BUDGET – AUSTRALIA

Budget to slice $23bn off debt pile

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Original article by David Uren
The Australian – Page: 1 & 4 : 18-Dec-17

Australia’s gross debt is now expected to be about $A583bn in 2020-21, which is $A23bn lower than forecast in the Federal Government’s May 2017 Budget. Treasurer Scott Morrison says the revised debt forecast, which will be outlined in the mid-year Budget update on 18 December, will reduce the government’s annual interest bill by $A1bn. He adds that the government will now no longer be reliant on debt to finance recurrent expenditure, and borrowings will only be used for capital expenditure.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, HIGH COURT OF AUSTRALIA, DELOITTE ACCESS ECONOMICS PTY LTD, S&P GLOBAL RATINGS, AUSTRALIA. DEPT OF FINANCE

Stronger economy to cut size of deficit

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Original article by David Uren, Joe Kelly, John Ross
The Australian – Page: 2 : 15-Dec-17

The Federal Government’s May 2017 Budget had forecast a total deficit of $A46bn over four years. However, Westpac economists Bill Evans and Andrew Hanlan expect the mid-year budget update to revise this down to $A40bn. Westpac also forecasts a deficit of $A1.5bn in 2019-20, followed by a modest surplus in 2020-21. Meanwhile, Prime Minister Malcolm Turnbull has signalled that higher education funding will not be reduced in the budget update, although he has flagged new savings measures after the government’s proposed university funding cuts were rejected by the Senate.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, WESTPAC BANKING CORPORATION – ASX WBC, THE GROUP OF EIGHT LIMITED, GRATTAN INSTITUTE

Income tax rises to save budget

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Original article by David Uren
The Australian – Page: 4 : 20-Oct-17

The Parliamentary Budget Office estimates that personal income tax will account for 12.5 per cent of Australia’s GDP by 2020-21. This compares with 11.3 per cent of GDP at present and a record low of 9.3 per cent in 2009-10. The Federal Government’s May 2017 Budget had forecast that revenue from personal income tax will top $A253bn in 2021, which is 30 per cent higher than in 2016-17. Factors such as "bracket creep" and an increase in the Medicare levy to finance the National Disability Insurance Scheme are expected to offset low growth in wages.

CORPORATES
AUSTRALIA. PARLIAMENTARY BUDGET OFFICE, AUSTRALIA. DEPT OF THE TREASURY

Unseasonal iron ore rally boosts budget

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Original article by Peter Ker
The Australian Financial Review – Page: 10 : 21-Jul-17

The iron ore price peaked at a three-month high above $US70 a tonne on 20 July. The price of the steel input has risen by 31 per cent in just over a month, and it has averaged $US65.12 a tonne since the start of July. Paul Bloxham of HSBC estimates that this will increase the Australian Government’s revenue by about $US1.25bn in 2017-18. The May 2017 Budget had forecast that iron ore would average $US55 a tonne in 2017-18. Bloxham expects the iron ore price to fall to around $US50 a tonne by late 2017.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, UBS HOLDINGS PTY LTD

Budget tax increases will always lead to a lower Consumer Confidence explains Gary Morgan, Executive Chairman, Roy Morgan Research

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Original article by Gary Morgan, Roy Morgan Research
Market Research Update – Page: Online : 17-May-17

This week’s drop in Consumer Confidence follows the Federal Budget considered by many conservatives to be "Labor-lite" and considered by those on the left to be unfair on low income earners. The Turnbull Government chose to increase taxes on consumers – by increasing the Medicare levy – rather than cutting spending; and to increase taxes on Australia’s largest banks, which could lower their share prices and lead to the banks increasing interest rates on the loans they provide to consumers and businesses alike. The budget was followed by decreases in four out of the five indices that comprise Consumer Confidence. Household financial expectations compared to a year ago dropped a net 3.2ppts, expectations for the Australian economy over the next year dropped by a net 3.9ppts and expectations for the Australian economy over the next five years dropped a net 5.5ppts. The only increase recorded was in the number of people saying now is a good time to buy.

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Labor push for 49.5pc top tax hit

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 12-May-17

Federal Opposition Leader Bill Shorten has used his Budget reply speech to outline measures to provide funding for the National Disability Insurance Scheme. He advocated retention of the two per cent temporary deficit levy for high-income earners and increasing the Medicare levy by 0.5 per cent for people on incomes of more than $A87,000. This would increase the highest marginal tax rate to 49.5 per cent. Shorten also said the Opposition supports a proposed bank levy, although he stressed that the cost should not be passed on to customers.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN GREENS, NICK XENOPHON TEAM, AUSTRALIA. DEPT OF HUMAN SERVICES. MEDICARE AUSTRALIA, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE, DELOITTE ACCESS ECONOMICS PTY LTD

Bitter war on banks escalates

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Original article by Phillip Coorey, James Eyers
The Australian Financial Review – Page: 1 & 8 : 11-May-17

Federal Treasurer Scott Morrison says Australia’s five largest banks should avoid passing the cost of a proposed $A6.2bn Budget repair levy on to customers, warning that it would make them even less popular. Morrison has also advised that the levy will not be abolished once the Budget returns to surplus, although Australian Bankers’ Association CEO Anna Bligh has called for it to be scrapped once the deficit is eliminated. Meanwhile, shadow treasurer Chris Bowen says a royal commission into the bank is still needed.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN BANKERS’ ASSOCIATION, AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, WESTPAC BANKING CORPORATION – ASX WBC, MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, LIBERAL PARTY OF AUSTRALIA

Ratings agency warns Coalition

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Original article by Jacob Greber, Phillip Coorey
The Australian Financial Review – Page: 1 & 6 : 9-May-17

The Australian Government’s May 2017 Budget is tipped to forecast a surplus in 2020-21. However, ratings agency Moody’s Investors Service has doubts regarding the Government’s ability to meet this target, as well as the economic growth forecasts in the Budget. Marie Diron of Moody’s says the firm will consider all aspects of the Government’s Budget consolidation policy over the next five years. She adds that the Australian economy’s trend growth is unlikely to be any higher than 2.75 per cent.

CORPORATES
MOODY’S INVESTORS SERVICE INCORPORATED, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. PRODUCTIVITY COMMISSION, AUSTRALIAN BANKERS’ ASSOCIATION, RESERVE BANK OF AUSTRALIA

Small business in line for big win

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Original article by David Crowe, Emily Ritchie
The Australian – Page: 5 : 9-May-17

A tax deduction that is popular with small business owners is due to expire on 30 June 2017. The "instant" deduction is able to be claimed against capital costs of up to $A20,000, and was first introduced by the Australian Labor Party in 2012. Peter Strong from the Council of Small Business Australia says he is hopeful that Treasurer Scott Morrison will announce an extension to the tax deduction in the May 2017 Budget.

CORPORATES
AUSTRALIAN LABOR PARTY, COUNCIL OF SMALL BUSINESS ORGANISATIONS OF AUSTRALIA LIMITED, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE

RBA: road and rail a house price fix

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Original article by Jacob Greber, Mark Ludlow
The Australian Financial Review – Page: 1 & 4 : 5-May-17

The Australian Government’s May 2017 Budget is tipped to include funding for road and rail infrastructure, as part of its policy on housing affordability. Reserve Bank governor Philip Lowe says improved transport infrastructure is the best way to making housing more affordable. He adds that the Australian Prudential Regulation Authority’s move to crack down on lending to property investors is intended to provide "breathing space" to allow the supply-demand imbalance to correct itself, rather than being aimed at reining in house price growth.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY