BUDGET – AUSTRALIA

$1 trillion debt bomb buried in budget papers

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Original article by Adam Creighton
The Australian – Page: 1 & 6 : 21-Jun-18

Analysis of budget documents shows that the net financial liabilities of Australia’s federal, state and territory governments will top $A944bn in June 2021, which is equivalent to about $A36,000 per person. Infrastructure projects will be a major contributor to the debt blowout, with New South Wales and Victoria unveiling plans to ramp up spending on infrastructure over the next four years. Meanwhile, credit ratings agency Moody’s has expressed concern about the NSW government’s increased debt in its 2018 Budget, warning that it could affect the state’s credit profile.

CORPORATES
MOODY’S INVESTORS SERVICE INCORPORATED, NEW SOUTH WALES. THE TREASURY, AUSTRALIA. DEPT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT, INFRASTRUCTURE PARTNERSHIPS AUSTRALIA, QUEENSLAND. TREASURY

Aunty coy about how budget affects news

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Original article by Dana McCauley
The Australian – Page: 2 : 24-May-18

The ABC’s CFO Louise Higgins has warned that the Federal Government’s looming funding freeze will force the public broadcaster to decide which services it continues to provide. The three-year funding freeze announced in the May 2018 Budgets takes effect in mid-2019, and Higgins says the ABC will negotiate with the government in the interim. Meanwhile, SBS CEO Michael Ebeid says there is no scope for further joint cost-saving initiatives by the public broadcasters.

CORPORATES
AUSTRALIAN BROADCASTING CORPORATION, SPECIAL BROADCASTING SERVICE (SBS), AUSTRALIA. SENATE STANDING COMMITTEE ON ECONOMICS

PRRT changes may be leverage on One Nation

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Original article by Phillip Coorey, Angela Macdonald-Smith
The Australian Financial Review – Page: 3 : 18-May-18

The Federal Government requires the support of at least one additional Senate crossbencher for its company tax package. Proposed changes to the Petroleum Resources Rent Tax were absent from the May 2018 Budget, and sources have confirmed that this was partially to provide the government with a bargaining tool amid concerns that One Nation may back down on its support for the tax cuts. The changes to the PRRT would only affect future oil and gas projects, but industry players want the reforms to be enacted before the next election in case Labor wins and opts to subject existing projects to the new regime.

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ONE NATION PARTY

Flat wages cast doubt on budget

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Original article by Adam Creighton
The Australian – Page: 1 & 4 : 17-May-18

New figures show that Australian wages rose by just 0.5 per cent in the March quarter, unchanged from the three months to December. Independent economist Saul Eslake says the wage price index data may undermine the Federal Government’s forecast for a Budget surplus in 2019-20, which is dependent on growth in wages and consumer spending. The subdued growth in wages may also affect the outlook for official interest rates, with Sarah Hunger of BIS Oxford Economics suggesting that the cash rate could potentially be on hold until 2020.

CORPORATES
BIS OXFORD ECONOMICS PTY LTD, RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH, AUSTRALIAN LABOR PARTY

Retirees to fund Labor cash spree

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Original article by Simon Benson, Joe Kelly
The Australian – Page: 1 & 4 : 16-May-18

It is estimated that the Federal Opposition’s tax plan would raise almost $A30bn in additional revenue over the four years to 2021-22. Labor’s proposal to scrap cash refund for excess dividend imputation credits, which primarily affects self-fund retirees, would account for $A10.7bn of this revenue, according to the Treasury and the Parliamentary Budget Office. Shadow treasurer Chris Bowen will use a speech on 15 May to emphasise that the bulk of the extra revenue will be used to reduce debt and the Budget deficit. Labor also intends to match the Coalition’s revised target of 2019-20 for achieving a surplus.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, NATIONAL PRESS CLUB (AUSTRALIA)

Coalition better for well-paid unionists

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Original article by Ewin Hannan
The Australian – Page: 1 & 4 : 15-May-18

Research suggests that many blue-collar workers on high salaries will be better off under the Federal Government’s tax plan than under Labor’s alternative proposals. Workplace Minister Craig Laundy contends that families will definitely be worse off under Labor’s tax plan. For its part, Labor claims that low and middle-income earners will do better under its tax plan than under the Coalition. Although stating that 90 per cent of its members earn more than $A100,000 a year, Electrical Trades Union official Troy Gray says its members would do better under a Labor government.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF JOBS AND SMALL BUSINESS, ELECTRICAL TRADES UNION, AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSION, AUSTRALIA. REGISTERED ORGANISATIONS COMMISSION, ACTU

Split tax cut bill, senators warn PM

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Original article by Joe Kelly
The Australian – Page: 4 : 14-May-18

One Nation leader Pauline Hanson says the Federal Government must legislate income tax cuts proposed for 2018-19 separately from future tax relief outlined in the May 2018 Budget. Hanson argues that there could be a recession before all three phases of the seven-year tax cuts package take effect. Centre Alliance also supports splitting the tax cuts bill. Both parties, which have five seats in the Senate, also oppose any move by Opposition Leader Bill Shorten to wind back company tax cuts that have already been legislated.

CORPORATES
ONE NATION PARTY, CENTRE ALLIANCE, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Shorten ups ante in tax cuts battle

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Original article by Simon Benson, Rachel Baxendale
The Australian – Page: 1 & 6 : 11-May-18

Opposition Leader Bill Shorten has used his Budget reply speech to outline Labor’s proposed income tax reforms, which includes an annual tax cut of up to $A928 for people on low and middle incomes. Labor will support the first phase of the Federal Government’s tax cuts package, but tax brackets will remain unchanged beyond this. Labor has also committed to reinstating the two per cent deficit levy, which would lift the tax rate for people on the highest incomes to 49 per cent. Shorten also said Labor will reverse company tax cuts that have already been legislated if it wins the next election.

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

Funding cut setback for enforcing wage laws

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Original article by Anna Patty
The Sydney Morning Herald – Page: 13 : 10-May-18

The May 2018 Budget has allocated $A110.009m in funding to the Fair Work Ombudsman in 2018-19, down from $A110.46m in 2017-18. However, the Registered Organisations Commission’s funding has been increased by $A8.1m. Labor’s workplace relations spokesman Brendan O’Connor has criticised the Federal Government for providing additional funding for the "disgraced" ROC rather than addressing the issue of rampant wage theft. The University of Adelaide’s Professor Andrew Stewart has expressed similar concerns.

CORPORATES
AUSTRALIA. FAIR WORK OMBUDSMAN, AUSTRALIA. REGISTERED ORGANISATIONS COMMISSION, AUSTRALIAN LABOR PARTY, UNIVERSITY OF ADELAIDE, AUSTRALIA. DEPT OF JOBS AND SMALL BUSINESS, UNIVERSITY OF SYDNEY, 7-ELEVEN STORES PTY LTD, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, CALTEX AUSTRALIA LIMITED – ASX CTX

AAA outlook remains negative: S&P

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Original article by Jacob Greber
The Australian Financial Review – Page: 6 : 10-May-18

Credit ratings agency Standard & Poor’s has welcomed the Federal Government’s "fiscal prudence" in its May 2018 Budget. However, the firm has retained its negative outlook for Australia’s sovereign rating due to global factors such as the potential for an international trade war. Meanwhile, Jeremy Zook of Fitch Ratings says the Government’s revenue forecasts are "optimistic" and may affect its ability to deliver a surplus ahead of schedule.

CORPORATES
STANDARD AND POOR’S FINANCIAL SERVICES LLC, FITCH RATINGS LIMITED, ERNST AND YOUNG, AUSTRALIA. DEPT OF THE TREASURY, MORGAN STANLEY AUSTRALIA LIMITED