Melbourne Institute Monthly Bulletin of Economic Trends

October 2011

Released at 11 am 21 October 2011

Outlook for Australia1

2010 Sep
Economic Activity GDP

Actual 2010 2011 Dec Mar 2.7 (0.8) 3.1 (0.6) 0.9 (-0.3) 0.2 (0.4) 9.2 (2.5) 4.8 (2.7) 2.2 (0.3) 2.7 (0.4) 5.0 74.0 0.99 5.2 3.4 (0.9) 65.9 3.9 (1.0) 1.0 (-0.9) 3.5 (0.6) 5.3 (2.7) 9.2 (4.8) 9.4 (2.4) -4.4 (-6.6) 2.3 (0.9) 3.3 (1.6) 4.9 74.8 1.00 5.0 2.9 (0.4) 65.8 3.9 (0.8)

2011 Jun 1.4 (1.2) 3.2 (1.0) 0.7 (-0.1) 10.5 (2.0) 10.5 (4.3) -3.7 (2.6) 2.7 (0.9) 3.6 (0.9) 5.0 77.5 1.06 4.9 2.2 (0.1) 65.6 3.8 (0.9)

2011 Sep 1.5 (0.4) 2.8 (0.6) 3.1 (0.8) 10.5 (3.0) 12.7 (2.9) 0.4 (2.0) 2.6 (0.5) 3.4 (0.5) 4.8 75.8 1.0 5.2 1.4 (0.0) 65.6 3.7 (0.8)

Forecasts 2011 2012 Dec Mar 1.2 (0.5) 2.8 (0.6) 4.3 (0.8) 12.5 (2.2) 12.7 (2.5) -0.5 (1.8) 2.9 (0.6) 3.5 (0.5) 5.0 75.4 1.02 5.2 0.8 (0.3) 65.7 3.4 (0.8) 2.8 (0.7) 3.0 (0.8) 2.3 (0.8) 9.5 (2.0) 12.5 (2.2) 8.1 (1.5) 2.6 (0.6) 2.6 (0.7) 5.0 75.0 1.00 5.2 0.8 (0.3) 65.8 3.4 (0.8)

2012 Jun 2.4 (0.8) 2.8 (0.8) 3.2 (0.8) 9.5 (2.0) 10.2 (2.2) 7.0 (1.5) 2.4 (0.7) 2.5 (0.8) 5.0 74.0 1.00 5.2 1.0 (0.3) 65.8 3.2 (0.8)

Actual Forecast Financial Year 2010/11 2011/12

2.7 (0.3) 3.4 (0.9) 3.5 (-1.6) 5.2 (3.0) 14.1 (0.9) 4.3 (-2.2)

1.9 3.3 2.6 6.2 10.7 0.2

2.0 2.9 3.2 10.5 12.0 3.7

Household Consumption

Private Dwellings

Business Investment

Imports of Goods & Services

Exports of Goods & Services

Inflation & Financial Market Underlying inflation2

2.5 (0.6) 2.8 (0.7) 4.8

4

2.4 3.1

2.6 3.0

Headline Inflation
3

90-day Bill Rate

Trade Weighted Index $A/$US rate (100) Labour Market Unemployment Rate4
4

69.7 0.90 5.2

5

5.1 2.9

5.2 1.0

Employment Growth Rate

4

3.1 (0.8) 65.5 3.5 (1.0)

Participation Rate Wage Price Index

65.7

65.7

3.8

3.4

1: Actual in black and forecasts in blue; values in parentheses are quarterly growth rates. 2: As measured by the Reserve Banks trimmed mean measure of inflation. 3: Average over last month in quarter. 4: Average of 3-months in the quarter. 5: Calculated from quarterly employment numbers that are averaged over the 3 months in the quarter. Prepared by G.Lim, M.Chua, E.Claus & V.Nguyen, Macroeconomics Research, Melbourne Institute

Monthly Bulletin of Economic Trends October 2011

Economic Activity Australian real GDP grew 1.2 per cent in the June quarter, following a (downward revised) contraction of 0.9 per cent in March. We forecast moderate positive growth going forward. We do not expect further stimulus from the rebound in activity following the Queensland floods in December 2010 and January 2011. We expect subdued 0.4 per cent growth for the September quarter and a modest acceleration of growth over the remainder of the forecast horizon. We forecast 0.5 per cent for December, and 0.7 and 0.8 per cent growth in real GDP for the March and June quarters. This translates into year-on-year growth of 1.5 and 1.2 per cent for September and December and 2.8 and 2.4 per cent for the March and June quarters. (see Figure 1) There is much talk about a double dip global recession and a looming recession in Australia. We view a recession in Australia to be unlikely, but, it is very difficult to gauge the direction of the global economy. Whether the world can steer clear of another recession in large parts hinges on warding off a deepening of the sovereign debt crisis in the Eurozone. The survival of the euro increasingly depends on swift and vigorous actions of EU policy makers but it is not clear that this will be easy or forthcoming. Uncertainty has been characterizing the global financial crisis (GFC) and post crisis period. On the business side of the economy, this uncertainty has translated into stock market volatility. On the consumer side, the uncertainty has translated into large variations in the Westpac Melbourne Institute Consumer Sentiment Index (CSI). Developments in the consumer confidence seem to lead the stock market. Local turning points in the CSI tend to precede those in the S&P/ASX 200 (see Figure 2). The recent small but ongoing rebound in the CSI is in line with our modest but positive growth projections over the next four quarters. At the state level, we expect a convergence in growth rates rather than a continuation of the two track economy. This is in large part driven by the moderating outlook for the global economy. We forecast growth in state final demand to converge to around 0.6 per cent by June 2012. Figure 1: Growth in real GDP (per cent) (actual and forecast)
140

Figure 2: Westpac MI consumer sentiment and share prices

8000 7000 6000 5000 80 4000 60 3000 40 20 0 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 2000 120

5 4 Annual per cent 3 2 1 0 -1 -2

Jun-08 Jun-09 Jun-10 Jun-11 Jun-12
Optimists-pessimists+100 100 31 December 1979 = 500

Consumer sentiment (lhs) S&P/ASX 200 (rhs)

1000 0

The dashed lines are the 90% confidence bands.

Source: Melbourne Institute and RBA

Monthly Bulletin of Economic Trends October 2011

Inflation and Interest Rates The June 2011 quarter ABS consumer price index showed that headline inflation rose by 0.9 per cent in the June quarter, following a 1.6 per cent rise in the March quarter. In the twelve months to June, headline inflation rose by 3.6 per cent. Underlying inflation, as measured by the trimmed mean, rose by 0.9 per cent in the June quarter. The September 2011 quarter ABS consumer price index will be released on 26 October 2011. Information from the TD Securities Melbourne Institute Monthly Inflation Gauge suggest that the September quarter CPI is likely to show a modest rise of around 0.3 per cent (based on monthly information that prices rose by 0.3 per cent in July, fell by 0.1 per cent in August and rose by 0.1 per cent in September). Prices for automotive fuel have been increasing steadily over the past few weeks (see Figure 4). This rise is likely to have an impact on inflation in the December quarter as the effects of higher fuel prices are more wide-spread, impacting on most commodities in the basket. This is in sharp contrast to the impact of the hike in the price of bananas in the first quarter of this year. A rise in the price of bananas has no influence on other commodities in the CPI basket, and moreover bananas can be easily be substituted with other fruits. Fuel is more integral and less easily substituted. Recent information from the Melbourne Institute Survey of Consumer Inflationary Expectations showed an increase in the median expected rate of inflation to 3.1 per cent in October from 2.8 per cent in September. This rise likely reflects the flow on effects of higher fuel prices. With global uncertainty still looming, we are still of the view that a neutral monetary policy stance is appropriate for the next few months. While the probability of a rate cut would increase if downside risks in Europe persist, recent growth in retail sales and the likelihood of inflation edging up, might just reduce the odds of a rate cut. Figure 3: Trimmed mean CPI (actual and forecast)
5

Figure 4: Fuel prices of 3 major cities (2 weeks moving average)

150

4 per cent

145

cents

140

135

Melbourne Brisbane

Sydney

1
Jun-08 Jun-09 Jun-10 Jun-11 Jun-12

130

1/08/2011

15/08/2011

29/08/2011

12/09/2011

26/09/2011

10/10/2011

The dashed lines are the 90% confidence bands.

Sources: www.motormouth.com.au

Monthly Bulletin of Economic Trends October 2011

Labour Market The latest ABS labour force statistics showed that the number of employed persons increased by 20400 in September after decreases in July and August. About 10000 persons took up parttime employment and a similar number took up full-time employment. Meanwhile, the number of unemployed persons fell by a modest 3800 in September. The labour force increased by 16600 in September, resulting in a total increase of 75000 since May. On balance, the national unemployment rate decreased slightly to 5.2 per cent in September from 5.3 per cent in August while year-end employment growth slowed further to 1.1 per cent from 1.2 per cent in August. Figure 6 exhibits the unemployment rates in the major States in August and September. The figure shows that unemployment rates rose in New South Wales, Victoria, and South Australia in September but the rates dropped in Queensland and Western Australia. In particular, the big drop from 6.3 per cent to 5.4 per cent in Queensland was the main reason for the marginal decrease in the national unemployment rate in September. The Westpac Melbourne Institute Unemployment Expectations Index fell by 5 per cent in October after four consecutive rises between June and September. The Indexes for major States also recorded decreases with the only exception being Western Australia. The ANZ job advertisement series decreased by 2.1 per cent in September. This was the third decrease in a row which was mainly attributed to the 2.2 per cent decrease in internet job advertisements. Also, the year-on-year growth of the series continued on its sharp downward trend and slipped further to 3.1 per cent in September from 6.1 per cent in August. We forecast the unemployment rate to stay at 5.2 per cent over the next three quarters, maintaining our view that it could be a while before we see improvements in labour markets.

Figure 5: Unemployment Rate (actual and forecast)

6.5

Figure 6: Unemployment Rate (by States)

8

Aug-11
7
5.5

Sep-11

per cent
4.5 3.5 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12

Per cent

4 NSW VIC QLD SA WA

The dashed lines are the 90% confidence bands.

Source: ABS

Monthly Bulletin of Economic Trends October 2011

What do the Indexes of Economic Activity say about GDP growth?

Indexes of Economic Activity are designed to combine information from a number of variables reflecting different aspects of the economy. A Coincident Index is a summary measure of the current state of activity, while a Leading Index is informative about the future state of the economy. Figures 7 and 8 present the Westpac - Melbourne Institute Leading and Coincident Indexes, here presented as deviations from trend growth. In general, a series of positive deviations signals above average growth and the likelihood of an economic boom, while a series of negative deviations signals slow growth and the likelihood of a recession. A Coincident Index is useful because GDP data are published with a lag. For example, we currently only have GDP data up until June. A lot has happened in Australia and abroad since June but we dont really know the effects of current events on current aggregate economic activity; we will only know that at the beginning of March next year when the December quarter national accounts are released. The current flat growth in GDP can be understood by an analysis of the contributions of the components to the annualised growth of the Coincident Index. The biggest negative contribution is from real industrial product. This likely reflects the ongoing weakness in Australian manufacturing that is partly driven by the very strong Australian dollar. The contribution of the unemployment rate has also been negative over the past two months. However, the Leading Index has turned and is now firmly above trend, suggesting that the Australian economy is heading for a rebound in growth, but it may not be anytime soon, as the Coincident Index is still below trend. Looking ahead, an analysis of the contributions of the components to the annualised growth of the Leading Index, showed that the only negative contribution is from the all ordinaries index. Global share markets have been experiencing increased volatility given the ongoing sovereign debt crisis on both sides of the Atlantic and rising concern of a double-dip global recession. The biggest positive contribution is from real corporate gross operating surplus that is likely in part a reflection of Australias ongoing high terms of trade. Figure 7: Leading Index (deviation from trend growth)
8 6 4 2

Figure 8: Coincident Index (deviation from trend growth)

8 6 4 2

0
-2 -4 -6 -8 -10
Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11

-2 -4 -6 -8
Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11

Source: Melbourne Institute

Source: Melbourne Institute

Monthly Bulletin of Economic Trends October 2011

Outlook for States

Actual 2010 Sep New South Wales Final Demand Consumption Unemployment Rate Employment Victoria Final Demand Consumption Unemployment Rate Employment Queensland Final Demand Consumption Unemployment Rate Employment Western Australia Final Demand Consumption Unemployment Rate Employment South Australia Final Demand Consumption Unemployment Rate Employment Tasmania Final Demand Consumption Unemployment Rate Employment 2.5
(1.0)

Forecasts 2011 Jun 2.1

(0.2)

Actual 2012 Jun 2.1

(0.6)

Forecast 2011/12 1.7 2.1 5.3 1.0

2010 Dec 2.3

(0.3)

2011 Mar 2.8

(0.4)

2011 Sep 1.4

(0.5)

2011 Dec 1.7

(0.5)

2012 Mar 1.7

(0.4)

Financial Year 2010/11 3.0 2.9 5.1 3.1

4.7
(1.2)

3.0
(0.9)

2.4
(0.8)

3.5
(0.5)

2.9
(0.7)

2.4
(0.4)

2.1
(0.5)

2.1
(0.5)

2.0
(0.6)

5.2 2.3
(1.2)

5.0 -0.9
(1.4)

4.9 0.3
(0.6)

5.1 0.5
(-0.9)

5.4 1.4 (0.4) 2.7

(0.6)

5.3 1.7
(0.5)

5.2 1.6
(0.3)

5.2 1.8
(0.4)

5.1
(0.2)

2.8
(0.1)

3.5
(1.6)

2.3
(0.4)

3.1
(0.4)

2.0
(0.5)

2.2
(0.6)

3.4 4.0 5.1 3.5

2.5 2.6 5.1 1.0

4.0
(1.3)

4.2
(0.3)

4.0
(0.5)

3.7
(1.6)

2.8
(0.3)

2.9
(0.4)

2.9
(0.5)

1.8
(0.5)

5.4 4.1
(1.1)

5.3 3.4
(1.1)

4.8 3.5
(0.8)

4.8 3.2
(0.2)

5.2 1.8
(-0.2)

5.2 1.1
(0.3)

5.1 0.6
(0.3)

5.1 0.7
(0.3)

1.7
(0.1)

1.1
(0.3)

1.3
(-0.6)

5.5
(5.6)

5.7
(0.3)

6.0
(0.6)

7.3
(0.7)

2.1
(0.5)

2.4 2.3 5.5 2.3

5.2 3.6 5.5 1.2

2.1
(0.4)

1.9
(0.7)

2.1
(0.8)

3.3
(1.4)

3.9
(1.0)

3.8
(0.6)

3.6
(0.6)

2.9
(0.6)

5.4 2.6
(-0.1)

5.7 3.6
(1.2)

5.5 1.9
(-0.6)

5.2 1.2
(0.7)

5.8 1.2
(-0.1)

5.5 0.5
(0.5)

5.5 1.5
(0.4)

5.4 1.3
(0.5)

5.9
(-0.1)

4.6
(1.3)

6.8
(3.2)

7.1
(2.6)

8.3
(1.0)

8.2
(1.2)

5.6
(0.8)

3.8
(0.8)

6.1 4.7 4.4 3.2

6.4 4.7 4.2 1.5

4.7
(0.3)

4.4
(1.1)

4.9
(1.5)

4.9
(2.0)

5.5
(0.9)

5.4
(0.9)

4.6
(0.7)

3.4
(0.8)

4.5 4.7
(1.2)

4.4 3.5
(0.0)

4.3 2.3
(0.0)

4.2 2.5
(1.2)

4.2 1.3
(0.1)

4.2 1.5
(0.2)

4.2 1.9
(0.4)

4.1 1.2
(0.5)

2.7
(-0.6)

2.9
(1.9)

1.8
(-0.6)

2.8
(2.1)

3.9
(0.5)

2.5
(0.5)

3.9
(0.7)

2.4
(0.6)

2.6 2.1 5.5 1.8

3.1 1.4 5.3 0.9

3.4
(0.1)

2.7
(0.1)

1.9
(0.5)

0.3
(-0.4)

0.9
(0.7)

1.2
(0.4)

1.3
(0.6)

2.2
(0.5)

5.4 2.2
(1.0)

5.6 1.8
(0.2)

5.5 0.7
(0.2)

5.3 2.3
(0.9)

5.3 1.1
(-0.1)

5.3 1.0
(0.0)

5.3 1.1
(0.3)

5.2 0.5
(0.3)

3.2
(1.6)

4.9
(1.7)

2.0
(-2.3)

2.5
(1.5)

1.6
(0.7)

0.5
(0.6)

3.6
(0.7)

3.2 1.2 5.7 1.4

2.0 2.1 5.2 0.2

0.7
(0.4)

0.8
(0.8)

2.0
(0.4)

1.2
(-0.4)

1.9
(1.1)

1.8
(0.7)

1.9
(0.5)

2.9
(0.6)

5.8 1.3
(0.1)

5.3 2.5
(0.1)

5.9 1.7
(0.5)

5.6 0.0
(-0.6)

5.0 -0.2
(-0.1)

5.2 0.0
(0.2)

5.2 0.0
(0.5)

5.2 1.0
(0.4)

Monthly Bulletin of Economic Trends October 2011

Around the world

The key issue for the world economy is to prevent a deepening of the sovereign debt crisis in Europe that could cause another global financial crisis and a double dip global recession. As with any financial instability, time is of the essence but the European Union is generally not known for speedy decision making. In the US, there were two pieces of somewhat good news in September. First, real GDP growth for the June quarter was revised up 0.3 percentage points to an annualised rate of 1.3 per cent. Second, nonfarm payroll employment increased by 103 000 persons. This rise included 45 000 telecommunications workers returning to work after their August strike. The employment growth is encouraging but job gains were only slightly larger than the growth in the working age population. This means that the share of Americans in jobs remained virtually unchanged and the unemployment rate stayed at 9.1 per cent. In Europe, the risk of the Eurozone slipping back into recession is increasing. Manufacturing production contracted for the second consecutive month in September. Moreover, the inflation rate increased sharply to 3.0 per cent in September from 2.5 per cent in August. Rising inflation coupled with an increasing risk of recession present complex policy challenges for the European Central Bank and other Eurozone policymakers. In the UK, the unemployment rate continued to rise, to 8.1 per cent in August and the number of unemployed persons reached 2.57 million, a 17-year high. In Japan, export growth has been slowing reflecting slowing global growth. In addition, global investors have been moving into yen as a safe haven which has been driving up its value against other major currencies for several months. This appreciation of the yen has put further downward pressure on Japans exports. Barring a rebound in global growth, Japan may not recover from recession for quite some time. In China, economic activity is also cooling. The inflation rate decelerated further, to 6.1 per cent in September, from 6.2 per cent in August and 6.5 per cent in July. Export and import growth also slowed in September and the trade surplus fell for the second consecutive month.

International indicators
Lead in g in dex es: p er cen t g ro wt h rat es Co in cid ent i nd exes : per cent gro wt h rates On e m o nt h O ne m o n th L ates t m o nt h L ates t mo n th ago ago A nn ual rat es (per cen t ) U ni ted St ates -0 .6 0. 0 A ug Recess io nary 2. 1 1 .9 Au g Reces si o nary /Sl ow Canad a 1 .8 3. 1 Ju l Sl ow /A verage 1. 8 1 .6 Ju l S lo w/ Averag e M exi co 2 .0 1. 4 Ju l Sl ow /A verage 2. 3 2 .0 Ju l S lo w/ Averag e Germ an y -3 .6 -2 .6 Ju l Sl o w 3. 5 4 .2 Ju l S lo w/ Averag e Fran ce 0 .6 4. 9 Ju l Sl o w 2. 3 2 .0 Ju n S lo w/ Averag e Un it ed Ki n gd om 1 .4 1. 4 Ju l Sl o w -0 .7 -0. 7 Ju l Slo w It aly -12 .6 -1 3. 6 Ju l Sl o w 0. 4 1 .4 Ju n Slo w Sp ain 3 .7 -1 .9 Ju l Recess io nary -3 .8 -3. 9 Ju l R eces si on ary Swi tzerl an d 4 .5 3. 0 Ju l Sl o w 1. 2 3 .2 Ju n Slo w Sw eden 7 .2 5. 9 Ju n Sl ow /A verage 7. 6 7 .3 Ju l Av erage J apan -1 .9 2. 2 Ju l Reces si on ary/ Slo w 1. 5 0 .4 Ju l R eces si on ary Chi na 1 0. 6 10 .6 Ju l Sl ow /A verage 5. 6 6 .8 Ju l S lo w/ Averag e In di a -5 .1 -3 .9 Ju l Sl ow /A verage 3. 6 9 .0 Ju n S lo w/ Averag e Sou th K orea 3 .4 4. 0 Ju l Sl ow /A verage 5. 1 4 .3 Ju l S lo w/ Averag e Tai wan -2 .6 -2 .3 Ju l Sl o w 3. 3 4 .0 Ju l S lo w/ Averag e N ew Z ealan d 5 .0 6. 0 Ju l Reces si on ary/ Slo w 1. 9 1 .5 Ju n Reces si o nary /Sl ow So urce: E con o mi c Cy cle Res earch Ins ti tu t e, In ter na ti o na l Cycli cal O ut lo ok , Sept em ber 20 11

This is an extract from the Westpac Melbourne Institute Indexes of Economic Activity, October 2011

Monthly Bulletin of Economic Trends October 2011

Precision of Forecasts 2011 Sep Australia Economic Activity GDP Consumption Dwelling Business Investment Import Export Inflation & Financial Market Underlying Inflation Headline Inflation 90 day bill Trade Weighted Index Labour Market Unemployment Rate Employment Participation Rate Wage Price Index New South Wales Final Demand Consumption Unemployment Rate Employment Victoria Final Demand Consumption Unemployment Rate Employment Queensland Final Demand Consumption Unemployment Rate Employment Western Australia Final Demand Consumption Unemployment Rate Employment South Australia Final Demand Consumption Unemployment Rate Employment Tasmania Final Demand Consumption Unemployment Rate Employment 2.5 1.0 2.9 1.5 0.3 0.9 3.3 1.7 0.5 1.1 3.7 2.0 0.6 1.5 2.2 1.2 0.3 0.7 1.4 0.9 1.9 1.3 0.1 0.5 2.3 1.6 0.3 0.7 2.7 1.9 0.5 1.0 1.5 1.1 0.2 0.5 2.1 0.9 2.9 1.3 0.3 0.8 3.9 1.6 0.5 1.0 4.6 1.9 0.7 1.4 2.2 0.9 0.2 0.5 1.4 0.8 2.0 1.2 0.3 0.8 2.5 1.6 0.5 1.0 3.0 2.1 0.7 1.4 1.4 0.8 0.2 0.4 1.2 0.7 1.7 1.0 0.3 0.5 2.3 1.4 0.5 0.8 2.7 1.7 0.6 1.1 1.1 0.6 0.2 0.4 1.0 0.7 1.5 1.1 0.2 0.5 1.9 1.4 0.3 0.8 2.3 1.6 0.5 1.1 1.0 0.5 0.1 0.3 0.3 States 0.1 0.2 0.1 0.4 0.2 0.4 0.2 0.4 0.3 0.6 0.3 0.5 0.3 0.5 0.3 0.4 0.6 0.5 2.3 5.2 2.5 2.6 0.2 0.5 0.5 3.7 0.9 0.8 2.4 6.0 4.2 3.4 0.3 0.7 0.7 3.9 1.1 1.0 2.5 6.7 5.8 4.0 0.4 0.9 0.9 4.5 1.2 1.1 2.8 7.5 6.6 4.4 0.5 1.0 1.0 4.7 0.7 0.7 1.9 4.6 3.7 2.9 0.3 0.6 0.6 2.3 2011 Dec 2012 Mar 2012 Jun Financial Year 2011/12

Melbourne Institute Monthly Bulletin of Economic Trends

The Melbourne Institute Monthly Bulletin of Economic Trends provides forecasts of the state of the Australian economy. Variables forecasted include: the growth in GDP, consumption and the unemployment rate as well as the outlook for inflation, the 90-day bill rate and the exchange rate. The forecasts are generated using econometric techniques which combine both historical information and forward information contained in, for example, consumer expectations, leading indexes of economic activity, and financial futures. The monthly updates of forecasts four quarters ahead provides timely on-going information in advance of official quarterly data.

Disclaimer: The University of Melbourne and the Melbourne Institute give no representation, make no warranty, nor take any responsibility as to the accuracy or completeness of any information contained herein and will not be liable in contract tort, for negligence or for any loss or damage arising from reliance on any such information. For information on the data contained in the report contact the Melbourne Institute, The University of Melbourne, on (03) 8344 2196. 2011 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research This report is copyright. Apart from any fair dealing for the purposes of study, research, criticism or review, as permitted under the Copyright Act, no part may be reproduced without written permission.

ISSN 1835-6443 (Online)