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Cheaper mortgages, tamed inflation and even higher home prices: how 29 forecasters see Australia’s economic recovery in 2024-25

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/peter-martin-682709">Peter Martin</a>, <a href="https://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292">Crawford School of Public Policy, Australian National University</a> Australia’s top economic forecasters expect the Reserve Bank to start cutting interest rates by March next year, taking 0.35 points of its cash rate by June. If passed on in full, the cut would take $125 off the monthly cost of servicing a $600,000 variable-rate mortgage, with more to come. The panel of 29 forecasters assembled by The Conversation expects a further cut of 0.3 points by the end of 2025. This would take the cash rate down from the current 4.35% to 3.75% and produce a total cut in monthly payments on a $600,000 mortgage of $335. The forecasts were produced after last week’s news of a higher than expected <a href="https://theconversation.com/australias-inflation-rate-jumps-to-4-putting-an-rba-rate-rise-back-on-the-agenda-233331">monthly consumers price index</a>. Several of those surveyed revised up their predictions for interest rates in the year ahead, while continuing to predict cuts by mid next year. Only two expect higher rates by mid next year. Only four expect no change. <hr /> <iframe id="6eIe8" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/6eIe8/" width="100%" height="400px" frameborder="0"></iframe> <hr /> Now in its sixth year, The Conversation survey draws on the expertise of leading forecasters in 22 Australian universities, think tanks and financial institutions – among them economic modellers, former Treasury and Reserve Bank officials and a former member of the Reserve Bank board. Eight of the 29 expect the first cut to come this year, by either November or December. One of them is Luci Ellis, who was until recently assistant governor (economic) at the Reserve Bank and is now at Westpac. She and her team are forecasting three interest rate cuts by the middle of next year, taking the cash rate from 4.35% to 3.6%. <h2>Reserve Bank a ‘reluctant hiker’</h2> Ellis says inflation isn’t falling fast enough for the bank to be confident of being able to cut before November. But after that, even if inflation isn’t completely back within the bank’s target band but is merely moving towards it, a “forward-looking” board would want to start easing interest rates. Another forecaster, Su-Lin Ong of RBC Capital Markets, says in her view the bank should hike at its next board meeting in August after the release of figures likely to show inflation is still too high. But she says the bank is a “reluctant hiker” and keen to keep unemployment low. Although several panellists expect the Reserve Bank to hike rates in the months ahead, almost all expect rates to be lower in a year’s time than they are today. <hr /> <iframe id="2xF3M" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/2xF3M/" width="100%" height="400px" frameborder="0"></iframe> <hr /> The panel expects inflation to be back within the Reserve Bank’s 2-3% target band by June next year, and to be close to it (3.3%) by the end of this year. Twelve of the panel expect inflation to climb further when the official figures are released at the end of this month, but none expect it to climb further beyond that. And all expect inflation to be lower by the end of the financial year than it is today. One, Percy Allan, a former head of the NSW Treasury, cautions that the tax cuts and other government support measures due to start this month run the risk of boosting spending and falling progress on inflation. <hr /> <iframe id="LGJa7" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/LGJa7/" width="100%" height="400px" frameborder="0"></iframe> <hr /> The panel expects wages growth to fall from 4% to 3.5% over the year ahead, contributing to downward pressure on inflation, but to remain higher than prices growth, producing gains in so-called <a href="https://www.investopedia.com/terms/r/realincome.asp">real wages</a>. It expects wages growth to moderate further, to 3.2%, in 2025-26. <hr /> <iframe id="iV7mZ" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/iV7mZ/" width="100%" height="400px" frameborder="0"></iframe> <hr /> Consumer spending is expected to remain unusually weak, growing by only 1.7% in real terms over the next 12 months, up from 1.3% in the latest national accounts. Mala Raghavan, from the University of Tasmania, said even though inflation was falling, previous price rises meant the prices of essentials remained high. AMP chief economist Shane Oliver expected the boost from the <a href="https://treasury.gov.au/tax-cuts">Stage 3 tax cuts</a> to be offset by the depressing effect of a weaker labour market. <h2>Unemployment to climb modestly</h2> The panel expects Australia’s unemployment rate to climb steadily from its present historically low 4% to 4.4%. Moodys Analytics economist Harry Murphy Cruise said although the increase wasn’t big, the effect on pay packets would be bigger. Employers were shaving hours and easing back on hiring rather than letting go of workers. <hr /> <iframe id="SM8PI" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/SM8PI/" width="100%" height="400px" frameborder="0"></iframe> <hr /> Panellists expect China’s economic growth to slip from 5.3% to 5% and US growth to slip from 2.9% to 2.4%. Australia’s economic growth is expected to climb from the present very low 1.1% to 1.3% by the end of this year and to 2% by the end of next year. Although none of the panel are forecasting a recession, most of those who offered an opinion said if there was a recession, it would start this year when the economy was weak. Some said we might later discover that we have been in a recession if the very weak economic growth of 0.1% recorded in the March quarter is revised and turns negative when updated figures are released in September. <hr /> <iframe id="3I49o" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/3I49o/1/" width="100%" height="400px" frameborder="0"></iframe> <hr /> Home prices are expected to continue to climb notwithstanding economic weakness. Sydney prices are expected to increase a further 5% in the year ahead after climbing 7.4% in the year to May. Melbourne prices are expected to rise a further 2.8% after climbing 1.8% in the year to May. Percy Allan said Sydney had fewer homes available than Melbourne, and Victoria’s decisions to extend land tax and boost rights for tenants had upset landlords, many of whom were offloading their holdings. <h2>Home prices to climb further</h2> Julie Toth, chief economist at property information firm PEXA, said rapid population growth was colliding with an ongoing decline in household size since COVID. At the same time, fewer new homes were being commissioned and long delays and high construction costs were also keeping supply tight. <hr /> <iframe id="JzLaY" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/JzLaY/" width="100%" height="400px" frameborder="0"></iframe> <hr /> The panel expects non-mining business investment to continue to climb in the year ahead, by 5.2%, down from 6.9%. It expects the Australian share market to climb by a further 5.6% Read the answers on <a href="https://cdn.theconversation.com/static_files/files/3350/2024-25_The_Conversation_AU_Forecasting_Survey.pdf">PDF</a>, download as <a href="https://cdn.theconversation.com/static_files/files/3351/2024-25_The_Conversation_AU_forecasting_survey.xlsx?1719478737">XLS</a> <hr /> <h2>The Conversation’s Economic Panel</h2> Click on economist to see full profile. <iframe id="tc-infographic-1066" class="tc-infographic" style="border: none;" src="https://cdn.theconversation.com/infographics/1066/93fb29ba32e178ec2dcda111f014a50cf7ea1f49/site/index.html" width="100%" height="400px" frameborder="0"></iframe><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/233244/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/peter-martin-682709">Peter Martin</a>, Visiting Fellow, <a href="https://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292">Crawford School of Public Policy, Australian National University</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/cheaper-mortgages-tamed-inflation-and-even-higher-home-prices-how-29-forecasters-see-australias-economic-recovery-in-2024-25-233244">original article</a>. </div>

Money & Banking

Almost half the men surveyed think they could land a passenger plane. Experts disagree

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/guido-carim-junior-1379129">Guido Carim Junior</a>, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a>; <a href="https://theconversation.com/profiles/chris-campbell-1414564">Chris Campbell</a>, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a>; <a href="https://theconversation.com/profiles/elvira-marques-1362476">Elvira Marques</a>, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a>; <a href="https://theconversation.com/profiles/nnenna-ike-1490692">Nnenna Ike</a>, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a>, and <a href="https://theconversation.com/profiles/tim-ryley-1253269">Tim Ryley</a>, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a> Picture this: you’re nestled comfortably in your seat cruising towards your holiday destination when a flight attendant’s voice breaks through the silence: <blockquote> Ladies and gentlemen, both pilots are incapacitated. Are there any passengers who could land this plane with assistance from air traffic control? </blockquote> If you think you could manage it, you’re not alone. <a href="https://today.yougov.com/topics/politics/survey-results/daily/2023/01/02/fd798/3">Survey results</a> published in January indicate about one-third of adult Americans think they could safely land a passenger aircraft with air traffic control’s guidance. Among male respondents, the confidence level rose to nearly 50%. Can a person with no prior training simply guide everyone to a smooth touchdown? We’ve all heard stories of passengers who saved the day when the pilot became unresponsive. For instance, last year <a href="https://www.youtube.com/watch?v=qbMoyWukjbs">Darren Harrison</a> managed to land a twin-engine aircraft in Florida – after the pilot passed out – with the guidance of an air traffic controller who also happened to be a flight instructor. However, such incidents tend to take place in small, simple aircraft. Flying a much bigger and heavier commercial jet is a completely different game. <h2>You can’t always rely on autopilot</h2> A pilot spends about 90% of their time monitoring autopilot systems and making sure everything is working as intended. The other 10% is spent managing problems, taxiing, taking off and landing. Takeoffs and landings are arguably the most difficult tasks pilots perform, and are always performed manually. Only on very few occasions, and in a handful of aircraft models, can a pilot use autopilot to land the aircraft for them. This is the exception, and not the rule. For takeoff, the aircraft must build up speed until the wings can generate enough lift to pull it into the air. The pilot must <a href="https://youtu.be/16XTAK-4Xbk?si=66yDo5g5I086Q2y2&t=65">pay close attention</a> to multiple instruments and external cues, while keeping the aircraft centred on the runway until it reaches lift-off speed. Once airborne, they must coordinate with air traffic control, follow a particular path, retract the landing gear and maintain a precise speed and direction while trying to climb. Landing is even more complicated, and requires having precise control of the aircraft’s direction and descent rate. <a href="https://youtu.be/u_it9OiTnSM?si=xNZrLB9ZH870LEa3&t=360">To land successfully</a>, a pilot must keep an appropriate speed while simultaneously managing gear and flap configuration, adhering to air traffic regulations, communicating with air traffic control and completing a number of paper and digital checklists. Once the aircraft comes close to the runway, they must accurately judge its height, reduce power and adjust the rate of descent – ensuring they land on the correct area of the runway. On the ground, they will use the brakes and reverse thrust to bring the aircraft to a complete stop before the runway ends. This all happens within just a few minutes. <figure><iframe src="https://www.youtube.com/embed/Nyx4NyMrvOs?wmode=transparent&start=0" width="440" height="260" frameborder="0" allowfullscreen="allowfullscreen"></iframe></figure> Both takeoff and landing are far too quick, technical and concentration-intensive for an untrained person to pull off. They also require a range of skills that are only gained through extensive training, such as understanding the information presented on different gauges, and being able to coordinate one’s hands and feet in a certain way. <h2>Training a pilot</h2> The journey from student to commercial pilot is a long one. It normally starts with a recreational licence, followed by a private licence, and then a commercial licence (which allows them to fly professionally). Even before stepping into a cockpit, the student must study aerodynamics, air law and flight rules, meteorology, human factors, navigation, aircraft systems, and performance and flight planning. They also need to spend time learning about the specific aircraft they will be flying. Once the fundamentals are grasped, an instructor takes them for training. Most of this training is conducted in small, lightweight aircraft – with a simulator introduced briefly towards the end. During a lesson, each manoeuvre or action is demonstrated by the instructor before the student attempts it. Their attempt may be adjusted, corrected or even terminated early in critical situations. The first ten to fifteen lessons focus on takeoff, landing, basic in-flight control and emergency management. When the students are ready, they’re allowed to “go solo” – wherein they conduct a complete flight on their own. This is a great milestone. After years of experience, they are ready to transition to a commercial aircraft. At this point they might be able to take off and land reasonably well, but they will still undergo extensive training specific to the aircraft they are flying, including hours of advanced theory, dozens of simulator sessions and hundreds of hours of real aircraft training (most of which is done with passengers onboard). So, if you’ve never even learned the basics of flying, your chances of successfully landing a passenger aircraft with air traffic control’s help are close to zero. <h2>Yet, flying is a skill like any other</h2> Aviation training has been democratised by the advent of high-end computers, virtual reality and flight simulation games such as Microsoft’s <a href="https://www.flightsimulator.com/">Flight Simulator</a> and <a href="https://www.x-plane.com/">X-Plane</a>. Anyone can now rig up a desktop flight simulator for a few thousand dollars. Ideally, such a setup should also include the basic physical controls found in a cockpit, such as a control yoke, throttle quadrant and pedals. Flight simulators provide an immersive environment in which professional pilots, students and aviation enthusiasts can develop their skills. So if you really think you could match-up against a professional, consider trying your hand at one. You almost certainly won’t be able to land an actual passenger plane by the end of it – but at least you’ll gain an appreciation for the immense skill pilots possess.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/218037/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/guido-carim-junior-1379129">Guido Carim Junior</a>, Senior Lecturer in Aviation, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a>; <a href="https://theconversation.com/profiles/chris-campbell-1414564">Chris Campbell</a>, Adjunct Associate Professor, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a>; <a href="https://theconversation.com/profiles/elvira-marques-1362476">Elvira Marques</a>, Aviation PhD candidate, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a>; <a href="https://theconversation.com/profiles/nnenna-ike-1490692">Nnenna Ike</a>, Research Assistant, Griffith Aviation, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a>, and <a href="https://theconversation.com/profiles/tim-ryley-1253269">Tim Ryley</a>, Professor and Head of Griffith Aviation, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/almost-half-the-men-surveyed-think-they-could-land-a-passenger-plane-experts-disagree-218037">original article</a>. </div>

Travel Trouble

Survey unveils Aussies thoughts on tourism tax

Earlier this year, Bali launched a controversial tourism tax, which meant that every traveller entering the island would have to pay a $15 fee, which the Indonesian province have said will be used for environmental and cultural projects. Now, Aussies have shared their thoughts on introducing a similar system here, and survey results have revealed that many are keen for the tourism tax to be introduced here. Travel provider InsureandGo conducted the survey and found that 60 per cent of Australians would support the government introducing a tax to combat the rising environmental toll of tourism. "Tourist taxes are a relatively new concept, but as travel demand swells, we are seeing more countries adopt the levy," InsureandGo Chief Commercial Officer Jonathan Etkind said. "What's heartening is that only a minority of 37 per cent of respondents don't support tourism taxes, demonstrating just how many Australians support the concept of sustainable travel." The response comes amid increased sustainability concerns on our flora and fauna, which are being threatened by over-tourism. The tax is particularly supported by younger Aussies aged between 18 to 30, with 73 per cent of them saying yes to tourism taxes. Etkind said that this may be because younger Aussies are typically more aware of the environmental impacts of travel compared to the older generation, who may be less accustomed to the tax. Along with Bali, other cities and countries have started introducing similar fees to combat overtourism, with Venice set to charge day-trippers a fee of 5 Euros ($8.20) per visit. Amsterdam, Netherlands has the highest tourism tax in Europe, with the former 7 per cent hotel tourist levy rising to 12.5 per cent this year. New Zealand also charges international visitors excluding Aussie citizens and permanent residents $25 levy ($32.64 AUD) to address the challenges created by tourism in its conservation areas. Image: Getty

International Travel

Five tips for developing and managing your budget – even in tough economic times

<a href="https://theconversation.com/profiles/oluwabunmi-adejumo-1370664">Oluwabunmi Adejumo</a>, <a href="https://theconversation.com/institutions/obafemi-awolowo-university-2843">Obafemi Awolowo University</a> There’s nothing quite like a new year to prompt us to take stock of our lives, our health, our goals – and our finances. Many people will start a new year by contemplating how best to budget, plan and save. This is always a good set of aims, but it’s especially important in the inflation-prone and unpredictable economies we’re seeing <a href="https://www.statista.com/statistics/268225/countries-with-the-highest-inflation-rate/">all over Africa and the world</a>. Budgeting is especially key. It is the most effective method to <a href="https://www.thebalancemoney.com/how-to-make-a-budget-1289587">monitor income and expenditure</a>. <a href="https://www.uslendingcompany.com/blog/key-differences-in-writing-a-household-budget-vs-a-personal-budget/">Personal budgets</a> can help you to monitor your resources in pursuit of larger financial goals. Budgeting also offers <a href="https://www.acrwebsite.org/volumes/v46/acr_vol46_2411998.pdf">more opportunities</a> to save money, reduce your debts and live a comfortable life. It can even <a href="https://prucomm.ac.uk/assets/uploads/blog/2013/04/Personal-Budgets-review-of-evidence_FINAL-REPORT.pdf">improve your mental health</a>. But where should you start? What questions do you need to answer in creating a budget? Here are some tips that I’ve learned – not just as an economist, but as a research cost analyst and someone who keeps a budget too. <h2>1. Understand the broader economic conditions</h2> It is imperative that individuals keep themselves aware and up-to-date on the realities of their country’s economic landscape. You don’t have to be a professional economist, but keep an eye on new developments like free business registration, small business development funds and printing of new money notes. What is the current exchange rate? What’s the political landscape and what international factors, like the price of crude oil, are at play? You should also watch the inflation rate and have a sense of unemployment trends. This economic awareness will prepare you to draft your own budget and you’ll have a sense of when external factors mean it’s time to revisit your plans. <h2>2. Review your income sources</h2> The ability to earn income is critical to sustaining livelihoods. Having a definite source of income is the bedrock of budgeting. Some important questions you should ask about your income – and how you might budget with it – include: <ul> <li>What is my current income?</li> <li>What do I use my income for?</li> <li>Am I able to save, given my current income?</li> <li>What proportion of my income do I save and what proportion do I spend?</li> <li>Do I have the capacity to earn more than this?</li> <li>How can I improve my income?</li> </ul> Your answers can help you to identify gaps or untapped potential. Those with irregular or unpredictable income should factor in the element of time-gap in their income, for effective budgeting. Time gap is when they are not earning income. And everyone should make allowance in their budgets for uncertainties like health issues, social engagements, inflation, unemployment, recession and price shocks. <h2>3. Appraise your expenses</h2> Expenses can be broadly categorised into “variable” and “fixed”. Fixed expenses recur within a short period: housing, food, transport, medical costs, electricity, utilities, toiletries and clothing. Variable expenses are more long-term and irregular, such as investment in property or interest-yielding assets, and the purchase of machinery. The main essence of revising our expenses is to analyse and possibly improve our spending habits. In reviewing our expenses, we can consider issues such as: <ul> <li>What is the proportion of consumption-savings ratio from my income? This is how much do I spend compared to how much I save.</li> <li>What are my regular expenses?</li> <li>What are my fixed, capital or investment expenses?</li> <li>What are my extraordinary expenses that need modification?</li> <li>Have there been emergency or extraordinary expenses?</li> </ul> A careful response to the issues raised above offers an occasion to re-evaluate the pattern and direction of our expenses. For instance, overspending, unplanned or extraordinary expenses can be identified. This can lead to an optimal, efficient reallocation of available resources. <h2>4. Stabilise your finances through savings</h2> Savings have been <a href="https://klinglercpa.com/bedrock-principles-for-saving-money/">described</a> as a financial stabiliser, given their potential to cater for urgent needs and create opportunities for investments. Of course, savings have more value when they grow faster than the rate of inflation. Inflation erodes the value of savings. For instance, an amount of 300,000 naira (US$676) saved to purchase an autorickshaw today may be impossible in two months’ time with an inflation rate of 10% when the tricycle price rises to 330,000 naira (US$744). The reverse is the case when there is deflation. Therefore, it is advisable to improve the value of savings through investments in interest-yielding assets such as stocks, shares, bonds, microfinance and production. That’s not to say it’s always easy to save. Many income earners spend as they go, not seeing savings as part of their budgets. Harsh economic realities can also make it difficult – sometimes seemingly impossible – to save. But it’s not impossible: savings can be made in small amounts, through a daily, weekly or monthly contribution to collections, cooperative schemes or microfinance affiliations. For instance, a point of sale business in Nigeria can permit a daily contribution of 500 naira (US$1.13) over 25 work days, giving an average saving of 12,500 naira (US$28.18) per month. The Point-of-Sale business started in Nigeria in 2013 when the Central Bank of Nigeria introduced the agent banking system. A POS agent operates and processes transactions through a POS service provider. Providers of such services include banks, microfinance banks and fintech companies. <h2>5. Run a flexible budget</h2> Once your budget is created, remember that it’s not set in stone. It should be flexible if anything changes in your life. For instance, an amount saved to buy a car can be invested in a promising venture buying shares through public offerings or private placements in multinational organisations like Nestle or Unilever. Also, health emergencies or career advancement programmes can require taking some money out of our savings. In all, budgeting should be flexible enough to incorporate exigencies, especially when catering for the current situation will culminate into a greater good.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/195590/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/oluwabunmi-adejumo-1370664">Oluwabunmi Adejumo</a>, Lecturer/Researcher, <a href="https://theconversation.com/institutions/obafemi-awolowo-university-2843">Obafemi Awolowo University</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/five-tips-for-developing-and-managing-your-budget-even-in-tough-economic-times-195590">original article</a>.

Money & Banking

Is Valentine’s Day worth the romantic investment? Here’s what we can learn from economics

<a href="https://theconversation.com/profiles/selma-wather-1510222">Selma Wather</a>, <a href="https://theconversation.com/institutions/university-of-sussex-1218">University of Sussex</a> Expressing affection can be expensive. Spending on heart-shaped gifts, romantic cards, chocolates and flowers (other gifts are available) to celebrate Valentine’s Day has reached <a href="https://www.statista.com/statistics/510981/valentines-day-total-spending-great-britain/#:%7E:text=In%20the%20United%20Kingdom%20%28UK%29%20alone%2C%20Valentine%E2%80%99s%20Day,increased%20by%20just%20over%20300%20million%20British%20pounds.">close to £1 billion</a> in the UK. So the value of Valentine’s to retailers seems clear enough. But just how valuable is the annual ritual to consumers? What return can you expect for the money you invest in that bouquet of roses or candle lit meal? Broadly speaking, and depending on your relationship status, buying into Valentine’s Day traditions suggests two possible scenarios. You might be sending a card or gift to a potential partner to inform them of your interest; or you might be giving something to your current partner to remind them of your continuing love. Research suggests that both options have intrinsic economic value. For those seeking to express interest, sending a card is like dipping your toe into what economists might refer to as the “marriage market” – the search for someone you like, who likes what you have to offer in return. This search can happen smoothly, with plenty of information about your potential match, or it can be paved with obstacles, where you may not know much about who is available, and <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1703310">learning about potential partners</a> takes time. So suppose you are searching for a partner, and comprehensive information about potential matches is not freely available. What do you do? One option might be to put all your hopes into meeting someone on your daily journey to work. You pray that one day, just like in the movies, you will simply bump into “the one”. A second option might be to focus your search on single work colleagues, or people you know socially, and send Valentine’s Day cards to those you are attracted to. The option with the highest chance of success is the second one. You are using reliable information – knowledge of who is single. And sending a card to them can provide them with important information about you – that you’re also single, and that you’re interested. This is why research suggests that sending a Valentine’s Day card can be a <a href="https://www.jstor.org/stable/2938374?origin=crossref">logical investment</a> of time and money. <h2>‘Match quality’</h2> Fast forward five years or so and imagine you are happily married to the recipient of one of those cards. Is it worth repeating the gesture now that you’re settled down together? Economists think of marriages or partnerships as having an inherent “<a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1468-2354.2006.00385.x">match quality</a>”, which reflects how good (or bad) your relationship is – and the likelihood of you breaking up. If match quality falls below the level of happiness you might expect to have if you were to leave, a <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2759255">separation may well follow</a>. But many studies also show that <a href="https://www.jstor.org/stable/2535409">match quality is malleable</a> – that it can change, for better and indeed for worse, over time. You can invest in trying to improve match quality in various ways. It might be starting a family, sharing hobbies and interests, or gestures such as cooking a special meal or exchanging gifts on the 14th day of February. Improving your match quality <a href="https://www.researchgate.net/publication/228431914_How_Does_the_Change_of_Marriage_Quality_Affect_Divorce_Decisions">directly reduces the probability</a> of a separation. Then there’s the question of commitment – the willingness to stay in a relationship rather than walking away. And again, gestures can make a difference. Imagine you have just started a new job, and your employer asks you to complete an intensive training session in your free time, for a skill that would only be useful for that particular role. If you expect to hold the job for a long period, you might happily invest your time. But if your employer is struggling financially and redundancy is on the cards, you are much less likely to agree to perform the task. Relationships work in a similar way. People are more prepared to invest in things like having children or buying a house together if they expect the relationship to last. Given that commitment is not guaranteed by a marriage certificate, people <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=950688">need to find other ways</a> to signal their continued devotion. Celebrating Valentine’s Day is one way of making such a signal. It can show faith in your shared commitment, signify that you wish to continue investing in the relationship and improve match quality, further stabilising the partnership. So even if deep down you think that Valentine’s Day has become over commercialised and meaningless, research suggests it makes good economic sense to send that card.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/223128/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/selma-wather-1510222">Selma Wather</a>, Senior Lecturer in Economics, <a href="https://theconversation.com/institutions/university-of-sussex-1218">University of Sussex</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/is-valentines-day-worth-the-romantic-investment-heres-what-we-can-learn-from-economics-223128">original article</a>.

Money & Banking

Survey reveals over a third of us are neglecting our hearing

A survey conducted by hearing healthcare group Audika - and hosted by Decibel Research - has revealed the hard truth that Australians just aren’t keeping on top of their hearing. Research even found that for 88% percent of respondents - 1,020 individuals over the age of 40 - the thought of losing their eyesight was a bigger concern than losing their hearing. People had a whole host of reasons, but most circled back to the stigma that surrounds hearing loss - they feared that hearing aids would make them look older, or that they might be too uncomfortable, or even that they’re simply too expensive for the average person, despite 37% of those surveyed admitting that they would probably benefit from one. 34% - roughly one third of the participants - confessed that they probably do have difficulty hearing, but have never undergone testing or sought out any sort of treatment. Meanwhile, 61% admitted that the chances of them partaking in a hearing test in the following 12 months were slim to none. Even more concerning were the 51% - over half of those surveyed - said that they would put off wearing a hearing loss “as long as possible”, even to their own detriment. Their minds wouldn’t change even if they received a hearing loss diagnosis. And this is all despite 69% of those with hearing loss reporting that their lives had been negatively impacted, from 35% citing their personal relationships as the area of concern to 35% noting their social life in general, and 19% looking to their career. Those same respondents shared that they have experienced difficulty communicating and that others don’t always understand them, often withdrawn from various events, and have faced a lack of confidence in navigating social situations. None of which can have been helped by the jokes from loved ones that a quarter of them also reported. It is more important than ever to address these statistics, and to overcome the stigma that surrounds hearing loss, as the World Health Organisation has estimated that by 2050, 1 in every 4 people around the world will experience hearing loss of some degree. On top of this, it’s believed that up to one third of the world’s population may be both undiagnosed and consequently untreated. Luckily for us, preventative measures can be taken, and the first - and arguably most important step - is to take our hearing health seriously, and make the necessary changes that will benefit us in the long run. The importance of taking such measures cannot be stressed enough, from managing symptoms all the way to preventing other “serious health conditions”. As Audika’s Audiologist and Clinical Trainer Lauren McNee put it, “poor hearing, if untreated, is linked to a number of other health conditions including mental health challenges. “The results of the recent survey indicate that Aussies don’t seem to be aware of how common hearing loss can be. They also appear to be unaware of the serious daily impacts that are felt by people that are hard of hearing, and their loved ones. “Unfortunately, stigma surrounding hearing health is still prevalent across our society – yet more than half (51%) of the survey respondents said that they have a loved one that experiences it. “With greater understanding of the impacts of hearing loss and compassion for each other, we can work towards more open conversations around hearing loss and encourage those we care about to be more proactive with their hearing health.” To help Australians on their way towards a better hearing future, Audika are encouraging people over the age of 26 to head out, learn to ‘Love Your Ears’, and visit an Audika clinic for a free hearing check. And for those who’d prefer to do it from the comfort of home, you can head over to <a href="https://www.audika.com.au/online-hearing-test">Audika’s five-minute online hearing check</a>. For more information, visit <a href="https://www.audika.com.au/">Audika’s official website</a>. Images: Getty

Body

Why does my dog eat grass? And when is it not safe for them?

<a href="https://theconversation.com/profiles/susan-hazel-402495">Susan Hazel</a>, <a href="https://theconversation.com/institutions/university-of-adelaide-1119">University of Adelaide</a> and <a href="https://theconversation.com/profiles/joshua-zoanetti-1439474">Joshua Zoanetti</a>, <a href="https://theconversation.com/institutions/university-of-adelaide-1119">University of Adelaide</a> Have you ever wondered why your dog is eating your beautifully cropped lawn or nibbling at the grass at the dog park? Eating grass is a common behaviour in pet dogs. Some surveys show <a href="http://raw-feeding-prey-model.fr/wp-content/uploads/2019/03/WhydogogsandcatseatgrassGrassVetMed2008-2.pdf">up to 80%</a> of guardians notice their dog regularly snacking on the grass. Grass eating isn’t a new behaviour either, or only done by our new designer dog breeds. Studies in Yellowstone National Park show plant matter (mostly grass) is found in up to <a href="https://academic.oup.com/jn/article/136/7/1923S/4664711">74% of wolf scats</a>, suggesting the behaviour is possibly inherited from the beginning of doggy time. <figure class="align-center zoomable"><a href="https://images.theconversation.com/files/529490/original/file-20230601-21796-wl09tw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/529490/original/file-20230601-21796-wl09tw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/529490/original/file-20230601-21796-wl09tw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=390&fit=crop&dpr=1 600w, https://images.theconversation.com/files/529490/original/file-20230601-21796-wl09tw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=390&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/529490/original/file-20230601-21796-wl09tw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=390&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/529490/original/file-20230601-21796-wl09tw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=490&fit=crop&dpr=1 754w, https://images.theconversation.com/files/529490/original/file-20230601-21796-wl09tw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=490&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/529490/original/file-20230601-21796-wl09tw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=490&fit=crop&dpr=3 2262w" alt="" /></a><figcaption></figcaption></figure> <h2>So why does my dog eat the grass?</h2> A lot of people think dogs eat grass when they have a sore stomach, believing grass causes dogs to vomit. This is probably not the case; a study with <a href="https://www.une.edu.au/__data/assets/pdf_file/0019/32446/bjone-brown-price-grass-eating20patterns-raan-2007.pdf">12 dogs that ate grass daily</a> found there were few vomiting episodes and the ones that did occur came after the dog had eaten a meal. And if a dog has a mild gastrointestinal disturbance because of something they’ve been fed, they are in fact <a href="https://www.sciencedirect.com/science/article/abs/pii/S0168159109003311">less likely</a> to eat grass than if they are fed a normal diet. Other theories include that dogs eat grass because they want a laxative or that it provides roughage in their diet (get that fibre!). Like the vomiting discussed above, there is little to no scientific proof for most of these theories. For example, in the study of <a href="https://www.une.edu.au/__data/assets/pdf_file/0019/32446/bjone-brown-price-grass-eating20patterns-raan-2007.pdf">12 dogs mentioned above</a>, all of them were wormed and had no previous digestive problems. Yet all 12 still happily ate grass (709 times). Their main finding was that when the dog had not yet had their daily meal, they were more likely to eat grass. In short, the hungrier the dog, the more likely they were to eat some grass. The answer to why your dog eats grass may simply be: because they like to. Your dog may be bored, and chewing on grass is something to do. Maybe your dog just enjoys eating grass. Ripping grass from the ground can be satisfying. The texture and taste of grass offers something different to what they usually eat. You may even notice they prefer grass in certain seasons; perhaps fresh spring grass a favourite delicacy. <figure class="align-center zoomable"><a href="https://images.theconversation.com/files/529491/original/file-20230601-23190-7g4mhp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/529491/original/file-20230601-23190-7g4mhp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/529491/original/file-20230601-23190-7g4mhp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/529491/original/file-20230601-23190-7g4mhp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/529491/original/file-20230601-23190-7g4mhp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/529491/original/file-20230601-23190-7g4mhp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/529491/original/file-20230601-23190-7g4mhp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/529491/original/file-20230601-23190-7g4mhp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" alt="" /></a><figcaption></figcaption></figure> <h2>Is there any reason why you shouldn’t let your dog eat grass?</h2> Well, yes, there are several. Firstly, you may not want your dog eating your neighbour’s immaculately presented fancy Kikuyu lawn. More importantly, though, grass is sometimes treated with herbicides. Grass at the local oval or parkland may have been treated or sprayed. Some local councils use a non-hazardous dye to show where grass has been sprayed with <a href="https://www.yassvalleytimes.com.au/general-news/council-to-use-marker-dye-when-spraying-weeds/">herbicide</a>, which is very helpful. Lawn chemicals are frequently detected in lawn for up to 48 hours after they’re applied, and have also been detected in the urine of dogs with <a href="https://www.sciencedirect.com/science/article/abs/pii/S0048969713003100?via%3Dihub">access to grass</a> treated this way. Research has suggested there may be a <a href="https://avmajournals.avma.org/view/journals/javma/224/8/javma.2004.224.1290.xml">link</a> between bladder cancer in dogs and exposure to herbicides. In fact, dogs may even act as sentinels; the same chemical exposures appear in the urine of dogs and people <a href="https://www.cambridge.org/core/journals/journal-of-clinical-and-translational-science/article/environmental-chemical-exposures-in-the-urine-of-dogs-and-people-sharing-the-same-households/C3F9330A4AA7723FE78CE5D492071F55">sharing the same environment</a>. <figure class="align-center zoomable"><a href="https://images.theconversation.com/files/529492/original/file-20230601-22271-5juhsh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/529492/original/file-20230601-22271-5juhsh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/529492/original/file-20230601-22271-5juhsh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/529492/original/file-20230601-22271-5juhsh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/529492/original/file-20230601-22271-5juhsh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/529492/original/file-20230601-22271-5juhsh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/529492/original/file-20230601-22271-5juhsh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/529492/original/file-20230601-22271-5juhsh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" alt="" /></a><figcaption></figcaption></figure> If you are using herbicides on your own grass, remove your dog, their toys, food and water bowls from the area prior to any application. Make sure the pesticide has completely dried out before you allow the dog back in the area, and be certain to check the packaging for the appropriate drying time period. This is particularly the case for granular pesticides or fertilisers that soak into the soil, as these can require up to 24 hours or longer. If you want to reduce the risk even further, hand weeding may be a <a href="https://www.cnet.com/home/kitchen-and-household/is-weed-killer-safe-for-pets-what-to-know/">better option</a>. Apart from grass, many leaves, flowers and berries from common plants can be toxic to your dog. <a href="https://www.aspca.org/pet-care/animal-poison-control/toxic-and-non-toxic-plants/o?&">This includes</a> plants such as oleander and arum lily; even oregano and bay leaves can cause vomiting and diarrhoea in dogs. One of the best things you can do for your dog is take them for a walk. And if they eat some grass along the way, provided it has not been sprayed with herbicide, you have nothing to worry about. Don’t worry if they occasionally vomit. If there is more serious vomiting or diarrhoea, however, please consult your vet.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/205658/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> Image credit: Shutterstock <a href="https://theconversation.com/profiles/susan-hazel-402495">Susan Hazel</a>, Associate Professor, School of Animal and Veterinary Science, <a href="https://theconversation.com/institutions/university-of-adelaide-1119">University of Adelaide</a> and <a href="https://theconversation.com/profiles/joshua-zoanetti-1439474">Joshua Zoanetti</a>, PhD candidate in Veterinary Bioscience, <a href="https://theconversation.com/institutions/university-of-adelaide-1119">University of Adelaide</a> This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/why-does-my-dog-eat-grass-and-when-is-it-not-safe-for-them-205658">original article</a>.

Family & Pets

Bizarre, "distressing" survey given to new mums in hospital

A survey sent to Queensland mothers who had recently given birth at a Brisbane hospital has been slammed for its inappropriate and “distressing” questions. Some of the questions asked mothers to rate their own behaviour during labour and if they had any fantasies of their newborns facing harm. Two surveys went out to mothers who had given birth at the Mater hospital in Brisbane, one prior to the birth and one six weeks afterwards. One question asked mothers to rate their experience, including “what happened when labour was most intense”, where they were given a scale of “I behaved extremely badly” to “I did not behave badly at all”. Another question asked, “Had you, during the labour and delivery, had any fantasies that your child would die during labour/delivery?” where mothers could respond between “never” and “very often”. In the surveys sent to mothers prior to delivery, they were asked to rate how they expected they’d behave during pregnancy. The survey was part of the CERPA study and asked several questions. The study explores the “CErebro Placental RAtio as (an) indicator for delivery following perception of reduced fetal movements”, according to an online entry. The survey questions were originally written in Swedish and were translated to English. A potential mistranslation has copped the blame for why the questions were so alarming. “Mater recognises the English translation in some questions is unsuitable and regrets that this may have caused distress to respondents,” a spokesperson for Mater Hospital said. One mother, Toni-Ann Drury, visited the Mater hospital toward the end of her pregnancy after she moved to Queensland. She received a call from the hospital soon after visiting, where they asked her to answer questions via email. “I had no idea that it was as part of a research program or anything like that,” she explained. They informed her during the call she should expect more questions thrown her way six months after giving birth. Drury described that the questions in both surveys were “distressing”. “How do women behave badly during labour?" she said. “I don’t think that labour and birth should be put in the same sentence as behaving badly. “Women go through extreme pain and body changes and all that sort of stuff, so I don’t think that any woman should associate the way that they responded to pain with behaviour. “The other questions were quite distressing in nature and the wording that was used.” Drury added that the mistranslation explanation is not a good enough reason. “I think Mater Hospital, as fantastic as they are, have a responsibility to the women that they’re providing services to,” she said. “To protect them from the stuff that they are delivering, ultimately, because their name is on that email that is going out.” The Maternity Consumer Network described the questions on the survey as “some of the worst, paternalistic, misogynistic, thoughtless BS we’ve ever seen asked of women”. Image credit: Shutterstock

Caring

20 years of tracking sexual harassment at work shows little improvement. But that could be about to change

The fifth national survey on sexual harassment in Australian workplaces shows little has changed since the last survey in 2018 – or indeed since the first survey in 2003. It points to the importance of the legislative changes being pursued by the Albanese government, including reforms that passed parliament on Monday. The <a href="https://humanrights.gov.au/time-for-respect-2022" target="_blank" rel="noopener">survey of 10,000 Australians</a> was commissioned by the Australian Human Rights Commission and conducted by Roy Morgan Research in August and September. It shows 33% of workers were sexually harassed at work in the previous five years – 41% of women and 26% of men. This compares with 39% of women and 26% of men <a href="https://humanrights.gov.au/sites/default/files/document/publication/AHRC_WORKPLACE_SH_2018.pdf" target="_blank" rel="noopener">in 2018</a>, and with 15% of women and 6% of men <a href="https://humanrights.gov.au/our-work/sexual-harassment-workplace-key-findings-overview" target="_blank" rel="noopener">in 2003</a> (though these results cannot be easily compared with the latest figures due to changes in survey methodology). The most common form of sexually harassment were: <ul> <li>comments or jokes (40% of women, 14% of men)</li> <li>intrusive questions about one’s private life or appearance (32% of women, 14% of men)</li> <li>inappropriate staring (30% of women, 8% of men)</li> <li>unwelcome touching, hugging, cornering or kissing (28% of women, 10% of men)</li> <li>inappropriate physical contact (26% of women, 11% of men).</li> </ul> Men were responsible for 91% of harassment of women, and 55% of harassment of men. Most of those harassed said their harasser also sexually harassed another employee. Just 18% formally reported the harassment. Of those, only 28% said the harassment stopped as a result, while 24% said their harasser faced no consequences. <h2>Slow work on reforms</h2> These results highlight the importance of the reforms now being made by the Albanese government, implementing the recommendations of the Australian Human Rights Commission’s 2020 <a href="https://humanrights.gov.au/our-work/sex-discrimination/publications/respectwork-sexual-harassment-national-inquiry-report-2020" target="_blank" rel="noopener">Respect@Work</a> report. That report made 55 recommendations. The Morrison government acted on just a handful. It amended <a href="https://www.fairwork.gov.au/about-us-legislation-fair-work-system/respect-work-reforms" target="_blank" rel="noopener">the Fair Work Act</a> to enable individuals to apply to the Fair Work Commission for a “stop sexual harassment” order, and to make it clear sexual harassment is grounds for dismissal. But it ignored the key recommendation: placing a positive duty on employers to prevent sexual harassment, requiring them to treat harassment like other work health and safety issues. This was needed, the report argued, because treating sexual harassment as being about aberrant individuals led to a workplace focus on individual complaints. It did little to change structural drivers of such behaviour. <h2>Albanese government commitments</h2> On Monday, the Albanese government finally made this pivotal reform, when parliament <a href="https://humanrights.gov.au/about/news/media-releases/passage-respectwork-bill-major-step-preventing-harassment" target="_blank" rel="noopener">passed its Respect@Work bill</a>. It is now no longer enough for employers to have a policy and act on complaints. They must also take reasonable and proportionate measures to eliminate sex discrimination, sexual harassment and victimisation. The government has committed to implementing all 55 recommendations. The Respect@Work bill implements seven. Others should be achieved with the omnibus industrial relations bill now before the Senate. Improving the conditions and bargaining power of those in insecure and low-paid work, and reducing gender inequalities, should lessen the vulnerabilities that enable harassment to flourish. <h2>Ratifying the ILO convention</h2> Last week Prime Minister Anthony Albanese also <a href="https://www.pm.gov.au/media/address-international-trade-union-confederation" target="_blank" rel="noopener">committed</a> to ratifying the International Labor Organisation’s convention on <a href="https://www.ilo.org/global/topics/violence-harassment/lang--en/index.htm" target="_blank" rel="noopener">Eliminating Violence and Harassment in the World of Work</a>. So far, <a href="https://www.ilo.org/dyn/normlex/en/f?p=1000:11300:0::NO:11300:P11300_INSTRUMENT_ID:3999810" target="_blank" rel="noopener">22 nations</a> have ratified the treaty. Ratification will oblige Australia to align its laws and regulations with the treaty’s provisions. This is significant not just because the convention is the first international treaty to enshrine the right to work free from violence and harassment as its focus. It also breaks with the historical framing of sexual harassment as an individual interpersonal conflict. The convention calls for an integrated approach to eliminating workplace violence and harassment. In Australia’s case, this will require developing approaches that break down the policy and regulatory fences between anti-discrimination measures, and those covering workplace rights and work health and safety. This could prove challenging – with sexual harassment being only one form of gender-based violence. But implementing all 55 recommendations of the Respect@Work report is a good start. Hopefully the sixth national workplace survey will have a better story to tell. This story originally appeared on <a href="https://theconversation.com/20-years-of-tracking-sexual-harassment-at-work-shows-little-improvement-but-that-could-be-about-to-change-195554" target="_blank" rel="noopener">The Conversation</a>. Image: Shutterstock

Legal

Nobel economics prize: insights into financial contagion changed how central banks react during a crisis

This year’s <a href="https://www.nobelprize.org/prizes/economic-sciences/2022/prize-announcement/" target="_blank" rel="noopener">Nobel prize in economics</a>, known as the Sveriges Riksbank Prize in Economic Sciences, has gone to Douglas Diamond, Philip Dybvig and former Federal Reserve Chair Ben Bernanke for their work on banks and how they relate to financial crises. To explain the work and why it matters, we talked to Elena Carletti, a Professor of Finance at Bocconi University in Milan. Why have Diamond, Bernanke and Dybvig been awarded the prize? The works by <a href="https://www.nobelprize.org/uploads/2022/10/popular-economicsciencesprize2022.pdf" target="_blank" rel="noopener">Diamond and Dybvig</a> essentially explained why banks exist and the role they play in the economy by channelling savings from individuals into productive investments. Essentially, banks play two roles. On the one hand, they monitor borrowers within the economy. On the other, they provide liquidity to individuals, who don’t know what they will need to buy in future, and this can make them averse to depositing money in case it’s not available when they need it. Banks smooth out this aversion by providing us with the assurance that we will be able to take out our money when it’s required. The problem is that by providing this assurance, banks are also vulnerable to crises even at times when their finances are healthy. This occurs when individual depositors worry that many other depositors are removing their money from the bank. This then gives them an incentive to remove money themselves, which can lead to a panic that causes a bank run. Ben Bernanke fed into this by looking at bank behaviour during the great depression of the 1930s, and showed that bank runs during the depression was the decisive factor in making the crisis longer and deeper than it otherwise would have been. The observations behind the Nobel win seem fairly straightforward compared to previous years. Why are they so important? It’s the idea that banks that are otherwise financially sound can nevertheless be vulnerable because of panicking depositors. Or, in cases such as during the global financial crisis of 2007-09, it can be a combination of the two, where there is a problem with a bank’s fundamentals but it is exacerbated by panic. Having recognised the intrinsic vulnerability of healthy banks, it was then possible to start thinking about policies to alleviate that risk, such as depositor insurance and reassuring everyone that the central bank will step in as the lender of last resort. In a bank run caused by liquidity (panic) rather than insolvency, an announcement from the government or central bank is likely to be enough to solve the problem on its own – often without the need for any deposit insurance even being paid out. On the other hand, in a banking crisis caused by insolvency, that’s when you need to pump in money to rescue the institution. What was the consensus about bank runs before Diamond and Dybvig began publishing their work? There had been a lot of bank runs in the past and it was understood that financial crises were linked to them – particularly before the US Federal Reserve was founded in 1913. It was understood that bank runs made financial crises longer by exacerbating them. But the mechanism causing the bank runs wasn’t well understood. <figure class="align-center zoomable"><a href="https://images.theconversation.com/files/489027/original/file-20221010-11-on0vn4.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/489027/original/file-20221010-11-on0vn4.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/489027/original/file-20221010-11-on0vn4.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=405&fit=crop&dpr=1 600w, https://images.theconversation.com/files/489027/original/file-20221010-11-on0vn4.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=405&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/489027/original/file-20221010-11-on0vn4.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=405&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/489027/original/file-20221010-11-on0vn4.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=509&fit=crop&dpr=1 754w, https://images.theconversation.com/files/489027/original/file-20221010-11-on0vn4.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=509&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/489027/original/file-20221010-11-on0vn4.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=509&fit=crop&dpr=3 2262w" alt="Police controlling an angry crowd during a Paris bank in 1904" /></a><figcaption>A bank run in Paris in 1904. <a class="source" href="https://www.shutterstock.com/image-illustration/paris-police-hold-back-crowd-making-242294071" target="_blank" rel="noopener">Everett Collection</a></figcaption></figure> How easy is it to tell what kind of bank run you are dealing with? It’s not always easy. For example, in 2008 in Ireland it was thought to be a classic example of bank runs caused by liquidity fears. The state stepped up to give a blanket guarantee to creditors, but it then became apparent that the banks were really insolvent and the government had to inject enormous amounts of money into them, which led to a sovereign debt crisis. Speaking of sovereign debt crises, the work by Diamond and Dybvig also underpins the literature on financial contagion, which is based on a <a href="https://www.jstor.org/stable/10.1086/262109" target="_blank" rel="noopener">2000 paper</a> by Franklin Allen and Douglas Gale. I worked with Allen and Gale for many years, and all our papers have been based on the work of Diamond, and Diamond and Dybvig. In a similar way to how state reassurances can defuse a bank run caused by liquidity problems, we saw how the then European Central Bank President Mario Draghi was able to defuse the run on government bonds in the eurozone crisis in 2011 by saying that the bank would do “<a href="https://qz.com/1038954/whatever-it-takes-five-years-ago-today-mario-draghi-saved-the-euro-with-a-momentous-speech/" target="_blank" rel="noopener">whatever it takes</a>” to preserve the euro. <figure><iframe src="https://www.youtube.com/embed/tB2CM2ngpQg?wmode=transparent&start=0" width="440" height="260" frameborder="0" allowfullscreen="allowfullscreen"></iframe></figure> The prize announcement has attracted plenty of people on social media saying we shouldn’t be celebrating Bernanke when he was so involved in the quantitative easing (QE) that has helped to cause today’s global financial problems – what’s your view? I would say that without QE our problems would today be much worse, but also that the prize recognises his achievements as an academic and not as chair of the Fed. Also, Bernanke was only one of the numerous central bankers who resorted to QE after 2008. And it is not only the central bank actions that make banks stable. It’s also worth pointing out that the changes to the rules around the amount of capital that banks have to hold after 2008 have made the financial system much better protected against bank runs than it was beforehand. Should such rules have been introduced when the academics first explained the risks around bank runs and contagion? The literature had certainly hinted at these risks, but regulation-wise, we had to wait until after the global financial crisis to see <a href="https://www.ecb.europa.eu/pub/pdf/fsr/art/ecb.fsrart201405_03.en.pdf" target="_blank" rel="noopener">reforms such as</a> macro-prudential regulation and more stringent micro-prudential regulation. This shows that regulators were underestimating the risk of financial crises, perhaps also pushed by the banking lobbies that had been traditionally very powerful and managed to convince regulators that risks were well managed. If retail banks become less important in future because of blockchain technology or central bank digital currencies, do you think the threat of financial panic will reduce? If we are heading for a situation where depositors put their money into central banks rather than retail banks, that would diminish the role of retail banking, but I think we are far from that. Central bank digital currencies can be designed in such a way that retail banks are still necessary. But either way, the insights from Diamond and Dybvig about liquidity panics are still relevant because they apply to any context where coordination failures among investors are important, such as sovereign debt crises, currency attacks and so on.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/192208/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> Written by Elena Carletti. Republished with permission of <a href="https://theconversation.com/nobel-economics-prize-insights-into-financial-contagion-changed-how-central-banks-react-during-a-crisis-192208" target="_blank" rel="noopener">The Conversation</a>. Image: The Nobel Foundation

Money & Banking

What’s taking the biggest toll on our mental health?

The new Labor government arrives at a time of mounting mental health strain: Australians have endured COVID, extreme weather events and financial stress from increased living costs. The new government has a lot to fix in the mental health system but policy priorities should be guided by the voices of Australians. To learn more about the nation’s priority mental health concerns, our <a href="https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0268824" target="_blank" rel="noopener">new research</a> surveyed more than 1,000 adults aged 18 to 85 across the nation. Without being prompted, participants consistently highlighted three major issues: the mental health service system, financial stress, and social disconnection. A strained mental health system The COVID pandemic added pressure to an already <a href="https://www.pc.gov.au/news-media/speeches/mental-health" target="_blank" rel="noopener">strained mental health-care system</a>. Countless Australians – many experiencing mental ill-health for the first time – were left without appropriate support. Participants described overwhelming barriers to accessing treatment, including high costs, wait-lists and inaccessibility: <blockquote> The out of pocket expense makes receiving regular, effective psychological treatment prohibitive, especially as a single parent. – female, late 30s, NSW When people are in crisis, they need the help at that time. Not six months down the track when an opening finally becomes available at the counselling centre. – non-binary person, early 70s, Tasmania </blockquote> Financial stress Respondents shared how the pandemic “pressurised” other mental health triggers, like financial stress, as JobKeeper and the Coronavirus Supplement were wound back and cost of living increased. A NSW woman in her late-20s living with a disability shared that prior to receiving the Coronavirus Supplement: “I felt it would be better to kill myself than try and make it work”, but with the supplement, “For the first time in years money wasn’t so tight.” The removal of the supplement was described by another as: <blockquote> crushing and damaging to your mental health – female, late 20s, Tasmania </blockquote> The low payment amount after the supplement was removed was not seen as “sufficient income to live a ‘reasonable life’”. <figure class="align-center "><img src="https://images.theconversation.com/files/467066/original/file-20220606-58478-ztwpxb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/467066/original/file-20220606-58478-ztwpxb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/467066/original/file-20220606-58478-ztwpxb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/467066/original/file-20220606-58478-ztwpxb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/467066/original/file-20220606-58478-ztwpxb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/467066/original/file-20220606-58478-ztwpxb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/467066/original/file-20220606-58478-ztwpxb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" alt="Person wringing their hands" /><figcaption>Cost of living pressures have had a significant impact on Australians’ mental health. <a class="source" href="https://unsplash.com/photos/qbTC7ZwJB64" target="_blank" rel="noopener">Unsplash/Ümit Bulut</a></figcaption></figure> Together, the stress of low incomes and the return of demanding mutual obligation requirements for JobSeeker (the <a href="https://www.acoss.org.au/media_release/acoss-analysis-shows-mutual-obligation-requirements-are-causing-harm/" target="_blank" rel="noopener">often-unrealistic</a> set of job-related tasks which recipients must undertake to keep receiving payments) worsened some peoples’ mental health, making recovery difficult. <blockquote> The social welfare system isn’t equipped to support those of us who struggle to work because of mental health issues. I cry every day at my full-time job and would like to focus on recovery, but the tiny rate of Centrelink payments means I keep struggling through – female, early 30s, Victoria </blockquote> With increasing living costs, a NSW man in his late 20s reported “stressing about having money to make ends meet […] the cost of food going up, and not having money to heat my home in winter”. He described making difficult financial decisions like choosing to “not eat” in favour of “making sure my dog is fed”. Many spoke of financial stress in relation to housing as a key priority for their mental health, particularly “unaffordable housing prices” (female, early 30s, NSW) and “prohibitive rent” (female, late 60s, Victoria). Social disconnection Many described a lack of social and community connection as a mental health priority, perhaps unsurprising with COVID lockdowns and strict border controls. Some felt this was linked to a lack of physical spaces for socialising: <blockquote> We need facilities for people and communities to socialise in a healthy environment. Get rid of the poker machines and make pubs a place where people can openly socialise again – male, late 40s, NSW </blockquote> Others sensed a broader cultural shift away from valuing community: <blockquote> We need supportive communities […] We are too ‘private’ don’t share our troubles, don’t ask for help – female, late 40s, NSW [S]ociety has become very individually focused and less about support – male, late 40s, Victoria. </blockquote> Building resilience The voices of diverse Australians included in <a href="https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0268824" target="_blank" rel="noopener">our study</a> provide clear guidance for the government to build a more resilient and mentally healthy future. Labor’s election promise to re-instate the <a href="https://www.alp.org.au/policies/regional-mental-telehealth-services" target="_blank" rel="noopener">telepsychiatry Medicare item</a> in regional and rural areas is important, but the government must address other pressing service issues, including long wait-times and high costs. The government also needs to address the causes of mental ill-health, such as financial insecurity and social disconnection. While Labor has promised to tackle <a href="https://www.alp.org.au/policies/secure-australian-jobs-plan" target="_blank" rel="noopener">job security</a> and <a href="https://www.alp.org.au/policies/safer-and-more-affordable-housing" target="_blank" rel="noopener">housing affordability</a>, it didn’t back an increase to income support benefits. This should be revisited. In 2021, <a href="https://alp.org.au/media/2594/2021-alp-national-platform-final-endorsed-platform.pdf" target="_blank" rel="noopener">Labor</a> committed to addressing loneliness and social isolation, although no related election promises were made. Doing so would require changes outside the “health” portfolio. We need a whole-of-government <a href="https://mentalhealththinktank.org.au/wp-content/uploads/2022/04/BuildingMentallyHealthyFutures_YouthRecoveryPlan.pdf" target="_blank" rel="noopener">social and emotional well-being lens</a> on all federal policies. Finally, our study highlighted that drivers of poor mental health are further strained in disaster settings, such as pandemics or extreme weather events. As the Labor government develops its <a href="https://www.alp.org.au/policies/disaster-readiness" target="_blank" rel="noopener">disaster readiness plan</a>, mental health impacts – in addition to economic and infrastructure impacts – must be a key consideration. If this article has raised issues for you, or if you’re concerned about someone you know, call Lifeline on 13 11 14.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/184148/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/marlee-bower-1000885" target="_blank" rel="noopener">Marlee Bower</a>, Research Fellow, Matilda Centre for Research in Mental Health and Substance Use, <a href="https://theconversation.com/institutions/university-of-sydney-841" target="_blank" rel="noopener">University of Sydney</a>; <a href="https://theconversation.com/profiles/maree-teesson-1274573" target="_blank" rel="noopener">Maree Teesson</a>, Professor & Director of The Matilda Centre. Chair, Australia's Mental Health Think Tank, <a href="https://theconversation.com/institutions/university-of-sydney-841" target="_blank" rel="noopener">University of Sydney</a>, and <a href="https://theconversation.com/profiles/scarlett-smout-1350860" target="_blank" rel="noopener">Scarlett Smout</a>, PhD Candidate and Research Program Officer at The Matilda Centre for Research in Mental Health & Substance Use and Australia's Mental Health Think Tank, <a href="https://theconversation.com/institutions/university-of-sydney-841" target="_blank" rel="noopener">University of Sydney</a> This article is republished from <a href="https://theconversation.com" target="_blank" rel="noopener">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/whats-taking-the-biggest-toll-on-our-mental-health-disconnection-financial-stress-and-long-waits-for-care-184148" target="_blank" rel="noopener">original article</a>. Image: Getty Images

Mind

Canberra takes out bronze in worldwide healthy city rankings

The world’s healthiest cities have been crowned for 2022, with Australia’s capital claiming bronze. A <a href="https://www.money.co.uk/mortgages/healthiest-places" target="_blank" rel="noopener">new study</a> from Money.co.uk has ranked Canberra in third place, two places higher than last year’s rankings. <blockquote class="instagram-media" style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" data-instgrm-captioned="" data-instgrm-permalink="https://www.instagram.com/p/CaOaNydoLR5/?utm_source=ig_embed&utm_campaign=loading" data-instgrm-version="14"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"> </div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"> </div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"> </div> </div> </div> <div style="padding: 19% 0;"> </div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"> </div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <div style="padding: 12.5% 0;"> </div> <div style="display: flex; flex-direction: row; margin-bottom: 14px; align-items: center;"> <div> <div style="background-color: #f4f4f4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(0px) translateY(7px);"> </div> <div style="background-color: #f4f4f4; height: 12.5px; transform: rotate(-45deg) translateX(3px) translateY(1px); width: 12.5px; flex-grow: 0; margin-right: 14px; margin-left: 2px;"> </div> <div style="background-color: #f4f4f4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(9px) translateY(-18px);"> </div> </div> <div style="margin-left: 8px;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 20px; width: 20px;"> </div> <div style="width: 0; height: 0; border-top: 2px solid transparent; border-left: 6px solid #f4f4f4; border-bottom: 2px solid transparent; transform: translateX(16px) translateY(-4px) rotate(30deg);"> </div> </div> <div style="margin-left: auto;"> <div style="width: 0px; border-top: 8px solid #F4F4F4; border-right: 8px solid transparent; transform: translateY(16px);"> </div> <div style="background-color: #f4f4f4; flex-grow: 0; height: 12px; width: 16px; transform: translateY(-4px);"> </div> <div style="width: 0; height: 0; border-top: 8px solid #F4F4F4; border-left: 8px solid transparent; transform: translateY(-4px) translateX(8px);"> </div> </div> </div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center; margin-bottom: 24px;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 224px;"> </div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 144px;"> </div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" href="https://www.instagram.com/p/CaOaNydoLR5/?utm_source=ig_embed&utm_campaign=loading" target="_blank" rel="noopener">A post shared by Visit Canberra (@visitcanberra)</a> </div> </blockquote> The study analysed a range of factors, including obesity levels, life expectancy, air pollution, the number of sunlight hours, and safety, along with some related to the pandemic such as healthcare accessibility and the number of healthcare professionals in each country. Though the study ranked Japan as the healthiest country to live in, the top two healthiest cities were both in Spain, with Valencia retaining the top position for another year. Australia also cracked the healthiest countries list, coming in 16th place. <blockquote class="instagram-media" style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" data-instgrm-captioned="" data-instgrm-permalink="https://www.instagram.com/p/Cagbx_5qF8I/?utm_source=ig_embed&utm_campaign=loading" data-instgrm-version="14"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"> </div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"> </div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"> </div> </div> </div> <div style="padding: 19% 0;"> </div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"> </div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <div style="padding: 12.5% 0;"> </div> <div style="display: flex; flex-direction: row; margin-bottom: 14px; align-items: center;"> <div> <div style="background-color: #f4f4f4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(0px) translateY(7px);"> </div> <div style="background-color: #f4f4f4; height: 12.5px; transform: rotate(-45deg) translateX(3px) translateY(1px); width: 12.5px; flex-grow: 0; margin-right: 14px; margin-left: 2px;"> </div> <div style="background-color: #f4f4f4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(9px) translateY(-18px);"> </div> </div> <div style="margin-left: 8px;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 20px; width: 20px;"> </div> <div style="width: 0; height: 0; border-top: 2px solid transparent; border-left: 6px solid #f4f4f4; border-bottom: 2px solid transparent; transform: translateX(16px) translateY(-4px) rotate(30deg);"> </div> </div> <div style="margin-left: auto;"> <div style="width: 0px; border-top: 8px solid #F4F4F4; border-right: 8px solid transparent; transform: translateY(16px);"> </div> <div style="background-color: #f4f4f4; flex-grow: 0; height: 12px; width: 16px; transform: translateY(-4px);"> </div> <div style="width: 0; height: 0; border-top: 8px solid #F4F4F4; border-left: 8px solid transparent; transform: translateY(-4px) translateX(8px);"> </div> </div> </div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center; margin-bottom: 24px;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 224px;"> </div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 144px;"> </div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" href="https://www.instagram.com/p/Cagbx_5qF8I/?utm_source=ig_embed&utm_campaign=loading" target="_blank" rel="noopener">A post shared by Visit Canberra (@visitcanberra)</a> </div> </blockquote> According to the study, Canberra significantly improved from 2021 to 2022. It is one of the safest cities in the world, has a high average life expectancy at 82.9 years, and experiences a whopping 2,813.7 hours of sunlight each year. In fact, the capital city ranked second when it came to cities with the cleanest air, followed by Wellington. Other Australian cities that made the list include Adelaide in 9th place and Brisbane in 16th place. Image: @visitcanberra (Instagram)

Domestic Travel

Ukraine war: what history tells us about the effectiveness of sanctions

The west has responded to the invasion of Ukraine by <a href="https://theconversation.com/ukraine-sanctions-can-still-make-a-difference-but-only-if-done-right-177783">imposing economic sanctions on Russia</a>. There has been plenty of discussion about whether economic sanctions are an appropriate response, what they hope to achieve and what the results will be – not only for Russia but for the world. Economic sanctions have been used as a tool of war for centuries. In 17th- and 18th-century Europe, when warfare was widespread, economic sanctions were frequently implemented. They included prohibitions on trade, the closure of ports against belligerent enemies, and bans on trade in certain commodities. Economic exchange was affected in more indirect ways, too, by increased privateering and piracy at sea, high taxes, and conscription. The economic consequences of war were felt not only by governments, but by merchants, manufacturers, consumers and wider society, as business and daily life were thrown into chaos. When Britain and France were at war during the Nine Years’ War (1688-97) and the War of the Spanish Succession (1702-13), both sides imposed economic sanctions on the other. England entered the <a href="https://www.nam.ac.uk/explore/nine-years-war">Nine Years’ War</a> by declaring war on France on May 17, 1689, in response to Europe-wide concerns that France – and its absolutist monarch Louis XIV – was growing too strong. In its declaration of war, parliament authorised officials to “arrest all ships and vessels conveying any goods or merchandise in them belonging to the French King or to his subjects and inhabitants”. When Scotland followed suit on August 6, the declaration of war forbade any Scottish subjects “to trade or correspond … with the said French king or any of his subjects”. France and Britain again found themselves on opposing sides during the <a href="https://www.nam.ac.uk/explore/Spanish-succession">War of the Spanish Succession</a>, a conflict fought over the disputed succession to Spain’s vacant throne and control over that country’s vast global territories. Similar economic sanctions were imposed. In January 1701, the Scottish parliament embargoed “the importation of all French wines, Brandy and other strong waters and vinegar made in France from any place”. The potential for broader ramifications are clear – not only would this harm France, but economic consequences would be felt by any nation doing business in French produce. There were social consequences, too, for anyone who enjoyed drinking French wine. This resonates with current fears over the price of oil. As prices soar as a <a href="https://www.bbc.co.uk/news/business-52188448">direct result of the Ukraine conflict</a> and <a href="https://www.bbc.co.uk/news/world-us-canada-60666251">global bans</a> on Russian oil imports, it is feared that prices of crude oil could <a href="https://oilprice.com/Latest-Energy-News/World-News/Russia-Says-Energy-Embargo-Could-Send-Oil-Prices-Over-300.html">rise as high as US$300 (£228) a barrel</a>. Just like in 1701, this economic sanction does not only harm the nation against whom it is aimed, but has consequences across the globe. <h2>Turning a blind eye</h2> But these early-modern sanctions met with mixed success. Individual merchants used a variety of tactics to circumvent them, including sailing in neutral ships or carrying falsified documents, as well as entering goods through different ports. In addition, governments on both sides of the channel were complicit in permitting activities that undermined economic sanctions. In 1692, three years into the Nine Years’ War, the Scottish privy council issued six passes for ships to travel to Bordeaux on a commercial venture. Again, in May 1693, Scots were allowed to trade with and travel to France with “express leave” of the monarch or privy council of Scotland. French admirals, too, ignored their own sanctions, granting passes for British ships to trade in La Rochelle and Bordeaux throughout the Nine Years’ War. Similar patterns emerged during the War of the Spanish Succession. The British monarch, Queen Anne, earned herself a reputation for granting passes that allowed trade with France to continue despite wartime embargoes. And in 1702 the English treasury reported that French wine was being brought over from the Spanish port of St Sebastian: “It was taken there from Bordeaux, a Spanish name given to it, and reshipped in Spanish casks”. There was also widespread bribery of port officials. In 1703, <a href="https://www.british-history.ac.uk/cal-treasury-papers/vol3/pp99-127">the English treasury noted that</a>: "This management seemed to be carried on in concert between the consuls in foreign parts and some officers in the Customs … who for private gratuities undertook for and passed such wines as were of the growth of Spain. " In 1704, in England, the House of Lords <a href="https://www.google.co.uk/books/edition/The_Wine_Trade/4QONQgAACAAJ?hl=en">undertook an enquiry</a> that found that 15 ships in Bordeaux, mostly from the West Country, had loaded French brandies and wines. The resulting report stated that the government discouraged informers and was inclined to hush the matter up rather than pursue the offenders. The stringent economic sanctions imposed during these early-modern conflicts were not consistently upheld, even as bold public statements were made about the strength of enmity. The importance of international economic relationships meant that trade had to be allowed to continue, and governments needed to reconcile their political aims with economic necessity. Early-modern economies were interdependent, so it was in nobody’s interests to destroy established trading routes, whatever the political context. We are already seeing the broader consequences of sanctions imposed on Russia, particularly in terms of the rising prices of oil and <a href="https://www.bbc.co.uk/news/business-60653856">food</a>. As the world watches Ukraine, it is worth remembering that in the past, the cost of upholding economic sanctions was often seen as too high a price to pay. Image credits: Getty Images This article originally appeared on <a href="https://theconversation.com/ukraine-war-what-history-tells-us-about-the-effectiveness-of-sanctions-178835" target="_blank" rel="noopener">The Conversation</a>.

International Travel

The economics of ridiculously expensive art

What would possess someone to buy Leonardo da Vinci’s Salvator Mundi for <a href="https://www.nytimes.com/2017/11/15/arts/design/leonardo-da-vinci-salvator-mundi-christies-auction.html">US$450 million</a>? You might think it’s an investment - after all it was previously sold <a href="https://news.artnet.com/market/timeline-salvator-mundi-went-45-to-450-million-59-years-1150661">for just US$10,000</a> in 2005. From an economic point of view, art can be an investment. Although the research shows art investing has mixed results. Art also has what economists refer to as “<a href="https://www.amazon.com/Beyond-Price-Economics-Institute-Political/dp/0521183006">psychic benefits</a>”. It is something to be enjoyed, experienced or flaunted, and this may be the key to the high price paid for Salvator Mundi. <h2>Art as an investment</h2> As an investment, art’s performance varies wildly, depending on a number of factors. For instance, artworks associated with movements that are currently fashionable will outperform other types of art. <a href="https://theconversation.com/au/topics/contemporary-art-1519">Contemporary art</a> is <a href="http://www.artagencypartners.com/market-analysis/impressionist-and-modern-2/">currently outperforming</a> <a href="https://theconversation.com/au/topics/impressionism-29990">impressionist art</a>, for example. The strong demand for contemporary art coupled with limited supply has resulted in some previously overlooked artists, such as <a href="http://www.haring.com/">Keith Haring</a>, being embraced by collectors. But it is typically the works of leading artists that are in hot demand. <a href="https://news.artnet.com/market/25-artists-account-nearly-50-percent-postwar-contemporary-auction-sales-1077026">Recent analysis</a> found that just 25 artists (including <a href="http://basquiat.com/">Jean-Michel Basquiat</a>, <a href="https://www.warhol.org/andy-warhols-life/">Andy Warhol</a> and <a href="https://www.gerhard-richter.com/en/">Gerhard Richter</a>) account for US$1.2 billion of the US$2.7 billion in worldwide art auction sales for contemporary art sold at auction this year. Only two women, <a href="http://www.artnet.com/artists/agnes-martin/">Agnes Martin</a> and <a href="http://yayoi-kusama.jp/">Yayoi Kusama</a>, made it onto the top 25 contemporary artists list. This is indicative of issues around <a href="https://theconversation.com/the-gender-pay-gap-is-wider-in-the-arts-than-in-other-industries-87080">gender representation in the arts</a> and the processes by which artists careers and reputations are established. Academic studies of art as an investment have mixed results. For instance, <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=563587">research</a> of the Canadian art market found that the returns are lower than investing in the stock market. However, the study identifies other benefits to having art in your portfolio, such as it being more diversified. But <a href="http://www.emeraldinsight.com/doi/abs/10.1108/10309610810891346">research</a> based on around 35,000 paintings by leading Australian artists show the financial returns average between 4% and 15%. Returns for paintings by leading Australian artists including <a href="http://www.australia.gov.au/about-australia/australian-story/brett-whiteley">Brett Whiteley</a> and <a href="http://www.artnet.com/artists/jeffrey-smart/biography">Jeffrey Smart</a> exceed stock market returns. The study also found that oil and watercolour paintings, as well as those sold by certain auction houses, had higher prices. So-called “masterpieces”, such as those by Leonardo da Vinci, actually <a href="https://www.deepdyve.com/lp/american-economic-association/art-as-an-investment-and-the-underperformance-of-masterpieces-p7UeNVweF6">perform worse</a> financially than the art market as a whole. However, because art also provides benefits through consumption (prestige, decoration etc.), it is different to shares and bonds. The returns may be lower, but art is still attractive to invest in. The Australian art market reflects what has happened in the global market for contemporary art. For instance the five highest priced Australian works sold in 2017 <a href="https://www.aasd.com.au/index.cfm/annual-auction-totals/">account for almost 10%</a> of the total value of all works sold. And while the recent sale of Earth Creation 1 by the late Indigenous artist Emily Kame Kngwarreye has not attracted the attention of the Leonardo sale, its <a href="http://thenewdaily.com.au/entertainment/arts/2017/11/17/emily-kame-kngwarreye-aboriginal-art-record-auction/">price of $A2.1 million</a> is nearly double what it sold for at auction a decade earlier. <h2>Art for consumption</h2> The aesthetic pleasure of art, a feeling of being challenged or inspired, is subjective and <a href="https://www.sciencedirect.com/science/article/pii/B9780444537768000040">difficult to measure</a>. But that doesn’t mean the consumption of art doesn’t add to its value. <a href="https://www.amazon.co.uk/Beyond-Price-Economics-Institute-Political/dp/0521183006">Economists</a> use the terms “psychic returns” or “psychic benefits” to describe the benefits of consuming art. This is broken down into three main areas. One area is the satisfaction of supporting the arts and artists. This motivation is especially important for those who donate their collections to museums or otherwise support the arts. While this motivation is important it is not directly related to auction prices. Then there’s the psychic benefit comes from the “functional” (or decorative) benefits of art that is used to adorn spaces. This is generally the closest to the artists intention when they create the work in the first place. There’s also the prestige that comes from possessing art - especially as it is used to display good taste, wealth and power. For instance, entrances and foyers of offices often display large striking works of modern or contemporary art. This is what <a href="https://www.aeaweb.org/articles?id=10.1257/aer.99.4.1653">economists</a> call “conspicuous consumption”. As people become wealthier, their demand for high-end art increases. Indeed, art has a long tradition of being used as a statement of power, including by the church. What drives the art market, especially at the upper echelons, is a curious mix of investment and consumption, fuelled by a limited supply. The work of famous artists provides a signal of quality and assurance to the market and so their work is coveted by the rich and powerful. The uniqueness and rareness of these pieces not only spurs demand, but restricts supply, creating a perfect storm to drive prices up. Although, even this doesn’t entirely explain the high price paid for Leonardo’s Salvator Mundi. <a href="https://news.artnet.com/market/the-gray-market-salvator-mundi-sale-1117208">Analysis</a> of the sale suggests the market campaign by the auction house was significant in achieving such a high price. But aside from its trade value, art can have cultural value and social significance that do not neatly translate to market prices. So while Leonardo’s Salvator Mundisold for US$450 million, non-tradable masterpieces such as Michaelangelo’s ceiling of the Sistine Chapel aren’t worthless. They’re “<a href="https://www.amazon.com/Beyond-Price-Economics-Institute-Political/dp/0521183006">beyond price</a>”. Image credits: Getty Images This article originally appeared on <a href="https://theconversation.com/the-economics-of-ridiculously-expensive-art-87668" target="_blank" rel="noopener">The Conversation</a>.

Art

Don’t look Up! has a surprising amount to tell us about economics, much of it useful

In the new Netflix sensation <a rel="noopener" href="https://www.netflix.com/au/title/81252357" target="_blank">Don’t Look Up</a>, two astronomers, played by Jennifer Lawrence and Leonardo Di Caprio, discover a massive comet heading towards Earth, and desperately try to warn the US president, played by Meryl Streep. Their hope is the government will take action to avert catastrophe while there is time. Their efforts are subverted by a combination of self-serving political cynicism, billionaire business interests, a media that sees its job as respecting those interests and that cynicism, and a population conditioned not to look up. It is an obvious metaphor for the threat of climate breakdown, where warnings and pleadings from climatologists and scientists and from a growing number of campaigners, ecological economists and others, are being ignored, trivialised and sometimes even ridiculed by political insiders. But after 40 years marked by the dominance of <a rel="noopener" href="https://www.investopedia.com/terms/n/neoliberalism.asp" target="_blank">neoliberal</a> pro-market economic policies, the metaphor can be extended to almost any challenge requiring a serious response, particularly where it involves standing up to vested interests. There’s more amiss than vision and courage. Public services no longer have the capacity they did to respond to problems like long-term climate change and short-term pandemics. Their administrative and decision-making capacity has been stripped away, as has the surge capacity in health systems and in many countries the ability to react to disruptions to supply chains – all in the name of efficiency, but with the effect of creating fragility while contributing to inequality and extremism. Hayek, Friedman and Buchanan got us here Neoliberalism is rooted in the work of three Chicago School economists: Friedrich Hayek, Milton Friedman and James Buchanan. <a rel="noopener" href="https://plato.stanford.edu/entries/friedrich-hayek/" target="_blank">Hayek</a>, though a famous name, was probably the least influential of the three. He saw mixed economies, market-based but regulated by governments, as inevitable steps on the road to totalitarianism. <a rel="noopener" href="https://www.investopedia.com/terms/m/milton-friedman.asp" target="_blank">Friedman</a> espoused a naïve and outdated theory of money, which was no sooner adopted than abandoned in the early 1980s, but like Hayek saw freedom in low taxes and championed privatisation and deregulation. It was Friedman who argued that many people had to remain unemployed in order to suppress wages. <a rel="noopener" href="https://www.libertarianism.org/topics/james-m-buchanan" target="_blank">Buchanan</a>, like Friedman, argued that politicians and public servants could be trusted to act in in their own interests at a cost to society, and that almost anything that could be done by public servants could be done better by the private sector. In the 1980s the trio effectively took over the conservative side of politics in high-income countries. Their ideas also helped intimidate those on the other side, including the Hawke-Keating Labor government in Australia, and every Labor front bench that succeeded them. That influence persists to this day. Mazzucato, Kelton and Raworth want to get us out In her book <a rel="noopener" href="https://marianamazzucato.com/books/mission-economy" target="_blank">Mission Economy</a>, the University College London economist Marianna Mazzucato imagines a different relationship between the public and private sectors: a proactive, problem-solving government cooperating with the private sector to address, among other things, climate change and the problems and opportunities associated with a rapid transition to sustainability. This would require rebuilding public capacity and an approach to government experimentation and risk-taking not seen for 40 years. Aligned with her are modern monetary theorist Stephanie Kelton and ecological economist Kate Raworth. <a href="https://images.theconversation.com/files/439590/original/file-20220106-27-iufaef.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/439590/original/file-20220106-27-iufaef.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" alt="" /></a> Stephanie Kelton, at Adelaide university in January 2020. John Staines Kelton’s <a rel="noopener" href="https://theconversation.com/bernie-sanders-economic-adviser-has-a-message-we-might-just-need-130182" target="_blank">The Deficit Myth</a> describes how modern monetary systems work and demolishes the metaphor of the government as a household used by neoliberals to push for balanced budgets and minimalist governments. Kelton points out it is normal for governments to run deficits (Australia’s Commonwealth government <a rel="noopener" href="https://theconversation.com/memories-in-1961-labor-promised-to-boost-the-deficit-to-fight-unemployment-the-promise-won-115376" target="_blank">nearly always has</a>) and that these deficits allow the private sector to avoid building up debt. Governments that create their own currencies such as America’s or Australia’s are well-placed to guide the private sector to serve a public purpose. While both Mazzucato and Kelton discuss what this means, and give examples, it is Raworth’s book that most clearly identifies the goal governments should aspire to. That book is called <a rel="noopener" href="https://theconversation.com/stay-in-the-doughnut-not-the-hole-how-to-get-out-of-the-crisis-with-both-our-economy-and-environment-intact-151917" target="_blank">Doughnut Economics</a>. It sets out a framework for providing everyone with an opportunity to enjoy a secure, dignified and connected life, while respecting nine environmental planetary boundaries that are prerequisites for the maintenance of the planet. <a href="https://images.theconversation.com/files/374713/original/file-20201214-19-1wp3kad.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/374713/original/file-20201214-19-1wp3kad.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" alt="" /></a> <a rel="noopener" href="https://doughnuteconomics.org/" target="_blank" class="source">doughnuteconomics.org</a> The framework requires a shift of focus away from the goal of economic growth as defined by gross domestic product towards a set of indicators of a successful society. The indicators are similar to the UN <a rel="noopener" href="https://sdgs.un.org/goals" target="_blank">sustainable development goals</a>. Both Kelton and Raworth are members of the World Health Organization’s <a rel="noopener" href="https://www.who.int/groups/who-council-on-the-economics-of-health-for-all" target="_blank">Council on the Economics of Health for All</a>, chaired by Mazzucato. Its guiding principle is that health should be seen not only as a human right but also as an investment in continued prosperity. It is an approach that would have led, among much else, to better preparations for the long-predicted pandemic. Deficit-funded spending pays dividends With Kelton and others, including leading medical researcher Steve Robson and health economist Martin Hensher, I have discussed the implications of modern monetary theory for health in an article for the Insight magazine of the <a rel="noopener" href="https://insightplus.mja.com.au/2021/21/whos-afraid-of-the-deficit-what-it-means-for-health-care/" target="_blank">Medical Journal of Australia</a>, and in a position paper for the <a rel="noopener" href="https://iht.deakin.edu.au/wp-content/uploads/sites/153/2021/06/IHT_Position_Paper.MMT_healthcareinAust_140621.pdf" target="_blank">Institute for Health Transformation</a> at Deakin University. As a nation, we should not have been worried by the prospect of health spending climbing above 10% of gross domestic product as it did in 2015-16, nor by the prospect of it climbing higher in future decades. We should be investing in resources including the skills, health infrastructure and technology we will need to deal with future pandemics and the consequences of climate change. On climate change, it is gradually dawning on people that the outcome of COP26 in Glasgow was not up to the challenge we face and that many countries will not even achieve what they committed themselves to at Glasgow. To a greater or lesser extent, every leader of a high-income country is failing to articulate a mission in regard to climate change, to drive that mission with the right public investments, and to locate the problems of climate change within the broader context of the planetary boundaries identified by Raworth – the most obvious of which is biodiversity. The attitude is “Don’t Look Up!”, we have got this. Or “technology will save us”, as President Orlean (Meryl Streep) believed in the movie. Few leaders any better than Streep <a href="https://images.theconversation.com/files/439603/original/file-20220106-15-gnu99g.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/439603/original/file-20220106-15-gnu99g.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" alt="" /></a> Meryl Streep as President Orlean. Tavernise/Netflix A search by Raworth’s colleagues at the University of Leeds has failed to identify any country anywhere in the world that is providing its citizens with the social foundations for a good life while remaining inside planetary boundaries. If that was to be the definition of a developed economy, none of our economies are developed. We are either not meeting the needs of our people or exceeding the carrying capacity of our planet, or (in the case of about <a rel="noopener" href="https://www.nature.com/articles/s41893-021-00799-z" target="_blank">a third</a> of countries) doing both at once. Therein lies both a warning and a challenge; a threat and an opportunity. Our mission ought to be to meet social foundations everywhere without destroying the environment of which we are a part and on which we depend. We have an opportunity to govern differently Governments, and especially monetary sovereign governments in high income countries such as Australia, will have to lead the way. They will have to throw off the neoliberalism of Friedman, Hayek and Buchanan, and the baggage which goes with it and buy into the new economics of Kelton, Raworth, Mazzucato and their colleagues. Then we can look up, with some confidence that we can deflect the metaphorical comets that threaten the lives of millions and the quality of life for us all. The resources and the technology to do what’s needed already exist. But until now we have been trapped in an outmoded way of thinking about both the role of government and the purpose of economic activity that has held us back to the point where the comet is bearing down upon us.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/174399/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a rel="noopener" href="https://theconversation.com/profiles/steven-hail-1302961" target="_blank">Steven Hail</a>, Adjunct Associate Professor, <a rel="noopener" href="https://theconversation.com/institutions/torrens-university-australia-899" target="_blank">Torrens University Australia</a> This article is republished from <a rel="noopener" href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a rel="noopener" href="https://theconversation.com/dont-look-up-has-a-surprising-amount-to-tell-us-about-economics-much-of-it-useful-174399" target="_blank">original article</a>. Image: Netflix

Movies

REVEALED: What lotto winners spend their millions on

Hundreds of Aussies win the lottery each year, and now a <a rel="noopener" href="https://7news.com.au/sunrise/on-the-show/survey-reveals-how-australian-lottery-winners-have-spent-their-millions-on-c-4078121" target="_blank">new survey</a> has revealed what they have done with their life-changing cash. 484 Australians took home $1.24 billion in prizes in 2020 after buying division one tickets, with the survey of these winners showing most were quite savvy with their prize money. 59 percent of winners decided to invest their money for the future, including 57 percent who used the cash to pay off mortgages or buy a house. 52 percent shared some of their winnings with friends and family, and more than a quarter donated some to their favourite charity. As for sharing the news about their win, the majority of division one winners told their partner and immediate family. But, 11 percent of winners kept the news to themselves, deciding not to tell anyone at all. Image: The Lott

Money & Banking

Survey reveals the best and WORST age to be

Survey says that having a family and watching them grow leads to a truly happy life As we age, we reminisce on our lives, looking back at what truly made us happy, and what, if anything, would we change. <a href="https://www.country-cousins.co.uk/">Country Cousins,</a> leading providers of live-in care to those living with Dementia, wanted to know more about what makes people happy, what they credit to an enriched life and what age was their favourite. So, they asked 1,000 UK adults aged between 50-75, and the results are not what we expected. Men prefer their twenties, yet women preferred their thirties The survey found that 27% of men preferred their twenties and only 22% of men favoured their thirties. On the other hand, women seemed to much prefer their thirties as 25% said they were the best years of their life, typically a time when they’re settled and have a young family, and only 21% of women favoured their twenties. Are the teenage years really the worst in our lives? 92% of respondents say being a teenager, a time when you’re carefree and have no major obligations, were some of the least enjoyable years of their lives? Perhaps it’s because 2% of people of the 1,000 respondents said watching their family grow around them helped them to live an enriched life, and 17% said having a family leads to a truly happy life. Along with that, 36% of those over the age of 60 credit watching their family grow and mature around them to be the most rewarding thing about getting older. What can we take from this? So, it seems that to live a truly happy, enriched life, we should aspire to have a family and enjoy watching them grow, learn, and maybe one day have a family of their own.

Retirement Life

Retired couples, have your say

As we approach retirement, we face a new and often drastic change in our lives. From cutting down on work to downsizing, this new stage of life can signal the start of a healthy and enjoyable period of your life or one that offers no direction. To combat this, we are encouraged to save for retirement, pursue hobbies and learn new skills, and stay in touch with friends, loved ones, and our wider community. But there is one aspect of life that many of us look past that can have a significant effect on our retirement years. The answer: our romantic partners. Two-thirds of Australian retirees are in relationships where they live with a significant other, but the impact of our significant others on us (and vice versa) is less well understood. Researchers investigate the impact of our personal relationships Ayeesha Abbasi, a PhD candidate at the Australian National University (ANU) College of Business and Economics is looking to improve our understanding of retirement and how our experiences are shaped by our personal relationships. Specifically, she is investigating the influence of partners on each other as they transition into and experience retirement. Have your say To do this, cohabiting couples who have retired completely, semi-retired, or otherwise left the workforce are invited to participate in a survey. Hearing from both partners will help to better understand the influence partners have on each other. Both partners can complete the Couples in Retirement Survey and answer questions regarding how you feel about retirement, relationships, health, social support, and more. To participate, and contribute to important research, take the time to head <a href="https://anu.au1.qualtrics.com/jfe/form/SV_1F9q3qpbOlxPYgJ">here</a>.

Retirement Life

50% of Australians are prepared to pay more tax to improve aged care workers’ pay, survey shows

The final report from the aged care royal commission this week was damning. Speaking of a system in crisis, it calls for an urgent overhaul. The Morrison government has been facing difficult questions regarding which of the 148 recommendations it will adopt. It also needs to grapple with how to pay for the much-needed changes. On this question, the royal commissioners disagree. Commissioner Lynelle Briggs calls for a levy of 1% of taxable personal income, while commissioner Tony Pagone recommends the Productivity Commission investigate an aged care levy. A 1% levy could cost the median person who already pays the medicare levy about $610 a year, while boosting funds for the aged care sector by almost $8 billion a year. So far, the government has played down the idea of new taxes. There is a view this would be hard sell for a Coalition elected, at least in part, to lower taxation. But as debate continues about how to make the changes we need to aged care (and not just talk about it), our research suggests many Australians support a levy to improve the quality and sustainability of our aged care system. Our research In September 2020, we surveyed over 1,000 Australians aged 18 to 87 years, representative by age, gender and state. We wanted to find out how the pandemic influenced attitudes to health, well-being and caring for others. Our findings indicated overwhelming public support for aged care reform, to ensure all older Australians are treated with dignity. The vast majority of our respondents (86%) either “strongly agreed” or “agreed” Australia needed more skilled and trained aged care workers. On top of this, 80% thought aged care workers should be paid more for the work that they did. More than 80% also either “strongly agreed” or “agreed” that nurses working in aged care should be paid at an equivalent rate to nurses working in the health system. Currently, nurses working in aged care are paid, on average, about 10-15% less. The crunch point Importantly, 50% of our respondents showed a willingness to pay additional tax to fund better pay and conditions for aged care workers. Of those willing to pay more tax, 70% were willing to pay 1% or more per year. This finding supports previous larger-scale research we undertook for the royal commission, before the pandemic. Here we found similar levels of public support for increased income tax contributions to support system-wide improvements. This suggests politicians seem to underestimate the public appetite for improvements to the system, and people’s willingness to contribute to achieve this. Changing ideas about economic ‘success’ Our survey findings also highlighted a growing recognition among Australians of the importance of a broader range of social and economic goals. For some time, economists, academics, organisations and peak bodies have been calling for a move away from traditional economic indicators (such as economic growth and expanding gross domestic product) at any cost, towards a broader definition of success. This would see governments focus on policies that promote a more equal distribution of wealth and well-being, where the fundamentals of community cohesion are highly valued and our natural resources are protected. We asked our survey respondents to rank the relative importance of seven key areas of public policy in framing Australia’s pathway to recovery from the COVID-19 pandemic, including: <ul> <li>dignity (people have enough to live in comfort, safety and happiness)</li> <li>nature and climate (a restored natural world which supports life into the future)</li> <li>social connection (a sense of community belonging and institutions that serve the common good)</li> <li>fairness (equal opportunity for all Australians and the gap between the richest and the poorest greatly reduced)</li> <li>participation (having as much control over your daily life as you would want)</li> <li>economic growth (an increase in the amount of goods and services produced in Australia), and</li> <li>economic prosperity (full employment and low inflation levels). The criteria ranked most important by the largest proportion of our survey respondents were dignity (20.1%) and fairness (19.3%).</li> </ul> Traditional economic indicators were not the highest priorities for the Australians we surveyed. Instead, economic growth and prosperity were only ranked as a top priority by 15.3% and 15.2% of our respondents respectively. This suggests the general public recognises the importance of moving beyond the traditional markers of a successful society. What Australians want Our research shows significant aged care reform is entirely consistent with the current priorities of the Australian public. The burning question now is whether the Morrison government will step up to the challenge. Written by Rachel Milte and Julie Ratcliffe. This article first appeared on <a href="https://theconversation.com/50-of-australians-are-prepared-to-pay-more-tax-to-improve-aged-care-workers-pay-survey-shows-156299">The Conversation</a>.

Retirement Income

A little ray of sunshine as 2021 economic survey points to brighter times ahead

Suddenly, economic forecasters are optimistic. Six months ago the forecasting team assembled by The Conversation was expecting Australia’s recession to continue into 2021, sending the economy backwards a further 4.6% throughout the year. This morning, in the survey prepared ahead of the Reserve Bank board’s first meeting for the year and an address by the Reserve Bank governor to the National Press Club on Wednesday, the same forecasting team is upbeat. It expects the recovery that began in the September quarter of last year to continue, propelling the economy forward by a larger than normal 3.2% throughout 2021, with growth slowing to more sedate 2.1% per year by the middle of the decade, still well above than dismal 1.7% per year expected six months ago. The unemployment rate is now expected to remain near its present 6.6% throughout 2021, instead of soaring to almost 10% as expected six months ago. But improvement in the unemployment rate is expected to be slow, and as house prices and share market prices climb, most of the panel expect the Reserve Bank to lose its patience and begin to lift interest rates from their emergency lows before the end of next year, ahead of its published schedule. The 21-person forecasting panel includes university-based macroeconomists, economic modellers, former Treasury, IMF, OECD, Reserve Bank and financial market economists, and a former member of the Reserve Bank board. Economic growth Only two of the panel expect the economy to shrink further in 2021. The rest expect the economy to grow, two of the panel by at least 5%, something that isn’t out of the question given that the economy shrank by 7% during the worst three months of the 2020 coronavirus restrictions and clawed back only <a href="https://theconversation.com/it-isnt-right-to-say-we-are-out-of-recession-as-these-six-graphs-demonstrate-151210">3.3%</a> in the three months that followed. <hr /> <iframe id="bH5sm" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/bH5sm/3/" height="400px" width="100%" frameborder="0"></iframe> Panellist Saul Eslake who forecast growth of 3.5% in 2021 six months ago is now forecasting growth of 5.25%, saying the transition away from JobKeeper and other supports has been going more smoothly and the property market and residential building market have holding up much better than he had expected. Growth will be constrained by unusually slow population growth, a gradual tightening of government purse strings and anticipation of higher interest rates. <hr /> <iframe id="WPE9k" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/WPE9k/2/" height="400px" width="100%" frameborder="0"></iframe> <hr /> China’s 2021 growth, expected to be 4% six months ago, is now expected to be 6.3% as it reaps the fruits of having recovered early from its coronavirus crisis with its production systems intact. Panellist Warren Hogan cautions that longer term China is likely to place less importance on economic growth and more on military adventurism. The continuing COVID crisis in the United States is expected to push its recovery out into the second half of the year as vaccination programs and President Biden’s stimulus measures take hold. Unemployment Although few on the panel expect unemployment to get much worse, most believe it will be many years before the unemployment rate shrinks to the 4.5% to 5% the Reserve Bank has adopted as a target. Panellist Julie Toth says the end of JobKeeper in March will reduce the ability of struggling businesses to keep their employees. Closed boarders mean skill mismatches and shortages will grow alongside persistent unemployment and underemployment. Other panellists warn of a “jobless recovery” as large organisations that held onto labour during the crisis start to shed staff as part of digitisation programs. <hr /> <iframe id="qaVR7" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/qaVR7/3/" height="400px" width="100%" frameborder="0"></iframe> <hr /> Living standards Annual wage growth, at present a minuscule 1.4% – the lowest in the 23 year history of the index – is not expected to improve at all in the year ahead, ending 2021 at 1.4%. At the same time annual inflation is expected to climb from last year’s unusually low 0.9% to 1.6%, putting it above wage growth for the first calendar year on record, sending the buying power of wages backwards. <hr /> <iframe id="NSbFV" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/NSbFV/4/" height="400px" width="100%" frameborder="0"></iframe> <hr /> A broader measure of living standards, real net national disposable income per capita, which takes account of the hours worked in each job and other sources of income, is expected to continue to climb in 2021, continuing the recovery begun in last year’s September quarter after the precipitous slide of 8% during the first half of last year. Household spending is expected to climb a further 3.4% in real terms, continuing the recovery begun in the September quarter after a slide of 13.8% in the first half of last year. <hr /> <iframe id="GqSAx" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/GqSAx/2/" height="400px" width="100%" frameborder="0"></iframe> <hr /> Interest rates The panel expects the Reserve Bank to lift its cash rate from the present all-time low of 0.10% well ahead of the “<a href="https://www.rba.gov.au/media-releases/2020/mr-20-32.html">at least three years</a>” timeframe set out by the bank. The bank had promised not increase the cash rate until actual inflation was “<a href="https://theconversation.com/5-ways-the-reserve-bank-is-going-to-bat-for-australia-like-never-before-149311">sustainably within</a>” its 2% to 3% target range. And it had moved the <a href="https://theconversation.com/5-ways-the-reserve-bank-is-going-to-bat-for-australia-like-never-before-149311">three-year bond rate</a> to 0.10% as a sign that it expected the cash rate to stay at 0.10% for at least three years. Although few on the panel expect inflation to climb back to the Reserve Bank’s target range by the end of next year, most expect the bank to begin to lift its cash rate by then. <hr /> <img src="https://images.theconversation.com/files/381256/original/file-20210129-13-1ifkzho.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" alt="" />The Conversation, <a href="http://creativecommons.org/licenses/by-nd/4.0/" class="license">CC BY-ND</a> Panellist Mark Crosby says rising home and other asset prices will put the bank under pressure to backtrack on its commitment in the knowledge that the economy is in a position to withstand more normal rates. Long-term interest rates are already higher than they were at the start of this year. The panel expects the ten-year benchmark used to set the rates at which the government can borrow to gradually climb from last year’s all-time lows. <hr /> <iframe id="hWglQ" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/hWglQ/2/" height="400px" width="100%" frameborder="0"></iframe> Asset prices Sydney home prices are expected to climb 4.9% after climbing <a href="https://www.corelogic.com.au/sites/default/files/2021-01/CoreLogic%20home%20value%20index%20Jan%202021%20FINAL.pdf">2.7%</a> in COVID-hit 2020. Melbourne prices are expected to climb a lesser 4.4% after slipping 1.3%. Saul Eslake says Melbourne’s economy has been far more reliant on interstate and international migration than any other part of Australia and has damaged its image as a desirable destination by its handling of the pandemic. Other panellists draw a distinction between apartment price growth, which should be weak because of lower demand for international student rentals, and freestanding home prices which should be supported by an implicit Reserve Bank guarantee of three years of ultra-low interest rates. The panel expects housing investment to climb 3.8% after falling 5% during the first nine months of 2020. <hr /> <iframe id="Q1Dwo" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/Q1Dwo/3/" height="400px" width="100%" frameborder="0"></iframe> <hr /> The Australian share market collapsed 37% in just over a month in the early weeks of the coronavirus crisis and spent the rest of 2020 recovering. Although opinion is split about 2021, the panel’s average forecast is for growth of 3.5% Panellist Mala Raghavan says low interest rates are forcing long term investors to take positions in companies with strong fundamentals. Craig Emerson says he expects the equities bubble to burst at some point, but probably not while low interest rates continue. At US$160 a tonne, the iron ore price has almost doubled since the start of 2020. On balance the panel expects it to ease to US$133 throughout 2O21, noting that at some point Brazil is going to return to full production after a series of dam collapses and pandemic-related problems. China is thought to prefer to buy from Brazil. <hr /> <iframe id="7qg2U" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/7qg2U/3/" height="400px" width="100%" frameborder="0"></iframe> <hr /> Business The panel expects Australian businesses to find any lift in the share market and consumer spending uninspiring. After collapsing 24% in the first nine months of 2020 the panel expects non-mining business investment to climb by only 2% in 2021 and 3.1% in 2022. It cites low immigration and uncertainty over COVID and the shape of new business practices as more important in determining investment decisions than the government’s generous tax incentives. <hr /> <iframe id="9GSTa" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/9GSTa/2/" height="400px" width="100%" frameborder="0"></iframe> Government The panel’s central budget deficit forecasts are not too far from the latest government forecasts <a href="https://theconversation.com/so-far-so-good-myefo-budget-update-shows-recovery-gathering-pace-152227">released in December</a> at A$192 billion in 2020-21 and $114 billion in 2021-22. Panellists note that the government will have little opportunity to restrain spending in the lead up to the election and will be under pressure to boost the JobSeeker unemployment benefit which is due to sink back to its pre-COVID level on <a href="https://theconversation.com/top-economists-want-jobseeker-boosted-by-100-per-week-and-tied-to-wages-150364">April 1</a>. <hr /> <iframe id="ZzfIZ" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/ZzfIZ/2/" height="400px" width="100%" frameborder="0"></iframe> Written by Peter Martin. This article first appeared on The Conversation.

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