERB
At what cost? The financial impact of extending CERB
The government needed unanimous consent to quickly pass the bill in a matter of hours last Wednesday but none of the opposition parties would support it. It then offered to deal with the disability benefit separately, which was supported by the NDP and the Bloc but the Conservatives blocked that idea.
The bill is still on the order paper and the government could theoretically try again today but officials say that isn’t in the cards.
Instead, the government is now trying to work out other ways to deliver the disability benefit and other measures without needing legislation.
Japan will take additional stimulus measures “swiftly” to combat the fall-out from the coronavirus pandemic, Prime Minister Shinzo Abe says, signalling readiness for a second supplementary budget in the current Diet session running through June.
The new package of steps would aim to cushion the blow to the world’s third-largest economy, which is on the cusp of deep recession amid a plunge in global demand and a local state of emergency that has been extended through to the end of May.
Abe said the government will consider additional steps such as aid to firms struggling to pay rent, support for students who have lost part-time jobs, and more subsidies to companies hit by slumping sales.
“If we decide that additional steps are needed, we will take bold and timely action,” Abe told parliament on Monday, when asked by an opposition lawmaker whether the government will compile a second extra budget to fund the additional steps.
“It’s important to act with speed,” he said, adding that the government was ready to compile the second extra budget in time to pass it through the current Diet session ending on June 17.
Abe declined to say how much the size of spending could be, saying the decision will depend how many prefectures will be able to lift state-of-emergency measures now applied nationwide.
In extending the measures to the end of May, the government said it would reassess the situation on May 14 and possibly lift them earlier for some prefectures.
“We will do our utmost to help companies sustain their businesses and protect jobs,” Abe said, adding the government will “act swiftly” taking into account proposals made by ruling and opposition lawmakers.
Japan compiled a record $US1.1 trillion economic stimulus package in April that focused on cash payouts to households and loans to small businesses hurt by the pandemic.
Ruling coalition lawmakers have ramped up calls for more assistance, as the government’s decision to extend the state of emergency heightens risks of more bankruptcies and job losses.
In a sign of the rising demands from politicians, opposition lawmaker Yuichiro Tamaki urged Abe to deploy fresh spending of 100 trillion yen ($A1.43 trillion) funded by a 100-year “coronavirus” bond.
Many analysts, however, expect any additional spending to be fairly small given Japan’s already huge public debt that is twice the size of its economy.
Japan’s economy likely shrank for a second consecutive quarter in the first three months of this year, a Reuters poll showed, meeting the definition of a recession as the pandemic crushed consumption and business activity.
About 15,777 coronavirus infections and 624 deaths have been confirmed in Japan as of Sunday, excluding cases from a cruise ship previously quarantined in Yokohama, according to NHK.
We the undersigned, call on the Australian Government to stop funnelling billions of dollars into offensive weapons for unjust U.S.-led wars, and invest instead in the health and safety of people and the environment.
On 23 March 2020, in the midst of the COVID-19 pandemic ravaging the world, the UN Secretary General Antonio Guterres called for a global ceasefire. The UN call highlights the disparity between the huge financial and technological resources invested in wars, and the under-funded and under-resourced public health systems desperately trying to control this deadly virus.
We call on the Australian Government to support the UN Secretary General’s call.
COVID-19 has sharply exposed the dangerous and unsustainable priorities of our society. On the other hand, the vast majority of Australians are co-operating to control the virus. World-wide, there are desperate shortages in the supply of most basic safety and life saving equipment – ICU beds, ventilators, virus testing kits and personal protective equipment for front line health workers.
At the same time there are vast stockpiles of technologically advanced military weaponry worth trillions of dollars, waiting to be used in endless profit-making wars.
Redirect military spending
The UN call for a worldwide ceasefire means little unless foreign military forces are sent back to their home countries. To that end we call on the Australian government to bring home our military forces from battle zones in the Middle East, Afghanistan and the Philippines, and to close the Pine Gap function that supports U.S. drone warfare. The hundreds of billions of our tax dollars are used to buy military equipment largely to support the U.S. military agenda around the world. Instead, huge expenditure is urgently needed here in Australia, for health and medical services and to address the climate crisis.
Australia’s immediate priorities should be providing support for millions of people facing unemployment, homelessness and poverty during the national disasters of coronavirus, the climate crisis, drought and bushfires – rather than supporting unjust U.S. led wars.
Prioritise people and environment
In spite of this difficult period of physical distancing, people are organising and helping each other and building social unity. We need to make sure we come out of these crises with a more humane, just and democratic society.
We need a society that prioritises the health, education and safety of people and the environment over war.
We need a society that builds Australia’s self-reliant and diverse industries to manufacture and produce for the needs of the people, and an economy that’s not based on multinational profit making.
We need a society that invests in our research scientists, the CSIRO and other public research institutions, not globalised corporations in search of profit.
We need a society that prioritises peace, justice and the health of people and the environment – an independent and peaceful Australia.
The Independent and Peaceful Australia Network (IPAN)
On paper, at least, Greenberg will be able to point to a raft of achievements during his years in the furnace. Sydney has more than $2 billion committed to stadia infrastructure, even if two-thirds of the projects remain incomplete; he has overseen the implementation of the controversial stand-down rule; and events such as Magic Round have been added under his watch.
His greatest strength is undoubtedly the way he handled the media as the game has lurched from one crisis to the next. Some of his strongest supporters on the commission wanted him to stay on for that reason alone. However, his strength was also his weakness amid claims he was more style than substance.
He wrestled with the ‘politician’ tag throughout his tenure. He said the moniker never bothered him, claiming he was always prepared to make the tough decisions. But for someone who has risen up the ranks based on an unparalleled ability to network, he also managed to fall out with the wrong people.
Peter V’landys wasn’t the first ARLC chairman Greenberg fell out with. He emerged with his job intact following a feud with John Grant, but was never going to survive after getting offside with the Racing NSW boss. While V’landys had the support of predecessor Peter Beattie, there were some at head office pushing for commissioner Tony McGrath to be his successor. Those people are feeling pretty nervous right about now.
Another Greenberg strength was also his weakness; that he came from club land. The knock on predecessor Dave Smith was that he had no history in rugby league. Greenberg not only knew who Cameron Smith was but was soon lavishing his wife with expensive jewellery. The clubs, united only by their mistrust of head office, felt Greenberg was more interested in building his Moore Park empire than ensuring their survival. When they started going above his head and straight to V’landys to get things done, there was only enough room for one of them.