Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also Chief Economist and co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

State debt blowout to cost each Victorian $1400

Victoria issued tens of billions in long‑dated bonds during 2020–21 at very low interest rates (i.e., 1.25–1.5%).

Renewable transmission costs to drive up power bills

Australian power users received a reprieve earlier this year as the default market offer (DMO), which is the benchmark against which retailers price their plans, was cut by between 1% and 10% from 1 July, following lower wholesale power (generation) costs amid a relatively calm summer.

Snowy Hydro 2.0 is a sunk cost fallacy

I reported this week that the cost of the Snowy Hydro 2.0 project is estimated to have ballooned from an initial announced cost of $2 billion in 2017 to around $42 billion.

Sydney and Melbourne home prices accelerate downwards

Cotality’s daily dwelling values index for 30 April shows that home values across the five major capital city markets rose by only 0.2% over the month, with sharp falls of 0.6% in Sydney and Melbourne offsetting still strong growth in Perth (2.1%), Brisbane (1.2%), and Adelaide (1.1%).

Aussie mortgage stress forecast to hit an 18-year high

The interest rate futures market has priced an official cash rate of 4.75% by the end of 2026. This implies that the Reserve Bank of Australia (RBA) will deliver at least two, and possibly three, more interest rate hikes this calendar year.

It’s official: EV tax breaks are upper-class welfare

The federal government is facing calls to scrap or amend its Fringe Benefits Tax (FBT) exemption for battery electric vehicles (EVs) in the May budget, as the exemption’s estimated annual cost is projected to rise from an initial $90 million to $1.4 billion in 2025-26.

Aussie inflation undershoots expectations

The Australian Bureau of Statistics (ABS) has released CPI inflation data for March, showing a headline CPI inflation rate of 4.6% for the year, below economists’ expectations of a 4.8% rise.

Don’t overcomplicate CGT reform

According to media reports, the upcoming federal budget will change the capital gains tax (CGT) from its current 50% discount on nominal gains to the pre-1999 method of taxing 100% of real, inflation-adjusted gains.

Renewable energy subsidies are a bottomless pitt

Earlier this year, some of Australia’s leading fund managers and economists warned that two major federal financing programs for renewable energy—the Capacity Investment Scheme (CIS) and the National Reconstruction Fund (NRF)—risk becoming “slush funds” unless the government provides far greater transparency about how taxpayer money is being allocated and what returns are being generated.

Is this the end of Australia’s 30-year house price boom?

Australian house prices have grown strongly for nearly 30 years, save for a few minor hiccups along the way.

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