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The University of Melbourne has expressed disappointment the merger of the Faculty of Economics and Commerce and the Melbourne Business School (MBS) will not go ahead at this time.

Commodity prices are set to push the Australian dollar higher in the not so distant future, according to Dr Les Coleman.  "The indicators are quite good for the global economy and it looks like there will be recovery in place next year.  That means growing demand for commodities, higher prices for commodities and in turn these prices will probably significantly support the Australian dollar, and will also  get some support in the rise in interest rates that the central bank seems keen on."

"But will we see a continuing increase?  Not so long ago the mining companies were talking about a once in a generation boom in commodity prices.  Now that was killed by the GFC, but if it comes back next year we may well see a long term uptrend in commodity prices."

Dr Coleman is a Senior Lecturer in Finance in the Faculty of Economics and Commerce.  A full staff profile can be found at

The National Director of World Vision Uganda, Rudo Kwaramba, will speak at the University of Melbourne next week.

Despite better than expected profit reporting by Australia's major companies, the direction of the Australian sharemarket is still cloudy, says Dr Les Coleman.  "In the last few months the stockmarket reached a low in March but has rebounded almost 50% since then.  In fact its gone back about 40% of the way to its previous high in 2007."

"Generally coming out of a bear market it takes two years or so to get that kind of recovery, so the market has gone a long way very quickly - up 25% for the year already - so while it's been a very very strong recovery, that rate of increase is simply unsustainable."

"Theres an old saying in financial markets: buy the rumour, sell the facts.  And I think we're going to see a re-evaluation of the market, and that it won't really go ahead so strongly in the next few months."

"Typically coming out of these mini bull periods the market falls back about 10% and that would bring back the rate of increase to 15% this year, to about 20% for the year as a whole.  That's a fairly normal rate of increase coming out of a deep bear market like we’ve seen, so a 10% correction now and a bit of recovery later in the year is what you’d expect."

Improvements in risk management processes can and should be made to avert the next bushfire catastrophe, says Dr Les Coleman, in the wake of the release of the bushfires Royal Commission interim report.  "It comes back to looking at the risks, putting in place mechanisms to try and reduce those risks ahead of time, and recognising that when these extreme events start to unfold, its really beyond anyone's physical resources to handle every part of it."

"It's hard to be critical of people under these circumstances. The Royal Commission has spent a lot of time looking at risk - and will spend more time looking at it - as risk is a major part of this issue: how do we understand it, quantify it, and work out what to do." 

However Dr Coleman, a senior lecturer in finance and a risk and crisis management expert from the Department of Finance, says criticism of the CFA is harsh.

"The CFA certainly came in for criticism, but if you look at the resources deployed on the day, they were huge: around 15 000 firefighters, 1000 vehicles, 50 aircraft and so on.  It's actually quite hard to work out what more they could have done.  So I think a lot of the criticism of the CFA is ‘Monday Morning Quarterbacking’ if you like, looking back on how to handle something that, at the time, they really couldn’t get more information about and didn’t have any additional resources."

"It would have been very very difficult to improve their management on the day.

Sir Howard Davies, the Director of the London School of Economics will ask whether central banks around the world could have helped head off the GFC in this years David Finch Lecture on Thursday August 13.

The rise of China in the new global economic order has made for a more prosperous and stable world, according to Associate Professor Mark Crosby from the Melbourne Business School.

While the Australian economy recorded positive growth over the last economic quarter, Associate Professor Mark Crosby from the Melbourne Business School says Australia is still in recession.

"Most economists would not use the journalistic interpretation of recession i.e. two quarters of negative growth.  Most economists would have a pretty rubbery definition of it, but generally the settle on something 'significantly below trend'.  The Australian economy IS significantly below trend, with regards to GDP growth, so I would say we are in recession."

"In the US there is a committee that decides whether the country is in recession, and they dont just look at the GDP numbers they take in all sorts of factors.  That committee put the US economy in recession in November 2007."

"I think if we had a similar sort of structural committee in Australia, they would put the economy in recession around about September last year, if you took into account all the data.  Even now if you look at the structure of GDP, the farm sector- and its recovery from the drought - has been what's kept us in positive growth, where most other sectors experienced negative or zero growth."

However Associate Professor Crosby says that Australia still has recorded some positive numbers in the last quarter.  "Our 0.4% growth is better than most OECD countries - we're number one for GDP growth and bottom in terms of unemployment rate - and certainly the best in the G7, and signifcantly better than most of the other countries in our region. 

"But our economy is still very soft, our growth is still very poor, just not as bad as other countries.  To do better we do need our trading partners to be in better shape."

You can read more of Associate Professor Crosby's thoughts on the current GDP data in today's edition of The Age: 

The Carbon Pollution Reduction Scheme (CPRS) is not the most efficient way to reduce carbon emissions, says Senior Lecturer in Finance Dr Les Coleman.

Dr Coleman says that while there have been extensive discussions about the pros and cons of the CPRS, alternatives to the scheme have not been adequately considered and people with specialist knowledge in the area of carbon reduction have not been adequately consulted.

“The reduction of carbon emissions is a very scientific objective, yet the process of deciding how to do this is being run by politicians and diplomats. If you really want to achieve reductions in carbon emissions, you need a technical solution. This could be achieved by consulting people with specialist knowledge like scientists, chemists and people with expertise in markets and taxation and not just diplomats.”

“The Government is setting up a false market with the CPRS and we know from the recent global financial crisis that markets don’t solve all of our problems. I would much rather see a technique used that has worked successfully in the past - a simple and direct tax system.”

“The main disadvantage of a tax system however is the name, as nobody likes to be accused of introducing another tax. Otherwise it’s a fairly direct process and could be introduced as a fairly simple extension of the current petrol excise or GST.”