Retail fail
I'm pretty much all charted out this week - time to go back and do some more videos, I think - and I can barely bring myself to run the dismal retail figures for January.
Basically, flat.
Take last month's figures and add approximately nothing.
Only New South Wales (+0.7 per cent) had a remotely positive month, and financial markets are now eyeing up two interest rate cuts despite the Reserve Bank's ongoing protestations, and the cash rate curve is inverted all the way out until the butt end of 2020.
Exports thunderous!
Exports thunderous!
There's once again another side to the story, though, and that's Australia's international trade, which is absolutely flying.
In Aussie dollar terms, exports screamed another 5 per cent higher in January 2019 to a record $40 billion, and in annual terms records continue to be smoked, even if volumes are muted.
There was a monthly rebound for gold exports back up to $2 billion, but the bigger picture surrounds record Aussie dollar coal export values and the huge ramp up in LNG.
Imports rebounded by 3 per cent after a rather horrible-looking December.
And tourism is still galloping along, even if the domestic consumer remains subdued.
The net result was an epic $4½ billion trade surplus in January, in seasonally adjusted terms.
Even the smoothed trend figures are almost literally soaring off the charts.
Hail Mary time
As you were, then, with soft retail figures but enormous strength in resources exports, royalties, and mining profits, with nominal GDP growth heading back towards 6 per cent per annum.
The Coalition has consistently trailed by about 47 to 53 according to the most reliable polling, and appears to have Buckley's chance in the looming election.
With a Budget surplus now all but in the bag all that remains for this administration is to run an election campaign built around delivering meaningful tax cuts to households over the years ahead.
Labor's bid will instead be based upon raising billions in taxes from capital gains tax (CGT) and franking credits, although the modelling is rather obviously flawed.
For one thing funnelling housing investors into new-build units and homes is statistically speaking far more likely to give rise to capital losses, rather than gains - all the more so given the ALP's two-tier negative gearing policy and hamstrung resale market - in the process creating high-rise but low-grade apartment towers populated solely by tenants, and some construction on the distant city fringe.
In the landlocked 'missing middle' yields will inevitably rise, possibly setting prospective first homebuyers back further, and there may even be upwards pressure on city suburban prices as maximum borrowing capacity is redirected from rentals into the commutable place of residence.
In the landlocked 'missing middle' yields will inevitably rise, possibly setting prospective first homebuyers back further, and there may even be upwards pressure on city suburban prices as maximum borrowing capacity is redirected from rentals into the commutable place of residence.
Higher capital gains taxes also create obvious disincentives for businesses, investors, and economic growth, which is precisely the opposite of what Australia needs right now given Bowen's so-termed 'per capita recession'.
Labor's proposed CGT policy at best has little merit, and at worst is inequitable to the young, while discouraging investment.
