The cost of bank funds. Up or down, take your pick. This morning we could choose between banks exploiting consumers by raising their interest rate margins or maintaining them. The Fairfax papers went with the greedy bankers line quoting a study by the Australia Institute with The Australian settling for a comment in the Reserve Bank board minutes that the Reserve had expected an increased cost of funds to result in banks adding something to its own 0.25% increase in the official rate.

It seems to me this would be the kind of case where the public has an interest in knowing the truth. Treasurer Wayne Swan should ask the Financial Services Administration to provide a definitive analysis of exactly what has happened since the start of the global financial crisis.

And last of all comes my lot. No signs yet of galloping wage inflation in the booming mining and the related construction industry. The biggest winners among wage and salary earners in the past year have been government employees.

Australian Bureau of Statistics figures out this morning show public sector movement for the year through to September quarter 2010 (4.0%) remained above that of the private sector (3.4%). However, the gap between the two series reduced the September quarter.

17-11-2010 wagepriceindex

The biggest winners during the year were in education and electricity, gas, water and waste services. Coming in last, both for the year and the September quarter, were the hard workers in the media and information industry. A pity about that.

What happens if a country goes bankrupt? The reports of troubles in Europe’s financial system just keep coming with gloomier and gloomier suggestions of the horror to come when countries cannot meet their debts. But it is hard for the moderately economically literate like me to understand what those horrors actually will be.

Hence my appreciation of the Calculated Risk blog site which earlier this year ran a series of posts on sovereign default risk. It is a comprehensive and detailed survey and I have summarised it on Crikey‘s The Stump blog.

Back to Vanuatu. The dismissal this morning of an appeal by betting agencies against the turnover tax they pay to the New South Wales racing industry is bound to lead to much of the Australian bookmaking industry moving offshore.

The 1.5% tax on turnover that has now been declared legal is at a level that will encourage Australian corporate bookmakers to follow the example of their British peers who set up in Gibraltar to avoid high fees levied by the British industry.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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