COVID-19 NSW 2023: Counting Dead People - Part 6

 

NSW Dept. of Health, @NSWHealth, 19 May 2023

In the 7 days up to 18 May 2023 the national COVID-19 death toll was in excess of 114 people.

Between Friday 12 May to Thursday 18 May 2023 61 of these confirmed COVID-19 deaths occurred in News South Wales.

There have been no 7-day reporting periods in 2023 where NSW deaths have been recorded in single digits – according to Covid Live weekly deaths over the last 20 NSW reporting periods have ranged from a low of 22 deaths (17, 24 March & 14 April 2023) to a high of 131 deaths (20 Jan 2023).

As NSW Dept. of Health no longer publishes the COVID-19 fourteen-day tables which include deaths by gender, age group and health district, there is now no way to break down current COVID-19 publicly available death data for the state or for the Northern Rivers region.

The last published table recording COVID-19 deaths by NSW local health district was for the week ending 22 April 2023 and the last published table including a Northern Rivers COVID-19 death was for week ending 15 April 2023.

From January 2023 to 15 April 2023 there have been est. 40 confirmed COVID-19 deaths in the Northern Rivers region.

All that can be stated from published tables from then on is that; as of 18 May there were 252 confirmed COVID-19 cases recorded that 7-day reporting period for the Northern NSW Local Health District, spread across all 7 local government areas and, that as of the preceding 6 May the health district was recording on a “Week To Date” and “Year To Date” basis more confirmed COVID-19 cases than confirmed Influenza and RSV cases combined.

The Australian Department of Health and Aged Care released the following information on 19 May 2023:

As at 8:00 am 18 May 2023 there are 3,132 active COVID-19 cases in 453 active outbreaks in residential aged care facilities across Australia. There have been 207 new outbreaks, 38 new resident deaths and 2,751 combined new resident and staff cases reported since 11 May 2023.

[my yellow highlighting]

New South Wales had the highest number of aged care facility COVID-19 outbreaks during 12-18 May period. As well as the highest number of aged care residents & staff with active COVID-19 infections. 

Sadly, compared to other states and territories New South Wales at 14 residential facilities also had the highest number of aged care facilities reporting COVID-19 deaths among their residents. Resulting in this state having possibly the highest number of residential aged care deaths* across all Australian states and territories.

Note: 

* The actual number of NSW aged care deaths in the 7 days to 18 May 2023 is problematic as the Dept. of Health for privacy reasons reported deaths in aged care facilities in blocs of “<6”. So deaths at the 14 individual facilities involved ranged from 1-5 elderly people per facility.

See: COVID-19 outbreaks in Australian residential aged care facilities: National snapshot, 19 May 2023, APPENDIX 1

AUSTRALIA EMPLOYMENT STATE OF PLAY APRIL 2023: monthly figures reveal fewer people have full time jobs & 528,000 workers are in the unemployment queue

 

The latest Labor Force Australia: Headline estimates of employment, unemployment, underemployment, participation and hours worked from the monthly Labour Force Survey was released on Thursday, 18 May 2023.

This survey reveals that:

In seasonally adjusted terms, in April 2023:

• unemployment rate increased to 3.7%.

• participation rate decreased to 66.7%.

• employment decreased to 13,882,100.

• employment to population ratio decreased to 64.2%.

• underemployment rate decreased to 6.1%.

• monthly hours worked increased to 1,974 million.

• full-time employment decreased by 27,100 to 9,726,500 people.

• part-time employment increased by 22,800 to 4,155,600 people.

So to recap:

Seasonally adjusted a total of 13.8 million workers remain in employment across Australia, with est. 4.8 million working less than 35 hours a week and 4.1 million classified as part-time employees.

 

While the national monthly seasonally adjusted unemployment figure stood at 528,000 persons and the unemployment rate at 3.7%. The gender breakdown for that number was 301,900 males (unemployment rate 4.0%) and 226,100 females (unemployment rate 3.3%). 

In NSW the monthly seasonally adjusted unemployment figure was 151,500 persons, being 85,200 males (unemployment rate 3.6%) and 66,300 females (unemployment rate 3.1%).

REGIONAL ESTIMATES COVERING THE NORTHERN RIVERS REGION IN APRIL 2023:

Coffs Harbour-Grafton

Employed Full-Time — 40,100 persons

Employed Part-Time — 28,100 persons

Unemployed Total — 2,800 persons

Not in the Labour Force — 55,100 persons

Unemployment rate for 15-64 years of age — 4% 

Youth Unemployment Rate 15-24 years — 6.3%.

Richmond-Tweed

Employed Full-Time — 79,800 persons

Employed Part-Time — 50,400 persons

Unemployed Total — 3,600 persons

Not in the Labour Force — 86,500 persons

Unemployment Rate for 15-64 years of age — 2.7% 

Youth Unemployment Rate 15-24 years — 5.4%.

NOTE: NSW regional estimates for all SA4 employment areas in April 2023 can be found at:

https://labourmarketinsights.gov.au/regions/all-regions-abs-sa4/. 

Australian Bureau of Statistics (ABS), media release, 18 May 2023:

The seasonally adjusted unemployment rate rose by 0.1 percentage point (rounded) to 3.7 per cent in April, according to data released today by the Australian Bureau of Statistics (ABS).

Bjorn Jarvis, ABS head of labour statistics, said: "with employment dropping by around 4,000 people and the number of unemployed increasing by 18,000 people, the unemployment rate rose to 3.7 per cent.”

“The small fall in employment followed an average monthly increase of around 39,000 people during the first quarter of this year.”

Similarly, the employment-to-population ratio fell 0.2 percentage points to 64.2 per cent and the participation rate decreased 0.1 percentage point to 66.7 per cent.

“Even with these falls, both indicators were still well above pre-COVID-19 pandemic levels and close to their historical highs in 2022,” Mr Jarvis said.

Hours worked

Seasonally adjusted monthly hours worked increased by 2.6 per cent in April.

“This was because fewer people than usual worked reduced hours over the Easter period,” Mr Jarvis said.

“The last time Easter and the survey period aligned like this was in 2015, when around 60 per cent of employed people worked fewer hours than usual. This Easter it was only around 55 per cent of employed people.

“This may reflect more people taking their leave earlier or later than usual, or that some people were unable to, given the high number of vacancies that we’re still seeing employers reporting….

Underemployment and underutilisation

The underemployment rate fell 0.1 percentage point to 6.1 per cent (seasonally adjusted), following a 0.4 percentage point increase in March.

"The underemployment rate is still low in historic terms, around 2.6 percentage points lower than before the pandemic, and underpinned by faster growth in hours worked than employment," Mr Jarvis said.

The underutilisation rate, which combines the unemployment and underemployment rates, rose slightly to 9.8 per cent, and remained 4.2 percentage points lower than in March 2020.

NOTE:

The April survey reference period was from 2 April to 15 April 2023.

The May survey reference period is from 30 April to 13 May 2023.

Tweet of the Week

NEW VIDEO: “009 One Minute of King Parrots” (1m05s) https://t.co/wIeNaNlW6e It’s what it says it is. Shot a short time ago at @bunjaree.

— Stilgherrian (@stilgherrian) May 14, 2023

 

Cartoon of the Week

Glen LeLievre

World Meteorological Organization predicts one year in the next five will almost certainly be the hottest on record and there’s a 66% chance a single year will cross the crucial 1.5℃ global warming threshold

“….So what is driving the bleak outlook for the next five years? An expected El Niño, on top of the overall global warming trend, will likely push the global temperature to record levels. Has the Paris Agreement already failed if the global average temperature exceeds the 1.5℃ threshold in one of the next five years? No, but it will be a stark warning of what’s in store if we don’t quickly reduce emissions to net zero.” [Dr Andrew King, Climate Extremes Research Fellow, School of Earth Sciences, Faculty of Science, University of Melbourne, writing in The Conversation on 17 May 2023]

World Meteorological Organization (WMO), media release, 17 May 2023:

Global temperatures set to reach new records in next five years

Geneva, 17 May 2023 (WMO) – Global temperatures are likely to surge to record levels in the next five years, fuelled by heat-trapping greenhouse gases and a naturally occurring El Niño event, according to a new update issued by the World Meteorological Organization (WMO).

There is a 66% likelihood that the annual average near-surface global temperature between 2023 and 2027 will be more than 1.5°C above pre-industrial levels for at least one year. There is a 98% likelihood that at least one of the next five years, and the five-year period as a whole, will be the warmest on record.

“This report does not mean that we will permanently exceed the 1.5°C level specified in the Paris Agreement which refers to long-term warming over many years. However, WMO is sounding the alarm that we will breach the 1.5°C level on a temporary basis with increasing frequency,” said WMO Secretary-General Prof. Petteri Taalas.

“A warming El Niño is expected to develop in the coming months and this will combine with human-induced climate change to push global temperatures into uncharted territory,” he said. “This will have far-reaching repercussions for health, food security, water management and the environment. We need to be prepared,” said Prof. Taalas.

There is only a 32% chance that the five-year mean will exceed the 1.5°C threshold, according to the Global Annual to Decadal Climate Update produced by the United Kingdom’s Met Office, the WMO lead centre for such predictions.

The chance of temporarily exceeding 1.5°C has risen steadily since 2015, when it was close to zero. For the years between 2017 and 2021, there was a 10% chance of exceedance.

“Global mean temperatures are predicted to continue increasing, moving us away further and further away from the climate we are used to,” said Dr Leon Hermanson, a Met Office expert scientist who led the report.

Key points

> The average global temperature in 2022 was about 1.15°C above the 1850-1900 average. The cooling influence of La Niña conditions over much of the past three years temporarily reined in the longer-term warming trend. But La Niña ended in March 2023 and an El Niño is forecast to develop in the coming months. Typically, El Niño increases global temperatures in the year after it develops – in this case this would be 2024.

> The annual mean global near-surface temperature for each year between 2023 and 2027 is predicted to be between 1.1°C and 1.8°C higher than the 1850-1900 average. This is used as a baseline because it was before the emission of greenhouse gases from human and industrial activities.

> There is a 98% chance of at least one in the next five years beating the temperature record set in 2016, when there was an exceptionally strong El Niño.

> The chance of the five-year mean for 2023-2027 being higher than the last five years is also 98%.

> Arctic warming is disproportionately high. Compared to the 1991-2020 average, the temperature anomaly is predicted to be more than three times as large as the global mean anomaly when averaged over the next five northern hemisphere extended winters.

> Predicted precipitation patterns for the May to September 2023-2027 average, compared to the 1991-2020 average, suggest increased rainfall in the Sahel, northern Europe, Alaska and northern Siberia, and reduced rainfall for this season over the Amazon and parts of Australia.

Paris Agreement

In addition to increasing global temperatures, human-induced greenhouse gases are leading to more ocean heating and acidification, sea ice and glacier melt, sea level rise and more extreme weather.

The Paris Agreement sets long-term goals to guide all nations to substantially reduce global greenhouse gas emissions to limit the global temperature increase in this century to 2 °C while pursuing efforts to limit the increase even further to 1.5 °C, to avoid or reduce adverse impacts and related losses and damages.

The Intergovernmental Panel on Climate Change says that climate-related risks for natural and human systems are higher for global warming of 1.5 °C than at present, but lower than at 2 °C.

The new report was released ahead of the World Meteorological Congress (22 May to 2 June) which will discuss how to strengthen weather and climate services to support climate change adaptation. Priorities for discussion at Congress include the ongoing Early Warnings for All initiative to protect people from increasingly extreme weather and a new Greenhouse Gas Monitoring Infrastructure to inform climate mitigation.

Ensemble mean forecast 2023-2027

Notes For Editors:

The Global Annual to Decadal Update is one of a suite of WMO climate products, including the flagship State of the Global Climate, which seek to inform policy-makers. WMO will release its provisional statement on the State of the Global Climate in 2023 at the UN Climate Change Conference, COP28, in December.

The UK’s Met Office acts as the WMO Lead Centre for Annual to DecadalClimate Prediction. This year there are 145 ensemble members contributed by 11 different institutes to the predictions, which start at the end of 2022. Retrospective forecasts, or hindcasts, covering the period 1960-2018 are used to estimate forecast skill.

Confidence in forecasts of global mean temperature is high since hindcasts show very high skill in all measures.

The forecasts shown here are intended as guidance for Regional Climate Centres (RCCs), Regional Climate Outlook Forums (RCOFs) and National Meteorological and Hydrological Services (NMHSs). It does not constitute an official forecast for any region or nation, but RCCs, RCOFs and NMHSs are encouraged to appropriately interpret and develop value-added forecasts from this Climate Update.

The World Meteorological Organization is the United Nations System’s authoritative voice on Weather, Climate and Water

~~~~~~~~~~~~~~~~~

Excerpts from WMO Global Annual to Decadal Climate Update: Target years: 2023 and 2023-2027 specifically mentioning Australia:

• Predicted precipitation patterns for the May to September 2023-2027 average, relative to

the 1991-2020 average, suggest an increased chance of above average rainfall in the Sahel, northern Europe, Alaska and northern Siberia, and reduced rainfall for this season over the Amazon and parts of Australia.

Near-surface temperatures in 2023 are likely to be higher than the 1991-2020 average in almost all regions except for Alaska, South Africa, South Asia and parts of Australia (Figure 7). Parts of the South Pacific Ocean are likely to be cooler than average. Skill is estimated from hindcasts to be medium or high in most regions (Figure 8) giving medium to high confidence in the forecast…..

This section shows predictions for the average of the next five extended seasons for May to September and November to March.

For the May to September average, predicted temperature patterns over the years 2023-2027 show a high probability of temperatures above the 1991-2020 average almost everywhere, with enhanced warming over land (Figure 9). Skill is very high in most regions, giving high confidence in this prediction (Figure 10). For the same season, sea-level pressure is predicted to be anomalously low over the Mediterranean and surrounding countries, and high over the maritime continent and surrounding countries.

There is medium skill for most of these regions, giving medium confidence.

Predictions of precipitation show wet anomalies in the Sahel, northern Europe, Alaska and northern Siberia, and dry anomalies for this season over the Amazon and western Australia. Skill is low to medium for these regions, giving low to medium confidence.

For the November to March average over the years 2023/24-2027/28 (Figure 11), the predictions show warm anomalies are likely almost everywhere, with land temperatures showing larger anomalies than those over the ocean. The Arctic (north of 60°N) near-surface temperature anomaly is more than three times as large as the global mean anomaly. The North Atlantic subpolar gyre shows negative anomalies, the so-called warming hole, which has been liked to a reduction in the AMOC. Skill is high in most regions apart from parts of the North Pacific, some areas in Asia, Australia, and the Southern Ocean (Figure 12), giving medium to high confidence…..

NOTE: My yellow highlighting throughout this post

Yamba NSW 2023: is anybody listening?

 

The road into Yamba, Clarence Valley NSW, 4 March 2022
Credit: Clarence Valley Council via Storyful in Yahoo!

To put it frankly Yamba township’s flood resilience is a shambles.

Surrounded on all compass points by river, lake or ocean, much of the urban footprint of the town is built on degraded sand hills and reclaimed marshland or swamp across 16.92 sq km of coastal land.

The natural fingers of the Clarence River estuary which intrude into residential streets are now exacerbated by a fringe of canal estates which bring tidal riverwater right up to the artificial soft shore boundary edges of the backyards, side yards or front yards of so many homes and make it possible for riverine flooding to enter more streets than it once did.

Ocean storm surges occurring during destructive East Coast Low storm events are something that are considered almost in passing when it comes to resilience planning and flood risk management. Even though authorities are aware that days of heavy rainfall leading to soil saturation accompanied by strong seas result in est. 1 in 1,000 chance that land slippage will affect sections of Yamba Hill & environs public and private property – including residential dwellings. Such an event can coincide with riverine and stormwater flooding in wider Yamba.

The Lower Clarence River floodplain spans 500km². That is a substantial floodplain and climate change modelling in BMT Lower Clarence Flood Model Update 2013 indicates that all along the lower river peak flood levels are expected to increase in 1% AEP events.

The natural protection of Yamba’s 690ha natural flood storage area has over time been eaten away by extensive landfill earthworks being created in preparation for housing another 2,000-2,500 people in West Yamba. While completed large scale earthworks elsewhere in Yamba are contributing to increased stormwater flooding adding to the volume of flood water flowing in from the Clarence River and into internal waterways and floodways of a town whose current population is 6,388 men women and children living in a density of 377.6 persons per sq km.

Coping with the town’s street plan and road surface heights which lead to predictable internal road closures during major flooding. These closures will inevitably occur ahead of any official advice to immediately evacuate during a Lower Clarence River flood. Currently it appears such emergency advice is not planned to be given until flood height reaches 2.1m at Maclean – at which point Yamba’s only evacuation route is highly likely to be closed in both directions.

In 2022 any evacuation by vehicle ahead of a flood front was calculated to take a minimum of one hour for the journey to Maclean via Yamba Road and the Pacific Highway to be completed. A journey that in good conditions might take twenty minutes. [C. Landers, Clarence Valley Council correspondence, dated 30 June 2022]

When it comes to Yamba residents and visitors; state & local government along with emergence services have placed the primary emphasis on “self-help" when coping with rising floodwaters or a need to evacuate, due to limited SES resources being spread across the valley.

Added to this is the fact that Yamba's flood heights expected ahead of active flood fronts and actual flood front heights as they reach the town are broad estimations. Because the town has to rely on the Maclean flood gauge further inland due to the strong tidal movement at the river mouth which is said to distort any flood calculations derived from the Yamba tidal gauge situated in the vicinity of the start of the southern breakwater wall.

Yamba is an accident waiting to happen and, it does not inspire confidence, when reading between the lines of the following newspaper article it seems that Clarence Valley Council administration is reluctant to obtain a written record of the lived experience of the wider population in Yamba over the last three decades. Something that would complement the data contained in the anticipated report by BMT WBM Pty Ltd.

Clarence Valley Independent, 17 May 2023:

The Yamba Community Action Network Yamba CAN Inc is urging Clarence Valley Council to conduct a flood survey of all residents on the Yamba floodplain so it can be incorporated in the updated Clarence River Flood Study and Flood Model which are currently being prepared.

Consideration of the impacts of the devastating floods in February and March 2022 will be factored into council’s new Flood Study and Flood Model, and Yamba CAN Inc believes the studies would be better informed if a survey was done to understand the impacts on individual residences.

When Yamba CAN recently discovered a flood study being conducted by Coffs Harbour City Council of residents in the Moonee Creek catchment area, members questioned why CVC couldn’t do the same.

Flooding impacts areas of Yamba differently, so to get a comprehensive picture of how the entire Yamba floodplain is affected, Yamba CAN Inc suggests CVC adopt a similar model to Coffs Harbour City Council, by asking each household to describe how they were impacted.

Questions in the Moonee Creek flood survey include: how long have you lived in the region; have you experienced flooding within the Moonee Creek catchment; have you experienced any other flooding event; please provide a short description of any flooding you have experienced; whether your home/business, garage, yard was flooded; were you able to drive your vehicle to safety; what areas of the community are most at risk of flooding; have you noticed any changes in the frequency or severity of flooding in your area and to provide photos and depths of the flooding.

From answers to these questions, Yamba CAN Inc asserts CVC could develop a comprehensive flood model of how individual residences are impacted in times of flood.

The important information obtained from the survey would assist with any upgrading of west Yamba’s stormwater drainage system.

Yamba CAN Inc sent a letter to CVC General Manager Laura Black, and all Clarence Valley Councillors calling for a flood survey of residents living on the Yamba floodplain to be included in the updated Flood Study and Flood Model.

“It has come to Yamba CAN Inc’s attention of another flood study being undertaken by Coffs Harbour City Council in the Moonee Creek Catchment area,” the letter states.

“This flood study includes gathering information from all residents in the Catchment area by means of a survey.

“A similar survey of residents living on the Yamba floodplain is of paramount importance to be included in the current Flood Study and Model, particularly not only in relation to riverine flooding but stormwater flooding during February/March 2022 which occurred two days prior to the Clarence River flood crest reaching Yamba.

“Yamba CAN Inc requests CVC undertake such a survey and the results be considered in the formulation of the current Flood Study and Model.”

A Clarence Valley Council spokesperson said council engaged BMT to undertake flood modelling using the latest available property and event data for the local government area to inform Floodplain Risk Management Plans.

“The plan will be presented to the Council for exhibition, providing opportunity for the community to comment and provide feedback,” the spokesperson said.

The spokesperson said council doesn’t plan to do a survey of impacted residents in Yamba.

“Council does not intend to survey individual households in relation to this matter,” the spokesperson said.

“However, we will be undertaking a Yamba Urban Drainage Survey to capture residents experiences in recent events, as we are currently doing for Iluka.”

The second Albanese Government budget sees Australia's healthy international credit rating remaining intact

 

After the Albanese Government's first national budget was delivered soon after winning federal government, all three major global credit rating agencies - Moody's, S&P Global and Fitch - gave Australia's financial status the thumbs up.

On 30 January 2023 Standard & Poor’s again reaffirmed Australia’s AAA credit rating.

On the heels of the second Albanese Government budget Fitch Ratings also reaffirmed the nation’s AAA credit rating on 15 May 2023:

RATING ACTION COMMENTARY

Fitch Affirms Australia at 'AAA'; Outlook Stable

Mon 15 May, 2023 - 1:37 PM ET

Fitch Ratings - Hong Kong - 15 May 2023: Fitch Ratings has affirmed Australia's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'AAA' with a Stable Outlook.

A full list of rating actions is below.

KEY RATING DRIVERS

Strong Institutions Support Rating: Australia's rating is underpinned by the country's high income per capita, as well as strong institutions and an effective policy framework, which facilitated nearly thirty consecutive years of economic growth before the Covid-19 pandemic and continues to support resilient growth outcomes amid global shocks. The recent outperformance of public finances relative to our expectations further supports the Stable Outlook.

Fiscal Performance Improves: On a general government (GG) basis, we forecast the fiscal deficit to narrow to 1.2% of GDP in FY23 (ending June 2023), from 3.8% in FY22, on consolidation at the federal and aggregate state level. The federal government is set to achieve its first underlying cash surplus in 15 years at 0.2% of GDP in FY23, from a 1.4% deficit in FY22, according to the FY24 budget on 9 May. This is well below the 1.5% of GDP FY23 deficit forecast in the October 2022 budget due to robust revenue from a strong labour market and buoyant commodity prices, combined with spending restraint.

Slight Deficit Widening: We forecast a slight widening of the GG deficit to 1.6% of GDP in FY24. Still, we expect a slightly lower federal underlying cash deficit in FY24 than the budget, as we forecast higher commodity prices and nominal GDP growth. The federal budget shows a return to a modest 0.5% of GDP underlying cash deficit, against a 1.8% forecast in the October 2022 budget. The commitment in the budget to save most of the revenue windfalls over the five-year budget horizon signals a commitment to prudent fiscal management.

Structural Fiscal Challenges: We forecast GG debt to tick up slightly to 49.7% of GDP in FY25, from a Fitch-estimated 49.1% in FY23 (AAA median 36.3%), before gradually trending down. Slowing nominal GDP growth, moderating commodity prices and structural spending pressures, particularly from the National Disability Insurance Scheme (NDIS), are expected to push the GG deficit up to 2% of GDP in FY25, before narrowing.

The government took some initial steps to address structural pressures in the FY24 budget through revenue measures and adjustments to NDIS. Even so, longer-term pressure remains in the absence of additional structural reforms.

GDP Growth Moderating: We forecast GDP growth to ease to 1.5% in 2023 from 3.6% in 2022. Higher interest rates and still-elevated inflation will weigh on consumer spending, although households could use their savings buffers to smooth consumption. Services exports are showing a strong recovery, while the rebound in the Chinese economy provides a modest benefit. Net inward migration has recovered rapidly after the border reopening, which should support the economy's resilience and help alleviate labour constraints.

Tightening Cycle at its End: We believe that the Reserve Bank of Australia has reached the end of its tightening cycle following its 25bp policy rate hike earlier this month to 3.85%. This represents a cumulative 375bp policy rate increase since May 2022. Inflation was high at 7% in 1Q23, but is past its peak. We forecast inflation to drop to 3.5% by end-2023, but services inflation could prove persistent.

Household Debt Risks Limited: Australian households, which have one of the highest levels of debt to disposable income (around 188%) among 'AAA' peers, are likely to face pressure from rising debt-servicing burdens. Transmission of rates has been relatively fast, as about 75% of households with mortgages are currently on floating-rate mortgages and most of those with fixed-rate loans are set to roll on to higher rates in the next two years, mainly in 2023.

We expect rising rates to dampen consumption, rather than pose financial stability risks. Prudent mortgage serviceability buffers instituted by regulators mean most households have been assessed at rates around prevailing levels. Sizeable household assets (5.7x the value of debt), including a large build-up in liquid financial assets in the past few years, and mortgage pre-payment by many households should cushion rising debt-servicing burdens. A solid labour market and our expectation that unemployment remains low, should also limit potential stress.

House Prices Show Resilience: Australian house prices are down 8.0% through April 2023 from their April 2022 peak (on the heels of a 26% rise from March 2020). Recent months have seen a modest rebound in prices, particularly in Sydney. We now see a 10% (from 15%-20% previously) peak-to-trough fall in house prices, with some possibility of further weakness in 2023. The peak in the interest rate cycle, combined with strong housing demand, in part from a recovery in inward migration, will be supportive.

Strong Banking Sector: Fitch believes banks are well-positioned to manage risks due to strong capital positions, resilient profitability and sound underwriting standards. Asset quality is likely to deteriorate only modestly from a strong initial position (0.7% non-performing loan ratio). Fitch's stress test of Australia's four major banks in July 2022, with a scenario of a 5% default rate and 30% fall in house prices, well beyond our baseline, resulted in losses that did not exceed 0.3pp of risk-weighted assets or 10% of pre-impairment operating profit.

External Finances: The external finance profile remains weak compared with peers, but is improving on sustained current account surpluses. We forecast the surplus to be relatively stable at 1.4% of GDP in 2023 as strong goods and services exports offset higher income payments. External financing risks are limited despite high net external debt of around 47% of GDP (AAA median 22% net creditor position). Banks have reduced their reliance on external funding over the past decade and funding needs are well-managed. Households have accumulated large equity asset holdings in the past several years.

ESG - Governance: Australia has an ESG Relevance Score (RS) of '5[+]' for both Political Stability and Rights and for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption. Theses scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in our proprietary Sovereign Rating Model. Australia has a high WBGI ranking at 91.2, reflecting its long record of stable and peaceful political transitions, well established rights for participation in the political process, strong institutional capacity, effective rule of law and a low level of corruption.

Read the full assessment at:

https://www.fitchratings.com/research/sovereigns/fitch-affirms-australia-at-aaa-outlook-stable-15-05-2023