Category: COVID-19

How deep is the financial hardship well?

financial-hardship-savings
How many weeks your savings will last without income – graph provided by The Grattan Institute

It is probably no comfort to anyone to reflect on the year when investors could get 14.95% on a bank term deposit. It was January 1991, the recession Paul Keating said we had to have. People with personal loans and credit card debt watched horrified as repayment rates went to 20% and beyond. The average variable mortgage rate rose to 17.5% at the same time. The gap between the haves and have-nots in that era was painfully obvious.

In the early 1990s, financial hardship forced many younger Australians, unable to service their mortgage repayments, to walk out of their mortgaged houses, leaving the house keys on the bank’s counter. Meanwhile, the lucky worker/investor with a lazy $100k to invest could earn $14, 950 in interest (the price of a new car), over 12 months with no risk whatsoever. Except, of course, if the deposit was with one of the eight financial institutions that went broke in that era.

In 2020, the COVCID-19 pandemic has certainly made it clear how many Australians are suffering financial hardship. At one end of the scale, you have self-funded retirees, on the pig’s back, really, but struggling with the collapse in the value of shares and difficulties finding safe places to store their cash for a return of more than 1.75%.

At the other end of the generational spectrum, while the official unemployment figure is an improbably low 6.2%, it does not reflect the one million casuals who not only lost their jobs, but did not qualify for the Federal Government’s safety net, Jobkeeper.

COVID-19 struck at a time when the Australian household savings rate had dropped to 3.6% (20% is the ideal), and is forecast to drop to 2% or lower in 2021-22. The rate is calculated as a percentage of the amount saved from disposable income.

Meanwhile household debt – most of it linked to mortgages –  is at a high of 119.60% of GDP. Economist Gerard Minack told the 7.30 Report in November that household debt at 200% of household income was a “massive macro risk”.

Then came COVID-19 and an economic shutdown the likes of which the country has not seen since the 1930s.

I’m running these confronting numbers past you because there is a lot of nonsense written about Poor Pensioners vs Irresponsible Millenials.  Also, some commentators, particularly in the housing sector, are ‘talking it up’ at a time when worst-case scenarios predict a 30% drop in prices.

Conversely, stock market analysts are talking the market down, even as it keeps (slowly) recovering. You have to wonder why.

In mid-April the share market was officially proclaimed a “bull market’’ by the Australian Financial Review (AFR), because share prices had jumped 20% since mid-March.

What’s amazing is that the market has rallied at the same time that Australian superannuation funds paid $9.4 billion in financial hardship paymentsto approximately 1.17 million fund members. Australian super funds have a large exposure to equities, so they have managed the payments so far by selling investments, including shares and holdings in managed funds.

They also asked for help. As the AFR’s exceptionally well-informed Chanticleer observed, The Australian Superannuation Fund Association (ASFA) put a proposal to Treasurer Josh Frydenberg to allow the Australian Taxation Office to cover the hardship withdrawal payments. The plan was super funds would repay the payments over a period of time. The industry also called on the Reserve bank of Australia to provide a liquidity buffer. None of this happened, but Australian funds are expecting a continuation of the rush to withdraw hardship payments.

Under the COVID-19 measures, individuals whose income has been affected can withdraw up to $10,000 of their superannuation balances prior to June 30. They can, if necessary, apply for a further $10,000 after June 30.

There are ordinarily a few hoops to jump through to apply for an early-release hardship payment. As we know, superannuation is meant to be locked away until you retire or reach an age when you can officially tap the fund for money. But in these dire times, super funds worked with the Australian Tax office and other government departments to expedite hardship payments.

By close of business on May 7, ASFA made around 1,175,000 individual payments, totalling around $9.4 billion in temporary financial support. ASFA estimated that 98% of applications were paid within five working days.

Applying for a super hardship payment is a risky business if you are under 35. According to AMP, the average super balance for people aged 25-29 is $23,371 for men and $19,107 for women. In the age group 30-34, the average balance for men is $43,583 and for women $33,748. So it does not take too many trips to the hardship well to run out of cash. I used those age groups deliberately, as most pollsters agree that so-called Millennials are people now aged between 22 and38.

But it is not just the young that have little in the way of savings. According to the Grattan Institute, 50% of working households have less than $7,000 in savings. This probably explains the rush of super fund hardship applications. The Institute admits the data is a few years old, but says the scenario is unlikely to have changed much.

“As you might expect, working households on lower incomes tend to have less in the bank. Among working households in the bottom fifth of household income, the median total bank account balance is just $1,350. 

“The meagre savings of many low-income workers are a big worry because they are most likely to be employed as casuals and therefore not have paid sick leave or annual leave.” 

The Grattan Institute makes the point that as the lockdown drags on, more people will start to run out of ready cash.

“Our analysis shows that half of working households have five to six weeks’ income or less in the bank. The bottom 40% of working households has about three weeks’ income or less in the bank. A quarter of all working households have less than one week’s income in the bank.”

This last figure may bring your head up, if you remember news stories from New York, which we found shocking, of people with less than $400 in the bank.

Sometimes I think about these matters when doing the weekly grocery shopping, where retail prices are clearly outpacing inflation. (Ed: We did score a large pumpkin from a roadside stall for $3, so you can get lucky).

Those with a job who have not had a pay increase in years can justifiably feel cheated. Admittedly, the Federal Government came to the National Cabinet table with an extraordinary rescue package. But while one of these measures temporarily doubled the unemployment payment overnight, it now seems to be flawed piece of legislation.

People may rightly point out that employers are obliged to pass on the Jobkeeper payment of $1,500 a fortnight, regardless of what the employee was being paid previously. At some stage, these payments will stop and we will revert to the status quo. Will recipients who were technically overpaid have to repay some of this money, or does it just go to the deficit?

Robodebt II, coming soon to a cinema near you.

FOMM backpages:

Ten songs that influenced teenage me

ten-songs-influenced
Image (and research): Wikipedia

Most of my musician friends spend time on Facebook, so that’s why I probably saw so many of those ‘10 albums which influenced your musical tastes’ challenges. It is no surprise this diversion has become popular in the uncertain time of COVID-19 because it allowed us to yearn, just a little, for those carefree days when music helped shape our lives.

You can tell how much the ‘challenge’ means, as so many participants cannot leave it at 10. Ah, the warm feeling of remembering a relationship that budded and flowered, just as Cat Stevens released Tea for the Tillerman. Maybe you’d met a brown-eyed girl (called Rhonda); perhaps you lived in a town without pity. Or it really got you when Ray Davies wrote, ‘I’m not like everybody else’.

I walked in to the ‘challenge’ by posting an ironic observation that nobody had nominated me to do anything, My record producer friend Pix Vane-Mason popped up, asking about the music that influenced my teenage years.

It didn’t take long for me to break the rules and make my own mini-FOMM, with explanations and reviews (most just post album covers on 10 successive days, with no comment at all). A few people who saw the first entry were surprised to find I was a pre-pubescent jazz head. No 1 was Carmen McRae’s version of Dave Brubeck’s ‘Take Five’. The song version of Brubeck’s famous jazz instrumental (in 5/4 time) came out in late 1961, when I was about to turn 13. I’d not heard the original instrumental version (1958), but this set me off on an exploration of modern jazz.

In 1962, pop music began to intrude, starting with Cliff Richard’s ‘The Young Ones’ in 1961. In 1962, I quickly became impressed with Cliff’s backing band, The Shadows. Original and distinctive tunes like ‘Apache’ and ‘Flingle Bunt’ can still be heard on the radio today. Check out this 2017 version of the No 1 hit ‘Apache’ (1960) when Hank Marvin and the original members reunited for one final tour.

 

(There’s a prize for the first one to tell me which politician they think the drummer resembles. Ed)

In 1963, the fickle fifteen year old was torn between folk (there was a folk club in town) and the peer pressure to go with those brash young pop/rock groups from the UK. This was the year The Beatles penetrated the Kiwi consciousness.

I liked the two covers the Beatles did early on (A Taste of Honey and Till There was You) which hinted at the musicality to come. But the music I remember most from that year was a collection of trad folk songs by an extraordinary singer, Odetta. It was a hit record in NZ.

An incredibly eclectic mix of music came through the AM radio in 1964. The Beatles dominated the charts – five songs in the top 20 including numbers 1 and 2, and nine in the top 100. But they had to share Billboard’s top 10 with Louie Armstrong (Hello Dolly), Roy Orbison (Pretty Woman), the Beach Boys (I get Around) and Dean Martin (Everybody Loves Somebody). I really liked vocal harmonies so the Beach Boys almost always got my vote. But the jazz influence was still there, so even though it seems cheesy now, Stan Getz’s collaboration with Brazilian singer Astrid Gilberto, was, as Danny R said on FB, perhaps our first taste of ‘world music’.

Difficult as it was to pluck one song from the plethora of hits in 1965, I could not go past ‘Rescue Me’ by Fontella Bass. It was released a few months shy of my 17th birthday. I bought the record and played it to death. Nothing wrong with a good old fashioned teenage crush, eh! This was the year that brought us ‘King of the Road’, ‘I Can’t Help Myself’, ‘I Can’t Get No Satisfaction’, ‘Downtown’, ‘Help’ and ‘You’ve Lost That Loving Feeling’, so there was a lot of competition.

(Rescue Me)

Aretha Franklin is sometimes mistakenly credited with this song, which was written by record producers Carl Smith and Raynard Miner (Bass claimed she co-wrote the song but was never credited). The other song that grabbed me in1965 was ‘I Got You Babe’ by Sonny and Cher (Cher also recorded ‘Rescue Me’ in 1974). What was that I said about teenage crushes!

Gordon Lightfoot’s ‘Early Morning Rain’ was a hit for folk trio Peter Paul and Mary in 1965. A version by George Hamilton IV made No 9 on the country charts in 1966. This was the year Simon and Garfunkel emerged, suitcase and guitar in hand, also a beautiful song full of imagery (Elusive Butterfly of Love). But this was also the year of ‘Doobie Doobie Doo’ (say no more) and the Monkees, a manufactured band provided with catchy hits by a then-unknown Neil Diamond. For all that, folk/country music was starting to penetrate the pop charts courtesy of artists like Dylan, PP&M and Gordon Lightfoot. ‘Early Morning Rain’ covers prevailed for decades, including Elvis Presley, Bob Dylan, Jerry Lee Lewis, Eva Cassidy and Australia’s Wendy Matthews, A great song is always just that, no matter the genre.

No 9 & 10 in music that influenced me as a teenager makes a reference to J.S Bach. I was raised in a household where classical music was always in the background. Mum played the piano and organ, so naturally enough, the Bach-inspired introductions to hit songs in 1967 (the year I turned 19), pressed all of the right buttons. The late Ray Manzarek, keyboard player with The Doors candidly spoke about the inspiration for the intro to ‘Light my Fire’, Bach’s Invention No. 8, BWV 779. Many piano players who ended up in rock bands had a classical background. So when the organ intro from Procol Harem’s No 1 hit ‘Whiter shade of Pale’ first emerged from the AM radios we owned in those days, the similarity between that and Bach’s Air on the G String was immediately identified. Matthew Fisher’s Hammond organ intro eased the way for Gary Brooker’s distinctive vocals and a global hit was born. Jim Morrison’s smoky vocals on ‘Light My Fire’ emerged from Ray Manzarek’s attacking organ intro.

Later, in my 20s, the classical/jazz influence continued with a love of 70s bands like Blood Sweat and Tears, Genesis, Sky, The Nice, the Moody Blues and Emerson, Lake and Palmer.

While Joni Mitchell’s songs (Both Sides Now and the Circle Game) were hits for Judy Collins and Buffy Saint- Marie in 1967, Joni’s first album did not appear until 1968 (when I turned 20). Little did we know, 19 albums later, what an incredible influence she would be for anyone with a keen sense of music, poetry and art.

My bad – I forgot to mention ‘Friday on My Mind’ (The Easybeats, 1966), selected as one of the best songs of the last 1,000 years by Richard Thompson, Here’s RT’s version.

In the Facebook posts I also neglected to mention a key influence on my songwriting, Ray Davies of The Kinks. Those well-crafted songs (e,g, ‘Sunny Afternoon’, ‘Dead End Street’, ‘Lola’ and ‘Dedicated Follower of Fashion’), stitched sardonic social comment into a fabric of catchy and rhythmic tunes. His songs lived on in my lizard brain until I picked up a guitar aged 27 and discovered the circle of fifths, just like Ray!

 

Morris Dancing And Other Cancelled Events

morris-dancing-cancelled events
Image of Morris dancers at Mt Coot-tha (2019) by Mary Brettell

Most of us have one social activity we love to share with like-minded people, be it Morris dancing, concerts, plays, ballet, rodeos, stock car racing, cricket, playing or watching football (all codes) or participating in surfing carnivals or golf tournaments.

Perhaps camp drafting is your thing (nothing happening here); there are no country shows or rodeos and the list of cancelled music events and festivals goes on for pages.

Even if your interest is excentrique (a dozen friends gathering for dinner and Chateau de Chazelles while trying to speak French for two hours), COVID-19 restrictions have put paid to it.

I might just add, before developing the theme, I’m puzzled why the horse racing industry has not come under much scrutiny for its lack of attention to social distancing. Horse racing, trots and even greyhound racing have continued without disruption throughout COVID-19. Sure, there are no crowds in attendance, but just envisage a typical blanket finish in a horse race: a nose, a neck and half a head. Pity the poor jockeys at the back; copping all that flying sweat, saliva and horse drool. That’s not social distancing, folks. As animal rights group PETA rightly observes, “staff members at a typical race meeting include trainers, jockeys, vets, strappers, farriers, stewards, handlers, and stable and kennel staff. “They’re required to be in close proximity, and many travel considerable distances to attend.”  (Nothing to do with gambling revenue, of course. Ed)

But as we were saying about cancelled events, Queensland’s Morris dancers called off today’s traditional May Day event.

Every year on May 1, dancers gather on hilltops at dawn to welcome the sun. Morris dancing is a 14th century English tradition which lives on, not only in the UK, but in Australia, New Zealand, Canada and the US.

This was the topic of my first FOMM, six years ago. It was an eye-witness account of pre-dawn shenanigans atop Brisbane’s best-known spot to view the city. It was cold, dark and showery, but nothing could extinguish the enthusiasm of musicians and dancers and their loyal followers.

Morris dancers clash sticks and bump bellies, symbolising the battle between the seasons. Morris men often wear hats with flowers, and “tatter coats” and many paint their faces. Dancers use either garlands of flowers or hankies for the gentle dances. But  there are as many variations in dress and dance style as there are Morris ‘sides’ or teams.

Brisbane Morris musician and dancer Nicole Murray told FOMM that local dancers would not be congregating at Mt Coot-tha this year, the first no-show for at least 40 years.

“But we are marking the occasion,” she said. “Emma (Nixon) and I recorded a version of Princess Royal (a traditional dancer tune). Everyone is dancing a jig at dawn and filming it. The aim is to do a stitched-together video. I hope that will be the outcome, anyway.”

Amongst other things, COVID-19 has postponed attempts by those who aspire to topple world records for mass participations. World records of this nature are many and varied – mass gatherings of Peruvian folk dancers, people wearing Akubra-style hats, Elvis impersonators, people dressed as Harry Potter, the longest River Dance line – the list goes on.

In 2018, the Potty Morris and Folk Festival set the record for the largest Morris dance in Sheringham (UK) with 369 dancers (33 Morris sides).

(Ed: Bob reels about clutching his head screaming ‘the bells, the bells”)

Nicole Murray’s partner John Thompson penned a song a few years ago which starts: “Dance up the sun on a fine May morning, dance up to sun to call in the Spring…” and traces the English tradition that spawned this annual event. The ritual insists that if Morris dancers don’t dance up the sun, it will never rise again.

May Day also commemorates those who struggled to win the right to fair pay and an eight-hour day. Perhaps that is one reason British Morris dancers arced up last year when the UK government arbitrarily decided to shift the date of the May long weekend (in 2020).

Meanwhile back home, a survey showed that Australians are anxious, bored and lonely as a result of the COVID-19 restrictions.

This may not apply so much to the over-65 cohort, many of whom will tell you they routinely experience anxiety, boredom and loneliness. For example, the highlight of my week was queuing up at 7.15am for my annual flu shot, along with 150 others over-65s. (We stayed at least three walkers apart).

Freedom of movement restrictions are sending some people a bit bonkers. Look how much trouble these rugby league players are in, not only breaking curfew but sharing their co-mingling activities on social media.

Young people are finding self-isolation and social restrictions tough. I offer as evidence the chart that shows more women aged 20-29 have been infected with COVID-19 than any other age group.

We have noticed, on our evening strolls along the river with the dog, increasing numbers of runners, seemingly out for more than routine exercise. Most people whizz by at one or two metres with a cheery “G’day”. Some give us a wide berth, occasionally muttering “1.5 metres mate.” A solitary young man can be seen repeatedly whacking a hockey ball into the net, not missing very often. One can only guess, in these uncertain times, at the level of frustration felt by people who enjoy team sports of any kind.

Even though I have been a rugby league fan for some 40 years, I disagree with the National Rugby League’s decision to restart the professional season in late May. It is irresponsible, fraught with risk and seems to be done for the sake of TV rights, betting agencies, and advertising contracts (not forgetting contractual obligations with players and coaches).

As is often demonstrated, the NRL cannot control what goes on in the lives of young athletes with high disposable incomes. What’s worse is the sense of entitlement the season re-launch implies. It may not be so well known that all amateur and semi-professional footballers (and netball players), were stood down in March. There are no signs at all of those competitions resuming any time soon.

We all may deeply resent the forced curtailment of our chosen sport/hobby/social activity. But it is being done for noble reasons, demonstrated every day with a notable drop-off in new COVID-19 cases. This weekend will be the first big test (in Queensland), as some restrictions are eased. For our part, we may visit Queen Mary Falls, located in a national park some 40 kms from home, just inside the 50km maximum travel allowance. As it’s in a national park, the dog will have to say home. He won’t like it, but rules are rules, eh?

As for the Morris no-show, several people who follow the tradition suggested Morris folk dance in their own driveways, just like on Anzac Day. Accordion and bells at 5am, LOL!

Here’s Nicole’s Murray’s song, Let Winter Begin, about that very magical moment from a southern hemisphere perspective.Let Winter Begin

Martial Law Or Just Do What You’re Told?

Martial-law-Brisbane-Ekka
Inventive Brisbane Ekka photo by David Kapernick

This may be Good Friday, but by any definition it’s not all that flash, given varying states of emergency in Australia and attempts to police COVID-19 restrictions (emergent but not quite martial law).

Well may you scoff, as hysteria spreads in the US about the very real prospect of the Commander in Chief ordering the armed forces to take over. Outspoken New York governor Andrew Cuomo has dismissed martial law rumours in his state, although he has tightened business restrictions. As always, the global situation changes by the day.

According to <militarynews.com>, there are more than enough believers that martial law could soon apply in some US states. As we should know, that means the abandonment of civil liberties, free speech and all recourse to legal protections through suspension of habeas corpus. This has happened in recent times in countries relatively close to us, including Fiji, East Timor and Aceh.

Martial law occurs when military control of normal civilian functions is imposed by a government. Civil liberties, such as the right to free movement or protection from unreasonable searches, can be suspended. Civilians may be arrested for violating curfews or for offences not considered serious enough (in normal times) to warrant detention.

The United States has imposed martial law in one or more States on more than a dozen occasions since the formation of the Union. Most were declared because of wars, civil unrest or natural disasters. President Trump has more wiggle room in 2020, thanks to John Warner’s National Defense Authorization Act, brought into law by President George W. Bush on October 17, 2006. In addition to allocating funding for the armed forces, it also gave the president the power to declare martial law and to take command of the National Guard units of each State without the consent of State governors.

The Atlantic reported last month on the extraordinary power available to the President simply by invoking a ‘national emergency’.

This delivers more than 100 special provisions not usually available in peacetime. For example, he can shut down many kinds of electronic communications inside the US, freeze Americans’ bank accounts and deploy troops inside the country to subdue domestic unrest. As The Atlantic’s Elizabeth Goitein observes, it would be OK if one trusted the President to do the right thing. But she points to past abuses, such as President Roosevelt’s rounding up and detaining Japanese nationals, even US citizens, after the bombing of Pearl Harbour. More recently, George W Bush supported programmes of wiretapping and torture after the 9/11 terrorist attacks.

As far back as the Civil War, some presidents have had misgivings about martial law. President Lincoln defended the suspension of habeas corpus, saying that while it was constitutionally questionable, it was “necessary to preserve the union”.

It may surprise readers to find that Australia was subject to martial law, notably Tasmania and NSW, during the Frontier Wars of the late 1800s.

Governor Arthur declared martial law (against indigenous peoples) in Tasmania in November 11, 1828.  Soldiers were given the right to apprehend without warrant or to shoot on sight any Aboriginal person in the Settled Districts who resisted them. The edict stressed that tribes that surrendered should be treated with every degree of humanity; and that “defenceless women and children be invariably spared”.

The Tasmanian state of martial law remained in place for three years. Meanwhile, Governor Brisbane introduced his own version of martial law in New South Wales. I have lost count of the Australians who have told me “we were never taught that at school”. Even now, some of the evidence is disputed, but at least there’s enough of it out there to make up your own mind.

Roll forward to 2020 and we have an executive Cabinet running Australia, only recalling Parliament one time, to vote on spending a lot of money to keep the economy in ‘hibernation’. There is a bi-partisan delegated legislation committee to oversee these measures, but how much influence does it really have?

The most sensible analysis I’ve read of this National Cabinet Committee is from libertarian blog, <Cattalaxyfiles>.

The writer describes the Cabinet (the nation’s first ministers – the Prime Minister, premiers and territory leaders), as an attempt at ‘cooperative federalism’. But he argues it has no constitutional authority.

 “The Commonwealth might not actually have the power to do many of the things that are currently being done. The States do. The ‘National Cabinet’ is an unconstitutional fig leaf that allows the States to coordinate their activities while appearing to have a unified national approach.”

Even with just a humble State of Emergency in place, Australian citizens have reportedly been subjected to harassment by police in NSW. Can someone sit on a park bench and eat a kebab? Not if the police have spoken to the same guy twice in the same day, apparently.

Life seems relatively benign in Queensland, compared with zealous police patrols of NSW streets, markets, shopping centres and beaches. Nevertheless, Queensland police have the power to order you to move on (when did they not?) and if you are flagrantly breaking the rules (using a kids’ playground for example), expect to get run in.

But is this anything new?

The National Museum of Australia may be closed, but you can still read online a summary of stern health measures taken by Australian authorities in 1918 and 1919, during the Spanish Flu pandemic’.

“The Australian Quarantine Service monitored the spread of the pandemic and implemented maritime quarantine on 17 October 1918, after learning of outbreaks in New Zealand and South Africa.

“The first infected ship to enter Australian waters was the Mataram, from Singapore, which arrived in Darwin on 18 October 1918. Over the next six months, the service intercepted 323 vessels, 174 of which carried the infection. Of the 81,510 people who were checked, 1102 were infected.”

Despite all best efforts, the illness spread and 15,000 people died of pneumonic influenza, the nation’s name for Spanish Flu. The death toll equated to 2.7 people in every 1000, one of the lowest death rates in the world.

History will show whether or not we can improve on this, more than a hundred years later. Much depends on how long we can all hang in there under virtual house arrest. The cancellation of the Royal Queensland Show (the Ekka) is a clear sign that authorities expect the pandemic to still be around in August.

Authorities decided that exposing up to 400,000 people to the coronavirus was too big a risk. Also, the State government has taken an option over the 22ha Brisbane Showgrounds site for temporary hospital accommodation, just as it happened in 1919, at the peak of the ‘Spanish Flu’ pandemic.

We can only imagine what a blow the Ekka announcement was to the State’s farmers – their annual chance to leave the drought and bushfires behind, put on their best duds and escape to the city.

It’s for the best, they say, but we don’t have to like it.

Further reading: NSW civil liberties advocate Nicholas Cowdery warns extended adjournment is “unacceptable and dangerous for democracy”

https://www.health.gov.au/news/health-alerts/novel-coronavirus-2019-ncov-health-alert/government-response-to-the-covid-19-outbreak