Budget close to surplus and a year early

Original article by John Kehoe
The Australian Financial Review – Page: 5 : 24-Apr-19

The federal government had an underlying cash deficit of $8.1bn in the first nine months of 2018-19, according to monthly Budget data from the Department of Finance. This is $4.6bn lower than had been projected in the mid-year Budget update. Peter Downes of Outlook Economics says the final quarter of a financial year tends to be good in terms of government revenue, and a balanced budget for 2018-19 is possible. The government expects the Budget to return to surplus in 2019-20.

CORPORATES
AUSTRALIA. DEPT OF FINANCE, AUSTRALIA. DEPT OF THE TREASURY, OUTLOOK ECONOMICS, AUSTRALIAN LABOR PARTY

Labor to have higher tax burden but bigger surpluses, says Bowen

Original article by Phillip Coorey
The Australian Financial Review – Page: 4 : 10-Apr-19

Shadow treasurer Chris Bowen will use his Budget reply speech on 10 April to argue that the federal government could not deliver on its tax cuts package while retaining a surplus over the next decade. He will state that the government’s projected surpluses in coming years are based on spending cuts elsewhere in the Budget starting in the 2023-24 financial year. Bowen will also note that tax revenue would be higher under a Labor government, but it would still be low compared to other OECD nations and some previous Coalition governments.

CORPORATES
AUSTRALIAN LABOR PARTY, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, KPMG AUSTRALIA PTY LTD

Per capita health spend is falling, says academic

Original article by Andrew Tillett
The Australian Financial Review – Page: 6 : 5-Apr-19

Analysis of the April 2019 Budget papers by the Centre for the Health Economy shows that the federal government’s per capita spending on healthcare will rise by just 1.5 per cent in 2019-20. This compares with growth of 6.7 per cent in 2016-17. Per capita spending will grow by just 0.4 per cent between 2019-20 and 2022-23 when population growth is taken into account. Centre for the Health Economy director Henry Cutler adds that ending the freeze on Medicare rebates may not result in lower co-payments for visiting a GP.

CORPORATES
MACQUARIE UNIVERSITY. CENTRE FOR THE HEALTH ECONOMY, AUSTRALIA. DEPT OF HEALTH

Tax cuts will cost less because of productivity lift

Original article by Joanna Mather
The Australian Financial Review – Page: 5 : 5-Apr-19

John Humphreys of the Centre for Independent Studies says a key measure in the federal government’s April 2019 Budget will have limited net economic benefit. He argues that the proposed increase in the low and middle-income tax offset is unlikely to have much impact on productivity, output or economic growth. His analyses also suggests that the government’s tax cuts package will cost about $122bn over 10 years, compared with Treasury’s forecast of $158bn, as a lower marginal tax rate will encourage people to increase their taxable income.

CORPORATES
THE CENTRE FOR INDEPENDENT STUDIES LIMITED, AUSTRALIA. DEPT OF THE TREASURY, UNIVERSITY OF QUEENSLAND

Fifield demands more efficiency from Aunty

Original article by Lilly Vitorovich
The Australian – Page: 5 : 5-Apr-19

The ABC was given a modest funding increase in the April 2019 Budget, to allow the public broadcaster to increase its newsgathering capacity in regional and rural areas. Acting MD David Anderson has welcomed the increased funding for the Enhanced News initiative, but he has criticised the decision to retain a freeze on overall funding for the next three years. He says this will require some difficult decisions regarding staffing and services, but Communications Minister Mitch Fifield argues that the ABC has greater funding certainty than any other Australian media organisation.

CORPORATES
AUSTRALIAN BROADCASTING CORPORATION, AUSTRALIA. DEPT OF COMMUNICATIONS AND THE ARTS, COMMUNITY AND PUBLIC SECTOR UNION, AUSTRALIAN LABOR PARTY

Shorten outbids on tax, health

Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 5-Apr-19

Opposition Leader Bill Shorten has used his Budget reply speech to advise that Labor will not support the second and third stages of the federal government’s income tax package. However, Labor will increase the low- and middle-income tax offset for people earning less than $37,000 year, while it will match the government’s rebate for those earning $48,000 to $90,000. Meanwhile, Labor will increase Medicare funding by $2.3bn over four years, in order to reduce the cost of cancer treatment and to list more cancer drugs on the Pharmaceutical Benefits Scheme

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

Lack of company tax cut biggest gripe

Original article by Ben Butler, Joyce Moullakis, Damon Kitney
The Australian – Page: 24 : 4-Apr-19

Business Council of Australia CEO Jennifer Westacott has reiterated the need for corporate tax cuts in the wake of the April 2019 Budget. She has described Australia’s current two-tiered company tax system as "bizarre", and notes that other nations are reducing their corporate tax rate while Australia’s remains one of the world’s highest. Meanwhile, the Australian Retailers Association’s executive director Russell Zimmerman says consumer spending should receive an immediate boost from the federal government’s proposed increase in the low- and middle-income tax offset.

CORPORATES
BUSINESS COUNCIL OF AUSTRALIA, AUSTRALIAN RETAILERS ASSOCIATION, AUSTRALIAN BANKING ASSOCIATION, THE AUSTRALIAN INDUSTRY GROUP, SUNCORP GROUP LIMITED – ASX SUN, MYOB GROUP LIMITED – ASX MYO, MORTGAGE CHOICE LIMITED – ASX MOC, STOCKLAND – ASX SGP

Market backs rate cuts over fiscal stimulus

Original article by Sarah Turner
The Australian Financial Review – Page: 9 : 4-Apr-19

The April 2019 Budget has not had much impact on monetary policy expectations, with financial markets still pricing in two interest rate cuts by August 2020. Sally Auld of JP Morgan says the Budget’s fiscal stimulus measures are unlikely to completely offset the impact of factors such as the downturn in housing prices, slowing construction activity and weak growth in real incomes. Meanwhile, economists are more bearish about the economic growth outlook than the Treasury.

CORPORATES
JP MORGAN AUSTRALIA LIMITED, AUSTRALIA. DEPT OF THE TREASURY, RBC CAPITAL MARKETS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA, AUSTRALIAN LABOR PARTY

Shorten’s magic pudding

Original article by Simon Benson, Joe Kelly
The Australian – Page: 1 & 4 : 4-Apr-19

Tax relief for Australians with annual income of less than $40,000 will be a key focus for Labor leader Bill Shorten in his Budget reply speech on 4 April. Workers whose income is below this threshold will be offered more generous tax cuts than those outlined in the Budget. Meanwhile, the federal government has announced that the one-off cash payment cash for pensioners, single parents and carers to offset rising energy costs will be extended to Newstart recipients. This will add about $80m to the cost of the Budget measure.

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

Flatter scales an incentive to work more

Original article by John Kehoe
The Australian Financial Review – Page: 1 & 8 : 4-Apr-19

Labor contends that the 10-year tax cuts package outlined in the April 2019 Budget is regressive as it will reduce the tax burden of people on high incomes. The current income tax brackets would be replaced by just three in mid-2024. University of Canberra labour economist Phil Lewis argues that while the tax system would be slightly less progressive under the Coalition’s plan, it would reduce the disincentive to earn more. Sinclair Davidson from the Institute of Public Affairs in turn says that flatter personal income tax rates would reduce bracket creep.

CORPORATES
AUSTRALIAN LABOR PARTY, UNIVERSITY OF CANBERRA, INSTITUTE OF PUBLIC AFFAIRS LIMITED, DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY