Thursday, April 20, 2023

Major changes coming to the Reserve Bank of Australia

The bank is just a scapegoat. The real cause of inflation is a government that funds its expenditures by printing piles of new money

The Reserve Bank of Australia board will be split in two, with a special panel of experts setting interest rates after a series of blunders plagued the central bank.

The biggest revamp in 35 years will see the RBA divided into two boards, with one solely focused on interest rates, in a move expected to soon be adopted by the government.

It has been a difficult 18 months for the bank, with Governor Philip Lowe forced to apologise for telling Australians that rates would remain low - only for 10 consecutive interest rates rises to follow.

Dr Lowe told Australians as late as November 2021 that the bank was likely to hold the cash rate steady at 0.1 per cent until 2024.

Since May 2022, the cash rate has risen to 3.6 per cent.

Later on Thursday, Treasurer Jim Chalmers will release the RBA review report - 'An RBA fit for the future' - and is expected to announce the government's in-principle agreement with all 51 recommendations.

The review was commissioned in July last year, in a bid to strengthen the central bank amid an increasingly complex global economic landscape.

The review will recommend establishing two separate boards: one concerned with monetary policy and a separate governance board.

The review is expected to reveal doing so will ensure decision making and governance agreements are effective.

The monetary policy board will be primarily focused on managing interest rates, especially as the RBA seeks to tame inflation back to the two to three per cent target.

The other board will focus on the rest of the RBA's 'governance' remit, including printing bank notes.

Some of the recommendations will require legislative change, while some will be incumbent on the RBA to implement given it operates monetary policy independently.


Why Australia can never build enough homes

The Australian Bureau of Statistics (ABS) on Wednesday released capital city population data for the 2020-21 financial year, which revealed that the number of people living in capital cities increased by 2.5 million (17%) between 2011 and 2021.

Melbourne had the largest increase (806,800), followed by Sydney (650,815) and Brisbane (421,491):

10-year population change

Over the past 20 years, Australia’s combined capital cities grew by 4.7 million people, led by Melbourne (1.48 million), Sydney (1.16 million), Brisbane (875,000) and Perth (737,000):

20-year population change

If anybody wants to know why Australia never builds enough homes, the above data provides the answer.

Australia’s immigration intake was increased substantially in the early-2000s, which drove a massive increase in population growth into our major cities:

Net overseas migration

This extreme immigration policy is projected to continue for decades to come, with the Intergenerational Report (IGR) projecting 235,000 annual net overseas migration into eternity, which is 20,000 more than the extreme immigration experienced in the 15 years leading up to the pandemic.

In turn, the IGR projected that Australia’s population would swell by 13.1 million people (roughly 50%) by 2061, which is the equivalent to adding a combined Sydney, Melbourne and Brisbane to Australia’s current population.

Already, net overseas migration has rebounded faster than the IGR projected, with nearly 400,000 net migrants landing in 2022, which drove record population growth:

Australian population change

The long-term population projections from the ABS are instructive. While they were released in 2018 and 2019 before the pandemic hit, they show the type of population deluge that will hit our major cities.

First, the ABS’ Household and Family Projections showed that the number of households across our capital cities would grow by 50% between 2016 and 2041, led by Melbourne:

Increase in households

In number terms, Melbourne was projected to add 1.09 million households over that period, whereas Sydney would add 882,000 and Brisbane 445,000:

Household projections

The ABS’ Population Projections released in 2018 projected that Melbourne and Sydney would each roughly double in size to around 10 million people, whereas Brisbane would grow to Melbourne’s size currently:

Capital city population projects

In turn, by 2066 both Sydney and Melbourne would have larger populations than Australia’s total population in 1950, with both approaching Australia’s total population in 1960.

While these projections will have changed following COVID, they do illustrate the extent of the population-housing problem.

Policy makers and developers can bang on all they like about increasing supply, but Australia will never build enough homes as long as it continues to grow its population like a science experiment via mass immigration.

That is the inconvenient truth.


"Nazi" message

image from

I think the message would more likely be seen as silly rather than as offensive

A worker behind the wheel of a well-known traffic control company vehicle which displayed a racist message on its electronic board last Friday has been sacked according to the company’s senior executives.

On Tuesday morning A2O Traffic Solutions chief executive officer James Bowe and general manager Sean Fitzpatrick said the firm was, “shocked and in complete disbelief over what has occurred”.

“We are completely devastated by such a disgraceful action,” they said.

“Such behaviour goes against every value we hold dear and we shall be taking steps to ensure it never happens again.

“As soon as we were made aware of this incident we instigated a thorough investigation with the allocated driver”.

Mr Fitzpatrick said the investigation included an intense check of the vehicle and its vehicle management system which provides detailed information about its use.

“We have sophisticated monitoring systems and interviewed the driver and concluded it was a deliberate act of serious misconduct,’ he said.

“He admitted liability. The outcome of our investigation has resulted in the swift termination of the person’s employment.”

Mr Bowe said the management and staff of A20 “apologise unreservedly for the offence and distress this disgraceful act has caused in our community”.


Service station owners are calling on the Federal Government to help them install EV charging bays on their forecourts

Another huge cost of the climate myth

Australian Association of Convenience Stores chief executive Theo Foukkare said it cost an estimated half a million dollars to upgrade a site’s electricity grid to accommodate EV chargers.

“We’ve got thousands of AACS members across the nation that want to go green but they’re not able to get their hands on half a million dollars on their own,” he said.

He said his members were supportive of the government’s new EV strategy, released this week.

“However, we really think a government funded program that helps small business owners to pay for these critical upgrades is essential to achieve that,” he said.

The recent surge in EV take-up – sales are up 150 per cent in the first three months of this year – meant there weren’t enough recharge stations to cope with existing drivers.

“Public infrastructure charging is being rolled out slowly by the federal and state and territory governments, however, most only include slow charging equipment. That means they can only be used by two cars at once, potentially leaving other drivers waiting hours before they are even able to plug in,” Mr Foukkare said.

A spokeswoman for Climate Change and Energy Minister Chris Bowen said small businesses could apply for a grant from the Australian Renewable Energy Agency ARENA, which had $70 million set aside to help businesses develop charging infrastructure.

Mr Bowen announced the latest round of grants yesterday and said infrastructure funding was a “critical step to make electric vehicles more accessible for all Australians”.

He said the latest funding round would make it easier to install the right type of public charging infrastructure and give Australians better access to facilities, particularly in remote and regional communities.

“Transport costs are a huge part of household budgets, and getting the charging infrastructure in place for electric vehicles is critical to ensuring households have a real choice when it comes to picking their next car,” Mr Bowen said.

But Mr Foukkare said that slower charging stations being rolled out by governments often lacked access to basic amenities.

“Australian motorists expect amenities like toilets, a place to sit and eat or enjoy a coffee, free Wi-Fi and even somewhere to do a small grocery top up,” he said.

“Our members already have those facilities – and they employ more than 70,000 people across Australia – so they could certainly do with the extra custom.

He said service station EV chargers could also address a “charging void” for the 25 per cent of Australian drivers who don’t have off street parking.




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