Thursday, June 16, 2016

Brexit breather but referendum has shock potential, says CMC's Jasper Lawler

There's been a brief respite on European markets overnight but in the background serious concerns about a possible British exit from the European Union loom large.

Just this morning, the US Federal Reserve left interest rates on hold as expected but cited uncertainty over a possible "Brexit" next week as a key factor.

That's ramped up worries about ramifications for the global economy - including Australia.

Jasper Lawler is an analyst with CMC Markets and I spoke from London earlier today.

Jobless rate steady but full time jobs growth evaporates

Unemployment has remained steady at 5.7 per cent in May with the estimated addition of 17,900 jobs.

The participation rate, the proportion of people in work or looking for it, remained steady at 64.8 per cent.

However, the entire growth in jobs was in part-time work, with fulltime work remaining flat.

Here's my reading of the May jobs outcome broadcast on The World Today

Medibank Private accused of misleading customers on health fund claims

Australia's biggest private health fund Medibank Private has been accused of misleading customers by failing to tell them about changes to benefits for pathology and radiation treatment.

The consumer watchdog the ACCC is taking Medibank to the Federal Court accusing it of unconscionable conduct to protect its brand and reputation.

Medibank Private listed on the sharemarket two years ago after being sold off by the Federal Government and has been in a battle with private hospitals over benefit payouts.

ACCC chairman Rod Sims spoke with the ABC's Peter Ryan.

Wednesday, June 15, 2016

Digital disruption, automation to shake up traditional jobs, report warns

Digital disruption has the potential to threaten 40 percent of jobs over the next ten to 15 years as automation and machine learning shake up the economy, according to a Productivity Commission report out today.

In research entitled "Digital Disruption: What do governments need to do?", the Commission warns governments and regulators need to prepare for changing times as "disruption" moves beyond Uber and Air BnB.

Productivity Commission chairman Peter Harris says developing disruptive technologies of machine intelligence and automation will gradually change economies.

I spoke with Productivity Commission chairman Peter Harris on The World Today

"There's little doubt that in some sectors there will be dislocation of labour and dislocation of capital. It's not just a cost to employees, it will be a cost to certain businesses as well," Mr Harris told The World Today.

"Things like 3D printing are going to have an impact. Right now it's more of a niche product but over time, you're going to see this applied to manufacturing."

However, Mr Harris says despite a new world of hyper-connected technology and big data, some of the early fears about humans being replaced by machines are overstated.

"The majority of jobs in our economies today are services kind of jobs and that requires some form of human interface. So simply saying that we have automated or can automate something doesn't mean to say it will be readily acceptable to consumers," Mr Harris said.

"You can't necessarily imagine that a doctor will be replaced by a robot to whom you will speak and get an analysis."

While smart technology will inevitably replace humans, especially in manufacturing, the Productivity Commission says Australia's social safety net, including a strong Medicare, could be critical.

"We do have an important social safety net and maintaining that will be essential for the purposes of people who will have their lives disrupted as a consequence of this," Mr Harris said.

The era of digital disuption will also be a challenge for governments and regulators but the report recommends that new companies and businesses should not be given a heavy handed approach.

Peter Harris warns against regulatory models that use inflexible "black letter law" that is based on the time the legislation is written.

"Giving regulators the power to offer temporary periods of holiday from a regulatory impact to allow an idea to unfold while ensuring consumers are protected," Mr Harris said.

"That sort of initiative and flexible thinking is tremendously important for governments if they're going to allow creative ideas to unfold and to deliver benefits not just for consumers but for employees and investors in the future."

But Mr Harris takes a wry view on how disruption will change lives, reflecting on the 1960s cartoon series The Jetsons.

"No, not quite Jetsons yet although we do have our video phones," Mr Harris said.

"George communicating with Jane is now possible today. But rocket jetpacks - I'm afraid I'm still waiting for mine to be delivered."

Brexit jitters, German ten year bond goes negative. So why should Aust care?

I talk Brexit and global jitters ahead of the June 23 vote with Robbie Buck from 702 Sydney.

Listen to it here

Tuesday, June 14, 2016

Mining transition underway - NAB business survey

Conditions for Australian businesses outside the mining sector continued to recover in May, according to NAB's latest monthly survey.

While conditions were flat compared to April, they remained at historically strong levels, with an improvement in sales and profitability offsetting a disappointing moderation in employment growth.

Here's my analysis on The World Today on ABC Radio

AAA rating in jeopardy without budget repair, CEDA warns

A leading business-backed economic think tank has warned that Australia's prized AAA credit rating is in jeopardy without serious budget repair.

The Committee for Economic Development of Australia (CEDA) has raised the prospect of a downgrade to Australia's sovereign rating as both the Coalition and Labor adjust their economic plans to return the budget to surplus.

Three weeks out from the election, CEDA's chief executive Professor Stephen Martin has told AM the AAA rating could be in the balance unless both major parties need to deliver sustainable and holistic plans to drive growth over the next four years.

"There is no doubt that if we continue to let the budget deficit slip year in and year out that the ratings agencies are going to look at Australia and say you're not serious about trying to get your budget back into balance," Professor Martin said.

"It doesn't matter who happens to be the government. Government must make the hard decisions to  that will get the budget back into balance sooner.

"That's a problem you can then put to bed and then you can embrace the real change issues that will see us set sail for growth."    

The warning is contained in a CEDA report out today which says time is running out for both major parties to convince voters that they have a winnable and workable plan for the economy.

The report also says policies for budget repair and a return to surplus need to have broad community support.

CEDA is urging a bipartisan approach on the economy to ensure measures undertaken by one political party won't be overturned by a change of government.

The report titled "Australia's economic future: an agenda for growth" outlines policy priorities across ten key areas including innovation, competition policy, education, workplace relations and climate change.

But Professor Martin - a former Labor speaker - said there was deep disappointment that significant tax reform on the GST and negative gearing had been put in the too hard basket.

"There's no doubt that a genuine debate around tax reform is still required," Professor Martin told AM.

"The business community believes it's still important  and this goes into the term of whoever wins government and the one after that.

"It is a critical juncture for Australia now and we need to see people put politics aside because we really are going to be left behind if we don't embrace these sort of agenda."