BUDGET – AUSTRALIA

Resources boom gives government wriggle room

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Original article by David Uren
The Australian – Page: 4 : 7-Mar-19

Higher commodity prices in 2018 resulted in nominal GDP growth of 5.5 per cent for the calendar year. The mid-year Budget update in December had forecast nominal GDP growth of 4.75 per cent in 2018-19 and just 3.5 per cent in 2019-20. Treasury is likely to revise these forecasts in the April 2019 Budget, although it is expected to scale back economic growth forecasts in response to the national accounts data for the December quarter. Meanwhile, company and personal income tax revenue rose by 11.8 per cent and 7.6 per cent respectively in 2018.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA

Iron and coal to deliver surprise budget bonanza

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Original article by David Uren
The Australian – Page: 6 : 12-Feb-19

Federal government revenue will be boosted by the recent rally in the prices of Australia’s key export commodities. The mid-year budget update had forecast that the iron ore price would average $US55 per tonne in the first half of 2019, but it is widely tipped to reach $US100/tonne in coming days. The price of coking coal also remains well above the budget update’s forecast. Chris Richardson of Deloitte Access Economics expects the government to use the revenue gains to provide cash hand-outs in the April 2019 Budget.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Budget surplus on track, says Frydenberg

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Original article by Lucas Baird
The Australian Financial Review – Page: 5 : 23-Jan-19

Treasurer Josh Frydenberg remains confident that the federal government will return the Budget to surplus in 2019-20. This is despite domestic and global headwinds, including the International Monetary Fund’s latest downgrade of its global economic growth forecast. Frydenberg also used a Sydney Institute speech to warn that the domestic economy cannot afford Labor’s proposed $200bn package of tax increases. He added that unlike Labor, the Coalition will increase health, education and infrastructure spending without increasing taxes.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, INTERNATIONAL MONETARY FUND, SYDNEY INSTITUTE, AUSTRALIAN LABOR PARTY

Slowdown threatens budget surplus

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Original article by John Kehoe
The Australian Financial Review – Page: 3 : 10-Jan-19

Fitch Solutions has cast doubt upon the federal government’s timetable for a return to a Budget surplus. The government expects a surplus equivalent to 0.2 per cent of GDP in 2019-20, but Fitch has forecast that factors such as slowing economic growth will result in a deficit equivalent to 0.1 per cent of GDP for the financial year. The firm warns that increased government spending and slowing global economic growth will also delay the return to a surplus. Fitch’s forecast of a 2018-19 deficit equivalent to 0.3 per cent of GDP is in line with the government’s projections.

CORPORATES
FITCH SOLUTIONS, FITCH RATINGS LIMITED, AUSTRALIA. DEPT OF THE TREASURY, UBS HOLDINGS PTY LTD, DELOITTE ACCESS ECONOMICS PTY LTD, RESERVE BANK OF AUSTRALIA

Slower wages growth pushes out RBA hike

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Original article by Matthew Cranston
The Australian Financial Review – Page: 4 : 18-Dec-18

The May 2018 Budget had forecast wages growth of 2.75 per cent in 2018-19, but this has been pared back to 2.5 per cent in the mid-year budget update. Wages are also expected to increase by three per cent in 2019-20, compared with previous expectations of 3.25 per cent growth. Meanwhile, growth in household consumption is also expected to be lower than projected in 2018-19, while the unemployment rate is tipped to fall further than forecast. The lower wages growth outlook may affect the timing of any change in monetary policy.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA, DELOITTE ACCESS ECONOMICS PTY LTD, KPMG AUSTRALIA PTY LTD

Miners drive corporate profit surge

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Original article by Matthew Cranston
The Australian Financial Review – Page: 5 : 18-Dec-18

The federal government expects total revenue for 2018-19 to be $8.3bn higher than forecast in the May 2018 Budget, and $12.4bn higher over the forward estimates period. The revenue windfall has been driven by rising corporate profits, particularly in the mining sector as a result of higher commodity prices. Corporate tax revenue is expected to be about $495bn in 2018-19, compared with $460bn in 2017-18. However, economists say a sustained increase in company tax receipts cannot be taken for granted.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, AMP CAPITAL INVESTORS LIMITED

PM’s $9.2bn tax cut plan for election

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Original article by Ben Potter, Michael Roddan
The Australian – Page: 1 & 4 : 18-Dec-18

Analysis of the Mid-Year Economic and Fiscal Outlook suggests that the federal government may announce some $9.2bn worth of income tax cuts over four years prior to the 2019 election. The figures for ‘decisions taken but not yet announced’ also suggest that an additional $1.4bn may be set aside for spending that could potentially be directed toward marginal seats. To date, the government has announced policy measures worth around $16bn in total. However, economists have cautioned against committing to expenditure on the basis of revenue gains that may not be sustained.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF FINANCE, DELOITTE ACCESS ECONOMICS PTY LTD

War chest to help schools, hospitals

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Original article by David Uren, Michael Roddan
The Australian – Page: 1 & 4 : 29-Nov-18

Prime Minister Scott Morrison has indicated that an improved Budget position will allow the federal government to increase its investment in essential services. Amongst other things, Morrison has flagged a $37m funding increase for schools over 10 years and an extra $30bn for hospitals over five years. The Budget bottom line has been bolstered by higher revenue, but Martin Whetton of the ANZ Bank says the government may opt to use some of this windfall to finance new spending initiatives in the lead-up to the 2019 election.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN LABOR PARTY, MOODY’S INVESTORS SERVICE INCORPORATED, STANDARD AND POOR’S FINANCIAL SERVICES LLC, AUSTRALIA. DEPT OF THE TREASURY, GROUP OF TWENTY (G-20), FINANCIAL STABILITY BOARD

PM puts budget relief on fast track

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Original article by Michael Roddan
The Australian – Page: 1 & 4 : 28-Nov-18

A federal election seems likely to be held on either 11 or 18 May, after the government announced that it will bring forward the 2019 Budget to 2 April. The government is also set to post the first Budget surplus since 2007-08 on the back of higher tax revenue. The Treasury has previously forecast a surplus of $2.2bn in 2019-20, following a deficit of $14.5bn in 2018-19. Shadow treasurer Chris Bowen advocates greater action on Budget repair due to the downside risks to the global economy.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, DELOITTE ACCESS ECONOMICS PTY LTD

Early budget points to a May election

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Original article by Phillip Coorey
The Australian Financial Review – Page: 4 : 26-Nov-18

The federal government is expected to deliver its 2019 Budget in late March or early April, rather than the traditional date of the second Tuesday in May. This would allow the government to lock in an election date in May and see out its full term in office. Meanwhile, Prime Minister Scott Morrison has reiterated his government’s commitment to returning the Budget to surplus in 2019-20, which suggests that a recent revenue windfall will be spent on election promises rather than further Budget repair measures.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, BUSINESS COUNCIL OF AUSTRALIA, AUSTRALIA. DEPT OF FINANCE, DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS, NATIONAL PARTY OF AUSTRALIA