BUDGET – AUSTRALIA

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

Budget to quell Labor’s Mediscare

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Original article by Fleur Anderson
The Australian Financial Review – Page: 1 & 5 : 4-May-17

The Australian Government’s May 2017 Budget will include a reduction in the cost of generic drugs under the Pharmaceutical Benefits Scheme. The freeze on Medicare rebates will also be progressively abolished from the start of 2017-18. This will initially apply primarily to visits to GPs, and the freeze on rebates for visits to a range of specialists will be phased out over the following two years. Opposition Leader Bill Shorten argues that the freeze should be lifted immediately for all medical services.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF HEALTH, AUSTRALIA. DEPT OF HUMAN SERVICES. MEDICARE AUSTRALIA, GRATTAN INSTITUTE

Badgerys airport plan: build, operate and sell

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 6 : 3-May-17

The Australian Government’s May 2017 Budget will include funding for the proposed Western Sydney Airport at Badgerys Creek, which is slated to cost between $A5bn and $A6bn. The Government has also signalled that it will seek a buyer for the new airport after it becomes operational. Prime Minister Malcolm Turnbull has emphasised the airport’s contribution to the economy and growth in jobs. Australian-listed Sydney Airport has ruled out developing the airport, citing the high level of risk associated with the project.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, SYDNEY AIRPORT – ASX SYD, KINGSFORD SMITH AIRPORT, AUSTRALIA. DEPT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT, AUSTRALIA. DEPT OF THE TREASURY, NEW SOUTH WALES. DEPT OF PREMIER AND CABINET, AUSTRALIA. DEPT OF FINANCE, NBN CO LIMITED

Coalition out for big uni savings

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Original article by Tim Dodd
The Australian Financial Review – Page: 5 : 1-May-17

Education Minister Simon Birmingham will reveal changes to the Federal Government’s policy on higher education on 1 May 2017. The changes, which are understood to include a tightening of the HELP loan system and a moderate increase in student fees, are expected to result in savings of around $A1 billion a year. Birmingham will then have the tough job of trying to persuade the Senate to pass the changes.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY, ONE NATION PARTY, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT