O75 Public Administration

Inflation expectations down significantly in mid-April

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Original article by Roy Morgan
Market Research Update – Page: Online : 22-Apr-20

In mid-April there was a jolt to Australian Inflation Expectations, with a steep fall in the weekly index on April 18/19 to a record low of only 3.1%, down from 3.8% the week before and significantly below the 2020 weekly average of 4%. The weekly fall was caused by fewer Australians expecting prices to increase over the next two years, down to 69.4% (down 1.4% on a week ago) and more expecting prices to either decrease (up 1% to 10.8%) or ‘Stay the same’ (up 0.4% to 19.8%). Roy Morgan CEO Michele Levine says the steep drop in Inflation Expectations in mid-April comes as the impact of the COVID-19 pandemic begins to hit key pricing metrics in the economy.

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ROY MORGAN LIMITED

Tax reform cure for virus fever

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Original article by Patrick Commins
The Australian – Page: 1 & 6 : 22-Apr-20

Reserve Bank of Australia governor Philip Lowe has warned that the nation’s GDP growth will fall by around six per cent in 2020 due to the coronavirus pandemic. However, he says the economy should begin to recover in September, with GDP growth of 6-7 per cent expected in 2021. Lowe also says the unemployment rate could peak at 10 per cent in coming months, and it is likely to remain above six per cent for several years. Lowe adds that total hours worked in Australia are forecast to fall by 20 per cent in the first half of 2020. Lowe has also used a speech in Sydney to argue that industrial relations and tax reform should be considered in the wake of the pandemic.

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RESERVE BANK OF AUSTRALIA

ANZ-Roy Morgan Consumer Confidence increases to 84.2

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Original article by Roy Morgan
Market Research Update – Page: Online : 22-Apr-20

ANZ-Roy Morgan Australian Consumer Confidence rose 7.7% to 84.2 in the week to 19 April. Now 20% (down 1ppt) of Australians say their families are ‘better off’ financially than this time last year, while 41% (up 1ppt) say their families are ‘worse off’ financially. Meanwhile, 36% (up 4ppts) of Australians expect their family to be ‘better off’ financially this time next year, and 24% (down 3ppts) expect to be ‘worse off’ financially. However, just 5% (unchanged) expect ‘good times’ for the Australian economy over the next 12 months, while 54% (down 4ppts) expect ‘bad times’. In addition, 28% (up 8ppts) of Australians say now is a ‘good time to buy’ major household items, while 47% (down 7ppts) say now is a ‘bad time to buy’. The four-week moving average for ‘inflation expectations’ fell 0.2ppt to 3.8%. The weekly reading dipped to 3.1% from 3.8%.

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

China rejects call for probe of virus origins

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Original article by Andrew Tillett, Michael Smith
The Australian Financial Review – Page: 11 : 21-Apr-20

China’s Foreign Ministry claims that it has "serious concerns" about Foreign Minister Marise Payne’s call for an independent inquiry into the origins of COVID-19. A spokesperson for the Ministry has suggested that Australia should not "blindly follow other countries", and should instead focus on improving epidemic control and on improving its relationship with China. Australia-China Relations Institute director James Laurenceson says he does not think China would agree to such an inquiry; he notes that the global financial crisis began in the US, but that the US "did not open up its books" to show what happened.

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AUSTRALIA. DEPT OF FOREIGN AFFAIRS AND TRADE, CHINA. MINISTRY OF COMMERCE. DEPT OF FOREIGN ECONOMIC AND TRADE POLICY, AUSTRALIA-CHINA RELATIONS INSTITUTE

Labor launches Senate push to reverse IR changes

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Original article by David Marin-Guzman
The Australian Financial Review – Page: 5 : 21-Apr-20

Shadow industrial relations minister Tony Burke has questioned the need for reforms which reduce the amount of time employees are given to vote on proposed changes to workplace agreements from seven days to just one. The reform was prompted by the pandemic, but Burke argues that any such changes to enterprise agreements will remain in place after the coronavirus abates and will need to be removed via another vote by employees. Labor will put a disallowance motion to the Senate when parliament resumes, and it intends to seek the support of crossbenchers.

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AUSTRALIAN LABOR PARTY

Ailing Virgin’s crash landing

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Original article by Simon Benson, Robyn Ironside
The Australian – Page: 1 & 4 : 21-Apr-20

Virgin Australia’s creditors are unlikely to recover much of the money they are owed after the struggling airline was placed into voluntary administration. Virgin’s international shareholders agreed to the move after the federal government rejected a request from the carrier for a $100m emergency grant. Private equity firm BGH is believed to be among two potential buyers of Virgin, which could be revived as a low-cost airline focusing on the domestic market. Labor and unions have urged the government to take a stake in Virgin to ensure that it survives.

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VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, BGH CAPITAL PTY LTD, QANTAS AIRWAYS LIMITED – ASX QAN

Lowe: Business needs reforms to recover

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Original article by Matthew Cranston
The Australian Financial Review – Page: 1 & 2 : 21-Apr-20

Reserve Bank of Australia governor Philip Lowe has warned that the nation is facing a "very significant economic contraction" due to the coronavirus pandemic. He is expected to use a speech on 21 April to call for further policy reform, amid growing concern that business investment will not rebound when the crisis abates. Some economists are also of the view that economic reform will be necessary, arguing that fiscal and monetary stimulus will not be sufficient to boost business investment.

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RESERVE BANK OF AUSTRALIA

Bushfires freed two years’ worth of CO2

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Original article by Graham Lloyd
The Australian – Page: 7 : 21-Apr-20

The Bushfires Royal Commission has been told that the 2019-20 bushfires released 830 million tonnes of carbon dioxide into the atmosphere. However, the extra emissions will not be counted towards Australia’s 2020 Kyoto and 2030 Paris emission reduction targets, as it is assumed that the CO2 will be reabsorbed by trees as they regrow. The federal Environment Department has told the royal commission that 96 per cent of emissions from the 2002-03 Canberra bushfires have been reabsorbed, while the amount of CO2 released by the 2019-20 bushfires was almost double Australia’s annual emissions from energy, industry and transportation.

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AUSTRALIA. DEPT OF THE ENVIRONMENT AND ENERGY

Jobless blow will be worst since 1930s

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Original article by David Marin-Guzman
The Australian Financial Review – Page: 9 : 20-Apr-20

A report from the Grattan Institute has forecast that jobs in the hospitality, arts and recreation, retail and education sectors will be hardest hit by the coronavirus and the measures that have been deployed to contain it. The public policy think tank estimates that 14-26 per cent of Australian workers will soon be out of work, or up to 3.4 million people. In addition, the Grattan Institute warns that the JobKeeper scheme will not prevent the unemployment rate from rising to 10-15 per cent.

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GRATTAN INSTITUTE

Coalition pressure to rescue Virgin

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Original article by Simon Benson, Sarah Elks
The Australian – Page: 1 & 2 : 20-Apr-20

It is understood that Virgin Australia could be placed into voluntary administration within days unless the federal government steps in to save the airline or it can be rescued by the private sector. Former Queensland premier Peter Beattie, who gave Virgin $10 million to base its headquarters in Brisbane in 2000, says the tourism sector would be "devastated" if the airline goes under. Federal Liberal MP Jason ­Falinski believes that Virgin needs to be kept afloat, and that the federal government and taxpayers may end up being the "buyer of last resort".

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VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, LIBERAL PARTY OF AUSTRALIA