O75 Public Administration

Wage subsidies not enough for small business

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Original article by John Kehoe
The Australian Financial Review – Page: 8 : 25-Mar-20

Former Treasury official Steven Hamilton has urged the federal government to increase the wage subsidies for small and medium enterprises in response to the pandemic. He warns that the SME sector will be "completely wiped out" if the government does not act, while the nation will face a long and deep recession. Andrew Boak of Goldman Sachs agrees that the government’s existing wage subsidy measures will not be sufficient to avert large-scale job losses.

CORPORATES
GOLDMAN SACHS AUSTRALIA GROUP HOLDINGS PTY LTD, GEORGE WASHINGTON UNIVERSITY

ANZ-Roy Morgan Consumer Confidence plunges to 30-year low at 72.2

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Original article by Roy Morgan
Market Research Update – Page: Online : 25-Mar-20

ANZ-Roy Morgan Australian Consumer Confidence fell a massive 27.8% to 72.2 in the week ended 12 March. This fall has bought the headline index to just above the all-time lows recorded in 1990, and 17% below the lowest point seen during the global financial crisis (Oct 2008). All sub-components of the survey plunged. Current financial conditions fell 23.9% while future financial conditions dropped 25.8%. The economic conditions subindices were also down sharply, with current economic conditions falling 37.1% and future economic conditions declining by 19.1%. ‘Time to buy a major household item’ fell by 37.2%, but the four-week moving average for ‘inflation expectations was stable at 4.0%.

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

Brace for a record fall in GDP

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Original article by Patrick Commins
The Australian – Page: 4 : 25-Mar-20

JPMorgan economist Ben Jarman expects GDP to fall by 10 per cent in the June quarter due to the coronavirus lockdown measures. The previous largest quarterly decline in GDP was just two per cent in 1974. Jarman also forecasts that the unemployment rate will rise to 11 per cent during the quarter, a view shared by Bill Evans of Westpac. However, Evans expects GDP to fall by just 3.5 per cent in the quarter. Westpac economists have also forecast a Budget deficit of $90bn in 2019-20 due to the federal government’s stimulus measures, and a deficit of $160bn in 2020-21.

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JP MORGAN AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC

BBQ ban: social life not ok

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Original article by Greg Brown, Simon Benson, Geoff Chambers
The Australian – Page: 1 & 5 : 25-Mar-20

The federal government has announced further restrictions as part of the coronavirus lockdown. A range of non-essential service providers will be forced to close, including beauticians, nail salons and tattoo parlours, although hairdressers and barber shops will be permitted to remain open for now. Restrictions have also been placed on the number of people who can attend weddings and funerals, while cultural institutions such as libraries and museums will be closed. Prime Minister Scott Morrison has also urged people to stay at home if possible, and he has cautioned against attending large gatherings such as barbecues and birthday parties.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

ANZ Roy Morgan Financial Wellbeing Indicator – Quarterly Update March 2020

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Original article by Roy Morgan
Market Research Update – Page: Online : 23-Mar-20

The ANZ-Roy Morgan Financial Wellbeing Indicator shows that the financial wellbeing of Australians improved by 1% year on year, from 59.6 (as a score out of 100) in December 2018 to 60.2 in December 2019. Financial wellbeing improved in the 12 months to December 2019 across most states and territories. However, financial wellbeing declined slightly in Queensland and the NT, and remained constant in NSW. The lack of growth in overall financial wellbeing in NSW can be attributed to a 3.1% fall in ‘resilience for the future’ during 2019. The improvement in national financial wellbeing was despite no change in financial wellbeing in the December 2019 quarter, and was due primarily to an improvement in ‘meeting everyday commitments’, which increased by 3.2% during 2019. ‘Resilience for the future’ – the ability to cope with financial setbacks – is strongly influenced by active saving habits. After steady growth in recent years, resilience declined nationally by 1.9%, from 53.7 in December 2018 to 52.7 in December 2019. This was due primarily to a decline in the number of month’s income in savings that Australians have on hand, weakened by slower deposit growth and subdued improvements in household incomes over the period.

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ROY MORGAN LIMITED

Businessmen Dick Smith, Mike Cannon-Brookes and Andrew Forrest score highest for Net Trust

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Original article by Roy Morgan
Market Research Update – Page: Online : 23-Mar-20

A special Roy Morgan survey on ‘Trust’ and ‘Distrust’ of business leaders shows Australian entrepreneurs Dick Smith, Mike Cannon-Brookes and Andrew Forrest have the highest ‘Net Trust Scores’ – meaning the ‘Trust’ felt towards the three far outweighs the ‘Distrust’ – according to a special Roy Morgan Snap SMS Survey of 974 Australians aged 14+ conducted this week. Behind the top three is Qantas CEO Alan Joyce. Also scoring highly for ‘Trust’ are Medical Leaders/Professionals and the Australian Medical Association, which is currently at the forefront of dealing with the COVID-19 coronavirus pandemic. At the other end of the scale are business leaders whose ‘Distrust’ outweighs their ‘Trust’ among Australians. Media proprietor Rupert Murdoch scores the highest ‘Distrust’ of any businessman, ahead of ex-politician and mining entrepreneur Clive Palmer and fellow miner Gina Rinehart. All three fill the rankings for the highest ‘Net Distrust’ and are followed by retailer Gerry Harvey of Harvey Norman. Also scoring high levels of ‘Net Distrust’ are the generic ‘Banks/Bank CEOs’ and ‘Mining companies’. Roy Morgan CEO Michele Levine says Australians often look towards high-profile business people to provide leadership in times of crisis.

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ROY MORGAN LIMITED

Jobless rate could hit 13.8pc despite priming of the pump

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Original article by Matthew Cranston
The Australian Financial Review – Page: 8 : 23-Mar-20

The federal government and the Reserve Bank have now announced a combined $189bn worth of coronavirus stimulus measures. This includes cash payments for small businesses and non-profit organisations. However, many companies that operate in sectors that employ a lot of people will not be eligible for financial relief. The construction, retail, hospitality, recreation and education are major employers; it is estimated that the unemployment rate would rise from 5.1 per cent to 13.8 per cent if they shed just 25 per cent of their workforce, or about 1.2 million people.

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RESERVE BANK OF AUSTRALIA

Insolvency law change to head off avalanche

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Original article by Matthew Cranston
The Australian Financial Review – Page: 6 : 23-Mar-20

The federal government will make temporary changes to laws governing insolvent trading in response to the pandemic. Amongst other things, directors will be exempt from personal liability if a company is found to be trading while insolvent, while the threshold at which creditors can initiate bankruptcy proceedings against a company will be increased from $5,000 to $20,000. These measures will remain in place for at least six months.

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AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY

A nation in shutdown

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Original article by Simon Benson
The Australian – Page: 1 & 4 : 23-Mar-20

The federal government has announced details of a ‘stage one’ coronavirus lockdown following a meeting of the national cabinet. Businesses that provide non-essential services will be forced to close from midday on 23 March, including pubs, clubs, cinemas and casinos. Churches and indoor sports facilities are also among the venues that must close indefinitely. Prime Minister Scott Morrison has warned that more onerous stage two restrictions will be imposed if people fail to comply with the initial restrictions. Schools in most states will remain open for the remainder of the first term.

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AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Third bailout being prepared as $66b injected to help first blows

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 23-Mar-20

The second stage of the federal government’s stimulus package includes the introduction of a welfare wage for workers who lose their jobs due to the coronavirus pandemic. They will be eligible for a fortnightly payment of up to $1,100, while the existing Newstart allowance will be increased and renamed the Jobseeker Payment. Workers who are stood down will also be able to withdraw up to $20,000 from their superannuation fund. Meanwhile, businesses with annual turnover of up to $50m will be eligible for a cash payment of up to $100,000. The government and the nation’s banks will also jointly provide a $40bn loan facility for small and medium enterprises.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET