And there are people who hate living in the city. Again sinkie mentality
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Ozland Becoming from Bad to Worse
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ANALYSIS'80 per cent of the economy is going backwards', and that's likely to continue for some time
By business reporter David Taylor
Posted8 hours ago, updated5 hours ago
Empty shops are a sign of the tough times for retail in many areas of Australia.(ABC News: Nathalie Fernbach)
The good news is the Australian economy is just about to notch up another quarter of economic growth, now in the 29th year of its record-breaking expansion.
The bad news is that growth is just inching along — to the point where one leading economist has described the nation as "teetering on the edge of a recession".
The fear is that, if the economy slows further, unemployment will rise and that could set off a disastrous economic chain reaction that would swing the entire economy into reverse.
The latest September quarter economic growth — or Gross Domestic Product (GDP) — figures out today are expected to show Australia remains on the edge.
The data include various aspects of the economy: consumption (what we spend at the shops), business investment, government spending and net exports (exports minus imports).
Many of the ingredients to GDP have already been announced, so forecasting the final result is a relatively straightforward exercise.
In the three months to the end of September, Australia recorded a seasonally adjusted $7.9-billion current account surplus, according to the Australian Bureau of Statistics. That's good economic news.
China's economy continues to expand at a very healthy pace and so demand for Australia's iron ore and LNG remains strong.
With a surge in exports, the Federal Government's coffers also grow and, for the moment, it's spending much of that windfall gain.
General government final consumption expenditure increased by $817 million, or 0.9 per cent, in the quarter, and is expected to contribute 0.2 percentage points to growth in the September quarter.
Again, that's good economic news.
But that's where the good news ends.
The economy is weak and heading downward
The Conversation's 2019-20 forecasting panel is predicting an economic growth rate as weak as any since the GFC.
Read more
The rest of the GDP equation points to a very weak economy.
The official ABS data show Australian businesses are not in great shape.
The seasonally adjusted estimate for total new capital expenditure fell by 0.2 per cent in the September quarter 2019.
This follows a fall of 0.6 per cent in the June quarter.
The seasonally adjusted estimate for company gross operating profits also fell 0.8 per cent in the September quarter 2019.
"Business investment is really quite weak," EY chief economist Jo Masters said.
"It's been disappointing for some time now.
Nervous consumers with high debts and low wage rises
That transition is partly dependent on the consumer spending more at shops around the country.
Despite record low interest rates and tax relief, highly indebted households are anxious about their finances.
Debt killing the economy?
Australian consumers have closed their wallets, and many analysts are pointing the finger at record levels of household debt as the main reason why.
Read more
Add job insecurity to that, and there's a big reluctance for consumers to part with their money.
National Australia Bank's chief economist Alan Oster said it worries him.
"You need to get more income into the consumer," he said.
"At present what you've got is a consumer that's scared and only spending on things they have to, you've got a slowdown in the construction industry, and business — for whatever reason — are basically not investing, and I don't really think they're going to invest anytime soon.
"So I see this pattern continuing for a while."
Unemployment fears lurking
Supporting Mr Oster's gloomy forecast for consumer spending and economic activity is data from ANZ on job advertisements.
Job ads fell 1.7 per cent in November. Over the year, they're now down 12.6 per cent.
The latest ABS job vacancy report (for August) also showed a decline in vacancies, down 1.3 per cent.
Hanging by a thread
Jobs are about the only thing keeping recession at bay, but with unemployment rising, so are the risks.
Read more
Analysis by the Centre for Future Work shows that, if the drop-off in job ads continues into next year, Australia's unemployment rate could climb above 6 per cent.
Research by National Australia Bank also points to rising unemployment.
The reason rising unemployment worries economists so much is that people without jobs find paying the mortgage extremely difficult and tend to spend less.
That puts huge pressure on the property market and on one of the sectors of the economy — consumption — that generally needs to keep growing to prevent Australia from slipping into recession.
The Centre for Future Work's Jim Stanford describes the economy as "teetering on the edge of a recession".
Mr Oster doesn't go that far, but he does concede that most of the economy is receding.
With economic growth, it's generally accepted, comes rising standards of living. So, the stronger the economic growth, the better off we should all feel.
The consensus among economists is that GDP will come in later today at 0.5 per cent in the September quarter, taking the annual pace of growth to roughly 1.7 per cent.
With population growth running at 1.6 per cent per annum, the average individual is essentially treading water.
ANALYSIS'80 per cent of the economy is going backwards', and that's likely to continue for some time
By business reporter David Taylor
Posted8 hours ago, updated5 hours ago
The good news is the Australian economy is just about to notch up another quarter of economic growth, now in the 29th year of its record-breaking expansion.
The bad news is that growth is just inching along — to the point where one leading economist has described the nation as "teetering on the edge of a recession".
The fear is that, if the economy slows further, unemployment will rise and that could set off a disastrous economic chain reaction that would swing the entire economy into reverse.
The latest September quarter economic growth — or Gross Domestic Product (GDP) — figures out today are expected to show Australia remains on the edge.
The data include various aspects of the economy: consumption (what we spend at the shops), business investment, government spending and net exports (exports minus imports).
Many of the ingredients to GDP have already been announced, so forecasting the final result is a relatively straightforward exercise.
In the three months to the end of September, Australia recorded a seasonally adjusted $7.9-billion current account surplus, according to the Australian Bureau of Statistics. That's good economic news.
China's economy continues to expand at a very healthy pace and so demand for Australia's iron ore and LNG remains strong.
With a surge in exports, the Federal Government's coffers also grow and, for the moment, it's spending much of that windfall gain.
General government final consumption expenditure increased by $817 million, or 0.9 per cent, in the quarter, and is expected to contribute 0.2 percentage points to growth in the September quarter.
Again, that's good economic news.
But that's where the good news ends.
The economy is weak and heading downward
The Conversation's 2019-20 forecasting panel is predicting an economic growth rate as weak as any since the GFC.
Read more
The rest of the GDP equation points to a very weak economy.
The official ABS data show Australian businesses are not in great shape.
The seasonally adjusted estimate for total new capital expenditure fell by 0.2 per cent in the September quarter 2019.
This follows a fall of 0.6 per cent in the June quarter.
The seasonally adjusted estimate for company gross operating profits also fell 0.8 per cent in the September quarter 2019.
"Business investment is really quite weak," EY chief economist Jo Masters said.
"It's been disappointing for some time now.
"I think that is a concern for growth, not just for today, but for the transition our economy has to make for the future."
Nervous consumers with high debts and low wage rises
That transition is partly dependent on the consumer spending more at shops around the country.
Despite record low interest rates and tax relief, highly indebted households are anxious about their finances.
Debt killing the economy?
Australian consumers have closed their wallets, and many analysts are pointing the finger at record levels of household debt as the main reason why.
Read more
Add job insecurity to that, and there's a big reluctance for consumers to part with their money.
National Australia Bank's chief economist Alan Oster said it worries him.
"You need to get more income into the consumer," he said.
"At present what you've got is a consumer that's scared and only spending on things they have to, you've got a slowdown in the construction industry, and business — for whatever reason — are basically not investing, and I don't really think they're going to invest anytime soon.
"So I see this pattern continuing for a while."
Unemployment fears lurking
Supporting Mr Oster's gloomy forecast for consumer spending and economic activity is data from ANZ on job advertisements.
Job ads fell 1.7 per cent in November. Over the year, they're now down 12.6 per cent.
The latest ABS job vacancy report (for August) also showed a decline in vacancies, down 1.3 per cent.
Hanging by a thread
Jobs are about the only thing keeping recession at bay, but with unemployment rising, so are the risks.
Read more
Analysis by the Centre for Future Work shows that, if the drop-off in job ads continues into next year, Australia's unemployment rate could climb above 6 per cent.
Research by National Australia Bank also points to rising unemployment.
The reason rising unemployment worries economists so much is that people without jobs find paying the mortgage extremely difficult and tend to spend less.
That puts huge pressure on the property market and on one of the sectors of the economy — consumption — that generally needs to keep growing to prevent Australia from slipping into recession.
The Centre for Future Work's Jim Stanford describes the economy as "teetering on the edge of a recession".
Mr Oster doesn't go that far, but he does concede that most of the economy is receding.
What he means by that is that areas like consumer spending and retail, building and construction and household incomes — the areas of the economy directly touching most people — are either going backwards or growing very weakly.
With economic growth, it's generally accepted, comes rising standards of living. So, the stronger the economic growth, the better off we should all feel.
The consensus among economists is that GDP will come in later today at 0.5 per cent in the September quarter, taking the annual pace of growth to roughly 1.7 per cent.
With population growth running at 1.6 per cent per annum, the average individual is essentially treading water.
Australia is a big island in the middle of nowhere. If China stop buying the resources, what else can Australia rely on for economic growth?
It is true that Aussies are racists.
Investment scheme leaves families $60 million out of pocket
7.30/ By Emily Baker and Raveen Hunjan
Posted 5h ago5 hours ago, updated 2h ago2 hours ago
WATCH
Duration: 7 minutes 6 seconds7m
Collapse of investment scheme leaves families $60 million out of pocket.(Emily Baker)
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Kris Agrawal was the go-to advisor for many in his orbit. When Yogita Patel needed a home loan, fellow temple-goers encouraged her to seek his help. He was Rajeev Kumar's mortgage broker, financial advisor and accountant. Others turned to him to help build their dream home.
Three years ago, Mr Agrawal began developing properties, offering his friends and loyal clients enticing returns on investment in his projects across western Sydney.
More than 150 mum and dad investors sunk almost $60 million into the scheme – money they fear they may never see again after the shocking collapse of several companies connected to Mr Agrawal and his wife Shashi.
Yogita Patel has been her family's sole earner for 13 years.(Supplied)
"It's gone, my money is gone," Mrs Patel said.
"I don't think ... it's coming back.
"Everything is messed up."
Mrs Patel has been her family's sole earner since her husband was brutally bashed in 2010, an attack that left him with a severe brain injury and unable to work. She had her own health issues and was worried for her family's future when Mr Agrawal – her financial advisor of about a decade – suggested she invest in a housing project at Castle Hill.
"He told me I will pay you back 12 per cent interest a year, and at the moment, whatever I'm earning, I would get double than that," she said.
"So I just trust him."
Mrs Patel received some interest on her initial investment, but she cries as she recalls the company's demise. It went into voluntary administration in June.
"I got the email and I told him in my language, 'Did you lose all my money?' and he said, 'Yes,'" Mrs Patel told 7.30.
"I was so shocked I just literally drop on the floor."
Money loaned through web of companies
The Agrawals sit at the top of a complex web of companies and trusts, many of which have gone into voluntary administration or liquidation.Several companies connected to Kris and Shashi Agrawal collapsed.(Supplied)
Olvera Advisory principal Mirzan Mansoor has been appointed external administrator of five of the companies. Key among them is Mansa Sons, which was effectively the fundraising arm for the couple's planned property projects.
Mr Mansoor explained money loaned to Mansa Sons by people like Mrs Patel was then on-loaned to a network of companies responsible for property purchase, construction or development.
"It's a very complex scheme," Mr Mansoor told 7.30. "We're working to understand… where the destination of these funds are."
A series of WhatsApp messages, seen by 7.30, showed Mr Agrawal requesting large sums of money from various contacts earlier this year.
"Have you transferred $200K," he said in March.
In another message from April, Mr Agrawal urged an investor to make a deposit into a Mansa Sons account.
"Saheb — $170K or more transfer karo in Mansa," he said.
Two weeks later, another request: "I need money urgently, can you transfer into SMSF [self-managed super fund] and transfer to me please."
Administrator Mr Mansoor said his team was working "around the clock" to try to recover funds for creditors.
Kris Agrawal offered his clients enticing returns on investment in his projects.(Supplied)
Mansa Sons does not itself hold any property, but several other asset-holding companies connected to the Agrawals have been handed over to other administrators. They've identified at least 12 properties across Sydney's west and north-west linked with Mr and Mrs Agrawal's network of companies.
"At this stage, we aren't able to give…the quantification of the return and the timeline as to when the funds can be recovered," Mr Mansoor said.
"I understand it's a very stressful situation for [investors and] their families … but please be rest assured that we will be doing our very best."
Administrator Cathro and Partners, which is overseeing three more companies connected to the Agrawals, has identified an additional $44.4 million in debts – about half of which is owed to everyday investors. It brings the couple's total debts to more than $80 million.
ASIC investigation underway
Mr Mansoor confirmed he had submitted a confidential report about Mr and Mrs Agrawal's network of companies to the corporate regulator, ASIC.An ASIC spokesperson said the agency was investigating the matter.
"While ASIC can't go into detail about specific complaints we have received, we can confirm that this matter involves persons and entities of interest to ASIC," the spokesperson said.
"We have commenced a formal investigation, which remains ongoing."
For creditors, action can't come soon enough.
Rajeev Kumar saw Mr Agrawal like a brother. The pair met in 2014 when Mr Kumar needed a mortgage broker, then Mr Agrawal became his financial advisor and accountant. Their families spent time together, including a dinner at Mr Kumar's home when Mr Agrawal's parents visited from India.
Rajeev Kumar says Kris Agrawal encouraged him to buy into his developments.(ABC News: Shaun Kingma)
In late 2020, Mr Agrawal encouraged Mr Kumar to buy into his developments, citing strong returns for past investors.
Mr Kumar estimates he invested more than $1 million in the scheme. He told 7.30 he and his wife have nothing left in their superannuation fund.
"My message to Kris is, you have to pay our money back," he said.
"We need our money back — everyone."
Mr and Mrs Agrawal did not respond to calls, texts or emails from 7.30. The property listed as their business address has been put on the market for sale.
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