AUSTRALIA – ECONOMIC POLICY

Tax bonus eases pain of lockdown

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Original article by Sid Maher, Patrick Commins
The Australian – Page: 1 & 5 : 11-Jan-21

Treasurer Josh Frydenberg says the federal government delivered some $7bn worth of tax cuts to Australian workers in the second half of 2020. This includes about $1.1bn under the stage-two tax cuts and $5.9bn via the Low and Middle Income Tax Offset. Treasury estimates that the tax cuts will boost GDP by around $3.5bn in 2020-21. The tax relief is likely to have contributed to a surge in retail spending during the half-year, despite the impact of COVID-19 lockdown restrictions. Citigroup expects consumer spending to have risen by seven per cent in November, with data to be released on 11 January.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, CITIGROUP PTY LTD

Reform taxes to help economy recover, IMF tells Australia

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Original article by John Kehoe
The Australian Financial Review – Page: 2 : 26-Oct-20

Harald Finger of the International Monetary Fund has expressed support for federal government measures such as the JobKeeper wage subsidy scheme in response to the coronavirus pandemic. Finger also agrees that the JobKeeper scheme needs to be wound back as the domestic economy recovers, and the focus should shift to economic reforms that boost growth in productivity and investment. The IMF Mission chief to Australia also advocates a reduction in the corporate tax rate and increasing the goods and services tax.

CORPORATES
INTERNATIONAL MONETARY FUND

Manufacturing vision drives blueprint for future

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Original article by Geoff Chambers,Simon Benson,Rosie Lewis
The Australian – Page: 1 & 4 : 28-Sep-20

Sectors such as defence, medical technology, biotechnology, agriculture and resources are expected to be the focus of the federal government’s strategy to boost Australia’s manufacturing capacity in the wake of the coronavirus pandemic. Prime Minister Scott Morrison will reveal details of the manufacturing strategy ahead of the federal Budget on 6 October. The push to increase local manufacturing is part of the government’s five-year plan to revive the economy and increase jobs.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Stimulus sparks 15pc surge in company profits

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Original article by Patrick Commins
The Australian – Page: 4 : 1-Sep-20

Government stimulus measures such as the JobKeeper wage subsidy scheme contributed to a sharp rise in gross operating profits in the corporate sector during the June quarter. Seasonally adjusted figures from the Australian Bureau of Statistics show that operating profits rose by 15 per cent overall. However, sectors whose sales have been hardest hit by the coronavirus pandemic recorded much bigger growth in profits; these include hospitality (86 per cent higher than the March quarter), arts and recreation (up 84 per cent) and retailing (up 31 per cent). Economists had expected a six per cent fall in profits.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS

AAA rating defies $184b deficit

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 6 : 24-Jul-20

The Australian economy will contract by 2.25 per cent in 2020-21, according to forecasts in the federal government’s economic update. The nation’s official unemployment rate is in turn projected to rise from 7.4 per cent at present to 9.25 per cent by the end of the year. Treasury has also forecast a Budget deficit of $85.5bn for 2019-20, rising to around $184.5bn in 2020-21. Meanwhile, the nation’s gross debt is slated to top $851.9bn in 2020-21. Moody’s and S&P have indicated that the economic update will have no impact on Australia’s triple-A credit rating.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, MOODY’S INVESTORS SERVICE INCORPORATED, S&P GLOBAL RATINGS

Frydenberg backs wider IR changes

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Original article by Ewin Hannan
The Australian – Page: 5 : 24-Jul-20

Treasurer Josh Frydenberg identified industrial relations reform as a key priority for the federal government after releasing the economic update on 23 July. He will push for temporary changes to the Fair Work Act to be extended to include businesses that will no longer be eligible for the JobKeeper wage subsidy at the end of September. Australian Industry Group CEO Innes Willox has backed the proposal, but ACTU president Michele O’Neil contends that the more flexible workplace arrangements should not be available to businesses that are no longer struggling.

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AUSTRALIA. DEPT OF THE TREASURY, THE AUSTRALIAN INDUSTRY GROUP, ACTU

HomeBuilder package most effective stimulus in a decade

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Original article by Simon Benson, Mackenzie Scott
The Australian – Page: 1 & 4 : 14-Jul-20

Nearly 40,000 people are believed to have registered for the federal government’s HomeBuilder grants since the scheme was launched on 4 June. Data from the Housing Industry Association shows that sales of new homes increased by 77 per cent in June; however, chief economist Tim Reardon says the data for July and August will indicate whether the surge in June was a one-off. Assistant Treasurer Michael Sukkar says HomeBuilder is working as intended, by stimulating construction and renovation activity and generating work for tradespeople.

CORPORATES
HOUSING INDUSTRY ASSOCIATION LIMITED, AUSTRALIA. DEPT OF THE TREASURY

PM vows to break Victoria’s fall

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Original article by Matthew Cranston, Andrew Tillett
The Australian Financial Review – Page: 1 & 6 : 9-Jul-20

Victoria recorded 134 new coronavirus cases on 8 July, as metropolitan Melbourne prepared to go into lockdown for six weeks. The virus outbreak in Victoria is set to dominate the national cabinet’s agenda when it meets on 10 July, while Prime Minister Scott Morrison has flagged extending the JobKeeper wage subsidy beyond late September. Treasurer Josh Frydenberg in turn says the federal government will look at bringing forward legislated personal income tax cuts in order to stimulate the economy. The government is also considering measures such as providing greater incentives for business investment.

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

Twenty years on, burning platform is here for GST reform: Ken Henry

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 36 : 29-Jun-20

Former Treasury secretary Ken Henry has called for an overhaul of Australia’s tax system in response to the coronavirus-induced recession. Henry was a top tax adviser to the Howard government when it introduced the goods and services tax. Former federal treasurer Peter Costello says Australia’s tax system has become increasingly complex since the GST was introduced two decades ago, arguing that it needs to be simplified. He concedes that the GST base should have been broader with fewer exemptions; however, he is cautious about expanding it now, arguing that ‘populist politics’ in the Senate could result in even more exemptions than at present.

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AUSTRALIA. DEPT OF THE TREASURY

JobKeeper cash needed for schools and hospitals

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Original article by Rosie Lewis
The Australian – Page: 2 : 16-Jun-20

Restaurant & Catering Australia CEO Wes Lambert has urged the federal government to retain the JobKeeper wage subsidy scheme until at least the end of 2020. However, Prime Minister Scott Morrison has argued that retaining coronavirus stimulus measures beyond the scheduled expiration date of late September would result in less funding for essential services such as health and education. The government may introduce stimulus measures that target sectors which have been hardest hit by the economic downturn.

CORPORATES
RESTAURANT AND CATERING INDUSTRY ASSOCIATION OF AUSTRALIA INCORPORATED, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET