Monday, February 8, 2016

Tom's Data Dump

The sources of Australian emissions








Australia's tax expenditures.

According to Treasury:
A tax expenditure arises where the actual tax treatment of an activity or class of taxpayer differs from the benchmark tax treatment. 
  • Tax expenditures typically involve tax exemptions, deductions or offsets, concessional tax rates and deferrals of tax liability. 
  • A positive tax expenditure reduces tax payable relative to the benchmark. A negative tax expenditure increases tax payable relative to the benchmark.


Note the potential revenue gain for cutting inequitable super tax concessions is $28.2 billion, which is quite a sum of money. Cutting GST exemptions would yield $17.3 billion, which would then lead to higher relative costs for lower income households. 



The consumer price index remains subdued.






Jobs in solar have outpointed jobs in coal mining. Interesting to note that the boom only moderately increased employment




Commodity prices continue to fall.








Australia has more international students than Britain and Canada and significantly more than them and the United States as a percentage of total student population. Education 'exports' are Australia's fourth biggest export, but the sector employs a lot more Australians than the resources industry.






For a full list of Australian jobs see https://docs.employment.gov.au/system/files/doc/other/australian_jobs_2015_-_occupation_matrix.pdf



The Australian wine industry.






The Turnbull government talks about innovation (and then sacks 100s from the CSIRO!). This graphic shows that Australia has a way to go in collaboration between business and research institutions.





A better story can be told about immigration. Australia ranks third in the world for immigrants and native born offspring of immigrants as a percentage of population. While some may not celebrate this fact, it provides a remarkable indicator of just how successful Australia's post-war migration has been. Think of the issues that homogeneous countries like Japan will face in coming years as their populations continue to decline and the need for immigration becomes clearer. It has not always been smooth sailing, but Australia has done as well as anyone in integrating massive numbers of migrants over the years
'





While car sales have gone up and the number of cars registered is 18 million, soon there will be no new Australian-made cars. 






Finally, interesting stats on selected causes of death in Australia.



The above figures are select figures over a 10 year period. The ABS data on causes of death shows that most people die from illnesses and old age.



Shark attacks




Total shark attacks since 1791 = 234 = roughly one a year since white settlement

For a full list of fatal shark attacks in Australia en.wikipedia.org/wiki/List_of_fatal_shark_attacks_in_Australia and https://taronga.org.au/animals-conservation/conservation-science/australian-shark-attack-file/latest-figures

Tuesday, December 15, 2015

The Real Australian Debt Problem

I've long argued that private debt is a major problem for Australia and could be an even bigger concern if unemployment were to rise in 2016. There are two major ways that debt burdens could become a problem in 2016-17. Firstly, if unemployment rises and secondly, if interest rates rise. It's possible that if unemployment rises then the RBA will cut rates further, but interest payments may not be possible at all if you lose your job and have committed to a loan that is too big to handle. If this happens to enough people with loans then the rate of defaults will rise, but more importantly, the number of forced sales will increase leading to further falls in house prices and an end to the wealth effect that has helped Australians keep spending despite increased indebtedness and uncertainty.

The problem with these predictions is the relevant time frame. As Rudiger Dornbusch once said "The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought". Australia has thus far avoided a negative self-reinforcing spiral where higher unemployment leads to debt defaults, housing price falls and then higher unemployment and so on. Trying to avoid such cycles is the major reason why the Rudd government decided to fiscally support the economy during 2008 and 2009. 

Leith van Onselon has written a great article over at MacroBusiness "Aussie Households Bombed on Debt". His article was based on a NATSEM report Buy Now, Pay Later: Household Debt in Australia

The report reveals:
“Australian average household debt is now four times what it was 27 years ago, rising from $60,000 to $245,000, reflecting an annual growth rate of 5.3 per cent above inflation and leaving our income growth rate of 1.3 per cent trailing in its wake”

Foreign debt is also high and the major contributor has been the banks increasing their call on overseas funds.


ScreenHunter_10741 Dec. 03 15.46




ScreenHunter_10740 Dec. 03 15.45

Household liabilities have been increasing at a greater rate than income - a simple function of increasing debt.


ScreenHunter_10915 Dec. 14 08.08


What really matters for households is the ability to service and pay down the debt. Low interest rates have helped enormously in recent years. The fact that the current level of rates is well below the average should be of some concern.




ScreenHunter_10916 Dec. 14 08.19



ScreenHunter_10917 Dec. 14 08.21



Australian asset holders have largely avoided a fall in housing prices. If prices were to fall, that gap between liabilities and income will seem larger as the assets side of the balance sheet loses value.

However, the really interesting data compares the debt situation for quintiles. This shows that the median ratio has increased for all income quintiles with the low income quintile showing the biggest increase.




Once again, however, low interest rates have made the servicing of debt easier, although the situation has worsened considerably for the lowest quintile.





NATSEM concludes with the following points: