My partner asked me the other day why things don’t seem that bad. Houses/apartments sell quickly and for good prices, rent dropped a bit (especially apartments) but not dramatically. People seem to be out and about at the shops (here in Sydney at least), cafes full. Is it a case of job keeper/jobseeker and also people raiding their super is propping things up?
Coronavirus impact on the economy
admira on 01/09/2020 - 21:21
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Paying for better internet, higher electricity cost, more grocery or uber eat bill, more toliet papers, more office equipment cost etc
My toilet paper consumption directly correlates with my uber eat bill.
the main reason for toilet shortage at the beginning of the pandemic, people realised that they need a lot more loo paper as they are working from home and getting more uber eat .
This is true to an extent. Our household is definitely in the no impact to income/both working from home, and we are probably about $4k a month better off (mostly due to no childcare and no trains/petrol for commuting). We're definitely spending a lot less on other non-essentials as well.
However, I think when job keeper/job seeker reduce/disappear is when the true state of things will show.
I would actually be interested to see the stats on % of office based jobs that in reality should be able to be mostly remote vs all of the jobs that can't. There is probably also going to be a huge difference between states, Melbourne would definitely have a massive change from normal just now vs any other state.
Jobkeeper/Seeker definitely propping things up, once they are taken away we will see the real impact.
This.
Wait until after the US election to start to see how they are going.
Wait until mid next year to see how we are going. That's presuming there are no more extensions to JobKeeper etc. And in all likelihood there will be many more govt subsidies coming. The more subsidies the longer it will take to see the real underlying picture.Also keep an eye on unemployment, and over the coming years watch interest rates and inflation.
Things are bad here in Melbourne. Shops are click and collect only except supermarkets and pharmacies (and hardware stores for tradies only). As a result, the vast majority of smaller retail isn't even operating so a lot of people have lost their jobs.
There's also a big impact on higher education. Melbourne Uni has sacked 450 permanent staff and countless casual staff (including yours truly). I recently saw a post on social media where a student described being told that pre-tutorial exercises are no longer being marked because the uni can no longer afford to pay tutors to mark them.
That's really unfortunate and I hope you will recover from this. Would this critically damage the university system and the quality of education provided at institutions?
Thanks for your thoughts. My manager sent an email before the start of this semester explaining that she could only hire 10 tutors (rather than the typical ~40) and encouraged us all to apply again next semester. Hopefully I'll get my job back then but I'm not overly confident.
The quality of education is suffering a lot. Some subjects are simply providing recordings of previous semesters' lectures and I've even read a post complaining about a tutorial with 100 students in it. Obviously this isn't every class and perhaps the particular time slot is popular but the massive cut to casual staff is no doubt playing a role as well (in the form of fewer time slots being available in the first place). Students studying disciplines like biology and chemistry are probably affected the most because they're not getting the practical experience in labs but all students are affected by the lack of face-to-face learning.
I recently saw a post on social media where a student described being told that pre-tutorial exercises are no longer being marked because the uni can no longer afford to pay tutors to mark them.
And yet, I read somewhere that international students are still expected to pay exorbitant tuition fees. No wonder so many are now considering moving to Canada.
Knowing multiple people who work at universities, what I don't get about the job cuts is:
University has already been payed for this year tuition, the work is actually more for most lecturers as they are filming a lot and doing many sessions with students and a lot more emails to answer from students. How did universities decide to cut jobs while still paying million dollar salary to the top execs? Surely for functionality of an organisation and survival it's better if 1 person who is very wealthy takes a big pay cut (90%???) while retaining the rest of the team?
To me universities have long drifted away from the goal of teaching and passing on knowledge and have become money making machines. ugh
Wait till the freeze on paying home loans and job keeper end - it will be a huge s**t show
When does the freeze on paying home loans end? I know jobkeeper will be “wound back” but I’m not sure of the impact this will have immediately. I suspect it won’t be till next year that has a huge effect, though I’m no economist (clearly!)
All i know is people were struggling to pay there big loans pre-covid and every dollar they government gives out we will have to pay back 3 times that - Australia also has a shattered relationship with China its biggest trading partner.
Australia will probably be flooded with immigration to try keep the economy going see it boost from 200k to 500k a year - it is the only solution otherwise we will be in recession for a long time
was 6 months from Mar-Sept , now extended for another 6 months to next year Mar-2021
maybe they'll extend again , who knows
Yeah seems to be kicking the can down the road… same with rental eviction moratoriums.
Am in Melb myself, living in a declared deathzone
Politically its DeVasTaTiNg, everybody close to me just finds it annoying 🤷♂️
JobKeeper/Seeker are papering over the economic fallout, plus many mortgage payments are suspended for a few more months. The latter only works if people had enough paid off to keep accruing interest. I mean, everyone was well ahead on their mortgage repayments, right?…. No one borrowed 90%+ interest only… That would be just dumb.
The RBA is splashing $200B into banks at 0.25% and theoretically banks can pass that on to customers.
https://www.smh.com.au/politics/federal/banks-offered-cheap-…
'Apart from increased lending to businesses, the scheme should help banks keep a lid on interest rates to mortgage customers and replace expensive money borrowed from overseas. '
Makes you wonder why it took the RBA this long to lower borrowing costs. If they could snap their fingers and deliver money at rock bottom prices to banks, why did banks have to borrow money from overseas markets? Unless… there's a hidden inflation cost in all of this years down the line.
Wait till banks increase their interest rates, and give people a tap on the shoulder to sell.
that's a suicide move
They need to make a profit though, they need to pay dividends. It will happen
will be years and years away
@Donaldhump: lol you believe them, just trying to get buyers in and sellers to list now, come in spinner.
@[Deactivated]: cool comeback to call someone old, you must have an array of solid comebacks and wit
because you are never going to be old.
anyway not a boomerbut happy to make that bet 10k now if you want
@[Deactivated]: I’ll need proof of assets for such a large amount but I’m keen, what’s your solicitors name.
Please ask your husband first though
@Donaldhump: All this 1k 5k 100k talk is entertaining, but how much do you think it will go up and by when? I mean could I imagine a .25 percent increase in 6 months? Yeah maybe, and that would impact some people. But anything more significant than that and I’m not so sure.
Not putting money on it though :)
@admira: Prob just .25 or .5 it’s nothing really and I’d say it’s 60/40 likely by June 2021
But if anyone can’t afford their mortgage right now they mustn’t have had much buffer.
unclesnake, think you're on the ball here. It is not just the direct bank shareholders, but also funds etc. Retirees for example already cop half a year without bank dividends. I reckon bank will start with the really bad loan and move up until their risk profile is lowered.
.or could he years because jobs and growth.@avoidfullprice: Heard 7 news said August apartments price dipped 15%. Just a matter of time the high leverage investors need to sell.
Banks make profits in all sorts of ways, interest rate movement usually (though not always) follows the central bank which sets them for macro economic reasons right… trying to reduce economic growth. I would have thought it was a way off but I'm also not really on top of whats happening (or you could say, I've no idea what I'm on about - hence my question) and there's some debate below about it so that's interesting to me.
why things don’t seem that bad
Where to start…. the gov is spending billions (weekly) via Jobkeeper/Jobseeker keeping people 'working'.
Home loan pauses
super raiding
credit card payment changes (as in not needing them/lowering the min to pay)
We are in the eye of the storm. Look at the sharemarket company reports coming out, most are reporting sadness. Companies will be culling staff to balance the books shortly. Most are trying to 'do the right thing' but once jobkeeper runs out, they'll be slashing staff.
stocks going up
stocks going up
Regardless, go read the quarterly reports, they are not pretty.
Stock Price has nothing to do with companies keeping staff.
Stock prices and asset prices are heavily influenced by how much money is printed out by the federal reserve. This has been the case since 2002 and this maybe the biggest buying opportunity as the asset prices are going to inflate even further. People cannot stop consuming and the government will do everything to bail out the asset classes the whole economy depends on. Keeping cash and saving money right now maybe the worst thing to do while the reserve banks globally contemplate negative interest rate regimes to prop up the economy/saving it from crashing massively.
I work in fast food, and it's gotten busier. Partially thanks to the local mcdonalds cutting it's open ours. so HJs gets more customers. Also, SA basically doesn't have the virus, especially rural areas, so things are pretty normal. Unis are still doing lectures online, but other classes(which tend to be even more close-contact), are still going.
The Govt are throwing money at businesses… this Job Keeper is essentially paying the wages that otherwise would be from the business. Businesses are raking in a fortune.
The Govt hounded people to their death for Centrelink overpayments… now they are tossing money at those who don't even need it.Go figure
go the 77th brigade…
Everything OP said is correct.
At this stage the economy is still humming alongMost of the impacted people were on temporary tourist, study and work visas and many have left the counrty (and still are).
This is the reason the rental market has been impacted more than others.Be patient. It will get worse. My take does the combo of jobkeeper/jobseeker is masking unemployment figures and in combination with relaxed laws around trading insolvent allowing and even encouraging non viable business to trade. As soon as this is wrapped the spike in business hitting VA/insolvency with be biblical.
While many people have been unfortunately affected by the pandemic, majority have transitioned to working from home and then business as usual.
This means continue to work and be paid but have no commute costs, no work clothing costs, no outside food/daily coffee costs, no dry cleaning costs, no going out costs, no weekend trip costs, no holidays, no events/parties/shows/festivals etc… Not to mention govt subsidies, rent reductions, mortgage/interest freezes etc where applicable.
That's a lot of saved up disposable income over several months that people are continuing to spend now things have relaxed a bit.