O75 Public Administration

Australians are wealthier than before COVID, but half the population holds over 95% of the wealth

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Original article by Roy Morgan
Market Research Update – Page: Online : 3-Jul-23

The sixth edition of the Roy Morgan Wealth Report provides the full picture of individual Australians’ wealth and how that has changed during COVID-19. The report shows that after inflation, Australia’s wealth increased by 7.0% between March 2020 and March 2023, driven largely by the soaring value of owner-occupied homes (up 43.2% from $4.16 trillion to $5.95 trillion). The value of debt increased more quickly than the value of assets (53.0% vs. 22.2%), but not enough to stop the growth in overall wealth; the value of assets is now six times higher than the value of debt. Half the population now accounts for 95.4% of the nation’s net wealth. Watch our special End of Financial Year Wealth Report webinar with Roy Morgan CEO Michele Levine and finance and investment journalist Alan Kohler at https://www.youtube.com/watch?v=p2QW7kMF8dI.

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ROY MORGAN LIMITED

RBA set to stay tighter for longer

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Original article by Joanne Tran
The Australian Financial Review – Page: 1 & 22 : 3-Jul-23

The consensus of economists polled by the Australian Financial Review is that official interest rates will peak at 4.6 per cent in August. Judo Bank economist Warren Hogan estimates that there is a 35 per cent chance that the cash rate will rise above five per cent, citing factors such as ‘sticky’ inflation. However, Su-Lin Ong of RBC Capital Markets expects the cash rate to peak at 4.35 per cent in July. Meanwhile, most of the 27 economists who participated in the quarterly survey anticipate that the Reserve Bank will not begin easing monetary policy before May 2024, although Carlos Cacho of Jarden expects the first rate cut to occur in November 2024.

CORPORATES
JUDO BANK PTY LTD, RBC CAPITAL MARKETS, RESERVE BANK OF AUSTRALIA, JARDEN AND COMPANY

Economy’s lost year of stagnation

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Original article by Patrick Commins
The Australian – Page: 1 & 6 : 3-Jul-23

KPMG chief economist Brendan Rynne contends Australia is in store for a period of extended economic gloom, brought on by what he states is a "deliberate" policy choice by the Reserve Bank. Modelling by KPMG suggests that unemployment will rise from 3.6 per cent to 4.2 per cent by the close of 2023, before rising steadily up to 4.6 per cent in mid-2024 and reaching a peak of five per cent in early 2025. Corinna Economic Advisory principal Saul Eslake thinks that the RBA might lift interest rates one more time, but that two "would be overdoing it", while he agrees with suggestions that the forecast 715,000 net increase in migration across two years might prevent a technical recession.

CORPORATES
KPMG AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA, CORINNA ECONOMIC ADVISORY

Australian unemployment jumped to 10.3% in June – the highest since January 2023 (10.7%)

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Original article by Roy Morgan
Market Research Update – Page: Online : 3-Jul-23

The latest Roy Morgan employment series data shows that the number of Australians who are unemployed rose by 314,000 to 1,572,000 (10.3% of the workforce) in June. However, underemployment fell 50,000 to 1,415,000 (9.3% of the workforce, down 0.5% points). A total of 2.99 million Australians (19.6% of the workforce) were unemployed or underemployed in June, up by 264,000 from May. Meanwhile, employment fell by 72,000 to 13,635,000 in June. The drop was due to a fall in part-time employment (down 167,000 to 4,697,000), while full-time employment was up 94,000 to 8,937,000. Roy Morgan’s unemployment figure of 10.3% for June is almost triple the ABS estimate of 3.6% for May and is closer to the combined ABS unemployment and under-employment figure of 10.0%.

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ROY MORGAN LIMITED, AUSTRALIAN BUREAU OF STATISTICS

Surplus bounty pushes tax take past 24pc

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Original article by Andrew Tillett
The Australian Financial Review – Page: 3 : 3-Jul-23

Record revenue from company and personal income taxes has resulted in the federal budget being in surplus by $19bn for the first 11 months of 2022-23, putting it on track for a surplus of around $20bn for the financial year. This compares with Treasury’s forecast of a $4.2bn surplus when the budget was released in early May. Economist Chris Richardson estimates that the tax-to-GDP ratio is currently around 24.2 per cent; it has breached the 24 per cent level for the first time since 2007-08, and Richardson believes that this could become a permanent trend. Treasurer Jim Chalmers has previously stated that he does not feel bound by the former Coalition government’s cap of 23.9 per cent, describing it as "arbitrary".

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AUSTRALIA. DEPT OF THE TREASURY

Virgin first to test Labor’s bargaining laws

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Original article by David Marin-Guzman
The Australian Financial Review – Page: 6 : 28-Jun-23

The Australian Licensed Aircraft Engineers’ Association will oppose Virgin Australia Regional Airlines’ application to the Fair Work Commission for an "intractable bargaining" declaration. The ALAEA’s federal secretary Steve Purvinas says the union does not believe that the Virgin Australia subsidiary meets the requirements of the ‘Secure Jobs, Better Pay’ amendments to the Fair Work Act that took effect in early June. VARA commenced enterprise bargaining negotiations with the ALAEA in February 2021.

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VIRGIN AUSTRALIA HOLDINGS LIMITED, VIRGIN AUSTRALIA REGIONAL AIRLINES PTY LTD, AUSTRALIAN LICENSED AIRCRAFT ENGINEERS’ ASSOCIATION, AUSTRALIA. FAIR WORK COMMISSION

PwC spin-off counting on census role

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Original article by Tom Burton
The Australian Financial Review – Page: 3 : 28-Jun-23

PwC’s contract to run the 2021 digital census was worth nearly $40m; the firm and its technology partner Amazon Web Services had been regarded as the leading contenders to run the 2026 census prior to the tax leaks scandal. The census work would be undertaken by PwC’s public sector consulting arm, which will be sold to private equity firm Allegro Funds for just $1. Codenamed Bell, the new entity is likely to be subjected to intense scrutiny by the government authorities responsible for awarding the census contract.

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PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, AMAZON WEB SERVICES LLC, ALLEGRO FUNDS PTY LTD

ANZ-Roy Morgan Consumer Confidence up 2.5pts to 74.9 – biggest weekly increase since the first week of January 2023

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Original article by Roy Morgan
Market Research Update – Page: Online : 28-Jun-23

ANZ-Roy Morgan Consumer Confidence rose 2.5pts to 74.9 in the week to 25 June. However, Consumer Confidence has now spent 17 straight weeks below the mark of 80, the longest stretch below 80 since the index began being conducted on a weekly rather than a monthly basis in October 2008. Consumer Confidence is now 9.8pts below the same week a year ago (84.7), and 4.1pts below the 2023 weekly average of 79.0. Consumer Confidence was up in NSW and Queensland, but down in Victoria, WA and SA. Now 20% of Australians (up 5ppts) say their families are ‘better off’ financially than this time last year, while 55% (down 1ppt) say their families are ‘worse off’ financially. Some 28% (up 1ppt) of Australians now expect their family to be ‘better off’ financially this time next year, while 41% (up 2ppts) expect to be ‘worse off’ financially (the highest figure for this indicator since August 1989). Only 6% (up 1 ppt) of Australians expect ‘good times’ for the Australian economy over the next 12 months, while 43% (down 1ppt) expect ‘bad times’. Meanwhile, 20% (unchanged) of Australians say now is a ‘good time to buy’ major household items, while 53% (also unchanged) say now is a ‘bad time to buy’.

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ROY MORGAN LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Real unemployment in June up 1.9% to 10.3%

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Original article by Roy Morgan
Market Research Update – Page: Online : 28-Jun-23

In June Roy Morgan shows ‘real unemployment’ jumped 1.9% to 10.3% – reversing a series of recent drops. This is the highest ‘real unemployment’ has been since January. In contrast, under-employment was down by 0.5% to 9.3% with fewer people employed part-time in June. Overall though this mean a large rise in combined unemployment and under-employment, up 1.4% to 19.6% of the workforce (2.99 million Australians) – again, this was the highest combined figure since January. These monthly movements take place within the broader context of longer-term trends in the Australian workforce – the total number of people employed or looking for work. The Australian workforce has grown rapidly over the last year. The annual increase in the working aged Australian population hit a record in the year to June 2023 – up by 632,000 to 21.9 million. This surge in the population helped drive the workforce up by 715,000 to over 15.2 million – the second largest annual increase on record. These large increases mean that employment growth has continued over the last year, despite the falls we see in the month of June.

CORPORATES
ROY MORGAN LIMITED

Inflation Expectations increased to 5.9% this week – far higher than May average of 5.2%

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Original article by Roy Morgan
Market Research Update – Page: Online : 28-Jun-23

In the last week Roy Morgan’s weekly Inflation Expectations is up 0.4% to 5.9% – far higher than the May average of 5.2%. Australians expect inflation of 5.9% annually over the next two years. The monthly Inflation Expectations figure for May of 5.2% was down 0.1% from April, and could be an indicator for today’s ABS May CPI figure. The monthly Inflation Expectations figure for May was the lowest monthly reading since February 2022. However, the latest figures show that the back-to-back decreases in monthly Inflation Expectations in April and May have not been sustained, with weekly Inflation Expectations rising throughout June and now at 5.9%. Looking longer-term, Inflation Expectations have averaged 5.4% so far during 2023 and are down from a monthly high of 6.5% in November 2022 and down significantly from a weekly high of 6.8% in early November. The data for the Inflation Expectations series is drawn from the Roy Morgan Single Source, which has interviewed an average of around 5,000 Australians aged 14+ per month over the last decade and includes interviews with 5,943 Australians aged 14+ in May.

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ROY MORGAN LIMITED, AUSTRALIAN BUREAU OF STATISTICS