News Article | April 30, 2017
The flecks of white speckled across the parched brown landscape of the Murray-Darling basin appear dramatically out of place – some kind of wintertime miracle in the Australian bush. On closer inspection it is not snow, but something equally alien to this harsh environment: fluffy wads of cotton. The major river system of the world’s driest inhabited continent somehow sustains this thirsty cash crop – the WWF estimates that 2,700 litres of water can be used to produce a single cotton T-shirt. Australian conditions have pushed local farmers to become the most efficient in the game, using hi-tech innovations to improve water productivity by more than 40% in a decade. Yet critics note that saved water is simply reinvested in producing ever-more cotton, rather than released back into a once-mighty river network crippled by increasingly erratic rainfall since the turn of the millennium. Both sides have turned to science to support their position – indeed both to the CSIRO, Australia’s national science agency, which simultaneously serves as both saviour and prophet of doom for the cotton industry. Lionel Henderson, the business development director for CSIRO agriculture and food, says the agency has developed varieties specially adapted to Australia’s climate, disease threats and nutrient availability. “When I first got involved in cotton industry during the early 80s, two bales to an acre was standard – now five to an acre is the target,” he says. “The breeding program has helped industry expand, particularly into southern New South Wales and northern Victoria – there is generally going to be water available in one of the different rivers, so by broadening the base you minimise the impact [of low rainfall in a particular region].” The challenging nature of Australia’s conditions has led to CSIRO-bred varieties being used in similar dry climates around the world. The CSIRO has worked with companies including Monsanto to roll out genetically modified varieties over the past two decades, with GM cotton today making up more than 99% of the crop. “Monsanto develop the traits, we then work with Monsanto to incorporate those traits into varieties we are breeding,” Henderson says. He says the main rivals to Australian growers are not foreign cotton producers but manufacturers of other fibres. In terms of water use, cotton’s rivals are certainly more efficient, from natural fibres including hemp to synthetics such as polyester, which represents less than 0.1% of cotton’s water footprint, according to a 1999 AUTEX Research Journal study by Eija Kalliala and Pertti Nousiainen. An Australian Conservation Foundation campaigner, Jonathan La Nauze, is more interested in another area of CSIRO work – the agency’s climate change research, which forecasts a dramatic rise in extreme weather events such as droughts and heatwaves, and a sharp drop in winter and spring rainfall across southern Australia. “We’re already the driest part of the world and water use is a key concern – cotton uses a hell of a lot of it,” he says. “Growers are aggressively trying to increase amount they can take rather than accept the current amount as the upper limit. We saw the Darling river stop flowing for months this year – extraordinary and avoidable.” “The impacts on native fish and water birds have been severe, and significant opportunities to improve downstream communities have been missed – and that’s before factoring in the CSIRO’s global warming scenarios of a reduction of water availability in the northern basin.” La Nauze welcomes Cotton Australia’s measures to improve water efficiency but says it isn’t much help to the environment if the saved water doesn’t get shared around. “The dividend should be a long-term sustainable river system – if you kill that system, you won’t have an industry,” he says. Cotton Australia’s chief executive, Adam Kay, says asking growers to pass the dividends of improved efficiencies on to the environment is “a ridiculous thing to say” given it is farmers making the investments in the first place. “We’ve got to help the public understand about this perception that cotton is somehow thirsty – it is a normal plant like soybeans or corn, uses about the same amount of water,” he says. “The issue is people with the best access to water choose to grow cotton as it offers the best return – that water would still be used to grow other crops if cotton wasn’t there.” But even Cotton Australia’s own promotional material acknowledges that the crop’s irrigation requirement of eight megalitres a hectare is the second-most water intensive in Australia, behind rice (12ML per hectare), but ahead of alternatives such as nurseries or cut flowers (5ML). Analysis of Australian Bureau of Statistics data reveals both the dramatic ebbs and flows of cotton production in response to water supply, and the continuing intensity of water use despite the progress made. During the water-scarce season of 2014-15, cotton sales represented 1.7% of Australia’s agricultural commodity value but used 12.2% of its water. In the more favourable conditions of 2013-14, cotton generated 3.9% of agriculture profits but in the process devoured 24% of the water diverted to agriculture. Kay says the industry has left no stone unturned in its quest for water savings and improved yield. Innovations include electromagnetic meters and soil moisture probes to monitor the need for irrigation, the laser-levelling of fields to ensure water drains evenly, weather forecasting software to know how much crop can be sustained before planting, thermal imaging to identify leaks, lining channels with non-porous materials to minimise seepage, autonomous spray rigs, and tailwater recycling programs. “We are on the cusp of incredible things with IoT technologies and digital agriculture,” he says. “We are using individual pieces [of data gathering] right now – it is commonplace to use drones to monitor crops and look for weed outbreaks, but the time is coming to link data from drones to data from the cotton picker to data in soil tests field and the canopy sensors – [but] once you link it all up, you can drive incredible decision making.” The reliance on new technology has thrown up new challenges for farmers: Kay notes that regional internet coverage is inadequate, and also that growers need to develop new tech-savvy skill sets. He says Cotton Australia’s investment of $20m a year into research and development can also help deal with the biggest new challenge of all: climate change. “We have research and development projects going on looking at impacts – tents out in the field to see what higher CO2 does to the crop, work on water use efficiency for potential scarcity in the future, and managing increased temperature,” he says. Cotton Australia is encouraging farmers to becoming accredited with the global Better Cotton Initiative, a framework founded by the WWF that requires members to meet stringent sustainability criteria – not to mention marketing rules. They must promote their cotton using a selection of pre-approved phrases, including: “The Better Cotton Initiative exists to make global cotton production better for the people who produce it, better for the environment it grows in and better for the sector’s future.”
News Article | November 2, 2016
As expected, the Reserve Bank of Australia kept the interest rate on hold at 1.5% this week, but the latest building approval figures out on Wednesday highlight the difficulty for the central bank and for government of balancing an economy growing at starkly different speeds. The RBA’s decision to keep the cash rate at 1.5% was not a shock. The market factored in next to no chance of a cut and, since the decision, it has become even more confident that there will not be another rate cut: But the problem for the RBA is that while the overall economic numbers are not fantastic – employment growth, for example, is pretty limp – the picture across the nation is very diverse. While the overall number of building approvals fell in September, this was due to a fall in the number of non-housing dwellings – apartments, flats, etc. The approval of these is always pretty lumpy due to a more complex approval process than for houses. In seasonally adjusted terms, there was a 16% drop in non-house approvals, but house approvals actually rose 2%. Even when we look at the trend growth, it is clear that while the national figures show improvement, they’re certainly not going gangbusters like they were through most of 2014 and 2015: The national picture hides the very different situations in each state. New South Wales (primarily Sydney) has seen strong growth in the past year. Victoria has also seen an increase in residential building approvals in the past year, although it has begun to slide a bit. But the rest of the country? Going backwards, and backwards fast: And when we include the Australian Capital Territory in the mix (which has seen a 95% increase in building approvals over the past year), the south-eastern part of the continent is far outpacing the rest: In September, in NSW, Victoria and the ACT, there were 13,702 dwelling unit approvals (both houses and non-houses) compared with just 6,746 in the rest of the country. That is the largest disparity across those two sections of the country since the Australian Bureau of Statistics began collating the data in 1983. Similarly, the gap in the annual growth of approvals in NSW, Victoria and the ACT combined compared with the rest of the country is greater than it has ever been – far greater than it was in the few years before the GFC, when the talk was of the “two-speed economy” due to the mining boom in Western Australia and Queensland: It makes for a tough life for the RBA, which gets to set one cash rate for the entire country, especially when you look at what is generating the big growth in buildings. In Sydney it is not houses, but apartments that are booming: The RBA has already expressed some concern over the growing number of apartments in Sydney (and Melbourne and Brisbane), and on Tuesday it again noted that “considerable supply of apartments is scheduled to come on stream over the next couple of years, particularly in the eastern capital cities”. Cutting interest rates would only serve to have that stream flow faster – something the RBA might not be disposed to do, given its concerns about a possible glut of apartments In Victoria, the surge of apartment building does appear to have halted, but remains at an historically high level: Whereas in WA, both the approval for apartments and houses is on a two-year slide: And WA also shows how the housing market can lag behind other parts of the economy – for the value of residential building kept rising in 2014 while the value of non-residential buildings began to fall: At the start of 2013 the value of both residential and non-residential building approvals was almost the same. Now residential approvals are almost back to that level, while the value of non-residential building is about 30% lower. But there may be cause for some cheer out west. This week the RBA also released its latest index of commodity prices. In October, the value of the bulk commodity index – which includes iron ore, metallurgical coal and thermal coal prices – rose 15%, the fourth-biggest monthly jump in the index’s history: Whether the increase in prices for coal and iron ore will be high enough and sustained will determine if it leads to more non-residential building work in the mining sector. And for those in the west, they will hope so. Because for now, with things the way they are, the RBA will likely keep the cash rate at 1.5%, and those outside NSW and Victoria will have to look elsewhere for something to spur their economies.
News Article | February 27, 2017
The government’s plan to cut company tax rates has been found by a new report from the Grattan Institute to be a major ongoing cost to the budget and will not improve national income for up to 20 years. In light of figures that show investment has now been falling for over four years, the government’s solution appears to be one that could be worse than the problem. The latest investment figures released last week by the Australian Bureau of Statistics were again disappointing. Private new capital expenditure fell 3.1% in the December quarter – the 17th quarter in a row: As has been the case throughout the past four years, the main culprit was mining investment – down 64% on the past four years: The drop matters, especially this week with the GDP figures released on Wednesday. The economy is essentially made up of four things: household spending, government spending, the amount of exports minus the amount imports, and investment. And historically, when investment is falling, the economy is either in a recession or near one. One reason we’re not in a recession now is because the ramp up in investment from 2004 to 2012 involved building mines that are now operational and are exporting absolute masses of iron ore: But investment is a key driver for the economy and for jobs, and is why the government has focused much of its economic policy around lifting investment. Its primary policy to achieve this is the plan to cut the company tax to 25% over 10 years. A report out this week by the Grattan Institute, “Stagnation nation? Australian investment in a low-growth world,” however, suggests that while lowering the tax would “probably attract more foreign investment” it would also “reduce national income for years”. And crucially – in light of the government’s desire to return the budget to surplus – the report estimates the tax cut will cost the budget $4.8bn a year over the long-term, because the increase in investment will never lead to enough of an increase in tax revenue to compensate for the cut in the tax rate. Pretty much the only impact from cutting the company tax rate is to attract foreign investment. As the governor of the Reserve Bank, Dr Philip Lowe, told the House Economics committee last week, “if you just think about domestic firms ... because we have dividend imputation, I do not think the tax rate really makes that much difference to their investment decisions.” But because other nations around the world have been cutting their company tax rates, all other things being equal, Australia has become less attractive to international investors. Of course all other things are never equal, and while the Grattan Institute suspects lowering the rate will likely attract more investment from overseas, they do note that the recent evidence on whether it will is “mixed”. The report’s author, Jim Minifie notes that foreign direct investment in Australia since 2010 has remained “relatively stable” even while our tax rate has risen relative to other nations. But as the report notes, attracting investment is not an end in itself – the key issue is whether a company tax cut will improve the living standards of Australians. And here the report suggests that the benefits are rather less tangible. It notes that Australia’s national income would drop by “about 0.25% ($4bn) immediately after the tax is cut” – because the benefits in the short term go to foreign investors. And while the report suggests increased international investment would mean in the long run the tax cut “will probably benefit Australians”, it notes “the long run” is a ways off. The report cites analysis used by Treasury which suggests that national income will “eventually rise above where it would have been without a tax cut”. But we’re talking in “about 20 years” – and that is only after the full cut to 25% has occurred in 2026-27. Due to the long wait for benefits, the uncertainty over the impact on investment, and the hit to the budget, the report concludes that “committing to a tax cut before the budget is on a clear path to recovery risks reducing future living standards”. The report is also pretty damming of cuts to the tax rate for small businesses. Of the policy that is favoured by the ALP, the Greens and the Liberal party, the report notes that it “is unlikely to lead to a substantial increase in investment”. The report suggests other measures, such as accelerated depreciation and immediate asset deductibility schemes, which “allows firms to write off new capital investments faster”. Yet it also notes this would be a substantial cost to the budget if, unlike the $20,000 accelerated depreciation for small businesses in the 2015-16 budget, it was applied to all businesses. One problem for encouraging investment is that the lending costs for businesses are already extremely low: As a result there is unlikely to be further cuts that might stimulate further investment. The report suggests that government could seek to invest in infrastructure in order to stimulate economic growth. However, it notes that the main problem with infrastructure spending is “finding quality projects that can be built quickly”. Infrastructure Australia currently has only seven projects currently designated as “high priority”. Given there is no real silver bullet for improving investment, the story might seem rather gloomy. But the report provides some nice context, pointing out that Australia has had a high level of investment compared to the USA and UK – even if we exclude mining: And while the latest capital expenditure figures were not good, they contained some pleasing signs for the year ahead. The latest figures contained the first estimate for investment in 2017-18. While the drop in mining investment is set to continue, there was a 7% increase in the estimate for investment in the non-mining sector: That is the best pick-up since 2008-09, and while that doesn’t always translate into actual investment, after four years of falling expectations from 2012-13 to 2015-16, it does appear things are improving. When parts of the economy turn bad, the tendency is for governments to seek a solution. But it is important to ensure the solution to that specific issue actually leads to a better outcome for the economy as whole. The Grattan Institute’s report suggests the government’s policy to cut company tax rate will probably lead to increased investment in the long-term, but less confident that it will lead to benefits for the economy. But the cost to both the economy and the budget in the short-term are very much certain.
News Article | March 1, 2017
Australia’s economy has rebounded, recording 1.1% growth in the December 2016 quarter. The result reverses the shock negative result in the September quarter and means Australia has avoided a recession, as was widely projected by market economists. Figures released by the Australian Bureau of Statistics on Wednesday show Australia’s gross domestic product (GDP) has now grown 2.4% through the year, below the long-term average of about 2.75%. Despite the high 1.1% seasonally adjusted growth figure, trend growth in the quarter was 0.3% and the trend annual growth was just 1.9%. The treasurer, Scott Morrison, said the result was achieved due to strong household consumption, but warned that “weak wages growth” was still weighing the economy and budget revenue down. Australia has now recorded 101 quarters between the June 1991 and the 2016 December quarter without two consecutive quarters of negative economic growth. Australia continues to close in on the Netherlands’ record of 103 quarters without a recession, which Deloitte Access Economics has predicted it will surpass this year. The ABS found that household final consumption expenditure contributed 0.5% to GDP growth and net exports a further 0.2%. Public and private capital formation contributed 0.3% this quarter after both detracted from GDP growth last quarter. The terms of trade grew by 9.1% in the December quarter due to strong price rises in coal and iron ore. The terms of trade are now 15.6% higher than the December quarter of 2015. In the September quarter Australia’s gross domestic product contracted by 0.5%, the first negative quarter in five years. Responding to the improved results, treasurer Scott Morrison lauded the fact Australia is growing faster than every G7 economy and the OECD average. “[The result] confirms the successful change that is taking place in our economy as we move from the largest resources investment boom in our history to broader-based growth,” he said. Morrison noted it was the “first time ... for a while” that final-state demand for all states and territories had grown in the December quarter. The treasurer said the principle driver for growth was “a solid rebound in household consumption” which occurred “despite subdued wages growth”. “Of concern in these accounts is that compensation of employees in the quarter declined by 0.5%. It was up 1.5% in the year.” Morrison said that the combination of better prices and higher trade volumes had “a significant impact on company profits, especially in the resource sector”. “However, I caution it would be wrong ... to assume that those gains have been experienced evenly across all businesses in the economy.” The chief Australian economist for Capital Economics, Paul Dales, warned that despite the result “economic growth will probably still disappoint this year”. “In the second half of last year the economy grew by just 0.6% and we know that the collapse in mining investment has further to go,” he said. Dales warned that recent falls in building approval meant dwelling investment may soon fall and record low wage growth would lower household spending. “In other words, the boost to national income from higher commodity prices will mostly boost profits rather than activity.” Shadow treasurer, Chris Bowen, said the GDP result was welcome and an expected bounce after “the horrible negative quarter last year”. Bowen said stronger household consumption was “largely attributable to people drawing down heavily on their savings instead of any boost to their wages which are growing at generation lows”. “The national accounts show that corporate profits surged while wages and salaries in the economy fell in December,” he said, noting that penalty rates had just been cut by the Fair Work Commission for 700,000 workers. Before the release of the figures on Wednesday, the Treasury secretary, John Fraser, told Senate estimates the September result showed the “economy remains sensitive to shocks”. “There were some factors likely to be of a one-off nature such as the weather related disruptions in the construction sector. “However that there is no denying that it was a very weak quarter.” Fraser said he did not believe the result represents the “underlying pulse” of the economy and treasury and market economists expected it to rebound. He said in the mid-year economic and fiscal outlook Treasury projected 2.75% growth in 2017-18.
News Article | August 31, 2016
Even the recent debate on the bungling of the digital census managed by the Australian Bureau of Statistics focused on questions surrounding possible distributed denial-of-service (DDoS) attacks. This was despite mention of hardware failures as well as inadequate redundancy and load testing, which are problems that stem from operations within data centres. Data centres provide governments and industry with advantages in terms of improving website and internet service speed, providing access to technical and security services and expertise, and cutting labour and hardware costs. Consultancy firm Frost & Sullivan forecasts that the Australian data centre services market will grow by 12.4% a year to 2022. Much of this growth will be driven by regular internet users. If you use social media sites, Google applications, web-based mail services, or just carry a smartphone, you have your data stored in a data centre. Even if you only very occasionally use the internet, you still have data stored about you: all metadata of people residing in Australia is now legally required to be stored by internet service providers for two years. But where are these data – your data – being stored? Ask someone in Australia where everything they've ever uploaded to social media is actually located, and they are more likely to say "in the cloud" than "in a data centre". Although cloud technologies make it difficult to pinpoint data to a particular data centre, the reality is that data centres are never too far from us. They are in our cities, suburbs and occasionally in rural and remote locations. In order to investigate the data centres near us we began looking in the inner Sydney suburb of Alexandria. Most Sydneysiders are aware of the ongoing transformation of Alexandria, which includes parts of the urban renewal project called Green Square. In the 1940s it was the country's densest industrial area: more than 22,000 people were documented to be working in 550 factories that were crammed into a 4km-square boundary. Today the suburb is best known for its warehouse apartments, tech industries, offices, commercial businesses and showrooms. The industrial look of the suburb has largely been retained thanks to a large number of heritage-listed buildings. A lesser-known fact about Alexandria is one that is shaping its current development phase: it is one of the places you need to be if you want the fastest connectivity in Australia. Alexandria, along with Brookvale on the Northern Beaches of Sydney, is where the Southern Cross Cable network "lands" in the country. This cable is one of five that sit above the ocean floor to connect Australia with the rest of the world. As New York University's Nicole Starosielski has explained on The Conversation, "undersea cables transport almost 100% of transoceanic data traffic". Few people know that Alexandria plays a role in connecting them to rest of the world, transmitting data through telecommunication networks. This is not surprising. Neither the landing port nor the suburb's cluster of data centres are easy to find. Taking a walking tour around the data centres of Alexandria requires research and planning. Data centres generally do not have a company name on their front gates. They are secured by guards and surveillance technologies. We decided to explore Alexandria by focusing on one company that has four data centres in the area, including a recently opened facility that will become one of the country's largest data storage and processing plants. Equinix is a US corporation that operates some 145 data centres across five continents. These data centres are "carrier-neutral", which means they operate independently from the companies that interconnect within them. Among Equinix's clients are cloud service providers such as Amazon Web Services and Microsoft Azure. Equinix bills its data centres as "international business exchanges". Peering services like those offered by Equinix allow companies to enhance speed and obtain a competitive advantage by connecting directly with each other inside its facilities rather than having to establish links over the much slower public internet. High-frequency trading is one financial sector that benefits from such arrangements. Equinix's four Alexandria data centres are spread along Bourke Road. One is housed in a refurbished warehouse designed by renowned architect Harry Seidler in the late 1960s. The recently opened facility, dubbed SY4, will almost double the company's capacity in Australia. A development application submitted in 2014 details plans for power supply, water management and noise control. The document states that the "data centre is to provide 24/7 mission critical services to business customers by providing a secure and reliable location for the 'co-locating' of their equipment". An argument can be made that the public doesn't really need to know where data centres like those in Alexandria are located. After all, much of the data they store, process and transmit are private and confidential. However, since data centres comprise a growing global industry that provides critical social and economic infrastructure we think they warrant research. Governments spend a great deal of resources safeguarding critical infrastructure. The protection of data and information systems is now included in this work. However, the focus for data security is on the development of software, as though we have forgotten that data storage happens in real places on the ground – and not in "virtual" clouds. Not knowing where data centres are located, or indeed what they actually do, prevents us from having conversations about how this infrastructure is governed, supported and protected. We need to ask how data centres can and will impact on the economy, different industries, government policy, society and the environment. Becoming acquainted with these facilities is a first step to understanding their role in shaping how digital communication and content are stored, used and moved around the world.
News Article | February 16, 2017
More Australians have a job, but they’re working fewer hours and wages growth is slowing, an economist warns. The unemployment rate fell to 5.7% January, from 5.8% in December, according to the Australian Bureau of Statistics. The number of jobs rose by 13,500 in the month, but that was entirely due to growth in part time work, with full-time employment falling by 44,800 jobs. In the year to January, the number of full-time jobs fell by 56,100, while the number of part-time jobs rose by 159,400. Capital Economics chief economist Paul Dales said a “worrying theme” of disappearing full-time work being replaced by part-time work has continued into 2017. “The number of people working full-time is no higher now than it was in August 2015,” he said. “This is weighing on incomes as lots of people are working fewer hours and the excess supply of labour is keeping wage growth low.” CommSec chief economist Craig James was more upbeat about the job market and its potential to grow, saying job advertisements are at five-year highs and the latest National Australia Bank business survey suggested job growth is set to accelerate. “As is always the case, there has been some volatility with full-time jobs down sharply in the month and part-time jobs sharply higher,” James said. “But full-time job creation in the December quarter was the strongest in six years. So it was not unexpected that there would be some pull-back in full-time positions.” Queensland’s unemployment rate rose to its highest level in more than six months, despite more than 8,000 extra people across the state finding jobs in January. The state’s seasonally adjusted unemployment rate rose 0.1 points to 6.3% last month, its highest level since June, while the trend unemployment rate remained flat at 6.1%. The number of people with jobs rose by about 8,500 in the month but that was offset by an increase in the number of people looking for work. Queensland’s shadow treasurer, Scott Emerson, seized on the figures, claiming the state had lost more jobs than any other since January last year, shedding 28,200 on trend terms. “When will this do-nothing premier abandon her do-nothing approach and start creating jobs for Queensland?” Emerson asked at question time. But Annastacia Palaszczuk said her government had a better record on jobs than the Liberal National party, under which unemployment rose to 6.6%. “They ripped out 40,000 jobs and there is no one who lost their job who doesn’t understand the pain that was inflicted by that government,” the premier told parliament.
News Article | November 16, 2016
The wages of Australian workers are growing at their slowest rate on record. According to figures from the Australian Bureau of Statistics on Wednesday, the annual rate of wage growth is now a historically low 1.9%, after slowing noticeably in the September quarter. The bureau says wage growth is relying heavily on increases to the national minimum wage and modern awards, and regularly scheduled enterprise agreement increases. It is also relying on salary reviews timed to coincide with the financial year. Economists say the breadth of the drag on incomes across the economy, coupled with thinning corporate profits, suggests core inflation is unlikely to move materially higher for some time. JP Morgan economist Tom Kennedy said it meant the Reserve Bank may have to cut the official cash rate again next year – from a record low of 1.5%. “Wages are undoubtedly weak in the expected places (mining and construction) but this is far from just a mining story, with the deceleration having been very broad across sectors,” Kennedy wrote in a note to clients on Wednesday. “This is symptomatic of a broad internal devaluation process unfolding as the real exchange rate stays too high, and consolidates the sense that unit labour costs should be well contained over the medium term. “Core inflation is unlikely to move materially higher anytime soon. For this reason, we remain of the view that the RBA still has more work to do in 2017.” The record low wages growth comes despite an apparently healthy unemployment rate of 5.6% (which has fallen from 6.2% in May 2015). But data shows the underemployment rate – a measure of the number of workers would like to work longer hours – has risen from 8.9% to 9.2% since November 2015, and economists say that suggests the demand for labour, and the composition of labour, is still insufficient to make wages rise in a significant way. The Reserve Bank governor, Philip Lowe, confirmed in the last Reserve Bank board minutes that Australian wages had been growing more slowly than implied by their historical relationship with the unemployment rate. “[But] the decline in wage growth had been a helpful part of the adjustment of the economy to the end of the resources boom,” he said. The ABS data, released on Wednesday, illustrates how the fortunes of different workers have been affected by the huge shifts occurring in the economy. They show the mining industry has recorded the lowest wage growth of any industry over the last year, with a meagre 1%. The strongest wage growth has occurred for workers in the healthcare and social assistance industry, at 2.4%. The data also shows public sector wages are growing more strongly, at 2.3%, with private sector wages growing at an annual rate of just 1.9% (excluding bonuses). Ged Kearney, the president of the Australian Council of Trade Unions, said the figures showed why unions were important. “Critics are always trying to scream out that unions are irrelevant, but 60% of the workforce are covered by some form of industrial agreement that unions actually negotiate for,” she told Guardian Australia. “Unions are doing their bit in a very difficult environment, where even getting small wages outcomes are hard. The rules and regulations around taking industrial action are very harsh, but we’re still trying to get a bigger share of the pie for workers.” Scott Morrison said the weak wages growth highlighted the need for stronger economic growth, and pressured Labor to support the government’s $48bn tax cut plan. “With the rest of the world looking to stimulate investment and growth through more competitive tax rates, Australia, as a net importer of capital, risks falling behind and becoming uncompetitive,” he said on Wednesday. “Labor knows this is true, which is why they used to support a more competitive tax system and campaigned for lower taxes when they were in government, but the opportunistic Bill Shorten would rather wreck the economy to get elected than work with the government to secure jobs, promote employment and increase real wages.” But the shadow treasurer, Chris Bowen, has criticised the government’s stewardship of the economy, saying it is “embarrassing” that wages growth has sunk to a record low under Malcolm Turnbull’s leadership. “The prime minister and treasurer talk about jobs and growth yet we are seeing an economic trifecta of record underemployment, record low wages growth and the loss of 100,000 full time jobs since the beginning of the year,” Bowen said. “With families around Australia facing higher costs, particularly with purchasing a new home, slowing wages growth and worsening job security under the Turnbull government just makes things that much harder.”
News Article | November 29, 2016
— According to the Australian Bureau of Statistics 66% men and 64% women in Australia participate in sport and physical recreation activities. Amongst those, there is a common trend to practise alternative sport disciplines such as yoga or Pilates, not just for fitness and health but also for managing stress. To answer that rising demand Kaya Health Clubs have now extended their offer by providing yoga, Pilates, and barre classes. To provide the most authentic yoga experience, Kāya Health Clubs make sure their teachers are all dedicated yogi’s, fully immersed in their practise. Their knowledge and passion help to create a supportive and calm environment for everyone attending, while also being able to adjust to specific needs of a group or individual. Yoga classes (http://kayahealthclubs.com.au/yoga-classes) range from traditional Hatha Yoga treated as an entry level yoga, through Yin Yoga generally used to increase mobility and help recovery, Vinyasa Yoga for experienced members looking for a ‘power flow’ yoga practise and finally Yoga Nidra which focuses on rejuvenation and deep relaxation. Kāya Health Clubs offer is equally interesting when it comes to Pilates classes (http://kayahealthclubs.com.au/pilates-classes). Their instructors are accredited by the Elixr School of Pilates (ESOP) – the Australia’s leading pilates education provider. ESOP is recognized and endorsed by the Fitness Institute of Australia. Kāya pilates classes focus on strengthening and decompressing the spine, reducing the risk of back injury as well as contributing to overall quality of life. Both Pilates Reformer and Pilates Mat Classes are dedicated to increasing range of motion, improving flexibility and support injury rehabilitation. The last addition to Kāya’s offer are barre classes (http://kayahealthclubs.com.au/barre-classes). They were developed to be suitable for members of all levels and are based around ballet and dance training. The goal of barre classes is to incorporate principles of Pilates, classical ballet and functional movement to help improve alignment and postural strength. During barre classes Kāya teachers emphasize the importance of core strength for maximum safety and results. Kāya Health Clubs is Melbourne’s premier mind & body health club. It is a family business established by Koula and Christian Ruggeri back in 2012 in the original Prahran location. In 2015 Kāya expanded to second location – Emporium Melbourne. Their goal from the very beginning was to provide members with a welcoming sanctuary and memorable experiences and to assist them in their journey to enhanced wellbeing. For more information, please visit http://kayahealthclubs.com.au/
News Article | December 13, 2016
RADNOR, Pa.--(BUSINESS WIRE)--Qlik®, a leader in visual analytics, today announced that Teachers Mutual Bank (TMB), one of the largest mutual banks in Australia, has deployed QlikView®, Qlik Sense®, and Qlik NPrinting™ to analyze customer data from several disparate sources to improve its marketing campaigns and business performance. By leveraging the Qlik analytics platform, TMB has transformed internal processes, significantly improving reporting times and integrating new external data sources for more targeted marketing campaigns. Marketing and financial reports that once took 16 days to produce are now produced in a few minutes, and as a result of the Qlik implementation, TMB’s data accuracy has improved by 30 percent, whilst reducing IT support costs. Teachers Mutual Bank has more than $5.5 billion in assets and over 177,000 members primarily employed by the Australian education sector. With a growing customer base, TMB generates significant amounts of data that requires a robust and sophisticated solution to satisfy its current and future analysis needs. Prior to implementing Qlik, TMB’s accelerating data demands had outgrown its original Excel-based technology solutions, which struggled to collate and present data in a visual way. TMB faced business-critical issues, including disorganized data from multiple sources, dated reports, and information that was not structured in a timely and effective way for management use. TMB needed a solution that quickly and effectively provided a simple, visual and interactive snapshot from a trusted source of data. With Qlik and its partner Satsumas, TMB is now able to effectively visualize and associate member data such as demographics, spatial distribution, and eligibility for home loans. Disparate data that is aggregated from the Australian Bureau of Statistics, census data, and TMB’s customer data are merged and analyzed dynamically to create highly targeted marketing reports and campaigns. This improves business uptake and decision making for a more efficient organization – ultimately creating maximized value for customers. “Qlik enables us to piece together insights derived from all our data sets far more efficiently so that we understand our customers and their behavior better,” said Dave Chapman, Chief Information Officer at Teachers Mutual Bank. “We have streamlined the view of our business processes in our analytics and reporting, reduced administrative time and increased workflow efficiency. This has allowed us to leverage the insights we’ve uncovered from using Qlik to market ourselves more effectively to our customers.” “Qlik provides financial institutions with the ability and agility to derive actionable insights that drive better outcomes for their customers,” said Paul Van Siclen, Market Development Director, Financial Services. “Our work with Teachers Mutual Bank is a great example of how the strategic use of visual analytics can lead to better customer satisfaction and a streamlined operational approach to become a more efficient and profitable financial organization. Data is a powerful ingredient for financial organizations and we are delighted that Teachers Mutual Bank is able to see their whole story in their data to serve their customers better in the future.” TMB intends to expand the deployment of Qlik solutions throughout the company, including finance, risk and operations. As the bank is maturing in its analytics capabilities and management of big data, it is focused on expanding its functionality to ensure that its customers are able to make better financial decisions. About Qlik Qlik® is the leading visual analytics platform and the pioneer of user-driven business intelligence. Its portfolio of cloud-based and on-premise solutions meets customers’ growing needs from reporting and self-service visual analysis to guided, embedded and custom analytics, regardless of where data is located. Customers using Qlik Sense®, QlikView® and Qlik® Cloud, gain meaning out of information from multiple sources, exploring the hidden relationships within data that lead to insights that ignite good ideas. Headquartered in Radnor, Pennsylvania, Qlik does business in more than 100 countries with over 40,000 customers globally. © 2016 QlikTech International AB. All rights reserved. Qlik®, Qlik Sense®, QlikView®, QlikTech®, Qlik® Cloud, Qlik® DataMarket, Qlik® Analytics Platform and the QlikTech logos are trademarks of QlikTech International AB which have been registered in multiple countries. Other marks and logos mentioned herein are trademarks or registered trademarks of their respective owners.
News Article | March 1, 2017
The latest GDP figures are a prime example of the great divergence of major economic indicators and the reality that most people feel after strong economic growth in the December quarter last year failed to translate into growth for workers’ wages. The treasurer, Scott Morrison would have breathed a small sigh of relief when the figures were released by the Australian Bureau of Statistics on Wednesday. While there was little expectation that the figures would be bad, had the economy gone backwards in the quarter we would have been in a “technical recession” (that most silly of phrases) given the September quarter saw the economy shrink 0.5%. The December quarterly growth of 1.1% in seasonally adjusted terms was well above expectations and enabled the treasurer to talk of how “Australia is growing faster than every G7 economy”. And certainly 1.1% quarterly growth is very strong. But before we turn up the music and start dancing in wild celebration, we should have a closer look, and a deep breath. Firstly, a big reason for the strong growth is because the figure is a comparison with the September quarter: December looks good purely because September was so bad. It is why the trend and seasonally adjusted figures tell rather different stories. In trend terms, the economy grew just 0.3% in the December quarter: And in the annual figures – which enable us to do more than just compare one bad quarter with one good one – we see the picture is pretty uninspiring. In seasonally adjusted terms, the economy grew by 2.4% in 2016, well below the long-term average and in trend terms it grew by just 1.9%, which is actually the worst annual growth since during the GFC: Thus the story the treasurer is able to tell is due quite a bit to the convention that we report the seasonally adjusted figure as the big number rather than the trend figure. And the seasonally adjusted figures can be a bit weird at times and not completely reflective of the true state of the economy. In the December quarter the big contributions to growth were household consumption, exports and public investment: The public investment was due to spending on the second NBN satellite as well as defence aircraft procurements. The growth of exports is not unexpected, but again shows the erratic nature of seasonally adjusted figures, given the past two quarters saw net exports detract from growth: The growth in household spending is a bit odd given that in the December quarter the big driver was on more luxury type items, such as household furnishings and recreation and culture: The annual figures however are more understandable – rent, insurance and health being the big drivers of household spending. And while consumption remains a key component of our economic growth it remains well down on the levels the occurred prior to the GFC: A closer look at the national accounts explains why, because the real story of the GDP figures is how nominal growth has taken off and how wages have not. Nominal GDP grew by a whopping 3% in the December quarter alone – the strongest increase in one quarter since June 2010. The annual growth of 6.1% in seasonally adjusted terms and 5.2% in trend terms is the best for over 5 years: The strong nominal GDP growth would bring a big smile to the treasurer given nominal GDP is a better guide for tax revenue than is real GDP – because taxes are paid in current dollars, not dollars minus inflation. The big driver of the nominal growth was increases in our export prices such as for iron ore and coal. The terms of trade in the December quarter grew by 9.1% in seasonally adjusted terms – the third biggest quarterly jump in the past 40 years. Even the trend growth of 6% is historically huge: But workers are not feeling the benefits. Because the growth is driven by export prices rather than through domestic demand, a great disconnect has occurred. While nominal GDP growth grew by the strongest level for seven years, wages and salaries actually went down 0.5% on a seasonally adjusted basis – the biggest quarterly fall since 1993. Even the trend growth of 0.2% is the lowest recorded outside of the GFC and the 1990s recession. That is not meant to happen. Usually when nominal GDP grows, so too do wages and salaries – but not at the moment: Over the past 30 years the relationship between nominal GDP and earnings has been very strong. On average when nominal GDP has grown over a year by 5.2%, then wages and salaries should grow by around 5% rather than the current rate of 1.8%: It’s indicative of the truly woeful wages growth we are currently experiencing – a growth that is out of whack with the state of the economy. There is for example usually a strong connection as well between the unemployment rate and wages growth (known as the Phillips curve). Generally as the unemployment rate falls, the growth of wages rises because there is more demand for workers and so employers have to pay more to keep workers and attract new ones. But right now the relationship has utterly broken down. Over the past 20 years, an unemployment rate of 5.7% that we currently have would be associated with wages growing by around 3.4%; instead wages (as defined by the wages price index) are growing by a record low of just 1.9%: There is bugger all reason for business groups to be complaining about industrial relations at the moment – especially in light of the penalty rates decision. In historical terms workers are the ones who are missing out. This is highlighted as well by the labour cost figures in the national accounts. Real unit labour costs in 2016 fell by 4.2% in seasonally adjusted terms – the biggest annual fall ever recorded. In real terms, the cost of labour is now lower than it ever has been: The big number in the GDP figures might suggest things are improving, but what the numbers really highlight is that things are not as strong as the erratic quarterly growth figure would suggest, and that workers are more than ever before missing out on the benefits of the growth that does exist.