Thursday, January 31, 2013

CairnsWatch Optimistic

The first monthly Cairnswatch for 2013 continues the optimistic tone of recent months. The strong employment trend is particularly highlighted although expectations are perhaps also becoming stretched?

The recovery in tourism is clearly the driver. Anecdotal reports so far are that January trade had also been stronger than previously. However, while the Far North has not been directly affected some impact from recent weather events should probably be expected. 

The airport traffic numbers continue to demonstrate that while the arrival of direct flights from China have been positive it is the consistent solid trend through the domestic terminal which has underpinned growth in the past year. A recent report of recovery and growth from NSW in the past year was noted.

Given stronger employment it's interesting to note the continued decline of Cairns Post job ads as an indicator of employment trends. Rick has commented on this in this Cairnswatch. It was queried and commented upon earlier last year at Loose Change.

Sunday, January 27, 2013

Supply v Demand

With flooded supply constraints along the Bruce Hwy it is interesting to watch where the empty spaces are appearing on supermarket shelves. As one would expect there are patchess of bare spaces mostly fresh products.

Coles at Cairns Central have done an excellent job of spreading their larger blocks of home brand cheese out along the shelves to make them appear full. However the meat shelf is a bit skinny and budding chefs may not find their imaginations stimulated by the available selections! Milk isn't too bad is that because there is a local supply?

However, as a keen observer of the quirky what caught the KS eye at Coles Central was the stripped shelves for toilet paper:


Consumer choice at work with half an entire aisle stripped bare! Has someone been hoarding this stuff or is there really a shortage of toilet paper in Cairns?

Thursday, January 24, 2013

FNQ employment at new monthly high

The unemployment rate for the Far North ticked slightly higher in December to 8.4%. The good news is that estimate for employment surged higher to 145,200 which finally surpasses the previous high of October 2008. The higher unemployment rate was a result of an also robust participation rate now up at 71.6%.

That is now the highest participation rate in Queensland with the exception of inner city Brisbane. The employment and participation data are certainly counter to the weak Queensland trend for both over recent months. While browsing the 2011 Census data for the previous post it was noted that while Cairns would score poorly on unemployment rate it would actually have rated relatively highly among the cities on employment to population even at that time.

However, it must be remembered that beyond the typical monthly volatility ABS do not provide seasonally adjusted or trend etimates for regional data so we will have to wait for Conus Consulting to update their numbers on this. The weather has cetainly also been kinder through the latter half of 2012, at least until this week!

Comparisons of employment over the period with other Queensland regions may also be of interest for a subsequent post. Perhaps a reminder also that as Ricardian Ambivalence like to point out the labour force survey methodology is designed principally to measure the unemployment rate rather than employment.

Monday, January 21, 2013

The Suncorp data-unfriendly report?

The big news last week was release of the Suncorp Bank Family Friendly City Report. There was outrage when this report placed Cairns 27th among the most populated thirty cities in Australia. King Parrot, the Lance Armstrong of the Cairns parrot cage, demanded an apology from Suncorp.

The report and response managed to make front page of the Cairns Post two days running. Chris Harrison followed up in the Weekend Post with a critical opinion: Family index simply sticks to the figures. However, Chris didn't question the numbers themselves, quite the opposite:
Numbers are numbers. I'm not questioning the bank's ability to count. What I am questioning is the report's self-confessed disregard for the subjective.
Perhaps he should have questioned the numbers because it is beyond me how this could have been so widely reported nationally without at least some professional journalist observing such obvious flaws. The accuracy of this report is so bad it is surprise it was ever released by Suncorp.

How bad? Well, in the income category they have somehow managed to excise Hervey Bay from Queensland altogether and move it over to Western Australia. However it was the health category which initially had Loose Change head scratching.

Suncorp declare that "Burnie is Australia's healthiest city" with citizens attending the GP barely 1.3 time each year on average. This somewhat clashes with a subsequent health indicator in the report where the citizens of Burnie assess their own health among the worst of the cities. Perhaps this says something about the GP's in Burnie but more likely it indicates that the data is flawed.

What stands out most about the health data is the huge dispersion. The bottom of the scale is Sunshine Coast with 8 GP visits per person. Townsville tops Queensland with just 2.9 visits. Even allowing for demographic differences it should be obvious that this dispersion on a basic health measure is unlikely. The report provides a link to the source of this data at A Social Health Atlas of Australia, 2011.

Data here is in excel file by state for various statistical areas. GP visits are based on a rate per 100,000.  GP visits for Burnie LGA are listed as 526,371 per 100,000 which would be equivalent to 5.3 visits per person. That is a long way from 1.3? Too far away for any difference to be explained by a different statistical area which would all still encompass the main body of Burnie.

The statistical division of Burnie-Devonport is 5.0 visits per person. Scrolling through all the Tasmanian data provideded at the source link whether it is broad statistical divisions, LGA's or smaller local areas there is not a single number within cooee of the 1.3 for Burnie! What have they done?

Meanwhile, up in Queensland, it is claimed by Suncorp that the average citizen of Townsville visits the GP 2.9 times a year while the Sunshine Coast is the centre of Australian ill health with 8 visits per year. Again, the data at the source link contradict this.

The Townsville Council region is 5.3 visits. Statistical division data still splits Townsville & Thuringowa but both are above 5 visits. There is no other data in the source link which supports the Suncorp numbers. Similarly with the Sunshine Coast there is nothing anywhere near a number of 8 visits for the Coast or any of its components.

Cairns is actually above Townsville on this health measure rather than below as in the Suncorp ratings. However, as suggested most urban regions are within a relatively close range on this rather than the extreme diversion implied by Suncorp. Smaller remote regions actually have lower rates of GP visits. Hence, those in the Far North seeking a family friendly destination on this measure should make a beeline for Torres Strait, followed by Kowanyama, Lockhart River and Yarrabah which all have lower rates than Cairns or Townsville!

Lets move on to education where Suncorp would have us believe that Townsville schools are a crowded Dickensian hell with 1,127 kiddies on average packed into each school? There is census data on those at school in the relevant age groups. Also found was a list of schools in Townsville at Wikipedia. This list may not be accurate but doesn't have to be to prove the Suncorp numbers wildly wrong.

A few hundred at primary schools and larger numbers close to a thousand at high schools would probably be expected and this is what the numbers actually show. Suncorps own description of their methodology appears to imply that they included everybody in the 15-19 age group whether they were at school or not. How any sensible and knowledgable person could have looked at these numbers and swallowed them defies belief!

Suncorp regarded disposable income as the most appropriate measure in that category. This would be nice except the broad data they have used from ABS doesn't provide detailed data for regions outside the capitals. Disposable income for each state ex the capitals is applied to all regional centres within each state. So all regional cities in each state get the same score.

This is the biggest clanger in the report because somehow they have managed to move Hervey Bay to Western Austrlalia and rank it at #6 with the highest ranking regional income centres. While not disposable income data, it would have made more sense to use the census numbers on income. This would place Hervey Bay stone motherless last and move it down from #6 to #30. Hervey Bay would then drop out of the paloton as the least family friendly city in Australia!

Do we need to go on? The King Parrot has demanded an apology from Suncorp on the crime and unemployment numbers for Cairns. There are similar issues with the employment numbers but the problem is that the Cairns numbers are actually among the more accurate in the report and wouldn't much change the ranking of Cairns in these categories. Most slighted in the employment category was Ballarat which was given an 8% unemployment rate when the census data is about 5.9%.

Problems with the employment numbers again should have been obvious with reference to Tasmania. Tassie is a relative economic and demographic basket case yet Suncorp managed to rate their two largest population centres in the top ten on employment. The numbers used for Hobart and Launceston, supposedly based on the 2011 census, are simply wrong by a substantial margin.

Cairns employment would move up a few places on appropriate census data but mostly because the numbers for other cities are more wrong. Suncorp used 7.2% census unemployment for Cairns while the SUA (Significany Urban Area) census data is 6.8%. It should be noted that the state electoral division of Cairns is significantly higher than the broad city average at 8.3%!

One could go on but shouldn't. Suncorp should be embarrassed by this report which looks like just another PR spin-job swallowed by the MSM media. However there is no basis for any apology specific for Cairns.



Sunday, January 20, 2013

Deadweights, Gifts & Ocean Spirits

In the wake of Christmas (Boxing Day) came a report on unwanted Christmas gifts being flogged on the internet. This report referenced Gumtree which is apparently a classifieds website:
"It's so much money that people spend with the best intentions for buying gifts, and unfortunately not all of those gifts find a loving home," he told AAP.
"So we're seeing increasingly people are choosing to sell those gifts rather than hiding them in a cupboard and gathering dust."
In the second year of Gumtree's annual Christmas survey, Mr Thomas said one million more people will head online this year to sell items via classifieds websites.
Now, one could dismiss this given the PR source however there is widely recognised academic research to back up the massive waste of unwanted Christmas gifts: The Deadweight Loss of Christmas

Simplistically, the deadweight loss here is what what you would have done with the money yourself if you had not been indulged with a gift you didn't want or need! Mind you, the internet now offers an easy channel to relieve oneself of such unwanted paraphenalia!

Nor surprisingly all research is that the likely value of your gift will deteriorate with your relational distance. Parents gifts are most likely to be most valued by children. Uncles and Aunts less so. Anyone more distant than that should just give up!

Cash and gift cards are always an option. Although it's best not to delay on gift cards. Many given an Angus & Robertson gift card for Christmas 2010 got a nasty shock in the new year when they were subsequently placed in receivership and the value of the gift cards cut in half. Anyone wanting to hang out for full value was invited to line up with the unsecured creditors!

Which is interesting given that the day after Boxing Day the Cairns Post carried a story on the recovery in the business of Ocean Spirits Cruises. This business was sold in late 2011 with locals cards for unlimited pre-payed reef trips cancelled half a year before expiry.

Loose change has posted previously on this and as a cardholder raised a complaint with Qld Fair Trading. The complaint was against Macro Corporation as vendor of the business to the current operator. This seemed to be going somewhere early last year but then subsequently went nowhere.

It seems legally that Fair Trading can only act if there is evidence that there was no intention to honour the cards at the time they were flogged to punters. Advice was given that an individual may be able to seek redress via QCAT.

Individual actions on items such as reneged gift cards are unlikely to be worthwhile for an individual in terms of time and costs for any funds recovered. This is very clearly a flaw in current consumer law. Any business can really can just get away with  impunity on this one with minimal chance of prosecution or being forced to pay out to all cardholders.

Note: Macro is ASX listed and the controlling Asian interests have done rather well after running off with the cardholders cash to invest in some rather speculative Indonesian coal exploration pasture. However Macro currently remains suspended from ASX trading.

Tuesday, January 8, 2013

Insurance Contents Conundrum

KS received today the contents insurance renewal for his bohemian retro Cairns Esplanade abode. The renewal proposal from NRMA hiked the premium by a not inconsiderable 157%. KS regards this as somewhat unreasonable given that it also based on a $1,000 excess!

A quick online search of a couple of alternatives of comparable insurance revealed:

NRMA:    $1,047
Suncorp:     $799
RACQ:        $318

Also of interest was that since the insurance was commenced with NRMA now two years ago, the insured amount has been hiked by approximately 10% p.a? Now, the KS abode is furnished in somewhat alternative fashion with the most significant furnishings acquired from the Crackerbox Palace so the contents are not so easily replaced as furnishings from the Harvey Norman selection.

However, I am not aware of any empirical justification for automatic hikes of 10% p.a in contents valuations? Rather if anything I would have thought these had been flat or even declined? Have the NRMA assumed that KS has in the past two years been manically filling his abode with additional flat screen TV's in each room? Obviously they havent checked out the prices at K-Mart lately!

This is also where the vexed issue of strata insurance multiplies complexities! In a strata property carpet is a content while tiles are a fixture covered by the body corporate insurance. I am not aware of anybody who has been able to explain the complexities of strata insurance.

Meanwhile, the experience and quotes indicated here simply provide further evidence of an insurance market which has become dysfunctional?!?