I have discussed before the spate of announcables from the current Government – events and releases which give the impression of taking bold actions which grab headlines, but which in reality signifies very little at all. Housing was a standout example, but now we have another, the jobs plan.
Which in fact was a scene resembling The Hollowmen. It took 260-pages and six cabinet ministers to announce the jobs plan, and according to Jim Chalmers he wants to reduce the non-inflationary jobless rate so 2.8 million people who are not working, or wanting to work more hours, can bolster the labour market and improve their wellbeing.
So, the federal government will put “full employment” at the heart of Australia’s policy frameworks and institutions, to drive down structural unemployment over time and keep unemployment as low as possible. And they say the benefits of a strong labour market are not equally shared.
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In the UK, Annual growth in regular pay (excluding bonuses) is the highest we have seen since comparable records began in 2001. The Office for National statistics said In May to July 2023, annual growth in regular pay (excluding bonuses) was 7.8%, the same as the previous three-month period and the highest regular annual growth rate since comparable records began in 2001.
Annual growth in employees’ average total pay (including bonuses) was 8.5% in May to July 2023; this total growth rate is affected by the NHS and civil service one-off payments made in June and July 2023. But we can see workers are chasing real wages growth, as inflation eases, just a little with annual growth in real terms (adjusted for inflation using Consumer Prices Index including owner occupiers’ housing costs (CPIH)) for total pay up for the year by 1.2% and for regular pay a year on year rise of 0.6%.
In Australia, The Fair Work Commission released their latest data on Monday which revealed that average pay rises in new collective agreements in Australia have soared to a high of 4.7 per cent, closing in on inflation and putting pressure on wage forecasts. The increase is the highest average recorded since the commission’s data series began in mid-2022, surpassing previous highs of 4.4 per cent and is based on 174 deals lodged from August 12 to August 25, extended to 63,553 employees.
But with inflation at 6% on the quarter to June 2023, and the monthly series at 4.9%, on average workers are still going backwards in terms of real take home pay after inflation.
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An important debrief on the past weeks Senate Inquiry into Regional Branch closures, use of cash and other banking issues, with Robbie Barwick from the Australian Citizens Party.
This is an edited version of our recent live show, as I discuss the latest economic and housing news with Chief Economist at Nucleus Wealth, Leith van Onselen, who is also the co-founder of Macrobusiness.
We do a deep dive on the Population Ponzi and why housing shortages are likely to remain with us for ever. Its by design.
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You’ve probably been reading about the Evergrande collapse and may have some important questions about what China’s property market crisis means for you and your nest egg.
Let me be honest with you – all the indications are pointing to dark days ahead for the global property market. In addition to China’s economic woes, interest rates are not showing any signs of easing, the cost of living is still high, and unemployment is set to spike too.
And property values are still 40% over long-term trends, so there’s risk of a fall – and it could be fast! But not all property is equal, which is why you need to be proactive in planning the road ahead, and get granular to safeguard and grow your portfolio through tough times.
I’m joining Greg Owen from Goko Group to talk through these issues in an exclusive live Zoom call, and I’d love to see you there. There are two sessions to choose from:
Session 1: Wednesday, September 20th @ 7pm (Sydney) / Wednesday, September 13th @ 10am (London)
Session 2: Thursday, September 21st @ 11am (Sydney) / Wednesday, September 20th @ 9pm (New York)
I can’t understate the importance of taking swift and targeted action to protect your nest egg and put yourself in a position to keep growing your wealth.
Please don’t miss this opportunity. Simply click here to register:
Another tour of the recent news, as some prices are moving higher, driven by high demand and poor supply. But according to our property insider, Edwin Almeida, not all areas are behaving the same, and there are clear reasons for this. We also look at how pets are impacting the supply of rental property, and what to remember when at an auction.
Robbie Barwick from the Citizens Party and I discuss the latest moves in the battle to retain cash in society ahead of the next Senate hearings which are scheduled for next week. The battle is reaching a head, and there is everything to play for, not least as Adrian Orr put it recently, its a question of social cohesion!
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This is an edit of my latest live show, as I walk through our latest financial stress analysis, to end August. Which post codes are most impacted, and what are the potential outlook for prices and defaults?
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OK, so we know many households are under severe pressure, thanks to falling real incomes, rising inflation and of course interest rate payments. I covered this yesterday in the context of the latest GDP numbers, which on a GDP per capita basis were pretty frightful.
We have seen a record rise in cost-of-living for employee households, driven by soaring mortgage payments and rents, according to the ABS. Employee households’ living expenses increased by 9.6% in the year to June, which is significantly higher than the CPI inflation rate of 6%.
Since they are the ones who are carrying the majority of the mortgage debt, it is obvious that working Australians have taken the brunt of the RBA’s fight on inflation.
But is does beg the question, what levers do households have to try to regain some balance in their finances?
Well, of course there is the obvious one, make sure you have the lower rate on your mortgage and best rates on your savings – as I discussed a couple of days back. Many potentially can save by getting better rates, and we are talking potentially of thousands of dollars!
And make sure you know where you cash flow is going, so you can prioritise effectively, do you really need all those streaming services, and big mobile plans, for example.
The other lever though is just work harder, for more hours. And the recent ABS data showed the hours worked growing fast. But data released today from the ABS showed the number of people working multiple jobs and the percentage of employed people having more than one job reached record highs in the June quarter of 2023.
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Go to the Walk The World Universe at https://walktheworld.com.au/
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