Latest news with #TheAustraliaInstitute
Al Jazeera
02-06-2025
- Business
- Al Jazeera
US urges Australia to increase defence spending to 3.5% of GDP
United States Defense Secretary Peter Hegseth has called on Australia to increase its military spending to 3.5 percent of gross domestic product (GDP) 'as soon as possible'. Responding on Monday, Prime Minister Anthony Albanese said the government will decide on Australia's defence capability needs before announcing spending. 'What you should do in defence is decide what you need, your capability, and then provide for it,' Albanese told reporters. 'That's what my government is doing. Investing to our capability and investing in our relationships.' Albanese added that his government is already increasing defence spending by about 10 billion Australian dollars ($6.5bn). 'We're continuing to lift up,' he said, citing his government's goal to increase spending to 2.3 percent of GDP by 2033. However, the government is facing other demands on its budget. Albanese was speaking from a farm in the state of South Australia, which is experiencing a significant drought. Meanwhile, Australia's treasurer said the country is facing a bill of billions due to recent floods in New South Wales and Cyclone Alfred. Public broadcaster ABC reported that increasing military spending to 3.5 percent of GDP would cost 100 billion Australian dollars ($65bn) annually, 40 billion Australian dollars ($25bn) more than it spends currently. Matt Grudnoff, a senior economist with The Australia Institute, said 'Australia already spends more than it should' on defence. 'Were Australia to increase its defence spending to 2.3% of GDP, we would be the ninth biggest spender on defence and the military,' Grudnoff said. 'Australia would be devoting more of its economy to defence than France and Taiwan, and on a par with the United Kingdom,' he added. Worldwide military spending increased by 9.4 percent in 2024, the sharpest rise since the end of the Cold War, in part driven by increased spending by European countries, according to the Stockholm International Peace Research Institute (SIPRI). The Australian government has already committed to spending hundreds of billions of dollars on US-manufactured nuclear submarines under its AUKUS agreement with the US and the UK in the coming decades. It estimates that the programme could cost up to 368 billion Australian dollars ($238bn). Hegseth and Australian Defence Minister Richard Marles discussed security issues, including accelerating US defence capabilities in Australia and advancing industrial base cooperation during a meeting on Friday, a Pentagon statement said on Sunday. Australia's role in manufacturing weapons components has come under increasing scrutiny amid Israel's war on the Gaza Strip, with protests outside Australian weapons factories and at Australian ports, as well as legal challenges. Hegseth's call for Australia to increase its military spending comes after the US Secretary of State Marco Rubio told the Shangri-La Dialogue on Saturday that 'the threat China poses is real, and it could be imminent'. 'There's no reason to sugar-coat it,' the Pentagon chief added. The US continues to warn of the threat that China poses to Taiwan, which Beijing considers part of Chinese territory. China's Defence Minister Dong Jun skipped the conference, which is considered to be the region's top security event. The Chinese Ministry of Foreign Affairs responded by saying: 'The US should not entertain illusions about using the question over Taiwan as a bargaining chip to contain China, nor should it play with fire.' Asked about Hegseth's remarks, Albanese said Australia will 'determine our defence policy'. 'Our position with regard to Taiwan is very clear, [and] has been for a long period of time, which is a bipartisan position to support the status quo,' he said.
News.com.au
27-04-2025
- Business
- News.com.au
‘Bulls**t': Expert erupts as CBA stuns world
A leading real estate guru has urged all Australians to ask one important question after the meteoric rise of Commonwealth Bank in recent months. The nation's biggest bank has seen its share price hit an all time high this week despite global financial turmoil caused by Donald Trump's trade war with the entire world. Kevin Doodney, an Australian housing futurist at the High Yield Property Group, has gone viral on social media for comments he made about Australia's big four banks — that point to why this share price rise may be happening. He referred to research from The Australia Institute that showed a staggering figure he claims the majority of Australians would be shocked to hear. He said the Australian banking industry is the most concentrated in the world and also the most profitable. 'In fact the 'big four' Australian banks make up four of the eight most profitable banks in the world,' he told 'They are making that money from a population of just 27 million people. There's 8 billion people out there, for Christ's sake. 'What the Australian public needs to ask is, how on Earth can that be possible? Because, I think the Australian people are going to look at that and go, nah, that's not possible.' In its latest results, Commonwealth Bank (CBA) made $9.48 billion after tax, while Westpac made $7 billion, Nab made $6.96 billion and ANZ made $6.53 billion. Mr Doodney said successive federal governments and the Reserve Bank of Australia (RBA) have justified these profits made in the banking sector because they have called for a 'robust banking system'. 'I'm calling bulls**t on that, because my attitude is that, you know, for the first time in history, affordable housing is becoming a serious issue for any government, and you've got to look at who's making the money out of that, between either the government themselves or the banking system,' he said. MORE: Huge prediction for Aussie house prices 'You've got the government making up to quarter million on the first time buyer through stamp duty, which means the first time buyer spends 10 years of a 30 year mortgage just paying that bit back. On top of that, you have a banking system that can adjust the interest rates at any time of their choosing, whereas on the world stage, that's not an option. So I think we all need to play by the same bloody rules.' He is referring here to Australia's system of using variable rates on home loans. Australia is an anomaly on the world stage when it comes to this. Up to 70 per cent of home loans here are serviced on a variable rate. New Zealand and South Africa have similar systems. However, most nations are geared towards fixed rate loans, so homeowners can lock in their preferred rate over several decades, or have a more even balance between variable and fixed options. Mr Doodney reckons this, along with high stamp duty, has resulted in Australians getting a raw deal. 'I'm just saying, After 45 years of future housing stuff that we do, sure the developers have got a part to play in affordability, a whole bunch of people have, but s**t, you know, the banking system has nearly busted our first time buyers in the last four years,' he said. 'Since the year 2000 the banks have had more robust support than anyone else on the planet, because the Americans are the biggest shareholders in those banks. 'You know, most people think the Commonwealth Bank of Australia is purely Australian, but if you check the major shareholders of those top four banks it's BlackRock and Vanguard — and those guys don't make bad decisions, you know. 'And I'm not trying to uncover the conspiracy here. I'm just simply stating the simple facts about housing.' The major shareholders of the big four banks are mainly large institutional investors, including global asset managers and Australian superannuation funds. US Investing giants Blackrock and Vanguard do have large stakes in the banks. They own roughly 2.5 per cent of CBA for example and BlackRock alone owns a hefty 5.82 per cent of NAB shares. However, far more money comes from Australian super funds — contributing to a nearly 30 per cent ownership of the big four banks. Mr Doodney said Australians are 'asleep at the wheel' when it comes to how much power these banks have. He said governments like to run royal commissions to make it look like they are doing something both nothing changes in the end. 'Australians are asleep at the wheel because the government keep making statements about who is to blame for house prices and why they should investigate and s**t like that,' he said. 'They'll just come back to you and say, we've done a royal commission you know? We're satisfied with this. And then it's like yesterday's news, and move on.' CBA stuns the world This all comes as Commonwealth Bank saw an unusual surge in its stock price this week — despite the world being rocked by uncertainty in recent weeks due to President Trump's tariffs. In a sign that the world is facing great economic turmoil, the price of gold has surged to record highs while stock markets around the world — from Europe to Japan — have taken a battering. Australia is fairing reasonably well, with the ASX only falling by 3.32 per cent in the past six months. But if you look closely, there is one company doing much of the heavy lifting. The nation's biggest company by market capitalisation — Commonwealth Bank — has seen something truly remarkable happen to its share price. On Tuesday, it surged to an all-time high after rocketing 4.2 per cent in one day after a massive rise 49 per cent in the past 12 months. That, remarkably, makes it now the most expensive bank stock in the history of the world. Even seasoned investors are stunned by what is happening. 'Everyone has been scrambling to explain the phenomenon,' the AFR's Chanticleer reported. 'One analyst reported 10 inbound calls on Tuesday from investors worried they had missed something. No one can rationally explain why any investor is ploughing capital into a bank with zero earnings growth and an eye-watering valuation.' There are some theories floating around about what is causing investors from around the world to pour their cash into an Aussie bank amid fears of a global recession. Richard Coppleson, the director of institutional sales and trading at Bell Potter, claimed in his Coppo Report newsletter that a very significant US institutional investor has been selling their US stocks and looking elsewhere. They have been spooked by what's happening in the US, so do want to plough their money into the stock market there because of the uncertainty created by President Trump. China is also taking a hammering as it cops brutal 145 per cent tariffs on its exports to one of its biggest markets, the US. So that is also scaring investors away. Mr Coppleson said these big investors have instead been looking for opportunities in Australia. The first place they tend to look is our banks and they don't care how much they pay for them. If they're looking at our banks then it's hard to look past Commonwealth which holds roughly a quarter of Australia's $2.2 trillion mortgage market. This is underpinned by a housing market that has famously risen so quickly over several decades that it has made tradies living in the suburbs into millionaires and prevented whole generations of Australians from ever owning their own homes, as wage increases have no chance to keep pace. However, it's not all plain sailing for Commonwealth — which is actually seeing its share of the lucrative borrowing market fall. For instance, in May 2023, CBA's mortgage market share was about 25.9 per cent. ​ This reduction in market share is partly due to the bank's strategic decision to focus on profit margins over aggressive expansion. It went as far as to deliberately reduce its home loan book by $2 billion, opting not to compete for less profitable mortgage customers. On the flip side, with other major banks like ANZ and Westpac have gained market share by offering competitive rates and cashback incentives. However, if you look at what happened on the ASX on Tuesday, it's clear these mystery cashed-up investors only have eyes for one bank. Westpac rose just 0.1 per cent, while NAB and ANZ fell 0.5 per cent and 0.6 per cent respectively. Australia's other big banks may not be getting the same luxuries as Commonwealth for a number of reasons. ANZ is undergoing big changes as it prepares for an imminent CEO change on May 12. ASIC has been investigating the bank for various concerns, including potential market manipulation during a $14 billion government bond sale in 2023, miscalculated interest on savings accounts, and potentially incorrect hardship provisions. NAB has just seen its CFO, Nathan Goonan, poached by rival Westpac. And, Westpac, in turn, is in the midst of a massive IT transformation which is costing it $2 billion a year until 2028. Macquarie Group — known as the 'millionaire factory' because of how much dosh it makes — has seen its earnings decline in recent years. For the fiscal year ending March 31, 2024, Macquarie reported a net profit after tax of $3.52 billion, marking a 32 per cent decrease compared to the previous year — marking the company's most significant annual profit drop in 15 years. Another reason CommBank may be doing so well is that size matters when it comes to investing, and the bigger you are the more you will get from so-called passive investing. This means people may not be actively seeking out CommBank shares but they are buying them passively because they are now such a big part of major part of index funds like the ASX200 or superannuation funds. Commonwealth Bank takes up a massive 11.5 per cent of the ASX200 — an index of Australia's top 200 companies — the next biggest stock is BHP at 7.9 per cent, and the next biggest bank is Westpac at 4.5 per cent. This means that for every $1000 someone invests in the ASX200, CommBank will get roughly $115 while is next biggest rival Westpac will get just $45.
The Age
27-04-2025
- Business
- The Age
Which jobs pay enough to save for a Sydney house deposit
Single workers and many high earning couples would have largely found it impossible to save a Sydney house deposit over the past decade as property prices soared out of reach, shifting the goalposts for first home hopefuls. Not one worker buying alone in the 17 occupations - from childcare workers to surgeons - analysed by left-leaning think tank The Australia Institute would have saved enough from June 2015 to December 2024, to reach a 20 per cent deposit for the median-priced Sydney house. A central issue for the upcoming election is housing affordability, with both major parties announcing policies. Home buying hopefuls having less than a 20 per cent deposit usually require lenders' mortgage insurance, or a government guarantee to waive the LMI - set to be expanded to more first home buyers under a Labor plan. Experts say having a 20 per cent deposit helps first home buyers avoid a situation where they lose their job while property prices are falling and need to sell their home for less than the loan, leaving them with a debt. A single checkout operator would be most challenged getting to this, according to the data. If they began saving for a 20 per cent deposit ($159,925) for a median priced Sydney house in mid-2015 ($799,625), they would have $33,178 by December 2024. But because the median house price in Sydney had by then risen to about $1.4 million, for which a deposit is $283,940, they would still be short $250,762. 'For people living in Sydney, saving for a home has become almost an impossibility unless you either have a very high-paying job, or you're married or a partner with someone with a very high-paying job,' Greg Jericho, chief economist at The Australia Institute said.
Sydney Morning Herald
27-04-2025
- Business
- Sydney Morning Herald
Which jobs pay enough to save for a Sydney house deposit
Single workers and many high earning couples would have largely found it impossible to save a Sydney house deposit over the past decade as property prices soared out of reach, shifting the goalposts for first home hopefuls. Not one worker buying alone in the 17 occupations - from childcare workers to surgeons - analysed by left-leaning think tank The Australia Institute would have saved enough from June 2015 to December 2024, to reach a 20 per cent deposit for the median-priced Sydney house. A central issue for the upcoming election is housing affordability, with both major parties announcing policies. Home buying hopefuls having less than a 20 per cent deposit usually require lenders' mortgage insurance, or a government guarantee to waive the LMI - set to be expanded to more first home buyers under a Labor plan. Experts say having a 20 per cent deposit helps first home buyers avoid a situation where they lose their job while property prices are falling and need to sell their home for less than the loan, leaving them with a debt. A single checkout operator would be most challenged getting to this, according to the data. If they began saving for a 20 per cent deposit ($159,925) for a median priced Sydney house in mid-2015 ($799,625), they would have $33,178 by December 2024. But because the median house price in Sydney had by then risen to about $1.4 million, for which a deposit is $283,940, they would still be short $250,762. 'For people living in Sydney, saving for a home has become almost an impossibility unless you either have a very high-paying job, or you're married or a partner with someone with a very high-paying job,' Greg Jericho, chief economist at The Australia Institute said.
Yahoo
28-03-2025
- Business
- Yahoo
New study uncovers hidden force behind rising cost of living: 'Feeling the financial strain more severely'
Climate change is directly affecting the cost-of-living crisis, and average people often pay the price for bad environmental decisions made by corporations. A new report from The Australia Institute revealed that the climate crisis is responsible for driving up costs for Australians, particularly in the areas of insurance, food, and energy. "Insurance premiums have soared due to an increase in natural disasters, with some households now spending over seven weeks of gross income just to cover home insurance," the institute said. Food prices are up by 20% since 2020 thanks in part to climate-related events disrupting harvests and growth periods. Energy prices are high because of a continued reliance on fossil fuels and an underinvestment in renewable energy sources. Rising global temperatures are causing extreme weather around the world, including wildfires, floods, hurricanes, tornados, and heat waves. These natural disasters can have lasting effects on people who don't have significant savings or adequate insurance coverage. "The impacts of the climate crisis are disproportionately affecting lower-income and regional households, who are already feeling the financial strain more severely," the institute said. Australia is the world's second-largest fossil fuel exporter and fifth-largest producer. More frequent and severe natural disasters have led to higher payouts from insurance companies and rising premiums for homeowners. "The only way to keep insurance costs down is to keep fossil fuel emissions down. The more we heat the climate, the more expensive storms, floods and fires will be and, in turn, the more insurance will cost. It's time we started to tax the fossil fuel companies to fund the damage that their previous emissions are already causing," said Richard Dennis, executive director of The Australia Institute. Extreme weather events have always existed, but the scientific consensus is that human-induced climate change supercharges these events, making them more powerful and dangerous to our communities. Addressing climate change and investing in renewable energy sources is expensive, but not doing so will be far costlier. Everyone can do their part by living a more sustainable life. Do you think America is in a housing crisis? Definitely Not sure No way Only in some cities Click your choice to see results and speak your mind. Try walking, biking, or taking public transportation when you can. Install solar panels to slash your carbon footprint and energy bills. Replace your biggest-ticket items with more energy-efficient alternatives, such as a heat pump or electric vehicle. For more tips on how to be a part of the solution, check out our guide on exploring critical climate issues. Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
