Australia

Almost half of Canadians on verge of bankruptcy-Ipsos

An Ipsos poll for bankruptcy specialist MNP Ltd has shown that 48% of Canadians have $200 or less of going bankrupt each month after meeting all obligations. The poll also revealed,

“35% of Canadians say an interest rate increase would move them towards bankruptcy, while 54% said they worry about their ability to repay debts.”

This is consistent with a ME Bank survey in Australia which found only 46% of households were able to save each month. Just 32% could raise $3000 in an emergency and 50% aren’t confident of meeting their obligations if unemployed for three months.

According to Digital Finance Analytics, “there are around 650,000 households in Australia experiencing some form of mortgage stress. If rates were to rise 150 basis points the number of Australians in mortgage stress would rise to approximately 930,000 and if rates rose 300 basis points the number would rise to 1.1 million – or more than a third of all mortgages. A 300 basis point rise would take the cash rate to 4.5 per cent, still lower than the 4.75 per cent for most of 2011.”

Do you know how many homes NAB has under repossession on its books at the latest filing? Around 277. Yes, Two hundred and seventy seven. Out of 100,000s of loans.

But we needn’t worry because we have to trust our central banks will keep rates low to avoid any economic shock. Remember the current and previous US Fed Chairmen have all but guaranteed there will be no more financial crises in their life time. Either they don’t hold much prospect for their longevity or they are clutching at straws.

Sir David Attenborough’s Climate Change: The Facts

Sir David Attenborough’s narration of Climate Change – The Facts is a one hour BBC sponsored piffle fest, wonderfully timed with the Extinction Rebellion protests. It is a collection of one alarmist liners of “we’re running out of time“, “if we don’t do something now,” or “we’re at a tipping point“. You get the drift. The irony of the title is that few facts are actually presented. A lot of grandiose statements but little in the way of hard numbers. Even when numbers are presented they don’t necessarily prove anything.

Many numbers presented are selected from groups that have been caught red handed manipulating data – including NOAA, UNIPCC and BOM to name a few. Take temperatures in Australia. Sir David puts them forward as rewriting records despite far hotter temperatures recorded a century earlier. Perhaps he should have cited the Bureau of Meteorology scandal of putting a hard floor on cold temperatures.

Some supposed experts spoke of:

1) an explosion in the severity and number of wildfires. The truth is both the area and frequency have fallen in the last few decades. 90% are either accidentally or deliberately lit.

2) rising sea levels and polar melting. Analysis using tide gauges and satellites showed 30 Pacific and Indian Ocean atolls including 709 islands, revealed that no atoll lost land area and that 88.6% of islands were either stable or increased in area, while only 11.4% contracted. What sea level rise? The most experienced is around. 1mm pa. Australia’s former climate change commissioner told us a decade ago that waves would lap the rooves of 8 storey apartments despite owning a house by the water.

NASA noted in 2018 that sea ice was increasing. It said an increase in Antarctic snow accumulation that began 10,000 years ago is currently adding enough ice to the continent to outweigh the increased losses from its thinning glaciers.

3) the tragedy of coral bleaching at the Great Barrier Reef, despite it seen to be flourishing. Scientists from the Australian Institute of Marine Science in Sep 2017 surveyed 14 coral reefs between Cairns and Townsville to see how they fared after being bleached and were surprised to find the coral had already started to reproduce.

By all means watch it to see how poor a documentary can be made to sell a story of activism. Hysterics, exaggerations and bias to create fear mongering. Even the background musical accompaniment is designed to pluck at the heart strings. To be honest it’s surprising that Sir David wanted to put his name to it. In decades to come the climate scientists will still be saying we’ve got little time left to fix things.

Profligacy paid for by wishful thinking

Lots of promises. Lots of grand assumptions. To be honest, best just ignore the minutiae. It’s a complete waste of time. The biggest question is, if the global economy, by Treasurer Josh Frydenberg’s own admission, is slowing down (just look at government bond yields flattening/gone negative) how on earth is Australia going to grow receipts from $485.2bn in 2018/19 to $566.9b in 2021/22? A 17% growth in tax revenue. Expenses will rise from $487bn to $559.9bn respectively. Give aways +15%. Best hope the world economy doesn’t tank. Expenses are locked in. Tax revenues aren’t.

Worse, these projections have all been massaged higher than the 2018-19 budget. What has changed to our overall net position in the last 12 months to gain such confidence? Climate alarmists would blush at the extent of the upward massaging of numbers. Did Treasury sit down after consuming 3 bottles of Absinthe to come up with these revisions? Think about it. How can we get an extra $5.9bn in tax receipts in 2021-22 when conditions are sure to be worsening?

This is NOT an old school Coalition budget by any measure. This is a crossing fingers, closing the eyes and hoping we muddle through budget. If the proverbial hits the fan, a monster deficit is assured. Take it to the bank.

We are technically at full employment. Unless we embark on mass migration (which we’re looking to cut) how will flat wage enduring Aussies and corporates contribute to a 17% rise in the Canberra coffers? Wishful thinking. The government targets around 23.9% of GDP for tax receipts and pats itself on the back for “the government’s average real spending growth is expected to be the lowest of any Commonwealth government in over 50 years.” Although that claim is dispelled by their own tables contained here.

Cutting taxes can create more tax revenue. Poland sliced its corporate taxes in half in 2004 and doubled revenue. However that was more a grey money grab than pure unadulterated tax policy spurring public revenue growth.

Giving away more money to the middle class through tax cuts and hand outs in the hope they spend more seems wishful thinking. The problem is if global growth hits a wall, we don’t have a Howard/Costello surplus to buffer the storm. No $38bn backstop in the war chest.

China, the US and EU are struggling. Things are so bad in the US that the Federal Reserve had to chicken out of any more rate rises because it would tank the economy. Our growth will stall if the world slows. Forget 28 straight years of continuous growth in Australia. The knock on effects will see unemployment surge, consumption fall off a cliff, housing prices crash and tax revenues slump. Forget a $7.1bn surplus. Think $20bn deficit because the promises are too grand and the tax receipts blindingly optimistic.

Of note in the 2019-20 budget is the expansion of the ATO’s tax grab from evil multinationals and HNW individuals who’ve avoided paying their fair share. That will result in a $3.612bn extr over the next 4 years. That against the $5.74bn tax cut for middle class Aussies over the same period. Spending up everywhere. Just not sure why the Treasury hasn’t pointed to where the extra revenue is coming from.

Take the assumptions of 2.75% GDP growth flat to 2020/21. Unrealistic. Treasury assumes the same labour force participation rate with unemployment remaining to 5% and wage growth of 3.25% in 2020/21, up from 2.1%. All looks so simple. Yet inflation is expected to grow to 2.5% meaning real wages will be flat.

Aussies, saddled under 180% debt to GDP, shouldn’t take any sense of comfort from this budget. What Frydenberg presented tonight was nothing more than a hope that the most rosy scenarios play out when thunder clouds are so obviously rolling in. It’s utterly irresponsible. Yet that’s today’s political class – spineless. They’re unprepared to tell Aussies that they have to be prepared to live with much less. Instead of asking us to tighten our belts, a whole load of freebies that can’t be paid for end in our laps so they can hold on to power for a bit longer.

Langer should tell selectors to keep Warner out

Just do it? There are two options. Aussie cricket coach Justin Langer knows a thing or two about opening batsmen. He was one of our best. Yes, if we want a better chance of winning sooner we could easily insert David Warner post his ban. However at 32 years and 64 days (154 days when the ban ends), isn’t there an argument to develop new talent for the long term? This is merely putting expedience ahead of principle.

We can argue that Warner will have served his punishment but does the team need to risk diluting its rebirth by reintroduction of a toxic force? Are we to believe Warner will return to the team as a reformed choirboy or play his hand at being the same ruffian who believes in his own mind he’s still a rightful veteran? Proof of the pudding was his trademark celebration after scoring a century in local grade cricket. He has changed not a jot.

Yes we lost the 3rd Test today but despite the woeful batting efforts in the 1st innings, Pat Cummins (who deserved man of the match) showed what grit means. 9 wickets and approaching 100 runs with the bat. We deserved to be flogged when bowled out for 151 runs but Cummins took out the top order including India’s highest scoring batters in the 1st innings for zero in the 2nd. He single handedly rallied his team to believe mentally it wasn’t over when they would have otherwise folded. He made Aussies proud.

Justin Langer has worked some miracles with the gutted side after taking the reins from Darren Lehman. Aussie team captain Tim Paine has also been impressive. Stephen Smith has none of Paine’s tenacity. Smith was made captain for being the best batsman in the world. Ability and leadership aren’t axiomatic. Smith’s weakness was evident. He allowed Warner to bully him into burying his judgement. It speaks volumes of why Smith should never captain again. His only real crime was to be a wimp.

It is also questionable whether Smith has the mental side to regain his top spot. He may well succumb to the pressure. He wouldn’t be the first gifted sports star to fall into a deep and prolonged slump post a scandal.

Warner can play 20 over big bash leagues (BBL, IPL) to earn his keep and feed his family but do we really want to send a message to kids that cheaters can prosper in our national side? His actions were disgraceful. Cheating is cheating and no rush of blood to the head is acceptable when earning millions let alone representing one’s country. It is a privilege to wear a baggy green, not a right.

CM would prefer to lose honorably than win with players who were only ever in it for themselves. Matches like today bear out how fighting as a “team” is so much more admirable. The taste of victory will be that much sweeter. No better opportunity to cast the net wide for sleeper talent who would probably have been overlooked otherwise. Make sure current players are kept on their toes to earn their spot.

It should be impressed upon incumbent players as a deterrent that cheating means life long bans. It would also be a stronger signal that the terrible governance of the farcical former Cricket Australia board is over.

Time to start afresh. Langer should take the option of keeping Warner out of the dressing room. It’s the only sensible choice.

COP24 – checking cash, corruption and cars

It should come as no surprise that the COP24 summit is a time to put the money where the mouth is. Look at the numbers of the delegates from Africa to stake their claim of the wealth redistribution. Guinea has sent the biggest delegation of 406 people. In 2016 the country received over $10.7mn in climate grants. DR Congo’s 237 delegates garnered $45 mn in aid for climate mitigation projects according to the OECD. The Ivory Coast received $114 million in 2016 for environmental aid. Indonesia got $250 million in climate related aid in the same year.  Poland can be forgiven being the host nation to be 3rd place. It receives zip, much like the US and Australia. The COP summits are nothing more than networking events to collect cash from virtue signaling Western governments.

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Putting that in context of the representation amongst all delegates to their representative population, Guinea is at 15.5x. America at 0.1x. Guinea is 86 people lighter than in 2017. The Ivory Coast had halved its delegates on the previous summit.

COP24delegates

One has to question how efficiently these millions given away get to be spent on the intent. Take a look at Transparency International’s global 2017 corruption index. 180 is the worst. 1 is the best. Note the correlation of delegates attending COP24 to those countries with a higher prevalence of corruption?

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There is a touch of irony that the transport recommendations to/from Katowice airport made by the UNFCCC are all diesel vehicles. Not an EV in sight. Surely there was an opportunity to team up with an EV maker to co–sponsor the event? Did the 7,331 observers going to the summit pick up on this? Why didn’t they take advantage of the virtual attendance technology that was available? Better to be there and enjoy the banquets and political graft.

Polandchauffeur

Live free and negotiate

40 Maseratis for PNG shows commitment to combat climate change

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Last month Australia was beaten over the head for not helping the Pacific Islands cope with the dangers of climate change which is causing those countries to supposedly slip below the waves. What better way to use part of the $150mn in aid money from Australia to buy gas guzzling sports limousines from Italy.

Of all the 4-door cars least suited to the PNG climate, Maseratis would be top of the list. Pot holed roads, firm suspension  and 20inch alloy rims wouldn’t work so well neither would the high performance V6s help lower the CO2 content that is such a grave risk to their survival. Lord only knows why anyone would pick an Italian car to stand up to corrosion by the sea side?!? To the best of CM’s knowledge a Maserati Port Moresby dealership does not exist,

Yet we shouldn’t forget that as angry as we have every right to be in Australia, these islands know how strategically important we are to them for national security that we should count ourselves lucky they didn’t go for the 4.7 litre high performance V8s with the optional high performance pack.

China’s President Xi has visited these islands in the Pacific. Our Aussie PMs Turnbull and Morrison have just sent the Foreign Minister showing a lack of priority. We just take for granted that cutting cheques should be enough to curry favour.

Do we really believe the $12mn gift from China to install CCTV cameras in PNG is for the locals’ benefit? Beijing will happily monitor everything, including facially recognizing our politicians when they visit. Might as well bug the meeting rooms while they’re at it! All because we’re too daft to think just because we have history that gives us a leg up over China. Best think again.

At the very least signing FTAs with these island nations won’t even be a rounding error for China’s GDP but there is no question we are way behind on diplomatic negotiations.

So when they buy Maseratis with our taxes we should not bat an eyelid. It’s a pittance in terms of what places like PNG mean to our long term security.  In fact we might have been better off suggesting the PNG government buy Rolls-Royce Cullinans as  a more sensible alternative given its SUV abilities.