O75 Public Administration

Income tax cuts, bigger surpluses

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 10 : 10-May-19

Labor will release the Parliamentary Budget Office’s costings of its election policies on 10 May. The costings show that Labor is projected to deliver a Budget surplus equivalent to one per cent of GDP in 2022-23. In contrast, the Coalition expects to post a surplus in 2022-23 that is just 0.4 per cent of GDP. Meanwhile, Labor’s proposed tax reforms are slated to raise $154bn over 10 years. The costings also show that a Labor government would deliver total tax cuts over the next decade that are similar to those that have been budgeted by the Coalition.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY

Inflation target review makes sense: Don Brash

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Original article by Matthew Cranston
The Australian Financial Review – Page: 5 : 10-May-19

The Reserve Bank of Australia should review its inflation target range of 2-3 per cent, according to former Reserve Bank of New Zealand governor Don Brash. He adds that the target band may need to be widened rather than reduced. Australia’s inflation rate remains well below the target band, but former RBA governor Bernie Fraser does not believe that a review is necessary. Brash headed the RBNZ when it introduced inflation targeting in 1990; its inflation target is currently 1-3 per cent.

CORPORATES
RESERVE BANK OF AUSTRALIA, RESERVE BANK OF NEW ZEALAND, AUSTRALIA. DEPT OF THE TREASURY

Morrison: Business tax cuts are no-go

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Original article by Tom McIlroy, Andrew Tillett
The Australian Financial Review – Page: 12 : 10-May-19

Prime Minister Scott Morrison has refuted suggestions that the Coalition will seek to revive its corporate tax cuts package if wins the election on 18 May. He also says the Coalition did not discuss the issue of company taxes with Clive Palmer’s United Australia Party during negotiations for a preferences deal. Shadow treasurer Chris Bowen recently claimed that company tax cuts will be on the Coalition’s agenda if it is returned to office.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, UNITED AUSTRALIA PARTY, AUSTRALIAN LABOR PARTY, ONE NATION PARTY, AUSTRALIA. DEPT OF THE TREASURY, BUSINESS COUNCIL OF AUSTRALIA

Trust tax to bring in $2b a year: Labor

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Original article by Phillip Coorey, John Kehoe
The Australian Financial Review – Page: 4 : 9-May-19

The Parliamentary Budget Office estimates that taxing distributions from family trusts at 30 per cent would raise $7.7bn over four years and $26.9bn over 10 years. This compares with Labor’s forecasts of $4.1bn and $17.2bn respectively when it announced the proposal in mid-2017. Shadow treasurer Chris Bowen has also indicated that Labor’s plan to cap tax deduction for managing tax affairs will raise $375m over four years and $1.6bn over a decade.

CORPORATES
AUSTRALIAN LABOR PARTY

‘Labor won’t lead revolution of reform’

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Original article by Michael Roddan, Joe Kelly
The Australian – Page: 6 : 9-May-19

Opposition Leader Bill Shorten has indicated that Labor will "modernise the economy" if it wins the federal election. Former IFM Investors chairman Garry Weaven says a Labor government would not pursue significant economic reform, adding that "revolutionary" reform is not necessary. Robert Carling of the Centre for Independent Studies agrees that a Shorten government would not seek to undertake reforms on the scale of those implemented by Labor under former prime ministers Bob Hawke and Paul Keating.

CORPORATES
AUSTRALIAN LABOR PARTY, IFM INVESTORS PTY LTD, THE CENTRE FOR INDEPENDENT STUDIES LIMITED, ACTU, GRATTAN INSTITUTE, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Kelty in accord with $10bn childcare vow

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Original article by Ewin Hannan
The Australian – Page: 6 : 9-May-19

Labor’s proposal to provide child care workers with a taxpayer-funded wage increase is supported by former ACTU secretary Bill Kelty. He argues that child care workers are "grossly underpaid", and the cost of the policy will not have a significant impact on wages across the economy. Kelty has also downplayed concerns that the policy would prompt employees in other sectors to seek a similar wage subsidy.

CORPORATES
AUSTRALIAN LABOR PARTY, ACTU

Final leaders’ debate: Shorten slams climate inaction as Morrison focuses on tax

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Original article by Sarah Martin
The Guardian Australia – Page: Online : 9-May-19

Climate change and tax policy are among the issues that dominated the third and final leaders’ debate on 8 May. Prime Minister Scott Morrison challenged Opposition Leader Bill Shorten to disclose the cost of Labor’s climate change policy, and stressed the need for a "responsible approach" to addressing the issue of climate change. Shorten in turn said the Coalition’s leadership instability over the last six years was due in part to its policy on climate change. Meanwhile, Morrison criticised Labor’s proposed tax reforms, arguing that higher taxes will result in slower economic growth.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY

State of the Nation – Election 2019 a photo finish

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Original article by Michele Levine
Market Research Update – Page: Online : 9-May-19

What seemed like a foregone conclusion after the Liberal Party Leadership upheaval late last year has suddenly become a competitive contest between the L-NP Government led by Prime Minister Scott Morrison and the Bill Shorten-led ALP Opposition. After Malcolm Turnbull was ‘turfed out’ from his job as Prime Minister in August 2018, and replaced by the then largely unknown among the public Scott Morrison, the Roy Morgan Poll showed the ALP two-party preferred vote spiking to what seemed an unbeatable lead with the Federal Election set to be called within the next few months: ALP 58% cf. L-NP 42% (October 2018). Following the leadership change former Prime Minister Malcolm Turnbull immediately resigned from his seat of Wentworth causing a by-election in his seat which was won by Independent candidate Dr. Kerryn Phelps, and Liberal MP Julia Banks resigned from the Government and joined the cross-bench. At this time the Morrison Government was beset by instability and appeared to be on the verge of collapse at any moment. Many media commentators (from afar) advised new Prime Minister Morrison to call an early Federal Election to put the political uncertainty to rest. As we now know PM Morrison ignored these calls and pledged to take the Government ‘full-term’ until May 2019, which he has done, and the last three Roy Morgan Polls conducted since mid-April 2019 show a very close contest with the ALP just ahead: ALP 51% cf. L-NP 49%. A number of key factors will determine who wins this year’s Federal Election.

CORPORATES
AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, MORGAN POLL, ROY MORGAN LIMITED

RBA sets jobless test for rate cut

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Original article by Vesna Poljak, Matthew Cranston
The Australian Financial Review – Page: 1 & 4 : 8-May-19

The Reserve Bank has downgraded its 2019 growth forecast for the Australian economy from three per cent to around 2.75 per cent. The central bank indicated on 7 May that a "further improvement" in the labour market will be necessary to lift inflation to its target range. It has also flagged the prospect of an interest rate cut if the employment rate does not fall below five per cent. Michael Blythe of the Commonwealth Bank says the central bank will almost certainly reduce the cash rate if there is even a modest rise in unemployment.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, GOLDMAN SACHS AUSTRALIA PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY

We can withstand a downturn: Frydenberg

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 6 : 8-May-19

Treasurer Josh Frydenberg is confident that the Australian economy would be resilient in the event of a significant downturn in the global economy. Frydenberg notes amongst other things that the tax cuts in the April 2019 Budget will boost consumer spending and economic activity, and he believes that the Coalition’s policy settings are sufficient without having to pursue stimulatory measures such as bringing forward the full tax cuts package. Frydenberg also dismisses suggestions that legislating the tax cuts is the Coalition’s only real policy agenda.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS, CENTRE ALLIANCE, NATIONAL PARTY OF AUSTRALIA, ADANI MINING PTY LTD