BUDGET – AUSTRALIA

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

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

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

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

Hold-out senators set test for tax bill

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Original article by Ben Packham
The Australian – Page: 4 : 8-May-18

Centre Alliance senator Rex ­Patrick says the contents of the May 2018 Budget may determine whether himself and colleague Stirling Griff hold further talks with the Federal Government regarding its corporate tax cuts package. Factors such as a clear strategy for a return to surplus and assurances that spending on social services will not be reduced in future years to finance the tax cuts are among Centre Alliance’s priorities in the Budget. The company tax package requires an additional two votes in the Senate.

CORPORATES
CENTRE ALLIANCE, NICK XENOPHON TEAM, ONE NATION PARTY, AUSTRALIAN LABOR PARTY, HIGH COURT OF AUSTRALIA

Seniors big winners in budget lift

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Original article by Simon Benson, Rick Morton, David Uren
The Australian – Page: 1 & 6 : 8-May-18

The Federal Government’s May 2018 Budget will feature a range of measures targeted at older Australians. Amongst other things, the government is expected to provide funding for an additional 20,000 people to receive in-home care, while a scheme that enables retirees to remain in the workforce without affecting their pension entitlements is tipped to be expanded. Meanwhile, people on low and middle incomes are expected to receive a tax cut of about $A10 a week.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS, AUSTRALIA. DEPT OF SOCIAL SERVICES

Morrison locks in tax limits

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Original article by Simon Benson
The Australian – Page: 1 & 4 : 7-May-18

The Federal Government’s May 2018 Budget is expected to restrict tax cuts to people with taxable income of less than $A87,000. The tax cuts are likely to be delivered via the low-income tax offset, while Treasurer Scott Morrison has indicated that people on higher incomes are likely to receive tax cuts by 2024. Morrison stresses that the tax cuts in the 2018 Budget will be real and affordable. Meanwhile, the Government will use the Budget to formally adopt a tax-to-GDP ratio of 23.9 per cent, while it is tipped to forecast a modest surplus in 2019-20, which is one year ahead of schedule.

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