Australia

Australia will recognise Jerusalem as Israel's capital

The Australian government is following the United States (U.S.) by preparing to formally recognize Jerusalem as the capital city of the State of Israel but is reportedly not planning on relocating its embassy from Tel Aviv in the near future. The embassy will not be relocated in the immediate future, due to the AUS $200 million estimated cost of moving the facility. Instead, Australia is reportedly planning to open a consular facility in the Israeli capital in lieu of an embassy move.

Shortly after Prime Minister Scott Morrison entered office it was reported that he was weighing the possibility of recognizing Jerusalem as Israel’s capital, as well as the relocation of the Australian embassy in Israel from Tel Aviv to Jerusalem. Palestinians claim Jerusalem as their capital and most countries believe that the status of the city should be determined as part of a peace deal.

Australia’s recognition of Israel’s capital joins a small but growing number of countries, including the U.S., Guatemala, the Czech Republic, and Honduras. In 2017, Russia announced that it recognized the western part of Jerusalem as the capital of Israel while also recognizing the eastern part of the city as the capital of a future Palestinian state.

Australia passes an anti-terrorism law forcing tech firms to hand over encrypted data

Australia's Parliament passed a controversial bill that will force technology firms to give police access to the encrypted communications of suspected terrorists and criminals. The bill caused heated debate over national security and privacy at a time when governments across the globe are grappling with how to access encrypted information to monitor illegal activities. The law is opposed by tech giants, where Australian security services are given authority under the law to obtain a warrant for international communications companies including Google, Facebook, and WhatsApp to remove encryption, help conceal government snooping, and hand over data linked to suspected illegal activities.

Critics say the law may unleash unintended consequences, with global implications for encrypted communications. Global communications firms have warned the law would force them to create vulnerabilities in their products that could then be used by other bad actors to gain a back door to users' data. They are also concerned about how the law's secrecy provisions will impact their business models and consumer privacy.

The law has raised questions about policy laundering through Australia, a member of the ‘Five Eyes’ intelligence-sharing group that also includes the United States, Britain, Canada, and New Zealand. "There is an extraterritorial dimension to it, where for example the U.S. would be able to make ... a request directly to Australia to get information from Facebook or a tech company," said Queensland University of Technology's technology regulation researcher Monique Mann.

Australians are the richest people in the world in 2018

A new report released by Credit Suisse finds Australians are the richest people in the world, where the greatest number of people are rich. Together, North America and Europe account for 60 percent of total household wealth despite being only 17 percent of the world’s adult population

When comparing the average amount of wealth per adult, which divides a country’s overall wealth by the total population, Switzerland ranks first, followed by Australia, then the United States, where wealth is growing most quickly in the world. “The United States has the most members of the top 1 per cent global wealth group, and currently accounts for 41 per cent of the world’s millionaires,” Credit Suisse's report notes.

However, when ranking the richest countries in the world by looking at which countries have the greatest number of people who are rich, Australia places first, whereas the U.S doesn’t place the top ten. Australia’s median wealth is USD $191,453 per adult, compared to Canada at USD $106,342, New Zealand at USD $98,613, the United Kingdom at USD $97,169, and the U.S. at USD $61,667 per adult.

 

Decreasing inequality

The report also concluded wealth inequality is not rising: the early twentieth century experienced the most broad-based wealth creation in history and all levels of society shared in the rewards. This came to an abrupt halt with the 2008 global financial crisis, which changed the pattern of wealth creation.

Top wealth holders benefited most from the rise in financial wealth, leading to rising wealth inequality in all parts of the world. In every region, with the exception of China, median wealth stopped rising and declined in many places. Evidence suggests the growth pattern has begun to shift back to the pre-crisis pattern. Wealth inequality has not yet fallen significantly but has stabilized according to most indicators. Therefore, future prospects for inclusive wealth growth appears promising.

The proportion of global adults with wealth below USD $10,000 has decreased since 2000. At the beginning of the century, 80 percent of global adults belonged to this stratum, whereas today the fraction is 64 percent, with projections show a further decrease to 61 percent in 2023.

 

Wealth outlook

In the past twelve months, total global wealth grew by 4.6, percent, which is lower than 2017 but higher than the average growth rate post-2008 global financial collapse. Global wealth also increased by USD $14 trillion in 2017, with China ranking second after the United States (U.S.), which is home to more millionaires than any other country in the world.

Global wealth is projected to rise by nearly 26 percent over the next five years, reaching USD $399 trillion by 2023. Emerging markets are responsible for a third of the growth, although they account for only 21 percent of current wealth.

Wealth will primarily be driven by growth in the middle segment, but the number of millionaires will also grow markedly over the next five years, anticipated to reach a new all-time high of 55 million.

 

Women and wealth

This global wealth report reviewed evidence regarding women's wealth around the world for the first time. After rising as a share of global wealth in the twentieth century, women’s wealth has risen this century in absolute terms and also relative to men’s wealth in some respects. There are signs that more self-made women are succeeding in business and entering the highest wealth ranks.

Australian drought and sportswear push up prices of wool clothing

A surge in demand for natural and sustainable fabrics, particularly from younger consumers, alongside increased popularity in sportswear due to its temperature regulating properties, has coincided with a prolonged severe drought in eastern Australia, resulting in a wool shortage. The consequent jump in the price of wool is impacting the global clothing supply chain, with some mills passing along costs and retailers either cutting down on wool or raising prices.

Australia supplies over 90 percent of the world’s exported high-quality wool and fleece used in clothing, and a lack of rain has turned pastures barren forcing farmers to buy expensive feed. Many farmers have therefore had to send their livestock to slaughterhouses, prompting Australia’s chief commodity forecaster ABARES to cut wool production forecasts by 4 percent this year. Benchmark prices for high-quality Australian wool were trading at more than A$21 per kilogram in August, up from A$16 a year earlier.

Italian clothmaker Botto Giuseppe, which supplies luxury brands Giorgio Armani and Max Mara, says it has increased prices on average by 7 to 8 percent in the last year on wool fabric, while high-end Swiss sportswear label Mover has put up the retail price of its merino wool t-shirts by 15 percent. “The wool price has increased consistently over the past three years,” said Silvio Botto Poala, Chief Executive Officer of Botto Giuseppe, a 142-year-old company, “But the big jump has been in the past year.” Botto Giuseppe has increased the price of wool flannel fabric used for suits to €19.50 per meter compared to €18 a year ago, CEO Botto Poala said. Pure merino wool t-shirts from Swiss skiwear label Mover retail for €75 compared to €65 last year, CEO Nicolas Rochat said. Swedish fast fashion company H&M has cut down on the amount of wool it uses in production, avoiding price rises on items like wool-blend sweaters and coats.

Australian Prime Minister Scott Morrison announces immigration cuts

Australian Prime Minister Scott Morrison had stated he will cut the number of migrants coming to Australia. As Cabinet determines a new population policy, PM Morrison predicted the impending changes would lower the annual immigration target from its cap of 190,000, saying, “Population growth has played a key role in our economic success. But I also know Australians in our biggest cities are concerned about population.” 162,000 permanent visas were approved in the twelve months ending June 30.

A Fairfax – Ipsos poll in October 2018 found 45 percent of voters supported a reduction in the annual intake as the population climbs past 25 million, and 52 percent backed the idea of keeping or increasing the number of immigrants coming to Australia. The survey showed a narrow majority of Coalition supporters wanted fewer migrants, with 54 percent saying they wanted “a little or a lot” cut from the annual intake compared toy 44 percent of Labour voters who said the same.

"The roads are clogged; the buses and trains are full. The schools are taking no more enrolments. I hear what you are saying. I hear you loud and clear," PM Morrison said, noting "community sentiment" towards migration must be considered in addition to the economic impacts. He has requested state premiers create their own population plans to be discussed at the next Council of Australian Governments meeting, scheduled for December 12.

At the annual Bradfield Lecture, PM Morrison said the following: "The old model of a single, national number determined by Canberra is no longer fit for purpose … My approach will be to move away from top-down discussions about population to set our migration intake caps. I anticipate that this will lead to a reduction in our current migration settings … It is the states who build hospitals, approve housing developments, plan roads and know how many kids will be going into their schools in the future … The states and territories know better than any what the population carrying capacity is for their existing and planned infrastructure and services. So, I plan to ask them, before we set our annual caps."

Reasserting the economic benefits of migration to Australia, PM Morrison conceded population growth also had its costs, and Sydney and Melbourne had become "a victim of our success", saying, "Here in Sydney migrants accounted for around 70 percent of population growth last year. This has created its own pressure points – and pressure points in population always manifest themselves in housing and infrastructure." New figures show Melbourne is one of the fastest growing cities in the world and New South Wales (NSW) Premier Gladys Berejiklian wants to halve the state's migration intake.

The center-right Coalition government believes it can revamp the current migration settings to better disperse new arrivals in regional areas. While the annual intake will be lowered, the changes may see the government increase the proportion of skilled migrants coming to Australia at the expense of others. Citing the mining boom, PM Morrison said the ability for migrants to move to areas where they had a good chance of finding a job was essential.