The bare minimum

Delivered on By Justin Pyvis

Good morning! Australia will get “the first mRNA production facility in the southern hemisphere”, after the Australian and Victorian governments finalised a deal with Moderna yesterday.

While some important details are still to be hashed out – such as where the facility will be located! – it will mean that from 2024 Australia should be capable of producing 100 million mRNA vaccine doses a year.

Great news. Not only should the ability to manufacture mRNA vaccines locally help to avoid lengthy lockdowns in the event of another pandemic, but Moderna also has a long “pipeline” of vaccinations it’s working on, covering everything from the seasonal flu to HIV.

That’ll be useful not just for domestic consumption but also for humanitarian efforts within the region, given the relatively high rates of HIV and other diseases in neighbouring countries such as Papua New Guinea.

Reading the tea leaves

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Note: Brent oil, gold bullion and iron ore prices are the second futures contract. Bond yields are 10-year Treasuries.

The US S&P500 closed up 1.43% with all 11 sectors finishing higher led by tech (+2.55%), in particular chipmakers Nvidia (+9.82%) and Intel (+6.94%), following a series of positive data releases that lent support to the growth sectors:

  • The US S&P Flash Composite Output Index rose to 58.5 in March, an eight-month high (a reading above 50 indicates an expansion in activity from the prior month).
  • The Kansas City Fed’s regional manufacturing survey increased to 37, the highest reading since the survey’s inception in July 2001 (a value greater than 0 signals growth).
  • Initial jobless claims in the US fell to 187,000 last week, the lowest level in 52 years.

Locally the ASX200 edged up for a third straight day, adding 0.12% thanks to solid gains in the utilities (+2.56%), energy (+1.95%) and materials (+0.97%) sectors.

Elsewhere, Russia’s stock exchange opened for the first time in a month – the longest break since the collapse of the Soviet Union in 1991 – with the MOEX Russia Index gaining 4.4%. However, short-selling remains banned and foreign investors aren’t able to trade stocks or ruble bonds until 1 April.

Food for thought

The number of tech workers in Australia has been growing rapidly over the past several years.
The number of tech workers in Australia has been growing rapidly over the past several years. Source

Yesterday the federal opposition Labor party pledged to increase the number of tech jobs in Australia from 861,000 to around 1.2 million by 2030:

“Working with the sector we want to grow an additional 340,000 jobs by 2030.

Too many experienced workers and businesses have left our shores due to the failure of the Morrison government to back tech jobs in existing and emerging businesses.

Labor will work closely with the tech sector, including the Tech Council of Australia (TCA), to develop an industry plan that will look to strengthen existing firms, build new ones, and grow jobs here at home.”

Ignoring any potential costs/benefits of such a proposal, we’re glad someone is at least talking about what will likely continue to be a very important sector for Australia. As opposed to, say, shovelling grants and low-cost loans to companies owned by wealthy individuals in the “critical minerals” sector.

But the target looks more like ‘business as usual’ than an ambitious policy goal.

According to Accenture (which is where the 861,000 jobs figure came from), between 2005 and 2021 the number of tech jobs in Australia grew by around 3.2% annually. But the sector really took off over the past four years, growing at about 5.9% annually between 2017 and 2021.

Labor’s target of 340,000 new jobs in the sector over a period of nine years is equivalent to an annual growth rate of about 3.8%, i.e. a rate not much above the 16-year trend and well below what actually happened over the past four years.

Given the existing trend, shouldn’t Labor’s jobs target be considered the bare minimum, not part of some bold policy announcement? 🤔

Chewing the fat

Bits and bytes

🧱 Inflation bubbling away: “Australia’s largest brickmaking group, Brickworks, has lifted prices across its bricks, roofing tiles [+20%] and masonry range… by between 6 to 8% as cost inputs climbed.”

ScoMo said: “The idea of sitting around the table with Vladimir Putin [at the G20]… for me, is a step too far. I think we need to have people in the room that aren’t invading other countries.”

🍻 Victoria’s shadow Treasurer David Davis was reportedly “inappropriately jolly” at a recent gala event, to the extent that he was eventually thrown out for being “heavily intoxicated”.

🏦 ‘Big four’ bank ANZ created “the first stablecoin pegged to the Australian dollar, encouraging its customers to support crypto.”

🎰 The Perth Casino Royal Commission found that Crown Resorts was “unsuitable” to hold a gambling licence. It also said there were “numerous deficiencies” with WA’s regulator and the Department of Local Government, Sport and Cultural Industries.

⚖️ “MP Gareth Ward has been suspended from the NSW Parliament while he faces indecent and sexual assault charges.”

🎉 Next Thursday the WA government will ease restrictions on gatherings and remove the need to check-in to venues where proof of vaccination is not required, such as supermarkets.

🌊 Regarding the proposed ~$500m Dungowan Dam in deputy PM Barnaby Joyce’s electorate, Joyce said: “We’re not asking for a return, so we’re not really interested in the business case. I want the thing built.”

🏝️ A leaked document showed that China and the Solomon Islands are in discussions to allow Chinese military to be stationed less than 2000km from Australia’s coastline.

💸 Well, duh. A new paper by the Federal Reserve Bank of Richmond “suggests that expansionary monetary policy may be an important factor in the ‘pervasive’ high inflation seen since October”.

🚀 The UK government will send 6,000 defensive missiles to Ukraine, along with 30 million pounds “to support the BBC’s coverage in the region and pay Ukrainian soldiers and pilots”.

⛽ The British government will cut fuel excise by 5 pence per litre until March 2023 “in a bid to reduce the cost of gasoline at the pumps”.

💊 A new male contraceptive pill “has been tested in preliminary mice trials and found to be effective… with no observed side effects”.

💰 China’s government will refund $US240 billion worth of taxes to businesses from next month, targeting “micro and small enterprises as well as mid-sized and big companies in six major industries”.

🥝 Nine years after it was first proposed, Australia accepted New Zealand’s offer to take in 150 asylum seekers from Nauru and PNG annually for the next three years.

✈️ Air New Zealand will soon fly direct between Auckland and New York, a 17.5 hour flight that will be one of the world’s tenth longest.

🛂 Vaccinated travellers to Singapore will no longer have to quarantine from 1 April and the government is considering “removing the pre-departure test requirement in the coming weeks”.

⚔️ An anonymous official revealed that NATO’s most recent intelligence assessment estimates up to 15,000 Russian troops have died in Ukraine, with a total of 40,000 injured, captured, or killed.