RATES CUT HOPES SLIDE
There was significant excitement at the Reserve Bank of Australia’s (RBA) more dovish interest rates statement earlier this week (even though they were held at 4.35% yet again) but it appears to have already faded.
The AAP reports the “drastically stronger than predicted” labour market data yesterday caused economists and traders to scale back their previous predictions of a rate cut finally coming in February. The previous excitement was cut short by the unexpected drop in unemployment to 3.9%.
The newswire flags ANZ, Westpac and NAB now reckon the RBA will start its monetary easing cycle in May “given the central bank’s concerns inflation remains too high and unemployment too low”. (Reminder: there’s an election due by May.)
Commonwealth Bank still reckons a cut could come in February. For that to happen CBA economist Gareth Aird says trimmed mean inflation (released on January 29) would need to come in below 0.6% (it was 0.8% in September) and the labour market would also need to show signs of softening.
The Australian Financial Review says yesterday’s figures cemented Australia’s jobs market “as among the strongest in the developed world”.
The paper quotes economists as saying the slowing private sector and employment gains meant “the bulk of the jobs created last month were likely in government-funded industries such as public service, healthcare and education”.
Betashares chief economist David Bassanese is quoted as saying: “A low unemployment rate alone should not stand in the way of lower official interest rates next year if inflation continues to decline. Instead, falling inflation and still-low unemployment — were that to occur — should force the RBA to reconsider what it deems to be the non-inflationary rate of unemployment — from its current assumption of 4.5%.”
Treasurer Jim Chalmers tried to maintain the enthusiasm at the start of the week by saying: “More jobs and better pay are key parts of our plan to help ease cost of living pressures.”
Elsewhere, the AFR provides a few more details on yesterday’s announcement about the payments facing tech firms if they don’t agree to deals to pay news publishers. The paper reports: “Apple and Microsoft could also be caught by the new policy with their Apple News and LinkedIn products respectively if they meet the threshold of having Australian revenue greater than $250 million a year.”
The paper also flags AMP has invested $27 million in bitcoin, becoming the first major superannuation fund to buy into cryptocurrency.
Finally, The Wall Street Journal flags Meta has donated US$1 million to Donald Trump’s inaugural fund. The Guardian says the donation “appears to be the latest effort by the social media company and its CEO, Mark Zuckerberg, to improve relations with the incoming president, and comes just weeks after Zuckerberg dined with Trump at Mar-a-Lago”.
NUCLEAR COSTINGS DAY
The day has finally arrived. Some said it would never happen but here we are — today we get the much-promised, long-awaited nuclear power costings from Opposition Leader Peter Dutton.
While nothing says “please pay real close attention to my policy’s details” like an announcement on a Friday 12 days before Christmas, unfortunately for Dutton people have been waiting a mighty long time to hear more information on his plans to build seven nuclear power stations around the country and previews of his big reveal are leading the agenda most places this morning.
The Nine papers report Dutton “will ask Australians to support hundreds of billions of dollars in new spending on nuclear energy, including a controversial move to use taxpayer subsidies to build the industry while promising to bring down household electricity bills”.
The papers say a key part of the Coalition leader’s plans will be an assumption coal-fired power stations will continue to operate as the nuclear plants are built, despite energy companies planning to stop using coal in the near future. The Australian Energy Market Operator (AEMO) reckons 90% of coal-fired plants will be shut down before 2035, with complete closure five years later.
Disagreeing analysis over the cost of the nuclear plans compared to Labor’s renewable pledges has filled many column inches recently. A rough summary of The Sydney Morning Herald’s reporting goes a bit like: the Coalition handily cites analysis which claims Labor’s renewables rollout will cost $642 billion while its nuclear plan will come in less than $400 billion. The government rejects those figures and cites other analysis that claims its plan will cost $122 billion.
Defending the nuclear plans, the Coalition reckons there will be less renewable energy added to the electricity grid than Labor predicts by 2030 and claims renewables will risk blackouts and raise bills. Meanwhile, the CSIRO says the first potential nuclear plant would be completed by 2040 at the earliest (the coalition says 2035) and “a fully operational fleet of nuclear reactors cannot be expected before 2050”.
The Nine papers also say the Institute for Energy Economics and Financial Analysis believes power bills would rise by $665 a year to repay the cost of building the nuclear plants, while (as previously flagged) the CSIRO projects nuclear will cost twice as much as renewable energy.
So… a whole load of disagreeing over something that potentially isn’t due to provide any help to people’s power bills for decades — something the ABC has picked up and is leading with this morning.
The broadcaster points out “senior Coalition sources” have expressed reservations over the nuclear plans, highlighting the fact they will “not map out an energy future in which households would get any immediate or even long-term relief”.
A member of the Coalition is quoted as saying: “The fundamental problem is that whichever way you cost it, nuclear power is not hugely cheap. Nuclear will keep the lights on, but it’s hardly going to bring prices back down to where they were 10 years ago.”
The ABC reports Coalition strategists are frustrated at the amount of scrutiny Dutton’s plans are getting, complaining Energy Minister Chris Bowen didn’t receive as much over his target of 82% renewable energy by 2030. One could argue perhaps if they’re annoyed over all the attention, maybe they should have considered telling the country a bit earlier about how they planned to fund their eye-catching plan…
Anthony Albanese (see Wednesday’s Worm) will be shocked to learn The Australian is keen to sell the opposition’s costings vs Labor’s, claiming “wind and solar will still dominate the grid under the Coalition’s model”.
ON A LIGHTER NOTE…
If you’ve ever wanted diamante-encrusted spectacles in the shape of the Sydney Opera House, have we got the auction for you!
In February next year, Christie’s in London will auction 250 items from the personal collection of the late Barry Humphries.
As well as the pair of glasses from his infamous Dame Edna Everage character, paintings by artist Charles Conder and a first edition copy of Oscar Wilde’s The Importance of Being Earnest are also being sold at the auction, the Press Association reports.
Benedict Winter, associate director of private and iconic collections at Christie’s, said: “Barry Humphries is best remembered for his comedic genius, but behind his famous figure was a true polymath and connoisseur.
“This refined and engaging collection provides compelling insights into the private world of this very public performer.”
Say What?
I will not touch bread if it is moist.
Kemi Badenoch
The Conservative Party leader claimed this week “lunch is for wimps”, sandwiches are not real food and she sometimes has steak brought to her while she works. The UK Prime Minster Sir Keir Starmer’s spokesperson said in response that the PM enjoyed a sandwich lunch (tuna, in case you were wondering) “and occasionally a cheese toastie”. The row continues.
CRIKEY RECAP
It has been a dire, unpredictable year for the Australian media. Jobs have been cut en masse, outlets grappled with ideals of objectivity, newspapers prosecuted campaigns that could see wholesale changes to how audiences interact with news, new outlets formed, others died, there were landmark defamation decisions and investigations into newsroom culture, and an executive allegedly shoulder-charged a reporter.
After a year of volatility, job cuts, uncertainty and brilliance, Crikey chased down Australia’s biggest media figures — from journalists to editors to defamation lawyers to academics — to pick their brains about our industry. What they shared has formed the backbone of a multi-part Crikey series, Movers and Shakers, holding a mirror up to the industry and asking it to reflect on itself.
It’s hard to know whether the Coalition’s support for retaining the activity test is driven by fiscal discipline — difficult to believe given the hundreds of billions it plans to waste on nuclear power — or by hostility to low-income families. It is, after all, the Dutton style to prefer identifying people to demonise rather than make policy work better. But the Coalition’s formal position is now that children — and, in the long-term, the community — should be deprived of the benefits of early childhood education because their parents are assessed as not worthy. The fact that the Coalition will go to the election telling outer suburban and regional communities that it will be withdrawing funding for more childcare services is likely to be something Labor will constantly draw attention to.
Indeed, the Coalition will go to the election as the first party in decades actively promising to cut childcare and childcare funding. On the other hand, Labor, backed by the Productivity Commission and even the business community, is investing in “long-term economic benefits” and “maximising the human talent pipeline of our nation”. Even this shambolic outfit can’t mess that up… surely?
Did the backlash to the speech contribute to Fletcher throwing in the towel?
“I don’t know what was in Mr Fletcher’s mind,” Boele tells me. “If you can see your main opponent, and it’s a two-horse race, has been in the field for that long … Maybe the 12 letters to The Sydney Morning Herald as soon as he insulted everybody was a feedback loop that he needed.”
Boele has been critical of the speech, arguing it showed little respect for Fletcher’s constituents. Her statement about it was titled, “Bradfield voters aren’t dopes, Paul”.
When I ask how it made her feel, she gives a very teal answer.
“It was disappointing, but it wasn’t a surprise. I get very protective, kind of a mum instinct, with the constituents. Like, hang on a second, what do you mean we’re dim-witted? Obviously there were some overtones about the gendered part of it, too, which I didn’t take very nicely to.”
READ ALL ABOUT IT
John Pesutto defies calls to resign after being ordered to pay $300,000 for defaming Moira Deeming (Guardian Australia)
Sydney street artist revealed as man found not guilty of two counts of rape (The Sydney Morning Herald) ($)
Donald Trump 2024 TIME Person of the Year (TIME)
Biden commutes roughly 1,500 sentences and pardons 39 people in biggest single-day act of clemency (Associated Press)
Trump’s Middle East adviser pick is a small-time truck salesman (The New York Times) ($)
Mystery New Jersey drones not from Iranian ‘mothership’ — Pentagon (BBC)
THE COMMENTARIAT
Peter Dutton’s nuclear policy would have coal-fired power stations operating for a lot longer — Michelle Grattan (ABC): The release of the costings unleashes a tsunami of claims and counterclaims about numbers. That debate will be eye-glazing for many voters.
Not to worry. We are talking the span of a generation. Numbers that stretch out to 2050 don’t mean a great deal. Hundreds of things — in technology and politics, for starters — can and will change as the years pass.
Moreover, numbers from modelling have an extra layer of complexity and uncertainty. They depend heavily on assumptions that are, in many cases, necessarily arbitrary.
Anyone inclined to take modelling at face value should reflect on the Labor experience. Before the 2022 election, it released modelling that gave it the basis to promise a $275 reduction in household power bills by next year. We all know what happened to that.
Regardless of the problems in attempting to be precise, the broad debate about nuclear’s cost will be intense.
Social media gorged itself on a free lunch of news. The buffet could be over — James Massola (The Sydney Morning Herald): In an age when hot-takes and “feelpinions” abound, the federal government’s levy on social media giants is designed to shore up the future of news outlets across the country. In regional areas in particular, where local newspapers are part of the fabric of small communities, the measure could slow or halt their retreat.
At their press conference announcing the policy, Rowland and Jones argued it was vital that Australians who accessed news through social media had access to “fact-checked information”.
One need only look at the spread of dis- and misinformation about vaccines during the pandemic to see why.
In the dispute between social and legacy media, it’s clear the government has picked a winner. Now the ball is in Meta’s court to respond.
