AUSTRALIA – ECONOMIC POLICY

Leaders say fiscal stimulus is the answer

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Original article by James Thomson, Tony Boyd
The Australian Financial Review – Page: 13 & 27 : 10-Dec-19

Tax cuts and increased spending on infrastructure are among the suggestions from business leaders to help stimulate the Australian economy. Rio Tinto CEO Jean-Sebastien Jacques has urged the federal government to revive its push for corporate tax relief, while Woodside Petroleum CEO Peter Coleman has called for the introduction of an investment allowance to boost business confidence. Meanwhile, Telstra CEO Andy Penn has stressed the importance of innovation to Australia’s future economic growth.

CORPORATES
RIO TINTO LIMITED – ASX RIO, WOODSIDE PETROLEUM LIMITED – ASX WPL, TELSTRA CORPORATION LIMITED – ASX TLS, COCA-COLA AMATIL LIMITED – ASX CCL, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, ENERGYAUSTRALIA PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, SEEK LIMITED – ASX SEK, AUSTRALIA. DEPT OF THE TREASURY

Low interest rates aren’t enough to boost wages growth: Economists

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Original article by Euan Black
The New Daily – Page: Online : 4-Dec-19

With official interest rates left unchanged at 0.75 per cent on 3 December, some economists contend that further rate cuts are necessary for the Reserve Bank to deliver on its employment and inflation targets. However, others argue that interest rates are already so low that further cuts will not do not much to stimulate the economy. Instead, they contend that wage increases are needed, and this in turn requires measures to boost labour productivity. Growth in productivity has averaged 1.1 per cent annually over the last five years, and Treasurer Josh Frydenberg has estimated that lifting it to 1.5 per cent would boost incomes by $3,000 a year.

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

PM wins an AAA-rating for his responsible approach to stimulus

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Original article by Patrick Commins
The Australian – Page: 6 : 28-Nov-19

S&P Global Ratings has praised the federal government’s commitment to a balanced Budget rather than pursuing stimulus measures. The ratings agency has warned that any fiscal stimulus that led to a change in the trajectory of the Budget could jeopardise Australia’s coveted triple-A credit rating. Anthony Walker, S&P’s director of sovereign ratings, has also warned that fiscal stimulus is likely to affect the nation’s ability to respond to future unforeseen economic shocks.

CORPORATES
S&P GLOBAL RATINGS, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, RESERVE BANK OF AUSTRALIA

‘QE will do nothing’: fundies back infrastructure spending

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Original article by Robert Guy
The Australian Financial Review – Page: 28 : 27-Nov-19

Quay Global Investors portfolio manager Chris Bedingfield contends that the Reserve Bank of Australia should not implement quantitative easing. He argues that the federal government should instead prioritise increased spending on infrastructure, noting that this will create jobs in the short-term and boost productivity in the long-term. Sarah Shaw of 4D Infrastructure also advocates investing in infrastructure to stimulate the economy.

CORPORATES
QUAY GLOBAL INVESTORS PTY LTD, 4D INFRASTRUCTURE PTY LTD, RESERVE BANK OF AUSTRALIA, BENNELONG FUNDS MANAGEMENT PTY LTD

Treasurer warns of ageing bill

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 19-Nov-19

Treasurer Josh Frydenberg will use a speech on 19 November to defend the federal government’s commitment to keeping the Budget in surplus. He will tell the Committee for Economic Development of Australia that a balanced Budget will enable the government to begin paying down debt, respond to disasters and address the long-term needs of an ageing nation. Frydenberg will emphasise the importance of population, participation and productivity in addressing the latter issue, noting that action is needed to boost productivity in particular.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, COMMITTEE FOR ECONOMIC DEVELOPMENT OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Cancer of complacency puts economy at risk, says Chalmers

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Original article by Andrew Tillett
The Australian Financial Review – Page: 4 : 11-Nov-19

Shadow treasurer Jim Chalmers will use a speech on 11 November to tell Labor think-tank the John Curtin Research Centre that the Australian economy is "running on fumes". Chalmers will accuse the federal government of a "cancer of complacency" when it comes to economic management, while he will state that he has identified four key elements required for an economic strategy as a result of consultations with business. These include the introduction of an investment allowance and a ‘responsible’ increase in unemployment benefits.

CORPORATES
AUSTRALIAN LABOR PARTY, JOHN CURTIN RESEARCH CENTRE

PM to keep his cool on economy

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Original article by Rosie Lewis, Simon Benson, Richard Gluyas
The Australian – Page: 1 & 6 : 17-Oct-19

Prime Minister Scott Morrison has downplayed concerns about the outlook for the Australian economy, arguing that good economic and financial management is needed in times of uncertainty. Labor leader Anthony ­Albanese has responded to the International Monetary Fund’s latest downgrade of its economic growth forecast for Australia by calling for a stimulus package. Former federal treasurer Peter Costello has in turn urged supply-side reforms, arguing that fiscal and monetary policy have reached the limits of their effectiveness.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, INTERNATIONAL MONETARY FUND, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, THE AUSTRALIAN INDUSTRY GROUP, AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY, AUSTRALIAN RETAILERS ASSOCIATION

Australia: rich, but getting dumber

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Original article by Aaron Patrick
The Australian Financial Review – Page: 7 : 8-Oct-19

The Harvard Kennedy School’s Center for International Development has developed an Atlas of Economic Complexity, with Australia being ranked as having one of the least complex economies. The Atlas measures the diversity and sophistication of national exports, with almost all of Australia’s exports not requiring a degree to make. The Center for International Development contends that for countries to get richer that they need to develop more sophisticated products, but Australia has been very tardy when it comes to innovation.

CORPORATES
HARVARD UNIVERSITY. HARVARD KENNEDY SCHOOL. CENTER FOR INTERNATIONAL DEVELOPMENT

Tax cuts, not surpluses, key to growth

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Original article by Adam Creighton
The Australian – Page: 5 : 24-Sep-19

Returning the Budget to surplus has been a priority for the federal government since it won office in 2013, and it is on track for a surplus in 2019-20 after posting a deficit of less than $700m for 2018-19. However, documents released under Freedom of Information laws show that the Treasury is of the view that tax cuts may be the best way to stimulate the economy. The Treasury papers note that the government’s income tax cuts package will boost household disposable income by 0.75 per cent over three years, while delaying or reversing future tax cuts would reduce the efficiency of the economy and the tax system.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY

CEOs to PM: support long-term growth

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Original article by Patrick Durkin, Simon Evans
The Australian Financial Review – Page: 1 & 4 : 2-Sep-19

Business leaders have put forward suggestions for boosting the Australian economy, amid expectations that upcoming GDP data will show that growth slowed to a 10-year low of 1.4 per cent in the year to June. JB Hi-Fi CEO Richard Murray has emphasised the need for policy initiatives that support long-term economic growth, rather than merely stimulating the economy. Woolworths CEO Brad Banducci and Flight Centre CEO Graham Turner agree that further easing monetary policy is unlikely to be sufficient to boost the economy, while Cardo CEO Ian Ball has called for increased investment in transport infrastructure.

CORPORATES
JB HI-FI LIMITED – ASX JBH, WOOLWORTHS GROUP LIMITED – ASX WOW, FLIGHT CENTRE TRAVEL GROUP LIMITED – ASX FLT, CARDNO LIMITED – ASX CDD, COLES GROUP LIMITED – ASX COL, VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, CSL LIMITED – ASX CSL, BORAL LIMITED – ASX BLD, LINK ADMINISTRATION HOLDINGS LIMITED – ASX LNK, WORLEYPARSONS LIMITED – ASX WOR, COCA-COLA AMATIL LIMITED – ASX CCL, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA