Health News at Your Fingertips

Markets for stocks and the Australian dollar were mostly unmoved by the GDP figures, matching expectations the data would not be a “major volatility catalyst” in the lyrical words of the ANZ.
Some other interesting figures to emerge include the 60% jump in transport for the quarter as Covid curbs were eased as the Omicron wave (sort of) receded.
The household savings dropped two percentage points to 11.4%, financing the 1.5% increase in consumer spending.
Sally Hunter, senior economist at KPMG, said the ratio remained “comfortably above pre-pandemic levels:

[H]ouseholds are still relatively well-placed to weather the emerging headwinds, from higher inflation and rising interest rates.

Notwithstanding this, momentum in spending is expected to cool through the rest of the year, as these drags combine with the end of the boost generated by the relaxation of restrictions.

Those floods in NSW and Queensland literally squelched growth in the construction sector, cutting it to just 0.2% even as governments and businesses were busy pouring money into projects all over the country.
Hunter, though, was wary about reading too much into the growth of total compensation for us toilers, noting they rose at a quarterly pace of 1.8%, or less than the 2% pace during the December quarter.
Meanwhile, the hard-hats are doing quite nicely. Profits for the mining sector were up 14.7%, accounting for more than half of all corporate profits.
Hunter said:

The last time this threshold was breached was in 2008, and with prices still elevated this is likely to remain the case in the near term.

Among the states, Victoria led growth in final demand, ahead of WA, with Tasmania the laggard.

Here are the latest coronavirus case numbers from around Australia on Wednesday, as the country records 37 deaths from Covid-19:

ACT

• Deaths: 1
• Cases: 832
• In hospital: 84 (with 5 people in ICU)

NSW

• Deaths: 9
• Cases: 8,333
• In hospital: 1,143 (with 31 people in ICU)

Northern Territory

• Deaths: 0
• Cases: 232
• In hospital: 15 (with 1 person in ICU)

Queensland

• Deaths: 6
• Cases: 4,455
• In hospital: 326 (with 5 people in ICU)

South Australia

• Deaths: 1
• Cases: 2,901
• In hospital: 244 (with 6 people in ICU)

Tasmania

• Deaths: 2
• Cases: 793
• In hospital: 48 (with 1 person in ICU)

Victoria

• Deaths: 17
• Cases: 9,934
• In hospital: 528 (with 30 people in ICU)

Western Australia

• Deaths: 1
• Cases: 8,452
• In hospital: 298 (with 8 people in ICU)

Tamsin Rose

Western Sydney light rail second stage to proceed

The second stage of the Paramatta light rail in Sydney’s west will go ahead, with a “significant” funding pledge headed its way at the upcoming New South Wales state budget.

Premier Dominic Perrottett announced the plan without any details around the timeframe for delivery or cost, despite a since-deleted post from his own Twitter account this morning revealing $600m was being promised for the initial stages of the project.

The plan was singled out to go ahead, despite advice from the state’s infrastructure body to delay it, alongside other “mega-projects” including the Beaches Link motorway and M6 extension in Sydney’s south.

Speaking on Wednesday morning, Perrottet said:

The foundation stone of this government has been infrastructure delivery. Not only do we have great projects at the end of it that improve people’s lives, but importantly as well, in addition to that, it drives jobs growth and economic growth.

Infrastructure minister Rob Stokes would not be drawn on the timeframe or the costs:

We have to go through a full environmental impact assessment process, which will involve detailed conversations with communities along the route. We can have it all, we can’t do it all at once.

That’s it from Chalmers.

Chalmers also makes clear that he expects the government’s submission to the fair work commission will call for an increase in the minimum wage of 5.1%, in line with inflation.

Chalmers is asked where he sits “philosophically” on supporting new gas exploration to “get more gas out of the ground to increase the supply?”

He responds:

It is not philosophy to me. It is science. Where it is safe to do it and the environmental impacts have been considered, of course. That is my position. It is based on science and evidence, and there are, obviously, a range of views in the community about gas developments. I thought what happened in the Northern Territory was a good template with the Government Michael Gunner was Chief Minister recognise that and had a look at all of the considerations and came to a conclusion. I thought that was good.

He was asked a follow up, about whether he was “ruling out pulling the trigger on gas” and he said he would not pre-empt discussions with Chris Bowen and Madeleine King, who hold the climate change, energy and resources portfolios.

Chalmers is asked an interesting question about whether he plans to include well being measures, such as life expectancy, in his October budget. He responds:

I think it is really important that we measure what matters in our economy in addition to all of the traditional measures, not instead of, but in addition to.

I do want to have better ways to measure progress, and to measure the intergenerational consequences of our policies and to give people an accurate sense, or a more accurate sense, of the cost to budget of various tax measures.

This is something I am personally very keen on. I have had a number of conversations already with the Treasury about them and you should expect to hear more about them, certainly, this year but over the course of this term.

Chalmers says the “waste audit” – which came up quite regularly as a Labor promise during the election campaign – has begun, and he expects “the fruits of that effort will be in the October budget”.

Chalmers is asked about immediate solutions to gas price hikes that are hitting those on the east coast, but says:

There is no simple mechanism that would immediately take this pressure off the gas price. This spike in the price has a number of causes and it does not have a single solution. If there was one, somebody would have reached for it.

Chalmers says there is a little light, but far more shade, in the numbers he’s looked at:

First of all, there are some pleasing elements of the national accounts, but there are far more troubling aspects in our economy and it is not just me saying it.

Skyrocketing inflation is a big challenge. Falling real wages is a big challenge. The impact of interest rate rises that the Reserve Bank governor has flagged, a big challenge. Anyone who has looked at our budget understands that we could get more bang for all of that debt we have got in the budget. I think the challenges are accepted across the community and people who think about the economy as much as we all do.

The main story that I wanted to take out of this national accounts briefing today is even if you consider GDP growth at 0.8%, the pre-election fiscal outlook anticipated 1.8%. Household consumption at 1.5%, the PFO anticipated different. New business investment, 1.4% and hoping for a exports was -0.9%. The PFO anticipated 2.4%.

So, this just gives you a bit of an indication of, even where some of these numbers on the surface that might be pleasing compared to some of the diabolic numbers we have had, they are still short of the former government before and I want to be upfront about those challenges.

Chalmers says international economies are facing similar challenges, and he says China’s management of future Covid outbreaks could cause further pressures.

When asked about what, exactly, he is talking about when he mentioned the mess left behind by the Morrison government, Chalmers said:

I would like to outline in some detail the problems that I inherited when I give a ministerial statement to the parliament, but as I have indicated in different conversations I have had with some of you over the last little while, there are substantial health costs…still from Covid, which we are concerned about.

There are interest rate rises and issues around the productivity assumptions in the budget … so there are a lot of measures which were not talked about by the government before the election. We hope to be able to detail them as we go about making sure that the budget … [handed] down in October is a genuine reflection of the economic challenges that we have inherited.

Chalmers says it is a “perfect storm” when it comes to energy prices, and again gives the Coalition a slap:

On energy in particular, this is an incredibly challenging set of circumstances, particularly for Australian industry, when you consider this spike in gas prices, which goes hand-in-hand with a spike in the price of liquid fuels and a spike in the price of electricity as well. This is, unfortunately, a perfect storm of conditions and challenges in our energy market. These are the costs and consequences of almost a decade now of a government, with 22 different energy policies, failing to land the necessary certainty to improve the resilience of our energy markets.

This is the chickens coming home to roost when it comes to almost a decade now on climate change and energy policy failure from our predecessors. Our first responsibility in times like this is to implementing our powering Australia plan, so we can boost renewables and storage but most of all boost certainty so we can get that investment flowing that we desperately need to make our energy markets more predictable, more resilient, so we can get cleaner and cheaper energy into the system.

This perfect storm of energy price spikes is doing enormous damage to our employers, to our households and to our national economy.

What he wants to get through, of course, are the GDP figures, ahead of a cabinet meeting at 1pm.

Chalmers says:

These are glimpses at the mess the former government have left behind for us to clean up. You can see in these figures, even with a number on the surface, when it looks relatively robust, is much lower in many instances and what the government was relying on in the forecast in the budget. That, for me, is really a defining take out of the numbers that we see today.

Obviously, we want the economy to recover strongly. Obviously, we want household consumption and other key elements of national accounts to be as strong as possible but even when, on the surface, they may look stronger than they have been during the worst of Covid, they are still short of what the government was hoping for.

The newly sworn-in treasurer says he wants to get through whatever he’s getting through “swiftly”.

With that, I’m off to buy my dog a coat. Have a wonderful Wednesday, Nino Bucci is here to keep the fire burning for the rest of the afternoon.