O75 Public Administration

Kickstart productivity or be kicked: RBA

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Original article by Patrick Commins, Giuseppe Tauriello
The Australian – Page: 1 & 4 : 17-May-23

The minutes from the Reserve Bank of Australia’s latest board meeting show that the decision to increase the cash rate by 25 basis points in May was a "finely balanced" one. Amongst other things, the board members noted that the nation’s declining productivity since the onset of the COVID-19 pandemic could make it difficult to bring inflation back under control. The RBA has warned that further interest rate increases are likely unless productivity is ‘kickstarted’. Analysts believe that quarterly wage price index data to be released on Wednesday could determine whether the RBA increases the cash rate in June.

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RESERVE BANK OF AUSTRALIA

No Budget Bounce as ANZ-Roy Morgan Consumer Confidence down 1.8pts to 75.9 – lowest since early April 2020

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Original article by Roy Morgan
Market Research Update – Page: Online : 17-May-23

ANZ-Roy Morgan Consumer Confidence fell 1.8pts to 75.9 in the week to 14 May. The index has now spent 11 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 13.4pts below the same week a year ago (89.3), and 4.4pts below the 2023 weekly average of 80.3. Consumer Confidence was down in NSW, Queensland, WA and SA; however, it was up in Victoria. Now 17% of Australians (down 2ppts) say their families are ‘better off’ financially than this time last year (the lowest figure for this indicator since April 2020), while 56% (up 3ppts) say their families are ‘worse off’ financially (a new record high for this indicator). Some 30% (down 2ppts) of Australians now expect their family to be ‘better off’ financially this time next year, while 37% (up 3ppts) expect to be ‘worse off’ financially. Only 6% (unchanged) of Australians expect ‘good times’ for the Australian economy over the next 12 months, while 37% (down 1ppt) expect ‘bad times’. Meanwhile, 18% (unchanged) of Australians say now is a ‘good time to buy’ major household items, while 55% (up 2ppts) say now is a ‘bad time to buy’.

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

ANZ-Roy Morgan Consumer Confidence down 2.1pts to 77.7 after the RBA unexpectedly increases interest rates again

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Original article by Roy Morgan
Market Research Update – Page: Online : 10-May-23

ANZ-Roy Morgan Consumer Confidence fell 2.1pts to 77.7 in the week to 7 May. The index has now spent 10 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 12.8pts below the same week a year ago (90.5), and 2.9pts below the 2023 weekly average of 80.6. As usual Consumer Confidence was mixed around the States, with decreases in Victoria, WA and SA, but up slightly in NSW and Queensland. Now 19% of Australians (down 1ppt) say their families are ‘better off’ financially than this time last year, while 53% (up 3ppts) say their families are ‘worse off’ financially. Some 32% (up 1ppt) of Australians now expect their family to be ‘better off’ financially this time next year, while 34% (unchanged) expect to be ‘worse off’ financially. Only 6% (unchanged) of Australians now expect ‘good times’ for the Australian economy over the next 12 months, while 38% (up 3ppts) expect ‘bad times’. Meanwhile, 18% (down 2ppts) of Australians say now is a ‘good time to buy’ major household items, while 53% (up 1ppt) say now is a ‘bad time to buy’.

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

Roy Morgan Business Confidence down 3.4 points to 90.2 in April before the RBA hiked interest rates in May

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Original article by Roy Morgan
Market Research Update – Page: Online : 10-May-23

In April 2023, Roy Morgan Business Confidence was 90.2 (down 3.4pts since March), before the RBA raised interest rates by 25 basis points last week to 3.85%. Business Confidence has returned to its level of November 2022 (90.2), when official interest rates were at 2.85%; there have since been four interest rate increases, totalling 1% points. Business Confidence is now 22.1pts below the long-term average of 112.3. Now 38.7% (down 3.1ppts) expect the business will be ‘better off’ financially this time next year, while 27.7% (up 0.6ppts) expect the business will be ‘worse off’. Meanwhile, 40.5% (down 5.6ppts) say the next 12 months will be a ‘good time to invest in growing the business’, while 51.7% (up 6.5ppts) say it will be a ‘bad time to invest in growing the business’. Only 37.4% (down 1.1ppts) of businesses expect ‘good times’ for the Australian economy over the next 12 months, while 60.1% (down 0.2ppts) expect ‘bad times’.

CORPORATES
ROY MORGAN LIMITED

Australian employment hit a record high above 13.8 million in April as unemployment fell 0.9% to 8.5%

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Original article by Roy Morgan
Market Research Update – Page: Online : 10-May-23

The latest Roy Morgan employment series data shows that the number of Australians who are unemployed fell by 124,000 to 1.29 million (8.5% of the workforce) in April. However, underemployment was up 21,000 to 1.34 million (8.9% of the workforce). A total of 2.63 million Australians (17.4% of the workforce) were unemployed or underemployed in April, down 103,000 from March. Meanwhile, employment increased by 240,000 to 13,814,000 in April. The increase was driven by an increase in full-time employment, up 68,000 to a new record high of 9,058,000; part-time employment also increased, up 172,000 to 4,756,000. Roy Morgan’s unemployment figure of 8.5% for April is 5% points higher than the ABS estimate of 3.5% for March and is comparable to the combined ABS unemployment and under-employment figure of 9.7%.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIAN BUREAU OF STATISTICS

Pay rises to cool but wage bills bite

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Original article by David Marin-Guzman
The Australian Financial Review – Page: B5 : 10-May-23

Treasury had forecast 2023-24 inflation of 3.50 per cent in October, but has lowered its prediction to 3.25 per cent in the 9 May budget papers. Wages growth is expected to be at four per cent in 2023-24,compared to Treasury’s forecast of 3.25 per cent growth in October. However, it did not revise its wages growth forecast for 2024 to 2027, expecting pay rises to remain at 3.25 per cent over that period. Meanwhile, Cairns restaurant Wild Thyme operations manager Catherine Pacey said she had decided in December to close the cafe on Sundays and Mondays, because Mondays are quite quiet and wages are quite high on Sundays

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AUSTRALIA. DEPT OF THE TREASURY

Dole hike strikes the right balance

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Original article by Sarah Ison
The Australian – Page: 5 : 10-May-23

The federal government’s 2023 budget includes some $4.9bn worth of measures for people who are unemployed. Treasurer Jim Chalmers has announced that welfare payments such as JobSeeker will rise by $40 a fortnight, which equates to an increase of less than six per cent. In contrast, the government’s Economic Inclusion Advisory Committee had recommended a 40 per cent increase. The government will also reduce the age threshold for older unemployed Australians to qualify for a higher JobSeeker payment from 60 to 55; Chalmers notes that many people aged 55+ struggle to find work, with women in particular being over-represented in this age group.

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AUSTRALIA. DEPT OF THE TREASURY

Tax bonanza but slower growth ahead

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Original article by Joyce Moullakis
The Australian – Page: 25 & 28 : 10-May-23

The budget papers show that the federal government’s corporate tax take is slated to total $138.4bn in 2022-23, compared with $123.3bn in 2021-22. Company tax receipts up to March were $7.6bn higher than had been forecast in Labor’s first budget in October, reflecting the increase in earnings in sectors such as resources. However, company tax receipts are forecast to total $128.7bn in 2023-24 and $119.8bn in 2024-25. Treasurer Jim Chalmers noted in his budget speech that global economic growth is expected to slow significantly over the next two years, which will affect the domestic economy, businesses and exporters.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY

Well-off super savers face $2.3b hit

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Original article by Hannah Wootton
The Australian Financial Review – Page: B10 : 10-May-23

The budget papers have confirmed that the tax rate on the earnings of superannuation funds with balances of more than $3m will increase to 30 per cent from mid-2025, and that the cap will not be indexed to inflation. The tax change is forecast to generate revenue of $2.3bn in 2027-28, its first full year of receipts collection. This is based on the number of superannuation accounts that are currently above the cap, although this may change if people shift money out of super in order to avoid the cap. Meanwhile, the federal government will press ahead with plans to require employers to pay their staff’s super entitlements at the same as their wages, rather than allowing them to do so each quarter.

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Higher spending, deficits keep pressure on rates and taxes

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Original article by Phillip Coorey
The Australian Financial Review – Page: B1 & B4 : 10-May-23

The budget papers have confirmed that the federal government expects to post a surplus of $4.2bn for 2022-23. Labor’s first budget in October had forecast a deficit of $36.9bn for the current financial year; however, government revenue has increased by $130bn since October, while its interest payments on debt have fallen by $15bn. The government has saved more than 80 per cent of the revenue upgrades since October. Meanwhile, the Treasury has forecast a budget deficit of $13.9bn in 2023-24, and the budget is not expected to return to surplus again until 2033-34. The Treasury expects the domestic economy’s growth to slow to 1.5 per cent in 2024, due to factors such as high interest rates and the slowing global economy. Inflation is turn forecast to fall from seven to six per cent in 2023, before falling to 3.25 per cent in 2024; inflation is not expected return to the Reserve Bank’s target range of 2-3 per cent until 2024-25.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY