BUDGET – AUSTRALIA

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

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