Heard the one about interest rates rising? Don’t be so sure


Having thus woken up, investors have suddenly begun to demand a lot more to lend to governments over the longer term.

Indeed, the interest rate payable on 10-year US Treasury bonds has crept up from 0.5 per cent in the middle of last year to around 1.4 per cent now. The longer-term average is around 4 per cent.

Illustration: Dionne GainCredit:

Similarly, in Australia, the yield on 10-year Australian government debt has increased from a low of 0.7 per cent last year to around 1.7 per cent.

Over shorter-term lending horizons, like three years or five, the pressure has been less intense, but still there. Our Reserve Bank had to go into the market to buy up more three-year government bonds last week to meet its pledge to keep the cost of this debt at an ultra low 0.1 per cent.

Amid this financial market frenzy, it’s only fair for punters to wonder if mortgage rate rises may also be on the cards.

And when you see positive news about our economic recovery, as contained in Wednesday’s national accounts, it’s easy to get carried away.

But don’t.

The good news is the total volume of goods and services produced by Aussies shot up by 3.1 per cent in the final three months of last year, as Melburnians were released out of captivity and went on a mini spending spree.

It’s a stellar performance compared internationally, thanks largely to our success in controlling the spread of the virus, which has allowed life to return much closer to normal here than elsewhere.

Australians are spending again and our household savings rate – having reached 22 cents out of every dollar of income mid last year – fell back to 12 cents in the December quarter.

Shrinking savings is due to a combination of both rising spending and falling income. The first part is good news: we feel more confident and able to spend.

The RBA has outlined why it extended its bond purchase program.

The RBA has outlined why it extended its bond purchase program.Credit:Dominic Lorrimer

The second part is ominous, reflecting the fall away in government support for household incomes via JobKeeper, JobSeeker, cash payments and early withdrawal of super.

This fall in the household savings rate, then, is partly a confidence story, but also partly a story of necessity for some cash-strapped households. As government support payments continue to fall, economists are hoping the first part of the story will outweigh the later. We’ll see.

As fiscal support is withdrawn – albeit with some likely top-ups around budget time – the onus will fall more heavily again on monetary policy and the Reserve Bank’s determination to keep interest rates low.

Reassuringly, the coronavirus crisis has only sharpened our central bank’s resolve to fulfil its mandate of achieving “full employment” in Australia, or something close to it.

Even before COVID, it was struggling to do this. Wages growth was tepid; inflation well below target. Companies were not investing. Workers did not have sufficient power to demand significant pay rises. And productivity figures were hardly backing their case for one.

I called it the “econo-meh”.

Importantly, even in this pre-COVID economy, inflationary pressures were insufficient to justify interest rate rises any time soon.

COVID only makes a return to sustainably higher wages and inflation even harder.

It will be mid-year before we’re even back to the level of economic output we had before the pandemic struck – longer still before we’re where we would have been absent a pandemic.

Bad for business: airports were empty for much of 2020, as travel restrictions curbed flights.

Bad for business: airports were empty for much of 2020, as travel restrictions curbed flights. Credit:Kate Geraghty

Of course, for economic life to return to normal, we still need international borders open again.

But the true task of rebuilding our economy after COVID goes well beyond that.

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It goes right back to the same problems we were grappling with before the pandemic, of sluggish business investment and wages growth.

To really see inflationary pressures back on the agenda, we’d have to complete our original task of unleashing significantly more innovation and investment in our economy. Whether through radical tax reform or huge increases in investment in education and knowledge, that’s all likely to take time.

The task was huge before COVID. It’s even bigger now.

It’s true that, given bond market moves, fixed-term interest rate loans may not fall much further from here. Now is a good time to look at the potential savings from fixing in at ultra low rates.

But variable-rate borrowers can remove interest rate hikes from their list of things to worry about. That’s good news for household budgets.

But it’s a concerning sign about the strength of our economy in the years ahead. The road to true economic recovery is looking as long and bumpy as ever.

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Albury residents support Home Run for Julian Assange tour | The Border Mail


news, local-news, Julian Assange, Wikileaks, Albury

“Why is he in jail for telling the truth?” About 20 people gathered outside the old Albury courthouse to share their disquiet and even disgust over the continued imprisonment of Wikileaks founder Julian Assange. The journalist’s father John Shipton visited the Border on Wednesday as part of the Home Run for Julian tour that began in Melbourne and includes Sydney, Canberra and regional centres. Helen Foster and Jenny Doxey travelled from Benalla, bringing their own signs, to show their support for Assange, now held in an English jail and awaiting the outcome of an appeal by the US against a judge’s decision not to permit his extradition. “Why are we persecuting a whistleblower?” Ms Foster said. “He’s a journalist, he’s got a Walkley award, he should be back here (in Australia), because otherwise we stop free speech, don’t we?” Albury councillor David Thurley, speaking on his own behalf, not council’s, said Assange was suffering a “terrible injustice” and the Australian government wasn’t doing enough to help him. “We need to be making representations to the US government and the British government,” he said. IN OTHER NEWS: “If he ends up in the United States that would be a disaster. “There’s too much secrecy and we need to be more open and fair about stuff.” John Hengstmengel, of Albury, said he was “really disgusted” by the Australian government’s attitude. “At least get him back to Australia, he is an Australian citizen,” he said. “I’d hate to be locked up and knowing the Australians probably won’t do anything about me.” Lloyd O’Keefe, of Thurgoona, and Albury’s David Bland said Assange had been exposing the truth and helping to hold governments to account. “If he’s not being charged he should be let go,” Mr O’Keefe added. Sandy Creek resident David Macilwain felt Assange was being held a prisoner because governments didn’t want his information to be considered credible. “(He) has to be restricted and debased and portrayed as a hacker and criminal,” he said. Mr Shipton said the Home Run for Julian tour aimed to thank people for their support and try to build the momentum for change. “To continue to push up into Canberra until the government realises that this is a terrible mess and also an imposition on an individual who’s made a solid contribution to journalism,” he said. “Just discuss things with friends, that’s enough, because that’s how we generate understanding amongst ourselves and then contact the local member, it works.” Melbourne 4 Wikileaks convener Jacob Grech, who introduced Mr Shipton on Dean Street, said previous situations had proven the federal government could advocate successfully for citizens jailed overseas. “It isn’t just about bringing one Australian home, it’s about saying this is what happens when you start telling the truth and exposing the lies and corruption,” he said. “We need to show the government that they need to grow some political will and go to England, go to the United States. “This government needs to intercede with the new administration in the US and say, ‘He’s one of ours, bring him here’.” Mr Shipton said he had spoken to his son from beside the Murray River on Tuesday night. “He said, ‘Is that crickets, can I hear crickets?’, he hasn’t heard a cricket in 10 years. “(I just) take things as they come towards me and do my best.” One older couple attended the rally just long enough to collect a pamphlet and meet Mr Shipton. “Are you his dad?” the man asked. “Congratulations, you’ve done a good job. “I wish him all the best, hope he gets back.” Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content:

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Mars Australia begins offsetting 100 per cent of its power consumption with renewable energy


Food manufacturer Mars Australia has switched-on a deal with a regional Victorian solar farm to offset 100 per cent of the chocolate maker’s power consumption.

Mars has six factories and two offices in Australia and the offset agreement produces “enough electricity to offset our operations across our business”, the company’s commercial manager Savannah Wallen said.

The deal, mooted in 2018, means Mars pays the Kiamal solar farm in north-west Victoria to put green energy into the grid on its behalf.

The deal came into effect yesterday.

“So what we’ve decided to do is partner with [Kiamal Solar Farm].”

The company’s facilities, like the Mars Petcare factory in Bathurst, NSW, are spread across the country.(

Supplied: Mars Australia

)

Ms Wallen said Mars had ambitious goals to reduce its global greenhouse gas emissions and this would help the company achieve its goals.

Power purchase agreements

Called a power purchase agreement (PPA), these power offset deals are “win-win for businesses and the climate,” said Climate Council researcher Tim Baxter.

“By helping new renewable energy projects across the line, companies entering into PPAs are driving down electricity sector emissions,” he said.

But he said to reduce emissions, companies need to take action on energy efficiency and the electrification of their own fossil fuel use.

Aerial of a huge solar farm on a fairly denuded landscape.
The Kiamal Solar Farm is located near Ouyen in north-west Victoria.(

Supplied: Mars Australia

)

Mars has stated it planned to reduce its global emissions by 27 per cent in 2025 and by 67 per cent in 2050.

“Since 2017 we have reduced our emissions by [around] 3.5 per cent year-on-year, and by continuing on this trajectory we will reach our 2025 goal,” Ms Wallen said.

The director of renewable energy advocacy group ReAlliance, Andrew Bray, said PPAs were a growing trend in the renewables sector.

“Mars’ announcement is one of many that is happening. There’s been a number of large corporates that are buying their energy from wind and solar farms,” he said.

He welcomed the agreement and said it secured the future of Total Eren’s Kiamal Solar Farm for the period of the PPA agreement.

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WA top cop wants new stop and search laws to ‘wipe out’ meth supply at interstate border


Mr Dawson said when it did end, he wanted officers to continue to have a strong presence at the border with powers similar to those granted to biodiversity officers searching vehicles for fruit.

“There’s another pest out there and it’s called meth, and that doesn’t just destroy crops, economics and livelihoods, it destroys people’s lives,” he said.

“I’m not saying we stop absolutely every vehicle, what I’m saying is if we can refine the powers similar to what we do to protect the state’s biodiversity – meth is actually just as, or even more destructive for our community.

“We know it’s working through this state of emergency, why would we not want to stop meth coming in?”

Existing laws currently allow police to stop and search a vehicle if there is reasonable suspicion.

New powers introduced in 2017 also allow police to randomly search vehicles along a declared drug transit route.

Transit routes can be declared by a district superintendent who reasonably suspects a road is being used for drug distribution, however, the additional search powers are temporary, only lasting up to a fortnight, and limit the number of routes targeted at any one time to three.

Mr Dawson has hinted at lobbying for the powers to become permanent by seeking to introduce a legislative reform package through the Minister for Police and the Attorney General following the March 13 state election.

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“I’m not saying we want to live in a police state, we want to live in a state where we can actually wipe out drug traffickers, that’s the aim I’ve got,” he said.

“I’m also not naive, I know drugs will come through air, through sea, by road, by post – but with the success we have seen over the past year, why would we not take this opportunity to build it even stronger?

“In the most recent six months, we’ve seized nine trucks, nearly $50 million, and a whole stack of meth and that’s reducing crime.”

Mr McGowan confirmed on Wednesday the state government was not considering extending WA’s G2G entry pass after the pandemic was over, instead clarifying he supported an increased police presence at border checkpoint.

“If we can stop bananas, avocados and tomatos coming in, surely we should be able to stop meth, cocain and heroin,” he said.

Liberal Democrat MLC Aaron Stonehouse, whose party promotes civil libertarianism, on Tuesday flagged concerns over any increase to police tracking powers.

“Giving police a blank cheque to surveil and control our movement, that is a serious risk to our civil liberties and our freedoms,” he said.

State opposition leader Zak Kirkup described any mass monitoring or tracking of people entering WA as an “immense overreach” of power.

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Vegan Market at Queen Victoria Market



In exciting news for herbivores, Queen Victoria Market is hosting a Vegan Market that will bring together a mix of stalls including food, fashion, art, craft, …

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Murray Basin CRC proposes Dookie, Mildura research hubs | The Border Mail


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Local expertise will play a crucial role in work by a proposed ONE Basin Cooperative Research Centre to ensure the Goulburn-Murray’s farms, businesses, and environment have the resilience to weather a changing climate. The bid to set up the $170 million CRC has been pitched to the federal government by the lead agency, the University of Melbourne. The University is seeking $50m in federal funding for the 10-year research initiative and has proposed five regional hubs, including at Dookie and in Mildura. The other hubs are proposed for Griffith, NSW, Goondiwindi, Qld and Loxton, SA. The CRC aims to offer an industry-led and basin-wide approach to the science needed to manage the Murray-Darling Basin’s resources sustainably. Read more: Murrumbidgee Irrigation express support for ONE Basin Community Research Centre ONE Basin interim chief executive Mike Stewardson said the CRC aimed to support industry to increase its long term sustainability, profitability and competitiveness. “We have seen major changes and rapid pressure in the water sector over the last two decades; it’s not just variability in climate and the drought that has had a significant impact on the Basin, it’s also in terms of water management arrangements,” Mr Stewardson said. “But what is striking to me is that we are actually at the lowest point, in terms of research to support the water industry and users like irrigators, since the 1980s. “It’s absolutely extraordinary – and what is more concenring is there is a lack of collaborative arrangements, to work on water challenges, which is absolutely critical.” He said the proposed CRC would focus on rural industries, particularly agriculture and the associated services sector. “It’s a partnership with industry,” he said. “The idea is we will put most of the staff in regional areas. “We have plans to set up five regional hubs across the Murray Darling Basin, and we will have those closely linked with regional organisations, dealing with the problems defined by the region.” While there was a lot of research being done in the agricultural sector, water management had been neglected. “That’s where we are focussed, water management, climate risk, the technologies that are needed to enable and advance agriculture,” he said. The bid is supported by a coalition of industry and community groups, universities, government bodies, and businesses that have committed more than $120 million to its operation. At last count, there were 80 bid partners, including the Victorian Farmers Federation, Murray River Council, Greater Shepparton City Council, Riverland and Murray Joint Organisation, Southern Growers, Western Murray Land Improvement Group, Murray Darling Basin Authority, Hort Innovation and Local Land Services. NSW. Prof Stewardson said previous CRCs had been a significant forum for driving innovation. “We are not a decision-making body; the CRC is about exploring policy options and we can be a forum where they can be discussed,” he said. “We are looking to bridge the gap between that strong local knowledge and understanding about what the opportunities and challenges are around water management and the work that state governments and the MDBA do in water reform, management and planning to drive better outcomes.” Farmer groups and the industry were all “really enthusiastic” about that possibility, he said. Read more: ACCC says Murray Darling water market badly ruled and lacks integrity National Water Initiative report way dams funded slammed in water reform report by Productivity Commission The Goulburn Valley-Central Murray Hub will work with partners across a region that spans the Murray River and reaches south to Bendigo in Victoria and north to Deniliquin in NSW. ONE Basin CRC Goulburn Valley-Central Murray Hub lead Professor Tim Reeves said the regional centres would play a key role. The Goulburn Valley-Central Murray Hub, planned for Dookie, will work with partners across a region that spans the Murray River and reaches south to Bendigo in Victoria and north to Deniliquin in NSW. “What the hubs bring is this place-based approach to research that will help farmers, communities and industries adapt to what the likely new scenarios will be for water and climate, in the Basin,” Prof Reeves said. Specific, expert personnel would be hired to staff the hubs. “A key part of CRC’s is PhD training so there would be scholarships available,” he said. “Our idea would be that any new PhD candidates are working on issues, challenges and opportunities, identified by industry. “We want them to be tackling those things that are seen as really important to adapting to a Basin that is probably going to have less, and higher priced, water.” Prof Reeves said it was proposed the CRC would be an evidence-based organisation. “We look at options; we don’t make judgments on which of those options we find. “He said he hoped research would identify the most water-use efficient production system the industry could use. “One could think of the dairy industry, where there are quite a lot of people thinking about looking at, or using, more water-efficient crops, such as maise, compared to pastures and the system that goes with that. “It may well you have a total mixed ration approach and a cut and carry system where you are taking the feed to the cows, rather than the other way around.” Just applying technology provided only a marginal saving. “If you can change the mix, change the system, the add the technologies, you can get those synergies where you have much greater gains.” Federal Industry, Science and Technology ministerKaren Thomas is expected to announce the successful CRC bids in March, with funding issued in October.

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Dr Seuss books will no longer be published due to racist images


The decision to cease publication and sales of the books was made last year after months of discussion, the company said.

“Dr Seuss Enterprises listened and took feedback from our audiences including teachers, academics and specialists in the field as part of our review process. We then worked with a panel of experts, including educators, to review our catalogue of titles,” it said.

Books by Dr Seuss – who was born Theodor Seuss Geisel in Springfield, Massachusetts, on March 2, 1904 – have been translated into dozens of languages as well as in braille and are sold in more than 100 countries. He died in 1991.

A mural featuring Theodor Seuss Geisel has been painted on a wall at The Amazing World of Dr Seuss Museum in Springfield.Credit:AP

He remains popular, earning an estimated $US33 million ($42.3 million) before taxes in 2020, up from just $US9.5 million five years ago, the company said. Forbes listed him No. 2 on its highest-paid dead celebrities of 2020, behind only the late pop star Michael Jackson.

As adored as Dr Seuss is by millions around the world for the positive values in many of his works, including environmentalism and tolerance, there has been increasing criticism in recent years over the way black people, Asian people and others are drawn in some of his most beloved children’s books, as well as in his earlier advertising and propaganda illustrations.

The National Education Association, which founded Read Across America Day in 1998 and deliberately aligned it with Geisel’s birthday, has for several years de-emphasised Seuss and encouraged a more diverse reading list for children.

School districts across the US have also moved away from Dr Seuss, prompting Loudoun County, Virginia, schools just outside Washington DC to douse rumours last month that they were banning the books entirely.

“Research in recent years has revealed strong racial undertones in many books written/illustrated by Dr Seuss,” the school district said in a statement.

In 2017, a school librarian in Cambridge, Massachusetts, criticised a gift of 10 Seuss books from first lady Melania Trump, saying many of his works were “steeped in racist propaganda, caricatures, and harmful stereotypes”.

In 2018, a Dr Seuss museum in his hometown of Springfield removed a mural that included an Asian stereotype.

The Cat in the Hat, one of Seuss’ most popular books, has received criticism, too, but will continue to be published for now.

Dr Seuss Enterprises, however, said it is “committed to listening and learning and will continue to review our entire portfolio”.

Numerous other popular children’s series have been criticised in recent years for alleged racism.

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In the 2007 book, Should We Burn Babar?, the author and educator Herbert R Kohl contended that the Babar the Elephant books were celebrations of colonialism because of how the title character leaves the jungle and later returns to “civilise” his fellow animals.

One of the books, Babar’s Travels, was removed from the shelves of a British library in 2012 because of its alleged stereotypes of Africans. Critics also have faulted the Curious George books for their premise of a white man bringing home a monkey from Africa.

And Laura Ingalls Wilder’s portrayals of Native Americans in her Little House On the Prairie novels have been faulted so often that the American Library Association removed her name in 2018 from a lifetime achievement award it gives out each year.

AP

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Police use tear gas on anti-coup protestors in Yangon




Myanmar protesters clashed with police after the bloodiest crackdown by security forces that killed 18 people on the previous day.

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Music industry legend Michael Gudinski dies aged 68




Mushroom Records founder and Australian music industry icon Michael Gudinski has died, with stars like Kylie Minogue, Bruce Springsteen and Jimmy Barnes paying tribute. Zane Rowe reports.

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Victoria’s state of emergency set to be extended until December


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Leader of the Opposition in the upper house David Davis said the crossbench had “sold out” and handed “extreme power to Daniel Andrews until Christmas”.

Mr Davis said the opposition would support the bill if it allowed for extensions of the state of emergency only on a month-to-month basis and with the approval of both houses. He said the government should make public the health advice underpinning each extension of the state of emergency.

As part of the government’s negotiations with crossbenchers, it will seek to establish a Detention Review Officer who will aim to review fines within 24 hours of someone requesting a review.

The government is also proposing to allow for reduced fines for children. The Victorian Greens have been pressuring the government to make the COVID-19 legal framework less punitive for children.

In a statement the Greens said they had secured a commitment for Fines Victoria to review all penalties for disadvantaged Victorians. They said the government agreed to the party’s demand to give people the right to appeal detention orders, as recommended by the Victorian Ombudsman in its review of the public housing tower lockdown.

“While COVID is still a risk in the community we must continue to keep people safe, but that shouldn’t come at the expense of people’s democratic rights and rights to social justice,” Greens leader Samantha Ratnam said.

“That’s why the Greens will support a nine-month extension to the state of emergency, on the proviso that we work on new laws that mean this is the last time the state of emergency is used for COVID in Victoria, and on the condition that the government reduces fines for young people and implements important recommendations from the Ombudsman’s inquiry into the public housing lockdown.”

Ms Patten also secured some amendments.

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Earlier this week, The Age reported that Ms Patten had agreed to extend the state of emergency powers for three months but she wanted the government to implement a “traffic light” system before announcing a statewide lockdown, enshrine the “right to protest” in the amended bill and accept the recommendations of the Victorian Ombudsman’s report into the lockdown of the public housing towers last year.

The lower house, where Labor commands a majority, last week passed legislation to extend the state of emergency powers for a further nine months until December 15.

But the government must broker a compromise in the upper house, where it requires the support of at least three crossbench MPs to pass the Public Health and Wellbeing Amendment (State of Emergency Extension) Bill.

In September Ms Patten, Mr Meddick and Ms Ratnam voted with the government to extend the state of emergency powers until March 15, but have all refused to support Labor’s current bill.

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