Weekend Contemplation

A friend of mine who combines a professional interest in Africa with a hobby of collecting antique maps has written a fascinating paper called “The evolution of European ignorance about Africa.” The paper describes how European maps of the African continent evolved from the 15th to the 19th centuries.
You might have supposed that the process would have been more or less linear: as European knowledge of the continent advanced, the maps would have shown both increasing accuracy and increasing levels of detail. But that’s not what happened. In the 15th century, maps of Africa were, of course, quite inaccurate about distances, coastlines, and so on. They did, however, contain quite a lot of information about the interior, based essentially on second- or third-hand travellers’ reports. Thus the maps showed Timbuktu, the River Niger, and so forth. Admittedly, they also contained quite a lot of untrue information, like regions inhabited by men with their mouths in their stomachs. Still, in the early 15th century Africa on maps was a filled space.
Over time, the art of mapmaking and the quality of information used to make maps got steadily better. The coastline of Africa was first explored, then plotted with growing accuracy, and by the 18th century that coastline was shown in a manner essentially indistinguishable from that of modern maps. Cities and peoples along the coast were also shown with great fidelity.
On the other hand, the interior emptied out. The weird mythical creatures were gone, but so were the real cities and rivers. In a way, Europeans had become more ignorant about Africa than they had been before.
It should be obvious what happened: the improvement in the art of mapmaking raised the standard for what was considered valid data. Second-hand reports of the form “six days south of the end of the desert you encounter a vast river flowing from east to west” were no longer something you would use to draw your map. Only features of the landscape that had been visited by reliable informants equipped with sextants and compasses now qualified. And so the crowded if confused continental interior of the old maps became “darkest Africa”, an empty space.
Of course, by the end of the 19th century darkest Africa had been explored, and mapped accurately. In the end, the rigor of modern cartography led to infinitely better maps. But there was an extended period in which improved technique actually led to some loss in knowledge.

Paul Krugman, The fall and rise of development economics

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ATO income data and Cairns City

To follow the previous post and comment that Cairns City SA2 is different here are personal income relativities for the Cairns urban SA2’s:

ATO income data Cairns City SA2

This is different from the 2016 census where Cairns City SA2 median personal income was above the Queensland median. Presumably this represents the difference between the flow of short term income earners through the City such as backpackers etc over the course of the year rather than the census snapshot in August 2016, although there could be other explanations..

Among the most regrettable experiences (but biggest learning experiences) of my life was working the ground follow-up to the 2016 census in Cairns. Never again. It was the most demoralising public service employment experience of my life. This follow up in the area covered targeted exactly this demographic and was completely stuffed up IMHO even in the context of the wider 2016 census failures. I have no confidence whatsoever in the census data around this subset.

Consequently there is no reason for confidence around this in the ABS labour force sample either.

 

 

Personal income down to SA2

Amidst the flurry of relevant regional data in the last week the easiest to miss was this from ABS: Estimates of Personal Income for Small Areas, 2011-2016

It draws off Australian Tax Office data down to the SA2 level. Shane Wright has looked into this data in context of WA: Post-mining boom stats show the wage squeeze is hurting more in WA than anywhere else

Just flagging this for now to come back to but two points which stick out:

  1. The divergence between Cairns and Townsville with income earners in Townsville down @ 2-3% in the year to FY2016.
  2. Cairns City SA2 is different and it is unlikely this is well represented in either the ABS labour force survey or the census.

ATO income data

Note: This is the number of income earners recorded through the course of the financial year. It doesn’t reflect changes in earnings or employment at any specific time.

Cairns Council Budget 2018

 

Yes, it’s council budget day 2018. Not sure what details and media releases are up at the council website but did note this extract from Agenda Item 29: Statement of Estimated Financial Position.

Council Budget 2018 1

No Council. You do not sum the column to derive a variance of (18.70%) on total operating expenses. This is more blindingly obvious because the total operating expenses are otherwise exactly the same as the total operating revenue. Even a Chinese government statistician would be impressed by this level of management control.

We can only trust they otherwise used the correct columns and rows combined with applicable mathematical functions. What to make of a statutory council agenda statement presented with basic mathematical errors?

Anyway. The biggest take away is the rates increase of 1.7% in line with CPI. I don’t know where the current Council EBA negotiation is at but sticking with my comments from last year.

The other is that there was no land revaluation again this year. Cairns will become the only major regional council not to receive a revaluation for three years.

Update: Something to come back to.

The NSW local government cost index last year increased 2.3% IPART Rate Peg

The Queensland LGAQ Cost Index increased 1.89%

 

insurance tragicomedy continues to run

The Financial Services Royal Commission has put out a discussion paper with a request for information: Natural Disaster Insurance. This includes some discussion of insurance in Northern Australia.

While the Royal Commission is certain to provide better theatre it is the ACCC inquiry which remains the most promising. The ACCC has also recently published an update report following public submissions. The list of public submissions received is rather long. Mostly more anecdotal ‘war stories’ with limited substantive contribution.

There are a couple of items of interest on a quick first perusal of the ACCC update:

ACCC preliminary 2ACCC preliminary 1

First. The order in both does actually represent relative cyclone risk despite common misconceptions and media misrepresentations in FNQ. It is North West highest, then Queensland, then NT. Could be better represented on a log scale though.

A question though is trend differences between houses and strata properties? There are some differences between these classes of insurance but they are unrelated to geographic risk.

The big Australian insurers (IAG and Suncorp) report these classes separately in their results. Strata is in commercial distributed through brokers. House and contents is its own division.

I wonder how many unit owners are aware that it is the body corporate managers who take the biggest slice of the 20% commission (typically 15% for large body corporate managers) and not the broker? My experience is almost none.

The relative difference here in premiums between the classes and regions appears to have shifted for strata since the previous report by the Australian Government Actuary. There is also an apparent anomaly between figure 5.6 and figure 5.8 within this report for North Queensland strata?

Comparisons and numbers here should also be another reminder to our elected political representatives that insurance stamp duty is a fiscal transfer from North Queensland to SEQ.

I have tried to aggregate links to the trail of successive inquiries at Insurance.

Not this year, next year

Noted at realestate.com.au: Brisbane apartment slump over with values set to rise

This latest CoreLogic-Moody’s Analytics Australian Home Value Index Forecast is available from CoreLogic at a bargain price of just $1,500. However a cropped snippet of Table 4 has thoughtfully been posted at the above link which includes Cairns.

Corelogic Forecast Index

Not this year Rick, next year: “if it doesn’t happen in 2018, it never will”

Disclaimer: The linked post doesn’t specify whether these are calendar years or financial years.

May is a boring month …. or maybe not.

Cairns Airport have posted numbers for May this morning. May is typically a quiet uneventful period anyway. This year it is the first month not under the influence of some unmonthly lunar event. If only the Chinese had adopted a civilised western calendar like we did with Easter.

Results: Domestic +2.2%; International -0.9%; Total +1.8% (ex transits & transfers).

How does that look in growth terms which is what matters:

Airport May

A three (3) month moving average returns to negative for the first time since 2011. It would be unfair to draw too much attention to this given volatility of previous months and whether it is plus or minus 0.2% is neither here nor there.

Commentary from the Airport was more limited than for some time. It must have been a boring month.

Coincidentally Sydney Airport also posted May stats to ASX today with domestic +1.1%; International +5.6%; Total +2.6%.

 

Gaming data conundrums

I have no idea what I’m trying to do with the monthly Queensland EGM (pokie) data. Maybe it’s just that it continues to throw up interesting stats.

Gaming May 2018 1Gaming May 2018 2

Interesting convergence there. Also interesting is this:

Gaming May 2018 3

Yes. In less than four (4) years the number of pokies in Queensland which are approved but not operational has grown from 3.9% of approved to 7.1% of approved numbers. The Queensland Government has a policy of capping approved pokie numbers.

Meanwhile the win/machine has escalated in hotels relative to clubs to compensate:

Gaming May 2018 4

Oops. Series 1 is pubs. Series 2 is clubs.

Anyway. This can be controversial as a social issue and was significant in the recent Tasmanian election. There was a paper last year from Prof John Mangan from UQ on this: Removing poker machines from hotels and clubs in Tasmania: Economic considerations

The particular circumstances of Tasmania can’t necessarily be translated to Queensland.

if it doesn’t happen in 2018, it never will

Beyond HTW CairnsWatch there is also a regular monthly publication from HTW covering national markets. Cairns commentary from most recent report today:

2018 thus far has proved to be a stodgy year for the Cairns property market. Residential property demand has remained constant, prices have remained flat and the market has remained stuck in a steady state position.
The latest trended median price readings in Cairns for sales during April 2018 stood at $405,000 for houses and $209,000 for units. Technically, these represent price changes during the past twelve months of -2.4% for houses and -5.5% for units.
Our own in-market assessment is that individual property value movements over the past 12 months have been varied by no more than plus or minus 5%. The upshot is that even though solid fundamentals are in place with low rental vacancy rates, no obvious oversupply in any market sector and continued economic improvement, the Cairns property market is still being hampered by a lack of confidence and a constrained fiscal environment.
We have been on record expecting demand for most residential property to revitalise during 2018 as a result of ongoing economic improvement. Sales volumes have been expected to come back to a slow but steady increase and flow through to modestly rising prices. So far it hasn’t happened. What’s more, if it doesn’t happen in 2018, it never will.

Rick is known as a perennial optimist and also for his sense of humour so who knows.

Source: HTW Month in Review