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hermansia12 :
28th October 2016, Friday

Underlying Inflation slips
-Trimmed mean of inflation fell from 0.5% in June to 0.4% in September Quarter
- Weighted median fell from 0.4% in June to 0.3% in September Quarter
-RBA’s cuts to cash rate to the low 1.5% were responses to lower than expected inflation; Has not been as effective yet in raising inflation to target band. Could be due to monetary policy's slow impact to economic growth and inflation (Usually about a year for impact to be felt by economy).
-Headline rate increases were due to rises in price of fruit and vegetables (about 15% increase in price), tobacco excise
-Stronger dollar to limit imported inflation and low wage growth to stifle domestic inflation.
- Concerns about housing market with such a low cash rate
-Predicts that the low underlying inflation will lead to cutting cash rate to 1% by next year

Biggest Jump in Terms of Trade since 2011
-Aus. Terms of trade increasing over past half year.
-Largest gain in September quarter, leading to stronger dollar and predicted increase in GDP
-Export prices rose 3.5% whilst import prices fell 1% -> 4.5% increase in terms of trade (Largest jump since 2011 aka during the mining boom)
-Increase purchasing power, more spending, nominal GDP increases and high standards of living
-Coal and iron prices strengthening, up to a 150% increase. Other bulk commodities with an increase in price include sugar, beef, gold, gas and metals (Exports Australia is relatively competitive in due to natural abundance)
-Hence, predicted that terms of trade haven’t peaked yet -> Long term economic growth and reducing the CAD in the Balance of Goods and Services
-Strength of exports may be dampened due to rising fuel prices however due to the resulting Increased transportation costs (less demand if price increase) 

Articles summarized:

http://www.smh.com.au/business/the-economy/eyes-on-reserve-bank-as-inflation-climbs-to-13-per-cent-in-september-20161026-gsashn.html

http://www.smh.com.au/business/the-economy/biggest-jump-in-terms-of-trade-since-2011-20161027-gsc1bt.html 

hermansia12 :
29th October, 2016 Saturday

Australia and the Trans-Pacific Partnership (TPP):
-“Gigantic foundation stone for our future prosperity” (Malcolm Turnbull)
-Biggest global trade deal in 20 years 
-TPP includes US, Aus, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, Vietnam and Brunei (12 nations but not including China)
- 40% of Global GDP and eliminate 98% of tariffs, free trade for Aus. Exports and services as well as increase investment
-Ensure that tobacco control measures remain intact (Esp. with recent tobacco excise) 
-Lower tariffs means that approx. $13m per year for the sugar industry (Injection and reduce CAD in the balance of goods and services)
-Increased foreign investment from $252m to $1094m
-Agreement has been drafted but not yet in force

Childcare and the economy:
-Affects young parents returning to work; childcare esp. in cities where there is undersupply
-Increased childcare can improve productivity, reduce social inequity (esp. to increase number of women in the workforce) -> Increase participation rate as more people can enter the workforce and offset aging population
-Women between 15-65’s participation rate is about 10% lower than men’s of the same demographic
- Childcare prices increased by 50% over last 5 years – discourages qualified workers from entering the workforce due to domestic responsibilities
-Turnbull gov. to spend $11 billion in subsidising childcare in 2018-19( An increased value from the current $8 billion). Make child care more competitive and productive ->increasing supply -> Achieve above economic benefits   
-Streamlining 2 childcare payments into more targeted subsidy -> Families to save $30 a week
-Low income families may still be disadvantaged under this system-> Social inequity

Articles summarised:

https://www.theguardian.com/business/2015/oct/06/australia-and-the-trans-pacific-partnership-what-we-do-and-dont-know

http://www.smh.com.au/comment/the-billions-we-spend-on-childcare-is-failing-women-the-economy-and-children-20161025-gsaaa0.html

kevin217:

--- Quote from: hermansia12  on October 29, 2016, 08:18:23 am ---29th October, 2016 Saturday

Australia and the Trans-Pacific Partnership (TPP):
-“Gigantic foundation stone for our future prosperity” (Malcolm Turnbull)
-Biggest global trade deal in 20 years 
-TPP includes US, Aus, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, Vietnam and Brunei (12 nations but not including China)
- 40% of Global GDP and eliminate 98% of tariffs, free trade for Aus. Exports and services as well as increase investment
-Ensure that tobacco control measures remain intact (Esp. with recent tobacco excise) 
-Lower tariffs means that approx. $13m per year for the sugar industry (Injection and reduce CAD in the balance of goods and services)
-Increased foreign investment from $252m to $1094m
-Agreement has been drafted but not yet in force

Childcare and the economy:
-Affects young parents returning to work; childcare esp. in cities where there is undersupply
-Increased childcare can improve productivity, reduce social inequity (esp. to increase number of women in the workforce) -> Increase participation rate as more people can enter the workforce and offset aging population
-Women between 15-65’s participation rate is about 10% lower than men’s of the same demographic
- Childcare prices increased by 50% over last 5 years – discourages qualified workers from entering the workforce due to domestic responsibilities
-Turnbull gov. to spend $11 billion in subsidising childcare in 2018-19( An increased value from the current $8 billion). Make child care more competitive and productive ->increasing supply -> Achieve above economic benefits   
-Streamlining 2 childcare payments into more targeted subsidy -> Families to save $30 a week
-Low income families may still be disadvantaged under this system-> Social inequity

Articles summarised:

https://www.theguardian.com/business/2015/oct/06/australia-and-the-trans-pacific-partnership-what-we-do-and-dont-know

http://www.smh.com.au/comment/the-billions-we-spend-on-childcare-is-failing-women-the-economy-and-children-20161025-gsaaa0.html

--- End quote ---
Hi hermansia, regarding childcare subsidies, is it part of fiscal or microeconomic policy?

hermansia12 :

--- Quote from: kevin217 on October 29, 2016, 05:13:03 pm --- Hi hermansia, regarding childcare subsidies, is it part of fiscal or microeconomic policy?

--- End quote ---

Hi Kevin,

The childcare subsidies are both fiscal and microeconomic.

The subsidies will improve productivity and competitiveness in the childcare industry which makes it microeconomic. However, since the subsidy is spending through the government budget, it is also considered a fiscal policy.  On a side note, it also targets macroeconomic objectives such as economic growth and higher participation rate (due to utilising the labour market more efficiently and encourage more parents esp. mothers to enter into the workforce).

hermansia12 :
30th October, 2016 Sunday

Paid Parental Leave
-Turnbull gov. proposing to amend paid parental leave;
-Currently, primary carers (usually the mother) can claim a maximum of 18 weeks of pay at minimum wage and the partner can claim 2 weeks. Scheme excludes those earning more than $150,000 per year
-Avg. of paid leave claimed is about 10 weeks
-National Employment standards (Labour market policy) states that parents can take up to 12 months of unpaid parental leave
-“International Labour Organisation recommends mothers to be entitled to at least 18 weeks of leave, on the equivalent of their normal rate of pay”

-Proposed changes: Parental leave restricted to 8 weeks ; choice to return to work or remain on unpaid parental leave for 26 weeks (Half a year)
-Lower capacity to spend as more income is spent on childcare, which could lower economic growth. However, the government hopes to combat this through the childcare subsidy
-Encourages women to enter the workforce, increasing participation rates
-May lead to lower standards of living as well-being and social development of families may be disrupted with the increased expectations to work

Population growth and economic growth:
-Theoretically, more people, increased spending, therefore faster rates of growth
-Population growth can increase underemployment, drive house prices up and increase traffic (meaning that transportation costs increase reducing profit margin)
-Need an increased amount of spending to infrastructure to account for these issues with growing population and maintain standard of living
-Underemployment nearly 10% in August 2016 and weak income growth;
-IMF warned that private sector debt is rising quickly in Australia -> lending to households rising by almost 50% of GDP since GFC level; Households have less to spend as more of their income is budgeted towards repayment of debt

Articles summarised:

http://www.abc.net.au/news/2016-10-25/ppl-plan-ignores-economics-of-well-functioning-families/7962698

http://www.news.com.au/finance/economy/australian-economy/population-growth-gives-australians-misleading-picture-of-economy/news-story/5a3e79b690885b788b88608df9182ff8

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