Business

Heaven help Australian economy, says Eddie Hobbs

Irish economist Eddie Hobbs has predicted “a lot of pain” ahead for the Australian economy.

Irish economist Eddie Hobbs has predicted “a lot of pain” ahead for the Australian economy.

Irish financial guru Eddie Hobbs has declared that Australia is in an economic “trap”, fuelled by a huge speculative property bubble.

Hobbs, writing in the Irish Examiner, says there are disturbing economic parallels between what happened in Ireland before its property crash and what is going on in Australia today.

“Housing values are already down 10 to 15 per cent on average, credit growth is cooling rapidly and early warnings like falling recruitment advertising, white goods and car sales are flashing red as employers and consumers rein in spending as the negative wealth effect takes a grip,” he says.

“Ireland and Australia have different economies that’s for sure, but not different people. Why Irish data matters is because the Australian mortgage book looks to have much higher risk than Ireland before its crisis.

“Forty per cent of all Australian mortgages are on capital repayment holidays, serviced on interest-only terms. This is a huge number,” he writes.

ALSO READ: Irish doctors heading to Australia in larger numbers

“The total loan book is also heavily skewed towards buy-to-lets at 34 per cent of which 80 per cent are interest only. These nose bleeding numbers compare to Ireland where 15 per cent of mortgages were buy-to-lets, half of them, interest only. The great bulk of Irish housing mortgages, 85 per cent were owner occupiers spilt even between first-timers and those switching home or mortgage. So, have Australian Banks been more carefully lending than Irish Banks? No.”

The Irish economist said he can not see a way out for Australia without ‘a lot of pain’.

“Despite its AAA status, high per capita wealth and low joblessness, Australia is in a trap. Heaven help them because it is hard to see a way out that doesn’t involve taking a lot of pain. The economy is sitting on a huge speculative bubble. If [the economic doomsayers] are right, Australia is staring into a full-blown systemic crisis for banks, for mortgage insurers and for sovereign debt as loses get socialised.

“Cutting rates, loosening credit rules to reignite credit growth or adopting emergency fiscal policies to provide market supports, could delay and temporarily inflate the bubble further but it cannot be magicked away. When the public is fed reckless Government, regulatory and banking policies for long enough, the results are always the same.”

Ireland among most expensive places for expat workers

Dublin is becoming a more expensive place to send expat workers.

Dublin is becoming a more expensive place to send expat workers.

Ireland is now one of the top 20 most expensive locations to send expatriate workers, according to a new global survey.

ECA’s annual MyExpatriate Market Pay report surveys the cost of benefits, salaries and tax treatments in countries around the world in order to assist companies with benchmarking their expatriate packages when relocating staff. Benefits include the allowance to cover essential costs such as accommodation, international school fees, utilities or cars.

The UK has overtaken Japan as the most expensive location to send expatriates, with the average expat pay package rising by £44,688 to £311,240, according to the survey.

Oliver Browne, Remuneration Manager at ECA International, said the tight Dublin rental market had contributed significantly to the costs.

“Similar to the trend we saw in the UK, benefits costs have increased notably due to the rise in accommodation and rental fees,” he said.

“Expats in Ireland are more expensive for companies despite average net salaries for expatriates actually dropping by two per cent (€965) since last year. This was more than offset by an average rise of 14 per cent (€8820) in the cost of benefit provisions that companies had to provide their overseas staff,” Browne explained.

ECA’s recent rental accommodation report revealed that rent in Dublin entered the top five most expensive in Europe for the first time, averaging €3406 per month for a mid-range, three-bedroom apartment.

As expensive as it is, Ireland (18th) is less costly than Australia (9th).

Middle Eastern nations Saudi Arabia and UAE continue to offer the best salaries for expats, with the nations now offering an average of £71125 and £69280 to mid-level expats respectively.

Browne explained: “The Middle East has always offered extremely high salaries to overseas workers, and 2018 was no different. However, the benefits offered in these nations are not among the most costly for an employer, and the average value of benefits offered actually dropped in both locations last year, while the lack of any personal tax means that the overall package works out to be a lot lower when benefits and tax are both taken into account.”

High salaries 'attracting emigrants home' claims Minister

Pictured at a green-lit Sydney Town Hall are (from left): Owen Feeney, Consul General of Ireland; Linda Scott, Deputy Lord Mayor of Sydney; Heather Humphreys, Ireland’s Minister for Business, Enterprise, and Innovation; Breandán Ó Caollaí, Irish Ambassador in Australia, and Sofia Hansson, director of, Tourism Ireland, Australia and New Zealand.

Pictured at a green-lit Sydney Town Hall are (from left): Owen Feeney, Consul General of Ireland; Linda Scott, Deputy Lord Mayor of Sydney; Heather Humphreys, Ireland’s Minister for Business, Enterprise, and Innovation; Breandán Ó Caollaí, Irish Ambassador in Australia, and Sofia Hansson, director of, Tourism Ireland, Australia and New Zealand.

Ireland’s Minister for Business, Enterprise and Innovation Heather Humphreys says the salary levels on offer in Ireland are attracting emigrants home.

“Our economy is good,” she told the Irish Echo during her recent visit to Australia. “The wages back home are attracting people back to Ireland. For that reason, there are more people coming back to Ireland than leaving right now.”

A large number of expat nurses sent a strong message of solidarity with their striking colleagues in Ireland during the recent industrial action. Protests in Sydney, Melbourne and Perth featured banners with a clear message for the Irish government: “Give us a reason to come home”.

Did the minister have a message for those nurses?

“The HSE always welcomes nurses back and has established a ‘Bring Them Home’ campaign to support nurses to make the move back,” she said.

“There are a range of incentives to encourage Irish nurses who currently live abroad to consider returning home and joining the Irish health service. Those incentives include up to €1500 in vouched removal relocation expenses including the cost of flights, nursing registration costs and a funded postgraduate education.”

The Government could not say how many nurses had taken advantage of the Bring Them Home incentives, but according to figures published under a Freedom of Information request, fewer than 150 nurses returned under the scheme in 2017.

Ministeer Humphreys with diplomatic, IDA Ireland and Enterprise Ireland staff in Sydney.

Ministeer Humphreys with diplomatic, IDA Ireland and Enterprise Ireland staff in Sydney.

The minister spoke at a number of events about the important role the diaspora has to play in Ireland’s future. She also opened the new Irish Support Agency offices at The Gaelic Club in Surry Hills. One way to engage Irish citizens abroad is to allow them to vote in elections. Does she personally support extending the voting franchise to Irish citizens abroad?

“This is something that the Government has looked at and we’re going to bring forward a referendum [on whether Irish citizens abroad can vote in presidential elections] and leave that decision to the people.”

Ireland is one of the few western democracies which does not allow its citizens abroad to vote.

Meanwhile, Australia is very much part of the Irish government’s plans to explore new markets to diffuse the impact of Brexit, according to Minister Humphreys.

“Diversifying our markets is part of our Brexit strategy,” she told the Irish Echo. “We consider Australia to be a very good opportunity. I know its a long distance but the world is a small place now. There are many opportunities for Irish companies here.”

She also said that Ireland provides excellent opportunities for Australian companies.

Asia’s largest fintech innovation hub, Stone & Chalk (S&C), has partnered with Enterprise Ireland, as a landing pad in both Sydney and Melbourne for Irish fintech companies seeking to enter Australian and Asia Pacific markets. From L-R: Kevin Sherry, Executive Director, Global Business Development, Enterprise Ireland; Hannah Fraser, Senior Market Advisor, Australia/New Zealand, Enterprise Ireland; Irish Minister for Business, Enterprise and Innovation, Heather Humphreys T.D.; Alex Scandurra CEO Stone & Chalk; Ambassador Breandán Ó Caollaí, David Eccles, Director, Australia/New Zeland Enterprise Ireland.

Asia’s largest fintech innovation hub, Stone & Chalk (S&C), has partnered with Enterprise Ireland, as a landing pad in both Sydney and Melbourne for Irish fintech companies seeking to enter Australian and Asia Pacific markets. From L-R: Kevin Sherry, Executive Director, Global Business Development, Enterprise Ireland; Hannah Fraser, Senior Market Advisor, Australia/New Zealand, Enterprise Ireland; Irish Minister for Business, Enterprise and Innovation, Heather Humphreys T.D.; Alex Scandurra CEO Stone & Chalk; Ambassador Breandán Ó Caollaí, David Eccles, Director, Australia/New Zeland Enterprise Ireland.

“They see Ireland as a gateway into the European Union. Ireland will be the only English language country left in the European Union when the UK leaves.”

The Minister said the fintech sector is particularly active. A number of Australian enterprises, including Macquarie Bank, are seeking licences to operate in Ireland.

“We welcome that,” she said. “Their corporate governance structures are very similar to ours. They’re happy that our government regulation is strong and we have a stable country. So they know, when they business with us, we do what it says on the tin.”

Ms Humphreys led an eight-day trade and investment mission, covering Melbourne, Sydney and Perth and Singapore. Seventy-one Enterprise Ireland client companies participated in 24 business events and pre-arranged meetings with potential business partners including Telstra, Optus, ANZ Bank, CBA, Cochlear, BT Financial, NAB Bank, Deloitte, Macquarie Bank, Stone and Chalk, and Amazon Web Services.

The minister confirmed plans to open new Enterprise Ireland offices in Melbourne as part of the Government’s Global Ireland 2025 strategy. She would not be drawn on whether the absence of diplomatic representation in Melbourne and Brisbane would be addressed. Perth has an honorary consul.

“We will continue to expand our representation through Global Ireland so whether its our agencies opening new offices or the diplomatic service, we’re always looking to increase our presence all over the world,” the Minister added.

Expat businessman's fairytale castle project complete

KING OF THE CASTLE: Killeavy Castle’s owner Mick Boyle with key players in the renovation, Jason Foody, Clare Clarke and Gary Flynn.

KING OF THE CASTLE: Killeavy Castle’s owner Mick Boyle with key players in the renovation, Jason Foody, Clare Clarke and Gary Flynn.

A Sydney Irish businessman has completed a fairytale project in his old hometown.

Mick Boyle, who was born in South Armagh, and his wife Robin have restored the 180-year-old Killeavy Castle to its former glory.

In doing so, they have also launched a new hotel business, creating 85 jobs in the border region.

“Robin and I wanted to change the way people think about South Armagh,” said Mr Boyle, who runs a successful construction business in Sydney.

“We want to create a destination venue where tourists and local people can come to and enjoy great dining, access the beautiful mountain walks and feel very connected with their natural surroundings.

“We want Killeavy Castle to be a world-class destination where people can escape the busyness of modern life and get closer to what’s important.”

It was 2013 when Mr Boyle first became aware that Killeavy Castle was on the market.

The old building, originally designed in 1836 by architect George Papworth of Dublin, had fallen into disrepair after sitting derelict for more than a decade. The Boyles bought the property for £1.3million in 2013 and set about restoring it.

The £12 million renovation involved more than 90 local contractors, from design to construction and landscaping companies, with the expertise to undertake the extensive renovations with painstaking care and to ensure the 19th century building has been fully restored to its former glory.

Killeavy Castle now has four luxury bedrooms, a formal dining room, a cellar bar and private function facilities, all with period features that have undergone significant restoration. Behind the castle there is a permanent marquee for weddings, retreats and corporate events.

An underground tunnel once used as a servant’s passageway now links the castle to the newly built 45-bed boutique spa hotel, a Grade 2 listed building that was once a coach house, a mill and farm buildings.

Mr Boyle says the renovations will put a modern twist on the traditional charm of the castle.

“What makes us unique is our location and heritage. We are situated at the foot of the mighty Slieve Gullion, with unrivalled natural beauty and incredible views. Our heritage and provenance are at the heart of everything we do.

The restoration includes a luxury hotel with five-star wedding facilities.

The restoration includes a luxury hotel with five-star wedding facilities.

“Our food will be sourced locally or grown in our walled garden; our 85 staff [mostly] live locally, and we have incorporated the beauty of the countryside into the design and interior of the castle and hotel. We also have a working farm with Cheviot sheep and longhorned cattle.”

Asked what the impact of Brexit might have on his new venture, Mr Boyle replied: “I haven’t a clue. I don’t think anyone has a clue.”

Mr Boyle and his family are well-known to the Irish community in Sydney.

Mick senior and Pauline Boyle

emigrated from south Armagh in the 1960s. Young Mick was just five when the Boyles settled in St Mary’s in Sydney’s western suburbs.

“My father was active for many years in Penrith Gaels and was president for several years at around the time the new club opened up,” he recalls.

In the 1990s, Mick junior set up his company Abergeldie, which provides complex infrastructure like roads, bridges, dams, shafts, tunnels, rail and water infrastructure. The firm now employs more than 500 people and has offices in Sydney, Melbourne, Brisbane, Auckland and now, Newry, Co Down.

The general manager of Killeavy Castle Estate, Jason Foody, said the new hotel was already attracting business from across Ireland and overseas.

“There has been a great demand for our unique facilities, with 50 events already booked in, from fairy-tale wedding ceremonies to glamorous receptions. We have had inquiries from all over the world, with people excited to visit the estate and take in the breath-taking scenery.”

The castle and hotel are located at the foot of Slieve Gullion in south Armagh

The castle and hotel are located at the foot of Slieve Gullion in south Armagh

Congratulating the owners on the development, Gary Flynn, business acquisition manager at First Trust Bank, which helped finance the project added: “We are incredibly proud to have played a part in the restoration of Killeavy Castle. The exceptional attention to detail at every step of the project has resulted in the creation of one of the most stunning venues on the island of Ireland.

“Mick’s passion for South Armagh is infectious. It’s clear he is committed to creating hospitality excellence and showcasing the beauty and charm of the local area on a global stage.

“The castle itself still has so many of its quirky period features, sympathetically restored to its former glory.

“So often we see investments of this scale taking place in our cities, so it’s great to see such a high-quality development of this kind enhancing our rural communities and is testament to the potential that is there to be harnessed,” Mr Flynn said.