BUDGET – AUSTRALIA

Budget won’t curb expansion: Credit Suisse

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Original article by David Rogers
The Australian – Page: 30 : 10-May-18

Hasan Tevfik of Credit Suisse says the Federal Government’s May 2018 Budget is unlikely to have a negative impact on corporate profits. He adds that the proposed tax cuts for people on low and middle incomes are relatively modest in comparison to Australia’s record level of household debt, and the tax cuts will result in only a small decline in the debt-to-disposable-income ratio in the next several years. Tevfik still expects the benchmark S&P/ASX 200 to reach 6,500 points by the end of 2018.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, STANDARD AND POOR’S ASX 200 INDEX, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, JB HI-FI LIMITED – ASX JBH, TABCORP HOLDINGS LIMITED – ASX TAH, WAGNERS HOLDING COMPANY LIMITED – ASX WGN, WESFARMERS LIMITED – ASX WES, WOOLWORTHS GROUP LIMITED – ASX WOW, MACQUARIE GROUP LIMITED – ASX MQG, CSL LIMITED – ASX CSL, TREASURY WINE ESTATES LIMITED – ASX TWE, TRANSURBAN GROUP LIMITED – ASX TCL, CHALLENGER LIMITED – ASX CGF, AMP LIMITED – ASX AMP, SUNCORP GROUP LIMITED – ASX SUN, LINK ADMINISTRATION HOLDINGS LIMITED – ASX LNK, IOOF HOLDINGS LIMITED – ASX IFL, HEALTHSCOPE LIMITED – ASX HSO, PRIMARY HEALTH CARE LIMITED – ASX PRY, RAMSAY HEALTH CARE LIMITED – ASX RHC, SONIC HEALTHCARE LIMITED – ASX SHL, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

One Nation holds key to tax-cut deal

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 6 : 10-May-18

The Federal Government has ruled out legislating only the first stage of the tax cuts package outlined in the May 2018 Budget. Labor and the Greens have signalled that they will only support the first part of the package, which will provide tax relief in three stages over seven years. Independent Senator Tim Storer also opposes all but the first stage of the package, arguing that it does not constitute the sweeping tax reforms that he is seeking. One Nation may support the tax package in the senate, but it says this would be conditional on a reduction in the annual migrant intake.

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

ABC determined to fight $84m funding cut

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Original article by Max Mason
The Australian Financial Review – Page: 8 : 10-May-18

ABC MD Michelle Guthrie has told the public broadcaster’s staff that a funding freeze in the May 2018 Budget will affect its ability to comply with the requirements of its charter. The ABCs budget will be unchanged at $A3.16bn over the three years from July 2019, effectively reducing its funding by $A83.7m over this period. Guthrie says the ABC’s management will "seek every opportunity" to have the funding cuts scrapped before they take effect. Funding for SBS will be increased by $A14.6m over two years.

CORPORATES
AUSTRALIAN BROADCASTING CORPORATION, SPECIAL BROADCASTING SERVICE (SBS), AUSTRALIA. DEPT OF THE TREASURY, FOXTEL MANAGEMENT PTY LTD, NEWS CORPORATION – ASX NWS

Trump the big threat to numbers

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Original article by Geoff Winestock
The Australian Financial Review – Page: B9 : 9-May-18

The Treasury has noted in the May 2018 Budget papers that changes to trade policies in a country like the US could have a significant impact on many other economies around the world. Its view of the global economy is generally positive, but contends that the consequences of President Donald Trump’s tariff policies could impact negatively on its outlook. In commenting on trade policy changes, Treasury noted that many components in goods exported from countries like the US and Japan have been imported from other nations.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, WORLD TRADE ORGANIZATION

ABC to feel the pinch with funding freeze

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Original article by Michael Koziol
The Sydney Morning Herald – Page: 6 : 9-May-18

The May 2018 Budget includes a freeze on the ABC’s funding until 2022, amounting to savings of $A83.7 million. Despite the freeze, the public broadcaster will still receive funding of over $A1 billion a year. Some $A50 million of the $A83.7 million saved as a result of the funding freeze will be spent over four years on the commemoration of the 250th anniversary of the landing of Captain James Cook. Unlike the ABC, SBS will not have its funding frozen.

CORPORATES
AUSTRALIAN BROADCASTING CORPORATION, SPECIAL BROADCASTING SERVICE (SBS), AUSTRALIA. DEPT OF THE TREASURY, FAIRFAX MEDIA LIMITED – ASX FXJ, NEWS CORPORATION – ASX NWS

Almost back in black as $126bn sliced off debt

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Original article by Adam Creighton
The Australian – Page: 1 & 6 : 9-May-18

The Federal Government has forecast a modest Budget surplus of $A2.2bn in 2019-20. The Budget had previously been expected to return to surplus in 2020-21, compared with a likely deficit of $A18.2bn in 2017-18. Meanwhile, Australia’s gross debt is now slated to be $A558bn in 2027-28, compared with expectations of $A684bn in the mid-year Budget update in December. Net debt is expected to fall to 3.8 per cent of GDP by 2029, down from a peak of 18.6 per cent in 2017-18.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, STANDARD AND POOR’S FINANCIAL SERVICES LLC

ScoMo’s in the money, so the shout’s on him

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Original article by Phillip Coorey
The Australian Financial Review – Page: B1 & B2 : 9-May-18

The Federal Government’s May 2018 Budget is underpinned by plans to progressively phase in personal income tax cuts over seven years. The threshold for the 37 per cent marginal tax rate will be increased from $A87,000 to $A90,000 on 1 July. This will in turn be increased to $120,000 from 1 July 2022, with all income below this threshold to be taxed at 32.5 per cent. This tax rate will then apply to incomes between $A41,000 and $A200,000 from 1 July 2024. The income tax cuts are forecast to cost $13.4bn in the first four years and $A140bn in total over 10 years.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, STANDARD AND POOR’S FINANCIAL SERVICES LLC

Corporate take will hit $100b in 2021-22

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Original article by Ben Potter
The Australian Financial Review – Page: B6 : 9-May-18

The May 2018 Budget papers show that company tax revenue is forecast to be $A100.7bn in 2021-22, compared with $A83.5bn in 2017-18. The rally in commodity prices has bolstered company tax revenue, although economists caution that this may not be sustainable. In addition, the corporate tax take could fall in future years if the government passes legislation for an across-the-board reduction in the company tax rate. The government expects companies to increase capital investment as a result of the tax cuts, but factors such as a recession could dampen investment intentions.

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

Resources bull run ‘won’t last’

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Original article by Glenda Korporaal
The Australian – Page: 43 : 9-May-18

The Federal Government’s Budget bottom line has been bolstered by stronger-than-expected commodity prices, although its economic forecasts for coming years are based on expectations of a fall in the price of iron ore and metallurgical coal. The Budget papers also forecast that Australia’s terms of trade will rise by 1.5 per cent in 2017-18, followed by a decline over the next four years, including a 5.25 per cent fall in 2018-19. The Budget also notes that the global price of oil will have a greater influence on Australia’s export revenue in coming years as the nation’s LNG exports increase.

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Budget to fail debt test

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Original article by Bevan Shields
The Sydney Morning Herald – Page: 1 : 8-May-18

Former federal treasurer Peter Costello says the Coalition government has not done enough to reduce government debt. Costello claims it would require the Budget to be in surplus for 10 years in a row for it to be paid off, and he has urged the government to cut spending by at least $A18 billion to address the debt issue. Costello supports Treasurer Scott Morrison’s goal of setting the government’s overall tax collection rate at 23.9 per cent of GDP, but says it should apply the same target to government spending.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, LIBERAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY