31 December 2022
This is the Property Developer with the Biggest Market Cap in Indonesia
JAKARTA, KOMPAS.com - 2023 is just hours away, leaving 2022 full of interesting records and at the same time giving hope that the property sector will show significant recovery. A number of developers are competing to release new projects for various target segments ranging from the luxury class to subsidies.
This is of course, for the sake of showing the public, that this sector which has a dual impact on 174 industries has regained market trust.
However, of the many developers, only five have made convincing performance. These big names continued their domination as was the record in previous years. Who are they?
Kompas.com ranks developers based on market capitalization (market cap).
Market capitalization is an indicator of stock performance related to the fundamentals of a company. One of the important considerations that investors take into account before buying a stock is the size of the market cap. According to Investopedia, market cap is the aggregate market value of a company. The market capitalization calculation is based on the total multiplied by the outstanding number of company shares traded on the stock market.
Usually, the market cap is used by investors to measure the quality of the company. For investors, market cap is a parameter that shows the size of the company. The bigger the market cap, the bigger the value for companies whose shares are traded in the public.
The following are the top five property developers based on market cap as of 30 December 2022:
1. PT Metropolitan Kentjana Tbk (MKPI)
The company recorded a market capitalization of IDR 34.85 trillion. Meanwhile, the revenue is Rp. 1.79 trillion and income is Rp. 642.25 billion.
MKPI has a property business that is supported by recurring and development for the residential and commercial categories. The property sales business includes townhouses and strata title apartments spread across Jakarta, Tangerang and Batam Island.
Its portfolio includes Pondok Indah Mall (PIM 1-3), Pondok Indah Golf Apartment (PIGA), Pondok Indah Office Tower (PIOT), Pondok Indah Office Park (PIOP) and Service Residence Pondok Indah (SRPI).
The company also has a hospitality business through its subsidiary, PT Hotel Pondok Indah, which is operated using the Intercontinental Hotel Group (IHG) network. Its subsidiaries include PT Bumi Shangril La Jaya and PT Pondok Indah Investment.
2. PT Pakuwon Jati Tbk (PWON)
Alexander Tedja gave birth to this company so he was able to score a market cap of IDR 21.77 trillion. Revenue as of 30 December 2022 reached IDR 6.42 trillion with a net income of IDR 1.85 trillion.
PWON operates in five segments namely offices, shopping centers, serviced apartments, housing and hotels. Its portfolio includes nine shopping centers spread across Jakarta, Surabaya, Yogyakarta and Solo; six offices, namely Gandaria 8 Office, Kota Kasablanka Tower A and B, and Pakuwon Tower in Jakarta, as well as Pakuwon Tower and Pakuwon Center in the Tunjungan Plaza superblock, Surabaya.
Then two serviced apartments namely Ascott Waterplace Surabaya and Somerset Berlian Jakarta. Furthermore, the hospitality segment includes Sheraton Surabaya Hotel and Towers, Four Points, Sheraton Grand Jakarta Gandaria City, The Westin Surabaya Hotel and Marriott Hotel Yogyakarta.
There are also strata apartments including two Gandaria Heights towers, four Casa Grande towers and others.
3. PT Bumi Serpong Damai Tbk (BSDE)
The company started by Muktar Widjaya recorded a market cap of IDR 19.69 trillion. Unlike MKPI, BSDE's revenue was recorded at IDR 9.36 trillion with a net income of IDR 1.34 trillion.
To note, BSDE focuses on developing new cities that include integrated residential areas, with infrastructure, environmental facilities, and parks. Among them are BSD City, Kota Wisata, Grand Wisata, Wisata Bukit Mas, Legend Wisata, Kota Deltamas, Balikpapan Baru, Grand City Balikpapan, and Nuvasa Bay.
Reporting from the Financial Times, the Company's property business segments include residential, commercial, asset management, retail and hospitality through a number of subsidiaries. For example, PT Bumi Indah Asri, PT Bumi Karawang Damai, Global Prime Capital Pte. Ltd., PT Kanaka Grahaasri, PT Kanaka Grahaasri, PT Putra Prabukarya, PT Bintaro Serpong Damai, PT Duta Dharma Sinarmas, and PT Duta Karya Propertindo. Then PT Duta Mitra Mas, PT Duta Pertiwi Tbk, PT Mustika Karya Sejati, PT Garwita Sentra Utama, PT Grahadipta Wisesa, Global Prime Capital Pte. Ltd., PT Indonesia International Expo and PT Indonesia International Graha.
4. PT Ciputra Development Tbk (CTRA)
The company, which is now controlled by the second generation, Candra Ciputra, has recorded a market capitalization of Rp. Rp. 17.54 trillion. The revenue reached IDR 10.31 trillion with a net income of IDR 2.25 trillion.
CTRA is engaged in housing as its core business in the development of integrated areas, then recreational areas, industrial areas, offices, hotels, shopping centers, apartments, golf courses, and others.
Its portfolio includes: CitraRaya Cikupa, Ciputra World 1 Jakarta, Ciputra World 2 Jakarta, Ciputra World Surabaya, CitraLand City Surabaya, CitraLand City Losari, and so on.
5. PT Summarecon Agung Tbk (SMRA)
The company started by Sutjipto Nagaria scored a market capitalization of IDR 10.07 trillion. Meanwhile revenue reached IDR 5.99 trillion and net income IDR 462.9 billion. For your information, SMRA's business includes property development, investment property, hospitality, and property management.
Until now, SMRA has developed several integrated townships, including Summarecon Kelapa Gading, Summarecon Serpong, Summarecon Bekasi, Summarecon Bandung, Summarecon Karawang, Summarecon Makassar, Summarecon Bogor, and Summarecon Crown Gading.
https://www.kompas.com/properti/read/2022/12/31/070000621/ini-dia-pengembang-properti-dengan-market-cap-terbesar-di-indonesia?page=all
This is of course, for the sake of showing the public, that this sector which has a dual impact on 174 industries has regained market trust.
However, of the many developers, only five have made convincing performance. These big names continued their domination as was the record in previous years. Who are they?
Kompas.com ranks developers based on market capitalization (market cap).
Market capitalization is an indicator of stock performance related to the fundamentals of a company. One of the important considerations that investors take into account before buying a stock is the size of the market cap. According to Investopedia, market cap is the aggregate market value of a company. The market capitalization calculation is based on the total multiplied by the outstanding number of company shares traded on the stock market.
Usually, the market cap is used by investors to measure the quality of the company. For investors, market cap is a parameter that shows the size of the company. The bigger the market cap, the bigger the value for companies whose shares are traded in the public.
The following are the top five property developers based on market cap as of 30 December 2022:
1. PT Metropolitan Kentjana Tbk (MKPI)
The company recorded a market capitalization of IDR 34.85 trillion. Meanwhile, the revenue is Rp. 1.79 trillion and income is Rp. 642.25 billion.
MKPI has a property business that is supported by recurring and development for the residential and commercial categories. The property sales business includes townhouses and strata title apartments spread across Jakarta, Tangerang and Batam Island.
Its portfolio includes Pondok Indah Mall (PIM 1-3), Pondok Indah Golf Apartment (PIGA), Pondok Indah Office Tower (PIOT), Pondok Indah Office Park (PIOP) and Service Residence Pondok Indah (SRPI).
The company also has a hospitality business through its subsidiary, PT Hotel Pondok Indah, which is operated using the Intercontinental Hotel Group (IHG) network. Its subsidiaries include PT Bumi Shangril La Jaya and PT Pondok Indah Investment.
2. PT Pakuwon Jati Tbk (PWON)
Alexander Tedja gave birth to this company so he was able to score a market cap of IDR 21.77 trillion. Revenue as of 30 December 2022 reached IDR 6.42 trillion with a net income of IDR 1.85 trillion.
PWON operates in five segments namely offices, shopping centers, serviced apartments, housing and hotels. Its portfolio includes nine shopping centers spread across Jakarta, Surabaya, Yogyakarta and Solo; six offices, namely Gandaria 8 Office, Kota Kasablanka Tower A and B, and Pakuwon Tower in Jakarta, as well as Pakuwon Tower and Pakuwon Center in the Tunjungan Plaza superblock, Surabaya.
Then two serviced apartments namely Ascott Waterplace Surabaya and Somerset Berlian Jakarta. Furthermore, the hospitality segment includes Sheraton Surabaya Hotel and Towers, Four Points, Sheraton Grand Jakarta Gandaria City, The Westin Surabaya Hotel and Marriott Hotel Yogyakarta.
There are also strata apartments including two Gandaria Heights towers, four Casa Grande towers and others.
3. PT Bumi Serpong Damai Tbk (BSDE)
The company started by Muktar Widjaya recorded a market cap of IDR 19.69 trillion. Unlike MKPI, BSDE's revenue was recorded at IDR 9.36 trillion with a net income of IDR 1.34 trillion.
To note, BSDE focuses on developing new cities that include integrated residential areas, with infrastructure, environmental facilities, and parks. Among them are BSD City, Kota Wisata, Grand Wisata, Wisata Bukit Mas, Legend Wisata, Kota Deltamas, Balikpapan Baru, Grand City Balikpapan, and Nuvasa Bay.
Reporting from the Financial Times, the Company's property business segments include residential, commercial, asset management, retail and hospitality through a number of subsidiaries. For example, PT Bumi Indah Asri, PT Bumi Karawang Damai, Global Prime Capital Pte. Ltd., PT Kanaka Grahaasri, PT Kanaka Grahaasri, PT Putra Prabukarya, PT Bintaro Serpong Damai, PT Duta Dharma Sinarmas, and PT Duta Karya Propertindo. Then PT Duta Mitra Mas, PT Duta Pertiwi Tbk, PT Mustika Karya Sejati, PT Garwita Sentra Utama, PT Grahadipta Wisesa, Global Prime Capital Pte. Ltd., PT Indonesia International Expo and PT Indonesia International Graha.
4. PT Ciputra Development Tbk (CTRA)
The company, which is now controlled by the second generation, Candra Ciputra, has recorded a market capitalization of Rp. Rp. 17.54 trillion. The revenue reached IDR 10.31 trillion with a net income of IDR 2.25 trillion.
CTRA is engaged in housing as its core business in the development of integrated areas, then recreational areas, industrial areas, offices, hotels, shopping centers, apartments, golf courses, and others.
Its portfolio includes: CitraRaya Cikupa, Ciputra World 1 Jakarta, Ciputra World 2 Jakarta, Ciputra World Surabaya, CitraLand City Surabaya, CitraLand City Losari, and so on.
5. PT Summarecon Agung Tbk (SMRA)
The company started by Sutjipto Nagaria scored a market capitalization of IDR 10.07 trillion. Meanwhile revenue reached IDR 5.99 trillion and net income IDR 462.9 billion. For your information, SMRA's business includes property development, investment property, hospitality, and property management.
Until now, SMRA has developed several integrated townships, including Summarecon Kelapa Gading, Summarecon Serpong, Summarecon Bekasi, Summarecon Bandung, Summarecon Karawang, Summarecon Makassar, Summarecon Bogor, and Summarecon Crown Gading.
https://www.kompas.com/properti/read/2022/12/31/070000621/ini-dia-pengembang-properti-dengan-market-cap-terbesar-di-indonesia?page=all
29 November 2022
2023 The Economy Has Worsen, This Is What Property Entrepreneurs Are Doing
Jakarta, CNBC Indonesia - The global economic situation which is expected to worsen in 2023 has not dampened the confidence of property industry players in the country to remain optimistic in looking at 2023. Through various breakthroughs and new initiatives, developers believe that their business will grow positively next year.
Marketing Director of PT Agung Podomoro Land Tbk Agung Wirajaya expressed his optimism that the property industry will continue to grow positively next year. According to him, the Indonesian economy has good fundamentals and is predicted to continue to grow positively in 2023. Through various new strategies and initiatives, Agung Podomoro has been able to take advantage of the Covid-19 pandemic situation over the past three years with very positive business growth.
"With various post-Covid-19 changes, developers are required to make various breakthroughs so that our property projects are in line with the latest consumer needs. This strategy has been implemented by Agung Podomoro in the last three years and has been successful," Agung explained in an official statement, Tuesday. (29/11/2022).
For example, during a pandemic, Agung Podomoro launched a residence in Podomoro Tenjo City and sold up to 4,500 units. Even the Podomoro City Deli Medan apartment that was built by APL in Medan was sold out in a short time.
"The need for housing is still very large. It has now reached 12.7 million, and it is certain that the number will continue to increase every year. Even if all the developers join forces, it is not certain that they will be able to meet the very large demand for housing," said Agung.
Based on the records of the Central Statistics Agency (BPS), in the third quarter of 2022 the Indonesian economy grew 5.72% on an annual basis. This figure is higher than growth in the second quarter of 2022 which was 5.44% on an annual basis.
Chief Economist of PT Bank Central Asia Tbk (BCA) David E. Sumual said, the government will of course continue to maintain this positive trend of economic growth. In fact, while the economic situation is still wait and see, several investment instruments will actually experience an increase, for example gold and property.
According to David, many banks have also not raised mortgage rates even though Bank Indonesia's benchmark interest rate has increased several times. For this reason, David believes that property investment will remain attractive considering that the trend of rising property prices will continue. Property is also a safe investment instrument.
David saw that the role of the property sector was proven by its contribution to GDP. In the second quarter of 2022 the contribution of the construction sector to GDP reached 9.14%, and 2.47% for real estate. In addition, growth was also shown by the property sector in the second quarter of 2022 with achievements that exceeded pre-pandemic levels of 2.16% (yoy) for real estate and 1.02% (yoy) for construction.
"The Commercial Property Demand Index in the second quarter of 2022 also rose by 1.58% (yoy). This gives confidence that the property sector will continue to grow, moreover banks will continue to maintain mortgage interest rates at a level that consumers can afford," he explained David in the discussion.
The same thing was expressed by the President Director of PT ERA Indonesia Darmadi Darmawangsa. The optimism of business actors in the property sector is marked by the large number of developers who are continuing to launch new projects even though economic conditions have not fully recovered after the pandemic.
"That's because housing is a primary need, so the demand will always be there. There are still lots of people who need housing and it hasn't been met," he said.
In the last 40 years, continued Darmadi, 90% of Indonesia's upper-middle-class people have had their wealth derived from property ownership. "If you don't invest in property, your wealth will surely be eroded by inflation. Because one of the things that can cover inflation is the increase in property prices," he said.
The magnitude of the increase in property prices cannot be measured with certainty. However, based on Darmadi's experience, the increase is always above inflation. "Not only property, the increase in the price of other commodities is also unpredictable. Take a look at the coal price in April 2021 during the pandemic, the price was only US$ 51, but after the pandemic in October 2022 the price has shot up to US$ 351. So now is the best time to invest. on the property," said Darmadi.
Bukit Podomoro Jakarta Chief Marketing Officer Zaldy Wihardja said, APL's confidence in looking to 2023 is proven by continuing to invest and build properties in the East Jakarta area. This was done as a strategy to meet the needs of consumers who want assets with high value growth as well as luxury residential areas that are coveted and awaited by East Jakarta residents.
In East Jakarta, Zaldy said, the increase in land prices was relatively late compared to other areas of Jakarta. But in the last five years the increase has been the highest. Moreover, the DKI Jakarta government plans to make the East Jakarta area a residential area, no longer an industry.
"We are building Podomoro Hills in Jakarta because the potential for growth is still very high. Currently the price of land is still around 20-25 million per meter, half of the price in Central and South Jakarta. But I am sure that in 3-4 years land prices in East Jakarta will skyrocket ," he said. East Jakarta, added Zaldy, is a Sunrise area stored in Jakarta and ready to become the next new gold area.
Zaldy then gave an example of the increase in house prices in Podomoro Hill in the past year which ranged from 10-15%. This increase was already higher than inflation.
"Property will continue to increase. Even if it is stagnant, it will not take long for it to rise again. Apart from that, property has a measurable risk, because the asset has a form, aka it can be lived in," he concluded.
https://www.cnbcindonesia.com/market/20221129060652-17-391952/2023-ekonomi-memburuk-ini-yang-dilakukan-pengusaha-properti
Marketing Director of PT Agung Podomoro Land Tbk Agung Wirajaya expressed his optimism that the property industry will continue to grow positively next year. According to him, the Indonesian economy has good fundamentals and is predicted to continue to grow positively in 2023. Through various new strategies and initiatives, Agung Podomoro has been able to take advantage of the Covid-19 pandemic situation over the past three years with very positive business growth.
"With various post-Covid-19 changes, developers are required to make various breakthroughs so that our property projects are in line with the latest consumer needs. This strategy has been implemented by Agung Podomoro in the last three years and has been successful," Agung explained in an official statement, Tuesday. (29/11/2022).
For example, during a pandemic, Agung Podomoro launched a residence in Podomoro Tenjo City and sold up to 4,500 units. Even the Podomoro City Deli Medan apartment that was built by APL in Medan was sold out in a short time.
"The need for housing is still very large. It has now reached 12.7 million, and it is certain that the number will continue to increase every year. Even if all the developers join forces, it is not certain that they will be able to meet the very large demand for housing," said Agung.
Based on the records of the Central Statistics Agency (BPS), in the third quarter of 2022 the Indonesian economy grew 5.72% on an annual basis. This figure is higher than growth in the second quarter of 2022 which was 5.44% on an annual basis.
Chief Economist of PT Bank Central Asia Tbk (BCA) David E. Sumual said, the government will of course continue to maintain this positive trend of economic growth. In fact, while the economic situation is still wait and see, several investment instruments will actually experience an increase, for example gold and property.
According to David, many banks have also not raised mortgage rates even though Bank Indonesia's benchmark interest rate has increased several times. For this reason, David believes that property investment will remain attractive considering that the trend of rising property prices will continue. Property is also a safe investment instrument.
David saw that the role of the property sector was proven by its contribution to GDP. In the second quarter of 2022 the contribution of the construction sector to GDP reached 9.14%, and 2.47% for real estate. In addition, growth was also shown by the property sector in the second quarter of 2022 with achievements that exceeded pre-pandemic levels of 2.16% (yoy) for real estate and 1.02% (yoy) for construction.
"The Commercial Property Demand Index in the second quarter of 2022 also rose by 1.58% (yoy). This gives confidence that the property sector will continue to grow, moreover banks will continue to maintain mortgage interest rates at a level that consumers can afford," he explained David in the discussion.
The same thing was expressed by the President Director of PT ERA Indonesia Darmadi Darmawangsa. The optimism of business actors in the property sector is marked by the large number of developers who are continuing to launch new projects even though economic conditions have not fully recovered after the pandemic.
"That's because housing is a primary need, so the demand will always be there. There are still lots of people who need housing and it hasn't been met," he said.
In the last 40 years, continued Darmadi, 90% of Indonesia's upper-middle-class people have had their wealth derived from property ownership. "If you don't invest in property, your wealth will surely be eroded by inflation. Because one of the things that can cover inflation is the increase in property prices," he said.
The magnitude of the increase in property prices cannot be measured with certainty. However, based on Darmadi's experience, the increase is always above inflation. "Not only property, the increase in the price of other commodities is also unpredictable. Take a look at the coal price in April 2021 during the pandemic, the price was only US$ 51, but after the pandemic in October 2022 the price has shot up to US$ 351. So now is the best time to invest. on the property," said Darmadi.
Bukit Podomoro Jakarta Chief Marketing Officer Zaldy Wihardja said, APL's confidence in looking to 2023 is proven by continuing to invest and build properties in the East Jakarta area. This was done as a strategy to meet the needs of consumers who want assets with high value growth as well as luxury residential areas that are coveted and awaited by East Jakarta residents.
In East Jakarta, Zaldy said, the increase in land prices was relatively late compared to other areas of Jakarta. But in the last five years the increase has been the highest. Moreover, the DKI Jakarta government plans to make the East Jakarta area a residential area, no longer an industry.
"We are building Podomoro Hills in Jakarta because the potential for growth is still very high. Currently the price of land is still around 20-25 million per meter, half of the price in Central and South Jakarta. But I am sure that in 3-4 years land prices in East Jakarta will skyrocket ," he said. East Jakarta, added Zaldy, is a Sunrise area stored in Jakarta and ready to become the next new gold area.
Zaldy then gave an example of the increase in house prices in Podomoro Hill in the past year which ranged from 10-15%. This increase was already higher than inflation.
"Property will continue to increase. Even if it is stagnant, it will not take long for it to rise again. Apart from that, property has a measurable risk, because the asset has a form, aka it can be lived in," he concluded.
https://www.cnbcindonesia.com/market/20221129060652-17-391952/2023-ekonomi-memburuk-ini-yang-dilakukan-pengusaha-properti
17 November 2022
Australia’s rental crisis hits new low
SQM Research has released rental data for October, with the nation’s vacancy rate plummeting to a new 16-year low of just 1.0%, down from 1.9% a year earlier:
In the 30 days to 16 November 2022, capital city asking rents also rose another 2% with the 12-month rise standing at an unprecedented 24.4%:
Commenting on the result, SQM Research managing director Louis Christopher noted that “the national rental market is still very much in favour of landlords, particularly for our capital cities where there is no evidence yet of any easing in the rental market”. However, Christopher said “there is some good news for tenants in a number of townships and regions outside the capital cities whereby SQM Research is now recording a consistent rise in rental vacancy rates, albeit from a very low base”.
Christopher believes this easing in regional rental vacancies “might be attributed to a population flow back into the cities whereby an increasing number of white-collar workers are being asked to come back into the office”. If true, “this means the capital city rental market will continue to be under great strain for tenants over the foreseeable future and may not ease until late 2023 at the earliest”.
Australia’s rental crisis is destined to get worse given net temporary student and work visa arrivals have risen to record levels:
The impact will be worst in the major cities of Sydney and Melbourne, which are the key landing points for migrants.
https://www.macrobusiness.com.au/2022/11/australias-rental-crisis-hits-new-low/
04 November 2022
The Fed et al give a signal to relax, afraid of a severe recession?
Jakarta, CNBC Indonesia - The United States (US) central bank, known as the Federal Reserve (The Fed) announced another interest rate hike on Thursday (11/3/2022). The world's most powerful central bank raised interest rates by 75 basis points to 3.75% - 4%, in line with market expectations.
However, there are few signs that interest rate hikes may not be aggressive in the future.
The Fed stated that in determining future interest rate hikes, it will take into account how much interest rate increases have already been made, their effect on economic activity and inflation, as well as developments in economic and financial conditions.
This means that in the future if inflation starts to slow down, the Fed is likely to reduce its aggressiveness. But for the economy, Fed chairman Jerome Powell and colleagues will likely see how severe the downturn will be.
A quick way to reduce inflation is to bring the economy into a recession. During a recession, demand pull inflation will certainly decrease because people will reduce their spending.
This is what central banks in the world are currently doing, very aggressively raising interest rates, despite the recession at stake. Economic contraction will be better than prolonged high inflation.
When a recession occurs and inflation finally declines, monetary policy can be relaxed slowly to spur the economy back on. This will be easier to do than to deal with "ingrained" inflation.
However, there are indications that some central banks do not want to experience a deep recession due to high interest rates.
Canada's central bank (Bank of Canada / BoC) has clearly stated this.
The Fed and the BoC are the two most aggressive central banks in raising interest rates, judging by the size of the percentage increase.
To date, the BoC has recorded 6 increases, even last July by 100 basis points and September 75 basis points.
The last increase was made last Wednesday (11/26/2022) by 50 basis points. Interestingly, the BoC raised interest rates below market expectations by 75 basis points.
The BoC even said that the period of rising interest rates would soon end, because the economy is expected to stagnate in the next 3 quarters.
"The period of monetary tightening is almost over. We are close, but not there yet," BoC Governor Tiff Macklem told a news conference.
Maccklem said how high interest rates will depend on the impact given, how much monetary policy is able to reduce demand, how supply problems are resolved and inflation and inflation expectations respond to the policy.
"We expect interest rates to be raised again. That means it could be bigger than a normal increase, or it could be a normal 25 basis point increase," said Maccklem.
Prior to the BoC, Australia's central bank (Reserve Bank of Australia/RBA) had already surprised the market by raising interest rates 25 basis points last October, whereas previously it was expected to raise 50 basis points.
One of the things the RBA sees is an increase in lending rates that will weigh on Australians. In fact, many residents are expected to sell their houses due to the sharp increase in mortgage interest rates.
Based on data from RateCity, as quoted by the Guardian, every 100 basis point increase in interest rates will add AU0 to mortgage payments with a 25-year tenor.
The RBA started raising interest rates since last May, until October it was recorded at 250 basis points. Based on RateCity's records, mortgage payments with a ceiling of AU0,000 experienced an increase of AU7.
This month, the RBA again raised interest rates by 25 basis points to 2.85%, as did the British central bank (Bank of England / BoE). BaoE also gave a signal that it will relax its interest rate hike.
https://www.cnbcindonesia.com/market/20221104073055-17-385081/the-fed-dkk-beri-sinyal-mengendur-takut-resesi-parah
However, there are few signs that interest rate hikes may not be aggressive in the future.
The Fed stated that in determining future interest rate hikes, it will take into account how much interest rate increases have already been made, their effect on economic activity and inflation, as well as developments in economic and financial conditions.
This means that in the future if inflation starts to slow down, the Fed is likely to reduce its aggressiveness. But for the economy, Fed chairman Jerome Powell and colleagues will likely see how severe the downturn will be.
A quick way to reduce inflation is to bring the economy into a recession. During a recession, demand pull inflation will certainly decrease because people will reduce their spending.
This is what central banks in the world are currently doing, very aggressively raising interest rates, despite the recession at stake. Economic contraction will be better than prolonged high inflation.
When a recession occurs and inflation finally declines, monetary policy can be relaxed slowly to spur the economy back on. This will be easier to do than to deal with "ingrained" inflation.
However, there are indications that some central banks do not want to experience a deep recession due to high interest rates.
Canada's central bank (Bank of Canada / BoC) has clearly stated this.
The Fed and the BoC are the two most aggressive central banks in raising interest rates, judging by the size of the percentage increase.
To date, the BoC has recorded 6 increases, even last July by 100 basis points and September 75 basis points.
The last increase was made last Wednesday (11/26/2022) by 50 basis points. Interestingly, the BoC raised interest rates below market expectations by 75 basis points.
The BoC even said that the period of rising interest rates would soon end, because the economy is expected to stagnate in the next 3 quarters.
"The period of monetary tightening is almost over. We are close, but not there yet," BoC Governor Tiff Macklem told a news conference.
Maccklem said how high interest rates will depend on the impact given, how much monetary policy is able to reduce demand, how supply problems are resolved and inflation and inflation expectations respond to the policy.
"We expect interest rates to be raised again. That means it could be bigger than a normal increase, or it could be a normal 25 basis point increase," said Maccklem.
Prior to the BoC, Australia's central bank (Reserve Bank of Australia/RBA) had already surprised the market by raising interest rates 25 basis points last October, whereas previously it was expected to raise 50 basis points.
One of the things the RBA sees is an increase in lending rates that will weigh on Australians. In fact, many residents are expected to sell their houses due to the sharp increase in mortgage interest rates.
Based on data from RateCity, as quoted by the Guardian, every 100 basis point increase in interest rates will add AU0 to mortgage payments with a 25-year tenor.
The RBA started raising interest rates since last May, until October it was recorded at 250 basis points. Based on RateCity's records, mortgage payments with a ceiling of AU0,000 experienced an increase of AU7.
This month, the RBA again raised interest rates by 25 basis points to 2.85%, as did the British central bank (Bank of England / BoE). BaoE also gave a signal that it will relax its interest rate hike.
https://www.cnbcindonesia.com/market/20221104073055-17-385081/the-fed-dkk-beri-sinyal-mengendur-takut-resesi-parah
30 October 2022
Change BI Checking, Here's How to Check Credit Online
Jakarta, CNBC Indonesia - The BI checking service (SID) has changed to the Financial Information Service System (SLIK). The service was transferred from Bank Indonesia to the Financial Services Authority.
BI Checking is a credit history information service for the Debtor Information System (SID) regarding customer loans exchanged between banks and financial institutions. This is one of the conditions for applying for bank loans, such as Home Ownership Loans (KPR), Unsecured Loans (KTA) or credit cards.
The SID contains information on the identity of the debtor's collateral, the owner and management of the business entity that is the debtor, the amount of financing received, the debtor's credit history, and information about bad credit. For debtors who have not paid off the loan or have problems in arrears on loan installments, their data will be included in the BI checking blacklist and cannot apply for a loan.
For SLIK, it contains information on the credit history of banking and financing customers, as well as other finance, which is referred to as a debtor information service (iDEB). Banking, financing and financial institutions have access to debtor data.
This information is publicly viewable. Here are the terms and how to check it:
1. Terms of Access to BI Checking SLIK
Prepare original identity cards, namely ID cards for Indonesian citizens and passports for foreigners for individual debtors. Meanwhile, business entity debtors are required to bring a photocopy of the identity of the business entity and the identity of the management by submitting the original identity of the business entity.
Visit the OJK office in Jakarta or OJK representative offices in the regions.
Fill out the SID application form.
If the documents are complete, the OJK officer will print the iDEB results.
2. How to Check BI Checking or SLIK Online
Open the link for the SLIK application consumer.ojk.go.id/minisitedplk/registration.
Fill out the form and fill in the queue number.
Please upload scanned photos of the required documents (KTP, Passport, NPWP, Company Establishment Deed, Management Identity).
Fill in the captcha fields and click the Submit button.
Wait for a confirmation email from the OJK containing proof of registration for the SLIK Online queue.
OJK will verify the data and the applicant will receive notification from OJK in the form of online SLIK queue verification results no later than D-2 from the queue date.
If the data submitted is valid, the customer can print the form and sign it 3 times.
Photo or scan of the signed form.
Then send it to the WhatsApp number listed in the email (complete with a selfie holding a KTP).
OJK will verify data via WA and make video calls if necessary.
If passed, OJK will send iDEB SLIK results via email.
27 October 2022
Incidents in Neighboring Countries RI: Mortgage Rises, Residents "Don’t Care"
Jakarta, CNBC Indonesia - The increase in interest rates does not seem to have any effect on residents of Indonesia's neighboring country, Singapore. This is at least believed by local analysts.
Several factors are the cause. Like buyers who are indeed wealthy, demand for rent is strong and many foreigners are moving to Singapore.
According to the Head of Asia-Pacific Research at Knight Frank, Christine Li, Singapore's real estate market is indeed underpinned by "prosperity". This, he said, is like buyers in China's Shanghai and Beijing who require little or no borrowing.
"This is different from markets like Australia and New Zealand," he said, published by CNBC International, Thursday (27/10/2022).
"People are buying houses because of income growth. So when interest rates start to go up, you can see the reaction ... much more quickly," he stressed.
It should be noted that banks in Singapore have just raised their interest rates. DBS, IOB, OCBC raised mortgages by 3.85% earlier this month.
"But in a wealthy-backed market like Singapore, interest rates don't move the needle. Because these people don't even rely on loans to fund these homes."
"Interest rates aren't going to be the determining factor in prices going down... I think you need something much stronger, especially from a macro standpoint, for people to realize that entering the market at these price levels may not give them the returns they want, " he explained again.
The same goes for Senior Vice President of Research and Analytics at OrangeTee and Tie. He said buyers, especially in Singapore's top wealth group, had enough cash to fund their home purchases and could reuse capital to repay their loans.
"Foreign investors can continue to buy property here because they perceive our mortgage rates to be lower than in other countries," he said.
"Our strong Singapore dollar can help maintain the value of their investment," he added.
However, Alan Cheong, Executive Director of Research and Consulting at Savills, has a different opinion. According to him, it does not mean that an established market makes interest rate hikes ignored and reduces risk.
"There are other factors that cause prices to continue to rise, which seems to go against the logic of the economy," he said.
According to the Urban Redevelopment Authority of Singapore, private residential property prices are still in an upward trend. It even increased 3.4% in the third quarter (Q3) 2022.
This prompted the Singapore government to issue a number of policy measures. This includes stricter loan restrictions and a 15-month waiting period for certain private homeowners.
The waiting period may affect the sale of general flats. This, it is believed, in turn, could lead to a decrease in demand for suburban condominiums.
https://www.cnbcindonesia.com/news/20221027142037-4-382996/kejadian-di-negara-tetangga-ri-kpr-naik-warga-masa-bodoh
Several factors are the cause. Like buyers who are indeed wealthy, demand for rent is strong and many foreigners are moving to Singapore.
According to the Head of Asia-Pacific Research at Knight Frank, Christine Li, Singapore's real estate market is indeed underpinned by "prosperity". This, he said, is like buyers in China's Shanghai and Beijing who require little or no borrowing.
"This is different from markets like Australia and New Zealand," he said, published by CNBC International, Thursday (27/10/2022).
"People are buying houses because of income growth. So when interest rates start to go up, you can see the reaction ... much more quickly," he stressed.
It should be noted that banks in Singapore have just raised their interest rates. DBS, IOB, OCBC raised mortgages by 3.85% earlier this month.
"But in a wealthy-backed market like Singapore, interest rates don't move the needle. Because these people don't even rely on loans to fund these homes."
"Interest rates aren't going to be the determining factor in prices going down... I think you need something much stronger, especially from a macro standpoint, for people to realize that entering the market at these price levels may not give them the returns they want, " he explained again.
The same goes for Senior Vice President of Research and Analytics at OrangeTee and Tie. He said buyers, especially in Singapore's top wealth group, had enough cash to fund their home purchases and could reuse capital to repay their loans.
"Foreign investors can continue to buy property here because they perceive our mortgage rates to be lower than in other countries," he said.
"Our strong Singapore dollar can help maintain the value of their investment," he added.
However, Alan Cheong, Executive Director of Research and Consulting at Savills, has a different opinion. According to him, it does not mean that an established market makes interest rate hikes ignored and reduces risk.
"There are other factors that cause prices to continue to rise, which seems to go against the logic of the economy," he said.
According to the Urban Redevelopment Authority of Singapore, private residential property prices are still in an upward trend. It even increased 3.4% in the third quarter (Q3) 2022.
This prompted the Singapore government to issue a number of policy measures. This includes stricter loan restrictions and a 15-month waiting period for certain private homeowners.
The waiting period may affect the sale of general flats. This, it is believed, in turn, could lead to a decrease in demand for suburban condominiums.
https://www.cnbcindonesia.com/news/20221027142037-4-382996/kejadian-di-negara-tetangga-ri-kpr-naik-warga-masa-bodoh
17 October 2022
After two years of cold shoulder, foreign workers and international students rush back Down Under
By Mark Saunokonoko • Senior Journalist
International students and foreign workers are roaring back into Australia, and visa approvals are now running at pre-pandemic levels, according to new data.
Fears that disillusioned foreign students, after being locked out for two years, would abandon Australia and look to the UK or other countries to study have not materialised.
The surge of approvals will be music to the ears of many businesses, particularly companies operating in the service sector who have struggled to fill vacancies.
Universities will also be breathing a huge sigh of relief with the return of an armada of students who generate a whopping billion annually to the national economy.
However, there will be a downside for some.
The new arrivals will put even more pressure on the rental market, particularly in Sydney and Melbourne where supply is already very stretched.
A recent report suggested tenants may soon hit their financial limit.
"The influx will definitely help some of those workforce shortages, which a lot of businesses have been complaining about," AMP Capital senior economist Diana Mousina told 9news.com.au.
She predicted the hospitality, tourism and administration sectors, who for many months saw their employee pool and customer base gutted, would feel an immediate improvement.
But the extra competition for jobs will impact Australian workers, she said.
"One of the reasons we've had such strong employment performance in the past two years is because we closed our borders.
"We had to fill those gaps using domestic workers, rather than relying on foreigners."
Mousina said the return of foreign workers would combine with higher inflation to push the rate of unemployment up from its current 48-year low.
The migration bounce back could also impact new housing demand, she said, which was vulnerable to recent Reserve Bank cash rate hikes, she said.
"We could actually see housing construction not declining as much as expected next year."
Although permanent and long-term arrivals had recovered to pre-coronavirus levels, international travel to Australia is moving much slower.
Overseas arrivals and departures data for August is tracking up but remains at around half of its pre-pandemic capacity.
https://www.9news.com.au/national/international-student-working-holiday-visas-back-to-pre-pandemic-covid-19-levels/9be29762-319f-410a-b97c-25f6f3cc4f18
International students and foreign workers are roaring back into Australia, and visa approvals are now running at pre-pandemic levels, according to new data.
Fears that disillusioned foreign students, after being locked out for two years, would abandon Australia and look to the UK or other countries to study have not materialised.
The surge of approvals will be music to the ears of many businesses, particularly companies operating in the service sector who have struggled to fill vacancies.
Universities will also be breathing a huge sigh of relief with the return of an armada of students who generate a whopping billion annually to the national economy.
However, there will be a downside for some.
The new arrivals will put even more pressure on the rental market, particularly in Sydney and Melbourne where supply is already very stretched.
A recent report suggested tenants may soon hit their financial limit.
"The influx will definitely help some of those workforce shortages, which a lot of businesses have been complaining about," AMP Capital senior economist Diana Mousina told 9news.com.au.
She predicted the hospitality, tourism and administration sectors, who for many months saw their employee pool and customer base gutted, would feel an immediate improvement.
But the extra competition for jobs will impact Australian workers, she said.
"One of the reasons we've had such strong employment performance in the past two years is because we closed our borders.
"We had to fill those gaps using domestic workers, rather than relying on foreigners."
Mousina said the return of foreign workers would combine with higher inflation to push the rate of unemployment up from its current 48-year low.
The migration bounce back could also impact new housing demand, she said, which was vulnerable to recent Reserve Bank cash rate hikes, she said.
"We could actually see housing construction not declining as much as expected next year."
Although permanent and long-term arrivals had recovered to pre-coronavirus levels, international travel to Australia is moving much slower.
Overseas arrivals and departures data for August is tracking up but remains at around half of its pre-pandemic capacity.
https://www.9news.com.au/national/international-student-working-holiday-visas-back-to-pre-pandemic-covid-19-levels/9be29762-319f-410a-b97c-25f6f3cc4f18
24 September 2022
Is Australia headed for a recession?
By business reporter Gareth Hutches
On Wednesday, the deputy governor of the Reserve Bank of Australia warned the outlook for the global economy was not good.
"It's on a bit of a knife-edge," she said.
Less than 48 hours later, the Bank of England said Britain was probably already in recession.
There are growing concerns about the United States, which looks to be heading towards recession.
And China's economy is straining under the pressure of its zero-COVID policy and problems in its gargantuan property market.
Will a recession in Australia be inevitable?
A 'probable' recession
RBA officials say that, at this point, they still have confidence Australia can avoid a recession.
They say our exceptionally-tight labour market, and the level of savings in the economy, can hopefully insulate Australia from any negative shocks that originate overseas.
But not everyone is optimistic.
Some economists suspect that, because so many countries are lifting interest rates in an uncoordinated frenzy, global growth will slow dramatically in the next 12 months and Australia won't be able to avoid the fallout.
Jo Masters, the chief economist of Barrenjoey, says a probable recession is "on the cards" for Australia.
Why? Partly because the RBA will be forced to keep lifting interest rates as long as other countries keep doing so, and it will take Australia's economy into recessionary territory.
The RBA's cash rate target is currently 2.35 per cent.
Ms Masters said her modelling suggested a cash rate around 3 per cent would be sufficient to bring inflation back down into the RBA's target band by early 2024, but the RBA will probably end up lifting the cash rate to 3.35 per cent.
"This will have economic consequences – weakening the growth outlook and seeing the unemployment rate lift," she said.
"B*Eco modelling suggests this would drive the economy into recession."
And what will happen once Australia's in recession?
Ms Masters said when domestic economic activity starts weakening rapidly next year, the RBA will end up cutting rates again to stimulate activity.
And those rate cuts will occur towards the end of next year.
So, the RBA will lift rates by more than it would like in coming months - pushing the economy into recession - and then it will start cutting rates to make the recession as painless as possible.
"This should be sufficient to leave any recession as relatively short and shallow, and perhaps that is what is needed to cement the path back to 2-3 per cent inflation," Ms Masters said.
She thinks the RBA will lift the cash rate target by 0.5 percentage points next month, from 2.35 per cent to 2.85 per cent.
Cash rate heading to 3.6 per cent?
Bill Evans, Westpac's chief economist, has made a similar argument.
In July, he was already forecasting the RBA to lift the cash rate target to 3.35 per cent, but this week he lifted that forecast higher.
He said the stubborn outlook for high inflation and wages growth in the US, and rising interest rates globally, had changed his mind.
He said he, too, suspected the RBA would lift the cash rate by another 0.5 percentage points next month.
But he now thinks the RBA will eventually end up lifting the cash rate target to 3.6 per cent by early next year.
He said since global central banks were planning to keep lifting rates, the RBA would have to follow suit to stop the Australian dollar losing too much value.
Why? For similar reasons to Ms Masters.
If foreign currencies were allowed to gain too much value against the Australian dollar, it might encourage foreigners to buy more Australian goods and services than they otherwise would have, and that would make it harder for the RBA to squeeze inflation out of Australia's economy.
Mr Evans said that was a key reason why the RBA won't want Australia's cash rate to lag too far behind the US's key interest rate.
"Recall that the key reason why the RBA reluctantly adopted quantitative easing in 2020 was maintaining competitiveness in the Australian dollar," he said.
"The RBA governor would be concerned that such a sharp widening of the expected yield differential with global rates will have implications for a weaker Australian dollar complicating the inflation challenge."
At this point, he thinks Australia's economy will grow by just 1 per cent in 2023.
Overall, he thinks central banks are taking the policy of 'least regret' by erring on the side of containing inflation "at the potential cost of growth in the near term."
Turning policy back decades
David Bassanese, the chief economist at BetaShares, also thinks the RBA will probably lift the cash rate target by 0.5 percentage points next month.
He said the RBA won't want Australia's dollar to lose too much value against other currencies.
"At US66c, the Australian dollar has already fallen 13 per cent from its peak of US76c in April this year," he said.
"My expectation is the Australian dollar will end the year at around US62-63c."
So, is there a clear coordination problem between global central banks?
As central banks everywhere lift rates to kill inflation, it's creating pressure for those same central banks to keep lifting rates to prevent their currencies losing value against other major currencies.
Meanwhile, the speed and breadth of the rate hikes globally is pushing the world's major economies towards recession.
Earlier this week, RBA deputy governor Michele Bullock was asked if there was a case to be made for some coordination among global central banks to stop the damage that's occurring from rising US interest rates and a strengthening US dollar.
But Ms Bullock pushed back against the idea, saying it would turn policy back decades.
"Exchange rates can play a very positive role," she said.
"In Australia, we've typically thought of it that way because it gives us flexibility and the ability to run our own policies, to a large extent, without necessarily having to follow what others are doing in other countries.
"We're not entirely immune, but it does give us more flexibility."
She said she didn't think global central bank coordination was the right thing to do in this situation, despite everything.
"In a sense, the US dollar is responding to relative economic conditions, and inflation and interest rates in the US, relative to other countries," she said.
"That's what you would expect."
https://www.abc.net.au/news/2022-09-24/is-australia-headed-for-a-recession/101467854?utm_campaign=abc_news_web&utm_content=link&utm_medium=content_shared&utm_source=abc_news_web
On Wednesday, the deputy governor of the Reserve Bank of Australia warned the outlook for the global economy was not good.
"It's on a bit of a knife-edge," she said.
Less than 48 hours later, the Bank of England said Britain was probably already in recession.
There are growing concerns about the United States, which looks to be heading towards recession.
And China's economy is straining under the pressure of its zero-COVID policy and problems in its gargantuan property market.
Will a recession in Australia be inevitable?
A 'probable' recession
RBA officials say that, at this point, they still have confidence Australia can avoid a recession.
They say our exceptionally-tight labour market, and the level of savings in the economy, can hopefully insulate Australia from any negative shocks that originate overseas.
But not everyone is optimistic.
Some economists suspect that, because so many countries are lifting interest rates in an uncoordinated frenzy, global growth will slow dramatically in the next 12 months and Australia won't be able to avoid the fallout.
Jo Masters, the chief economist of Barrenjoey, says a probable recession is "on the cards" for Australia.
Why? Partly because the RBA will be forced to keep lifting interest rates as long as other countries keep doing so, and it will take Australia's economy into recessionary territory.
The RBA's cash rate target is currently 2.35 per cent.
Ms Masters said her modelling suggested a cash rate around 3 per cent would be sufficient to bring inflation back down into the RBA's target band by early 2024, but the RBA will probably end up lifting the cash rate to 3.35 per cent.
"This will have economic consequences – weakening the growth outlook and seeing the unemployment rate lift," she said.
"B*Eco modelling suggests this would drive the economy into recession."
And what will happen once Australia's in recession?
Ms Masters said when domestic economic activity starts weakening rapidly next year, the RBA will end up cutting rates again to stimulate activity.
And those rate cuts will occur towards the end of next year.
So, the RBA will lift rates by more than it would like in coming months - pushing the economy into recession - and then it will start cutting rates to make the recession as painless as possible.
"This should be sufficient to leave any recession as relatively short and shallow, and perhaps that is what is needed to cement the path back to 2-3 per cent inflation," Ms Masters said.
She thinks the RBA will lift the cash rate target by 0.5 percentage points next month, from 2.35 per cent to 2.85 per cent.
Cash rate heading to 3.6 per cent?
Bill Evans, Westpac's chief economist, has made a similar argument.
In July, he was already forecasting the RBA to lift the cash rate target to 3.35 per cent, but this week he lifted that forecast higher.
He said the stubborn outlook for high inflation and wages growth in the US, and rising interest rates globally, had changed his mind.
He said he, too, suspected the RBA would lift the cash rate by another 0.5 percentage points next month.
But he now thinks the RBA will eventually end up lifting the cash rate target to 3.6 per cent by early next year.
He said since global central banks were planning to keep lifting rates, the RBA would have to follow suit to stop the Australian dollar losing too much value.
Why? For similar reasons to Ms Masters.
If foreign currencies were allowed to gain too much value against the Australian dollar, it might encourage foreigners to buy more Australian goods and services than they otherwise would have, and that would make it harder for the RBA to squeeze inflation out of Australia's economy.
Mr Evans said that was a key reason why the RBA won't want Australia's cash rate to lag too far behind the US's key interest rate.
"Recall that the key reason why the RBA reluctantly adopted quantitative easing in 2020 was maintaining competitiveness in the Australian dollar," he said.
"The RBA governor would be concerned that such a sharp widening of the expected yield differential with global rates will have implications for a weaker Australian dollar complicating the inflation challenge."
At this point, he thinks Australia's economy will grow by just 1 per cent in 2023.
Overall, he thinks central banks are taking the policy of 'least regret' by erring on the side of containing inflation "at the potential cost of growth in the near term."
Turning policy back decades
David Bassanese, the chief economist at BetaShares, also thinks the RBA will probably lift the cash rate target by 0.5 percentage points next month.
He said the RBA won't want Australia's dollar to lose too much value against other currencies.
"At US66c, the Australian dollar has already fallen 13 per cent from its peak of US76c in April this year," he said.
"My expectation is the Australian dollar will end the year at around US62-63c."
So, is there a clear coordination problem between global central banks?
As central banks everywhere lift rates to kill inflation, it's creating pressure for those same central banks to keep lifting rates to prevent their currencies losing value against other major currencies.
Meanwhile, the speed and breadth of the rate hikes globally is pushing the world's major economies towards recession.
Earlier this week, RBA deputy governor Michele Bullock was asked if there was a case to be made for some coordination among global central banks to stop the damage that's occurring from rising US interest rates and a strengthening US dollar.
But Ms Bullock pushed back against the idea, saying it would turn policy back decades.
"Exchange rates can play a very positive role," she said.
"In Australia, we've typically thought of it that way because it gives us flexibility and the ability to run our own policies, to a large extent, without necessarily having to follow what others are doing in other countries.
"We're not entirely immune, but it does give us more flexibility."
She said she didn't think global central bank coordination was the right thing to do in this situation, despite everything.
"In a sense, the US dollar is responding to relative economic conditions, and inflation and interest rates in the US, relative to other countries," she said.
"That's what you would expect."
https://www.abc.net.au/news/2022-09-24/is-australia-headed-for-a-recession/101467854?utm_campaign=abc_news_web&utm_content=link&utm_medium=content_shared&utm_source=abc_news_web
01 September 2022
‘We’re at crisis point’: Calls for Aussie kids as young as 13 to start work to address labour shortages
Writer: Rhiannon Lewin
With more than 40,000 job vacancies in retail alone, one industry organisation says the solution may be right in front of us.
Teens as young as 13 could soon be making coffees and packing groceries, as part of a proposal by the Australian Retailers Association (ARA) to fill gaps in labour shortages across the country.
In a submission to the Jobs and Skills Summit, ARA chief executive Paul Zarha said labour shortages in Australia need to be addressed.
“We’re at crisis point when it comes to labour shortages,” he said.
“With over 40,000 job vacancies in retail trade across the country – the largest growth in vacancies is within retail.”
Zahra said a national framework on the legal working age could allow younger Australians to fill labour shortages.
“What we’re looking for is national consistency and the ability to tap into willing student workers in a consistent way around the country,” he said.
“At the moment, there’s disparity around the legal working age for students, with the states and territories setting their own regulations. It’s not for business to define the minimum working age – that’s a job for government.”
Currently, in NSW, there is no minimum age for part-time work.
In Victoria, the general minimum age for part-time or casual work is 15.
In Queensland, the minimum age for part-time work is generally 13, but under 16s need parental consent.
“An ideal model would be one where we allow 13 to 15 year olds to work, with sensible regulations in place around not working during school hours or at times that would impact a young person’s education,” Zahra said.
“Agreeing to a national framework on young workers would help mobilise a willing and able cohort of people to help address the staffing shortfall.
“Most Australians got their first job in retail or hospitality and learn many skills that set them up for their future. A simple change like this could have an immediate impact on filling vacancies.”
Meanwhile, University of Sydney Vice-Chancellor Mark Scott says a stronger government focus on higher education would help solve the skill’s shortage crisis.
In an address to the National Press Club on Wednesday, Professor Scott said the funding model for universities needed to be improved.
Ahead of the government’s jobs and skills summit, which begins on Thursday, the vice-chancellor said it was critical for there to be an increase in national investment in research to drive future jobs.
“Great changes in Australia’s economy and labour market have already taken place. More than half of the new jobs created over the last 30 years can only be held by people with a post-school qualification,” Scott said.
“I’d like those at tomorrow’s jobs and skills summit to consider not just the immediate challenges, for which migration will surely be one answer, but those challenges Australia will contend with a decade from now.”
The speech also highlighted the university’s vision for the next decade.
Among some of the goals outlined was to enable more than 1000 more students from low socio-economic backgrounds and disadvantaged schools to study at the university, along with a greater emphasis on student-focused education.
https://7news.com.au/business/workplace-matters/were-at-crisis-point-calls-for-aussie-kids-as-young-as-13-to-start-work-to-address-labour-shortages--c-8067447
With more than 40,000 job vacancies in retail alone, one industry organisation says the solution may be right in front of us.
Teens as young as 13 could soon be making coffees and packing groceries, as part of a proposal by the Australian Retailers Association (ARA) to fill gaps in labour shortages across the country.
In a submission to the Jobs and Skills Summit, ARA chief executive Paul Zarha said labour shortages in Australia need to be addressed.
“We’re at crisis point when it comes to labour shortages,” he said.
“With over 40,000 job vacancies in retail trade across the country – the largest growth in vacancies is within retail.”
Zahra said a national framework on the legal working age could allow younger Australians to fill labour shortages.
“What we’re looking for is national consistency and the ability to tap into willing student workers in a consistent way around the country,” he said.
“At the moment, there’s disparity around the legal working age for students, with the states and territories setting their own regulations. It’s not for business to define the minimum working age – that’s a job for government.”
Currently, in NSW, there is no minimum age for part-time work.
In Victoria, the general minimum age for part-time or casual work is 15.
In Queensland, the minimum age for part-time work is generally 13, but under 16s need parental consent.
“An ideal model would be one where we allow 13 to 15 year olds to work, with sensible regulations in place around not working during school hours or at times that would impact a young person’s education,” Zahra said.
“Agreeing to a national framework on young workers would help mobilise a willing and able cohort of people to help address the staffing shortfall.
“Most Australians got their first job in retail or hospitality and learn many skills that set them up for their future. A simple change like this could have an immediate impact on filling vacancies.”
Meanwhile, University of Sydney Vice-Chancellor Mark Scott says a stronger government focus on higher education would help solve the skill’s shortage crisis.
In an address to the National Press Club on Wednesday, Professor Scott said the funding model for universities needed to be improved.
Ahead of the government’s jobs and skills summit, which begins on Thursday, the vice-chancellor said it was critical for there to be an increase in national investment in research to drive future jobs.
“Great changes in Australia’s economy and labour market have already taken place. More than half of the new jobs created over the last 30 years can only be held by people with a post-school qualification,” Scott said.
“I’d like those at tomorrow’s jobs and skills summit to consider not just the immediate challenges, for which migration will surely be one answer, but those challenges Australia will contend with a decade from now.”
The speech also highlighted the university’s vision for the next decade.
Among some of the goals outlined was to enable more than 1000 more students from low socio-economic backgrounds and disadvantaged schools to study at the university, along with a greater emphasis on student-focused education.
https://7news.com.au/business/workplace-matters/were-at-crisis-point-calls-for-aussie-kids-as-young-as-13-to-start-work-to-address-labour-shortages--c-8067447