Tuesday, June 2, 2020

Negative interest rates debate steps up as Reserve Bank confronts COVID19 woes. Westpac chief economist Bill Evans wants the negative option at least on the RBA's radar

Could Australia be on the cusp of negative interest rates? 

Reserve Bank governor Philip Lowe says the prospect is unlikely, but Westpac chief economist Bill Evans says negative rates would stop investors hoarding money and lower the Australian dollar as the economy faces the end of JobKeeper payments in September. 

But Mr Evans tells ABC's Peter Ryan there is a risk that negative rates would further unsettle economic recovery. 

Monday, June 1, 2020

Living large - emergency super access used for clothing, alcohol, gambling; PWC warns that without tax reform, budget could remain in deficit for 19 years

Concerns are rising that Australian's dipping into their superannuation in the face of an economic shock are living large rather than buying essentials. 

Alpha Beta director Andrew Charlton says two third of emergency super funds are being spent on disrcetionary items rather than essentials. 

PWC partner Paul Abbey tells ABC's Peter Ryan that without tax reform, the budget could remain in deficit for two decades. 

Friday, May 29, 2020

News Corp going digital is the latest sign of the Murdoch empire's struggles. Will Australia be on the map when Rupert Murdoch dies or cedes power?

In the once lucrative newspaper business, the so called "rivers of gold" from classified advertising not only underpinned quality journalism but ensured that highly anticipated hard copy editions landed with a thud at homes and businesses every day.

If you were selling or buying a car, looking for a job, buying a house, running a garage sale or even looking for love, newspapers were once the main way of taking care of business and getting on in life.

That is until the Internet devastated the business model of metropolitan newspapers.

Read my analysis on ABC News Online

The one time broadsheet giants like The Age and The Sydney Morning Herald could afford to break even on weekdays and assigned reporting teams to expensive long term investigations because massive classified advertising revenue on Saturdays created a cash cow.

But over the past twenty years, since newspaper proprietors began seeing the threat of the Internet materialise, metropolitan print editions have gradually shrunk to the size of suburban and regional papers in line with the demise of traditional print advertising that had been taken for granted.

Now, those suburban, regional and community newspapers - the lifeblood of small towns usually ignored by the big smoke papers - are likely to become relics in the local museum about the way things once were.

Listen to my interview with News Corp Australia executive chairman Michael Miller broadcast on The World Today 

The underestimation of the internet revolution was summed up by comments from a prominent newspaper editor in the mid-1990s who emphatically told me the Internet was a "fad" and scoffed at suggestions that consumers would switch to little known digital startups who brazenly sought to cut the grass of traditional publishers.

History tells a bleak story of massive change where arrogant proprietors have been forced to make thousands of reporters redundant with News Corporation and Fairfax Media (now owned by Nine Entertainment) even sharing printing facilities - something unthinkable a decade ago in cut-throat newspaper wars.

Seek now has a major slice of employment classifieds, Realestate.com dominates property, Carsales is where buyers and sellers trade wheels while romance and dating opportunities abound on the Internet. Who would go to a newspaper?

The latest chapter in this slow-moving train wreck has engulfed Rupert Murdoch's News Corporation which is now focused on survival and has made hard decisions about the viability of sustaining printed newspapers in a high cost, low advertising digital world.

The once mighty publishing empire is watching dollars and cents ferociously to protect its flagship interests and has put up the white flag by converting the bulk of its regional and community newspapers to digital only.

Some mastheads will close completely. Profitable regional papers like the Cairns Post and the NT News will remain in print. Metropolitan papers in Sydney, Melbourne, Brisbane and Adelaide will remain in print and will focus on greater regional coverage to fill the void.

But the hard decision to close down the printing presses underscores the demise of hard copy editions and the dawn of an uncertain digital era where no one knows if the advertisers will defy the odds and shift their business to a purely digital world.

News Corp Australia executive chairman Michael Miller will spend the following days meeting staff and delivering bad news to journalists who are not among the 375 required in the new business model.

When I spoke to Mr Miller shortly after the restructuring announcement was made public, he seemed resigned and well prepared to back the decision which has been in the works for months with COVID19 providing the trigger. 

"It was a regrettable decision, but one which was coming for a while. Locals can now transact to the other side of the world with a click," Mr Miller told me.

Mr Miller has refused to say how many staff will be axed, despite speculation that between 650 and 1000 will go.

"We're not talking about numbers, we're talking about people. There will be staff leaving the organisation and we're not shying away from that statement."

But as the rivers of gold become rivers of blood, Mr Miller would not call the end on further cuts despite concerns that staff numbers were razor thin even before.

In what appeared to be a scripted answer, Mr Miller told me: "we'll continue to change as our country and people continue to change."

Mr Miller wasn't pulling punches, but the words are not comforting for remaining News Corporation staff especially those in the regions who worry their hard fought livelihoods are vanishing.

This month, News Corp posted a $1.1 billion loss for the March quarter, dragged down in Australia by the cable TV business Foxtel which has seen the plug largely pulled on its once wealthy sports broadcasting model due to COVID19 restrictions on crowds.

Media analyst Peter Cox, a long time News Corp watcher, says the slump in real estate advertising though REA has compounded the losses but that financial pressures at Foxtel accelerated the decision to close regional and community printing presses.

"News Corp in Australia is totally challenged. The original idea was that Foxtel would be the cash cow to finance the newspapers in Australia," Mr Cox told the ABC.

"But of course Foxtel is in steep decline, it has huge borrowings and very reduced advertising and is in a diabolical state. 

"So rather than being able to feed and finance the newspapers, that hasn't happened."

News Corp boss Michael Miller says the digital strategy while painful for staff is all about taking advertisers and readers along with rapid changes to a digital world.

But Peter Cox doubts the advertising switch from print to digital will ever go close to matching the old "rivers of gold" from classified advertisement revenue.

"This is what we used to call a 'dime for a dollar' in the advertising business," Mr Cox said.

"When you advertise in newspapers or on the television you get a dollar and when you put the same ads on the digital versions, you only get ten cents for it."

"This is a double whammy. No money from Foxtel, reduced money from REA and struggling newspapers, News Corp is in a desperate position."

Rupert Murdoch established his global empire from a single Adelaide afternoon newspaper he inherited from his father in the 1950s and challenged the establishment by turning around struggling mastheads and taking on massive debt.

But Peter Cox doubts that an ageing Mr Murdoch would sentimentally prop up the company's fading interests in Australia and might be under pressure to concede the local business is unviable.

"That is certainly the case. Rupert Murdoch is now in his mid-80s, he won't last much longer," Mr Cox said. 

"I would think that as soon as he passes, that there would be a push to reassess the Australian operations and whether they want to be in Australia or not."

Mr Cox says the viability of The Australian - the national broadsheet established by Rupert Murdoch in the 1960s - will not escape the glare of News Corporation bean counters who are working to sandbag key investments in the US including the prestigious Wall Street Journal and the conservative Fox News cable network.

"I think there's going to be reductions right across the organisation. Not just the regional newspapers and closing some of them down. And every time you cut back, you lose experienced journalists, you lose skills.

"So this is a very challenging time for both News Corp and their newspapers."

The challenge for Michael Miller is to deliver on the promise of maintaining community content in regions where the ABC is often the only other journalism voice.

News Corporation must find a model to take advertisers and readers online in the faith that parish pump events like local council meetings and sporting events are covered.

It's another critical moment for journalism and ensuring that politicians, businesses and local government bodies are properly scrutinised in a COVID-19 world where rules are changing by the day.

Thursday, May 28, 2020

Regional printing presses to fall silent as News Corp scraps local hardcopy editions. I speak with News Corp Australia executive chairman Michael Miller

News Corporation has confirmed major jobs losses across its newspaper business as the bulk of its regional and community mastheads go purely digital. 

Executive chairman Michael Miller says metropolitan mastheads will continue to with print editions but will become more state focussed with increased regional content. 

Mr Miller speaks with ABC's Peter Ryan.

Friday, May 22, 2020

LISTEN: Retail crisis - up to 167 Target stores to close or rebrand in massive restructure, 1300 jobs at risk

In the latest crisis to hit Australia's struggling retail sector, the Wesfarmers conglomerate says it will either close or rebrand up to 167 Target stores. 

The massive restructure could see as many as 1,300 staff lose their jobs, at a time when the jobless rate is surging because of fallout from COVID19. 

The decision has sparked an extraordinary outburst from the Agriculture Minister David Littlerproud who says Australians should vote with their wallets. 

But ABC's Peter Ryan says Wesfarmers is taking hard decisions to reduce its exposure to commercial leases.

TWU renews call for PM to rescue Virgin as German gov't takes equity in Lufthansa

Transport Workers Union national secretary Michael Kaine says the clock is ticking on the survival of Virgin Australia and it's now critical for the federal government to stump up with an emergency rescue loan. 

The request comes as the German government considers a 20 percent equity stake in Lufthansa worth US$9.9 billion. 

Mr Kaine tells ABC's Peter Ryan that the Prime Minister's steadfast refusal is "brinkmanship" and complicates the work of Virgin's administrators.

Monday, May 18, 2020

Will COVID-19 accelerate demise of cash as social norms adapt? HSBC global economist predicts a :cash lite" world where human contact is minimised

When was the last time you used cash during the pandemic? 

And will it disappear all together in a post-virus world as cashless payments dominate? 

I speak with HSBC global economist James Pomeroy who sees a "cash lite" post COVID19 world where human contact is minimised. 

Thursday, May 14, 2020

Jobless rate surges to 6.2pc in April as coronavirus cuts swathe through economy

Source: Australian Bureau of Statistics

Australia's unemployment rate has posted its steepest monthly rise on record, with 594,300 people losing their jobs in April as restrictions to limit coronavirus shut thousands of businesses and affected many more. 

Unemployment jumped 1 percentage point to 6.2 per cent, which would have been much worse except that many people did not look for work. 

Prime Minister Scott Morrison said Australians should prepare for more bad economic news.

ABC's Peter Ryan says the $130 billion JobKeeper program masks the reality of the jobless rate.

The charts from the ABS and JP Morgan paint a bleak picture of the human and social damage being inflicted on Australia's economy.

Queensland gov't confirms bid for Virgin Australia, but deputy PM says leave it to the market

The Queensland government's rescue bid for the troubled airline Virgin Australia has raised questions about the potential risk to taxpayers given the uncertainties of COVID-19 and the crisis in global aviation. 

Deputy Prime Minister Michael McCormack says governments should stay away and let markets decide. 

Aviation analyst Neil Hansford says the bid appears to be poorly thought out and that the Queensland Investment Corporation will be up against cut throat players experienced in aviation deals.

Here's my analysis from this morning's AM program

Wednesday, May 13, 2020

Commonwealth updates with $1.5b coronavirus hit to bank and risk of 32pc house price fall in "prolonged downturn"

Commonwealth Bank has sets aside a large pile of cash to cover expected COVID-19-related losses, as Australia's biggest home lender warns of a potential 32 per cent house price crash in a worst-case "prolonged" economic downturn. 

Here's my analysis from The World Today

Tuesday, May 12, 2020

Business conditions have plunged to levels not only below the global financial crisis but the last recession in the 1990s. 

A survey by the National Australia Bank for April shows all sectors are "deeply negative" with the exception of mining. 

Premier Investments says it will re-open its stores on May 15, after standing down 9,000 staff when restrictions were first introduced. 

Here's my analysis from The World Today

Alan Jones's retirement will spark mourning or celebration, depending on who you ask

Abrasive, divisive, kind, charitable, loyal, influential, and a very good hater with a long memory.
Perhaps not enough words to sum up shock jock Alan Jones, whose at times caustic broadcast style moulded the minds of his loyal conservative fan base as he aired personal grudges and spoke constantly in favour of climate change deniers. 
So how will Alan Jones be remembered? I depends who you ask.

Friday, May 8, 2020

Jobless rates surges to 10pc, growth slides by 8pc - grim Reserve Bank downgrades forecasts. ME Bank backs down on loan redraw limit controversy

There's been a grim reality check on the economy from the Reserve Bank which see GDP growth going backwards by 8 percent in June as the pandemic locks down the nation. 

The official jobless rate will rise to 10pc in June with inflation turning negative consumers cut their spending.  

Also - ME Bank in backdown on loan redraw shock that damages bank's reputation.

Home office here to stay, hotdesking dead, social distancing new normal, KPMG forecasts

Advisory firm KPMG says remote working is here to stay, big corporates will reduce their city office spaces as workers stay home in the suburbs and high flying executives should say goodbye to international trips. 

KPMG Futures partner James Mabott says there could be an upside and tells ABC's Peter Ryan people are becoming kinder and reflecting on what really matters.

Thursday, May 7, 2020

Real estate to suffer ten percent pandemic hit, ANZ warns as incomes tighten and jobless rate spikes

Australian property prices are in for a potential hammering, as the pandemic hits pay packets, and jobless queues grow. 

Research by ANZ Bank sees price falls of 13 percent in Sydney, Melbourne and Hobart as borrowers confront falling incomes and rising unemployment. 

ANZ senior economist Felicty Emmett tells ABC's Peter Ryan the official ABS employment rate masks great uncertainty in the economy. 

Wednesday, May 6, 2020

ME Bank apologises for loan redraw debacle but CEO Jamie McPhee rejects liquidity concerns in pandemic

ME Bank has been forced to make a humbling apology for raiding the redraw facilities on some mortgage accounts that left customers shocked and bewildered. 

Chief executive Jamie McPhee concedes the bank "messed up" when it changed rules at the height of the pandemic on how borrowers access extra payments already pumped into an account. 

While the bank says there are no concerns about the it's stability during the crisis, complaints from anxious customers have sparked the attention of financial regulators. 

ABC's Peter Ryan with the story.

Tuesday, May 5, 2020

Qantas extends flight cancellations for two more months, workers stood down until late June

Qantas has underscored the economic damage from the COVID-19 pandemic by extending its flight cancellations for another two months.

The airline will be burning through $40 million a week by next month to maintain operations but says it can withstand the scenario of flights not getting back to normal until December next year. 

Chief executive Alan Joyce flags cheaper flights once the recovery takes hold.

APRA asks ME Bank for "please explain" for tapping mortgage redraw facilities during crisis; deputy chair Helen Rowell says $1.3b in super released in first week of emergency access

The Australian Prudential Regulation Authority says $1.3 billion has so far been released to anxious Australians who have raided their superannuation after the federal government changed hardship provisions during the pandemic. 

APRA deputy chair Helen Rowell says the superannuation sector is acting responsibly in the crisis, but warned the regulator will take action against super funds that are holding back on urgent payouts to struggling Australians. 

Mrs Rowell tells ABC's Peter Ryan that APRA has asked the industry super backed M-E Bank for a "please explain" after the boutique bank tapped the redraw facility in some mortgages at a time of crisis.

Monday, May 4, 2020

Westpac profit dives as COVID19 bites, CEO Peter King pledges not to tap mortgage redraw facilities

Banking giant Westpac has revealed an ugly half-year profit result, which is down 62 percent to $1.2 billion. 

The bank has deferred its dividend to shareholders, and flagged $2.2 billion in charges for bad loans, which includes the potential impact of COVID-19. 

Mr King tells ABC's Peter Ryan that Westpac won't be following action of ME Bank, which has upset borrowers by tapping redraw facilities in mortgages.

Consumers increasingly cautious as pandemic tightens household budgets

Consumer spending is on a slide as COVID-19 pandemic tightens household budgets according to real time data from advisers Illion and AlphaBeta. 

Applications for new finance is down and shoppers are choosing Aldi and Costco over Coles and Woolies. 

ABC's Peter Ryan says initial government spending is starting to fade. 

Friday, May 1, 2020

Europe on brink of deep recession as Australian manufacturing crashes to worst level in 28 years

Europe is on the brink of a deep recession with the Eurozone economy contracting by 4.8 percent in the most recent quarter. 

European Central Bank president Christine Lagarde has warned of worst to come. 

Manufacturing in April crashed to worst level in 28 years according to a survey Australian Industry Group. 

AI Group chief executive Innes Willox tells ABC's Peter Ryan that employment will take years to recover from the economic lockdown. 

Thursday, April 30, 2020

ANZ profit halves, flags loan impairments, Board defers dividend payment, CEO Shayne Elliott sees 3-5 years for full employment recovery

The ANZ Bank has become the latest major lender to reveal the impact of the pandemic on its bottom line. 

The bank's half year profit plunged 51 percent to $1.4 billion and the ANZ board has deferred its dividend payment to shareholders to keep cash on the balance sheet. 

Chief executive Shayne Elliott is bracing for profound economic fallout and says it could take 3 to 5 years for employment to fully recover.

Here's my analysis from The World Today

Wednesday, April 29, 2020

Coles sales surge as households hoard; CEO Steven Cain says restart of economy becoming urgent once COVID-19 is contained

Panic buying in the early phase of the COVID-19 restrictions has resulted in record sales for the Coles supermarket chain given the hoarding of toilet paper and more recently flour to feed a baking craze. 

While the behaviour of anxious shoppers have been great for the Coles bottom line, it's chief executive Steven Cain has become the latest business leader to say the time is getting closer to re-open the economy.

I spoke with Steven Cain after the sales results were released

Tuesday, April 28, 2020

Westpac reveals $2.2b coronavirus impairments, CEO Peter King says some businesses won't survive

The economic damage from COVID-19 is continuing to cut a swathe through the banking sector. 

Westpac has revealed $2.2 billion in impairments and says $1.6 billion is related to economic fallout from COVID-19. 

CEO Peter King says it's clear that not all businesses will survive.

Here's my report from The World Today

Toilet paper hoarding switches to baking craze as ALDI Australia boss Tom Daunt warns supply chains were initially pressured

From toilet paper and hand sanitizer hoarding - to the soaring demand for flour to feed Australia's home baking craze. 

Supermarket giant ALDI Australia managing director Tom Daunt says supply chains initially faced enormous pressure because of the unusual demand during the COVID-19 pandemic. 

Mr Daunt tells ABC's Peter Ryan he wants to see restrictions eased when the health crisis is contained and is cautiously leaving scrutiny of China's role in the pandemic to politicians.

Monday, April 27, 2020

NAB profit shredded, dividend slashed, as COVID-19 forces $3b capital raising

National Australia Bank has revealed a 51 percent fall in half year profit to $1.3 billion, attributing the plunge directly to fallout from COVID19. 

In the first move by any of the Big Four banks, the NAB will also slash its dividend to shareholders and is seeking to raise $3 billion to strengthen the bank's balance sheet as it confronts the deepest downturn since the Great Depression. 

ABC's Peter Ryan says NAB is predicting the jobless rate will peak at 11.7 percent.

Friday, April 24, 2020

Virgin Australia first creditors meeting to be virtual because of COVID-19 restrictions

What's expected to be a long and complex administration process to restructure Virgin Australia has been complicated by the COVID-19 lockdown. 

Justice John Middleton has approved changes to allow Virgin's first creditors meeting scheduled for next week to be online rather than as the normal physical gathering. 

ABC's Peter Ryan says Justice Middleton declared his interests as a potential creditor including Virgin tickets, frequent flyer points and membership of the Virgin lounge but would not be claiming.

Former Virgin high flyer John Thomas says airline can re-emerge as full service competitor to Qantas

One of Virgin Australia's former top executives believes the airline can re-emerge in a leaner meaner incarnation to ensure Qantas isn't handed a monopoly in Australian skies.

John Thomas - who left the embattled airline in 2017 after falling out over strategy- had been a contender to succeed then chief executive John Borghetti. 

Mr Thomas says if Virgin's administrators can find new owners and restructure $5 billion of debt, they should take Qantas on as a full service airline rather than become a budget competitor in the post COVID19 world.

I spoke with John Thomas on this morning's AM program

Thursday, April 23, 2020

Sir Rod Eddington backs gov't 1.4 billion loan refusal to Virgin; points to leaner, meaner airline post administration

Virgin Australia is likely to re-emerge as a leaner and meaner airline with the company's administrators confident of selling it to one of ten interested parties within three months. 

Aviation veteran Sir Rod Eddington says the federal government was right to reject Virgin's bid for a $1.4 billion loan. 

ACCC chairman Rod Sims tells ABC's Peter Ryan it's now critical to ensure Qantas does not swamp the market and become a monopoly.

Wednesday, April 22, 2020

Airline operations industry on brink of collapse, as Swissport calls for $125m government lifeline

Airport logistics company SwissPort is poised to sack 80 percent of its workers unless it gets a $125 million lifeline from the Federal Government. 

Executive vice-president Glenn Rutherford says that without the cash injection to guarantee services like security and checkin, the sector could collapse even if travel restrictions are eased. 

Glenn Rutherford's warning comes as Virgin Australia's administrator is optimistic of restructuring and selling the airline in two to three months. 

ABC's Peter Ryan with the latest.

Virgin Australia boss Paul Scurrah upbeat in face of administration, "disappointed" but diplomatic on PM's rejection of $1.4b lifeline loan

Virgin chief executive Paul Scurrah remains upbeat about the rapid turnaround and sale of the stricken airline with ten potential suitors circling. 

However, Mr Scurrah said he was disappointed that the federal government refused to provide a $1.4 billion loan after eight meetings with the Prime Minister and Treasurer in recent weeks. 

He tells ABC's Peter Ryan that Virgin staff should be encouraged by comments from administrator Vaughan Strawbridge that no redundancies were being planned.

Tuesday, April 21, 2020

Virgin Australia in administration, but corporate undertaker Deloitte says no job cuts planned

Virgin Australia has entered voluntary administration after the Federal Government rejected its pleas for a $1.4 billion loan as global aviation reels from coronavirus fallout. 

Deloitte administrator Vaughan Strawbridge is cautiously confident the airline can be restructured and says there are no plans to sack staff, confirming the $1500 per fortnight JobKeeper supplement would be paid. 

ABC's Peter Ryan says if Virgin survives, it will be a vastly different airline.

Time up for Virgin Australia as corporate undertakers prepare to move in

Virgin Australia's administrators face the massive task of untangling high levels of debt and staff entitlements in the hope of restructuring the airline as a going concern and competitor to Qantas. 

ABC's Peter Ryan says the insolvency firm Deloitte is expected to be appointed as administrators later today.

Monday, April 20, 2020

Most Australians adhering to social distancing guidelines, official statistics show

Australians appear to be sticking to social distancing guidelines during the COVID-19 crisis, according to the Bureau of Statistics. 

Data for the first week of April shows 98 percent of the thousand people surveyed were social distancing, 88 percent avoiding public places and 87 percent using hand sanitiser more often.

However, the ABS says around 3 percent of people with a job in March didn't have one in April. 

ABC's Peter Ryan explains.

Real jobless rate to smash official forecasts, Grattan Institute warns

 The economic toll from the coronavirus lockdown is now becoming apparent with one prediction that as many as 26 percent of Australians could be out of work in the coming weeks. 

The Grattan Institute says while the federal government's $130 billion JobKeeper program will keep the official jobless rate much lower, there's growing alarm that the reality will be much more brutal. 

ABC's Peter Ryan with this analysis.

Friday, April 17, 2020

Virgin boss Paul Scurrah urges aviation industry to "link arms" as he pleads for $1.4b taxpayer loan or bailout to avert national crisis

Virgin Australia chief executive Paul Scurrah says a $1.4b taxpayer loan is necessary to prevent the airline's collapse and a national aviation crisis. 

Speaking at an industry summit, former Labor Treasurer Wayne Swan says the lessons from the global financial crisis do not appear to have been learned and that consumers are frightened about Australia's economic future.

ABC's Peter Ryan listened in to the online summit

Thursday, April 16, 2020

Jobless rates ticks slightly higher but economists warn of calm before the storm; ATO prepares for deluge as applications open for $130 billion JobKeeper program

Australia's official jobless rate ticked slightly higher to 5.2 percent in March, below estimates for 5.5 percent. 

But economists warn coming months will confirm a surge in unemployment with Treasury estimating a 10 percent jobless rate by mid-year. 

Applications for the $130 billion JobKeeper program open next week and will be administered by the Australian Taxation Office. 

Deputy commissioner James O'Halloran tells ABC's Peter Ryan the ATO will have strict checks and balances to ensure eligible workers get the money without delay. 

Wednesday, April 15, 2020

Business leaders begin lockdown debate as IMF warns economic damage will rival Great Depression; Kevin Rudd predicts "W" shaped recovery

Business leaders are questioning the economic damage from the coronavirus lockdown as the International Monetary Funds warns of the worst downturn since the Great Depression.

Former Prime Minister Kevin Rudd is sceptical of the IMF's forecast 6.1 percent bounce for Australia's economy in 2021, saying a "V" shaped recovery could become a volatile "W" shaped turnaround. 

Westpac's closely watched consumer confidence survey collapses with the biggest decline in its 47 year history exceeding the 1990s recession.

Peter Ryan analyses the latest for The World Today

Great Lockdown to rival Great Depression as global growth tanks, IMF warns

Australia will be swept up in the worst global downturn since the Great Depression with economic growth contracting sharply because of the coronavirus pandemic, the International Monetary Fund is warning. 

In its latest World Economic Outlook, the IMF predicts Australia's economy will shrink by 6.7 percent this year with unemployment surging to 7.6 percent and 8.9 percent in 2021. 

However, the IMF forecasts Australia will bounce back with 6.1 percent growth in 2021 if the pandemic is contained and restrictions ease, referring to a "swift and sizable" fiscal response. 

I speak with Ernst & Young chief economist Jo Masters who says Australia's economy might never be the same even in the best case scenario.

Tuesday, April 14, 2020

Young to be saddled with coronavirus debt bill without major tax reform, ANU tax expert Professor Robert Bruenig warns

Does the $320 billion coronavirus debt bill create an opportunity for big tax reform? 

Australian National University tax expert Professor Robert Bruenig says the family home should be in aged pension assets test, the goods and services tax should be raised, death duties considered, and state stamp duty replaced by land tax. 

ABC's Peter Ryan says tax reform is risky and potentially toxic for both major parties.

Monday, April 13, 2020

Jobless rate set to rise to 5.5pc in March with worse coronaviris fallout ahead

Australia's official jobless rate is expected to have risen to 5.5 percent in March with around 50,000 jobs disappearing. 

The update from the Australian Bureau of Statistics scheduled for Thursday will reflect the economic fallout from the coronavirus lockdown. 

The Reserve Bank is warning of potential falls in real estate values with the risk of "negative equity" for some borrowers as an outstanding loan exceeds the value of a property.

ABC's Peter Ryan with the latest

Thursday, April 9, 2020

Negative equity incidence to rise as coronavirus shock hits economy and takes real estate prices down with it

The Reserve Bank's Financial Stability Review says Australia is feeling the full force of "significant strains in the global financial system" and high levels of uncertainty about the size and duration of the economic downturn.

The review signals that Australia's still-hot real estate market will be unable to escape - and negative equity is a risk.

Financial Stability Review, 9 April 2020

Prepare for steep house price falls and negative equity "at margins", warns Bank of Queensland boss George Frazi

Bank of Queensland chief executive George Frazis warns of steep fall on housing prices as coronavirus fallout bites and that, at the margins, there could be some cases of negative equity. 

But Mr Frazis tells AM, the federal government is likely to step in with more stimulus if unemployment goes into double digits to protect distressed borrowers. 

The banking veteran tells ABC's Peter Ryan, the key to any economic recovery is lifting lockdown measures sooner rather than later. 

Wednesday, April 8, 2020

HSBC Australia confirms potential money laundering breaches as it works with AUSTRAC

Global banking giant HSBC has quietly outed itself to Australia's financial crime agency for potential breaches of anti-money laundering laws by failing to report transfers to foreign banks and institutions. 

HSBC joins other banks including Commonwealth Bank and Westpac which have been implicated in breaches of anti-money laundering laws. 

ABC's Peter Ryan with this analysis for The World Today.

Read the story here

Tuesday, April 7, 2020

"Helicopter money" to households an option as gov't, RBA confronts coronavirus crisis. I speak with economists Andrew Charlton and Stephen Halmarick

The extreme measure of "helicopter money" is on the table as an option to resuscitate the economy one it begins to crawl out of the coronavirus lockdown. 

Economist Andrew Charlton, who advised Kevin Rudd during the global financial crisis, says the risky strategy where money is printed and pumped to households might have to be considered. 

Commonwealth Bank chief economist Stephen Halmarick agrees the measure would be extreme and says without massive government and Reserve Bank stimulus, the economy would have tipped into a crisis beyond a deep recession. 

Here's my report from this morning's AM program.

Friday, April 3, 2020

Virgin Australia boss says $1.4 billion taxpayer rescue loan now critical for airline's survival

The stakes are getting higher for Virgin Australia as the airline pleads for a $1.4 billion loan from the federal government. 

Virgin's chief executive Paul Scurrah has not set a deadline for assistance but is betting the Prime Minister won't want to hand Qantas a monopoly if Virgin collapses. 

Mr Scurrah has also tapped Virgin's major investors including Singapore Airlines, Etihad and the Chinese group HNA but says they face the same global predicament. 

Paul Scurrah spoke with ABC's Peter Ryan.

Thursday, April 2, 2020

News Corp Australia chairman Michael Miller on community print shutdown, cites successive gov't bungling on reining in tech titans Facebook and Google

News Corporation Australia executive chairman Michael Miller speaks with ABC's Peter Ryan on the media giant's decision to suspend hard copy print runs for 60 community newspaper titles.

Mr Millers says the coronavirus has accelerated a rapid deterioration in advertising revenue but that the refuse of the tech titans Google and Facebook to pay for content continues to harming the media industry.

Westpac's new chief Peter King on rising jobless - not all borrowers will survive coronavirus emergency

Westpac's newly-appointed chief executive Peter King has warned the risk of spiralling unemployment means not all borrowers will survive the coronavirus emergency.

The Westpac veteran says more than a hundred thousand people are being helped to manage their repayments during the crisis amid expectations of a recession and a jobless rate of ten percent. 

Mr King replaces Brian Hartzer who resigned after last year's money laundering scandal - and he spoke with ABC's Peter Ryan.

Locked down workers swamp internet, new Optus boss Kelly Bayer Rosmarin says coronavirus app usage up as much as 1125 percent

New Optus chief executive Kelly Bayer Rosmarin says demand for high speed internet has surged during the coronavirus lockdown as millions of Australians work from home. 

Data from the telco giant shows online meeting apps are putting extraordinary pressure on networks with the use of the Zoom service up 1125 percent. 

The former Commonwealth Bank senior executive says Optus is hiring as many as 500 recently laid-off staff including some from the airline Virgin Australia. 

Speaking with ABC's Peter Ryan, Ms Bayer Rosmarin backed Scott Morrison's $320 billion emergency package and is confident Australia will come out of the coronavirus crisis stronger.

Wednesday, April 1, 2020

Coronavirus rescue to push government debt to a trillion dollars, UBS warns. Businessman Graham Bradley backs extraordinary measures, likens crisis to WW2

The looming cost of shielding businesses and households from the worst of the coronavirus is set to push Australia's debt to eye-watering levels. 

Some economists predict the debt bill could eventually exceed a trillion dollars as the Prime Minister does "what it takes" to get Australia to the other side of this crisis. 

But prominent businessman Graham Bradley says all the normal rules have been put aside for now as Australia deals with the biggest challenge since World War 2. 

Tuesday, March 31, 2020

Economists applaud $130b jobs package but warn deep recession is inevitable. I speak with UBS Australia chief economist George Tharenou

Economists have welcomed the Prime Minister's $130 billion rescue package to keep as many as six million Australians in jobs. 

But UBS Australia chief economist George Tharenou predicts a deep recession with GDP diving ten percent in the second quarter of 2020 with the jobless rate of 10.5 percent. 

Mr Tharenou speaks with ABC's Peter Ryan.

"We'll keep the lights on": AGL boss Brett Redman on energy grid security during COVID-19 crisis

AGL chief executive Brett Redman tells AM despite the risk of workers going down with COVID-19, he's confident about "keeping the lights on". 

With the national energy grid an essential service, he outlines contingency plans AGL has such as special backup accommodation for isolating any infected staff. 

Mr Redman backs the PM's $130 billion wages subsidy scheme and tells ABC's Peter Ryan it will be critical in keeping the wheels of the economy turning. 

Monday, March 30, 2020

Commercial landlords under moral pressure not to evict business tenants as banks extend six month loan holiday - if they "do the right thing"

Major banks have put commercial landlords under moral pressure not to evict tenants or terminate leases. 

Landlords will be extended a six month loan repayment holiday on the condition that they  "do the right thing" and agree to throw distressed tenants a lifeline. 

Australian Banking Association chief executive Anna Bligh tells me despite the measures,  there's more pain to come. 

Also, the Foreign Investment Review Board will now scrutinise all proposals in a tightening of rules to protect Australian assets and distressed companies from potential raids. ABC's Peter Ryan with this analysis.

Thursday, March 26, 2020

Flight Centre, Premier Investments latest in coronavirus stand-downs; Virgin boss flags 1000 redundancies

Flight Centre will stand-down 3,800 Australian staff as the coronavirus fallout bites in the economy. 

The retailer Premier Investments is standing down 9,000 staff globally and will closes all its Australian stores after close of business today. 

The Australian Bureau of Statistics says about half of businesses surveyed say they are experiencing an "adverse impact" from the coronavirus. 

ABC's Peter Ryan with this analysis.

US jobless rate set for coronavirus spike as companies lay off workers

Economists predict US weekly jobless claims out this evening could surge by between a million and four million as companies lay off workers. 

Westpac predicts Australia's jobless rate will spike to 11 percent by mid-2020 and that a likely deep recession that will be worse than the global financial crisis a decade ago. 

As government debt spirals, market analyst Russ Mould says future generations will be left with a mind-boggling bill.

Wednesday, March 25, 2020

Jobless rate to spike to 11pc; Virgin stands down 8,000 staff

Westpac predicts the unemployment rate will spike to 11 percent by mid-2020 and that Australia will fall into a deep recession that will be worse than the global financial crisis a decade ago. 

At the same time, Virgin Australia to stand down 80 percent of its 10,000 staff as the coronavirus freezes global aviation. 

The airline will cut its flight capacity by 90 percent and ground 125 aircraft. 

Here's my report from The World Today

Friday, March 20, 2020

Banks to defer loan repayments to small business, NAB extends six month offer to residential borrowers. I speak with NAB boss Ross McEwan

Australia's major banks have announced action to protect households and consumers from the economic fallout from the coronavirus. 

Small businesses will be given a six month deferral on their loan repayments to help get them through the tough months ahead.

The National Australia Bank is going a step further, offering the same relief to residential mortgage customers. 

Chief executive Ross McEwan tells ABC's Peter Ryan Australia is facing a risk that eclipses the global financial crisis a decade ago.

Coronavirus shaping as bigger threat than GFC, warns CBA boss Matt Comyn

Commonwealth Bank chief executive Matt Comyn warns the coronavirus pandemic is shaping up as a much bigger threat than the global financial crisis.

In an interview with ABC colleague Elysse Morgan, Mr Comyn says not all businesses will be saved and direct government payments might be needed.

Thursday, March 19, 2020

Reserve Bank to cut cash rate, embark on money printing program to confront cororavirus crisis

The Reserve Bank is tipped to make an emergency interest rate cut to a new low of 0.25 percent today as it unleashes a quantitative easing program to cushion the economy from the coronavirus crisis. 

Also, banks are coming under pressure to offer deferred loan repayments to small and medium businesses as ANZ economists predict a recession and a jobless rate of 7.8 percent. 

ABC's Peter Ryan analyses the latest move by the Reserve Bank.

Wednesday, March 18, 2020

Coronavirus - coming to you from the ABC's newest home bureau

Virgin Australia grounds all international flights as coronavirus takes airlines to brink

With global travel in lockdown, the airline Virgin Australia will suspend all international flights and halve its domestic services. 

The drastic action comes as Virgin joins others in the aviation industry struggling to survive as the coronavirus pandemic begins to freeze the global economy. 

S&P Global Ratings predicts that world will be unable to avoid a recession with the US and Europe facing a deep downturn. 

ABC's Peter Ryan analyses the developments for The World Today.