BUDGET – AUSTRALIA

Iron ore extends losing run to five

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Original article by Daniel Palmer
The Australian – Page: Online : 4-Dec-15

The price of benchmark iron ore for immediate delivery to the port of Tianjin in China has fallen by 0.7 per cent to $US40.30 per tonne. The price of the steel input has fallen in 35 out of the last 39 trading sessions and Daniel Hynes of the ANZ Bank says it is high likely to fall below $US40/tonne. The Australian Government’s 2015 Budget forecasts were based on an average iron ore price of $US48/tonne, but this is expected to be scaled back to about $US40/tonne in the mid-year Budget update.

CORPORATES
PORT OF TIANJIN, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, ROY HILL IRON ORE PTY LTD, VALE SA, MINE LIFE PTY LTD

Iron ore hit undermines budget

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Original article by Phillip Coorey, Stephen Cauchi
The Australian Financial Review – Page: 1 & 4 : 2-Dec-15

The Australian Government’s May 2015 Budget was based on expectations that the spot price of iron ore price would average $A48 per tonne for the calendar year. However, its average price in the year to date has been less than $US47 per tonne, and ore with 62 per cent iron content delivered to China’s port of Qingdao recently fell to $US42.97 per tonne. The downturn in the iron ore price will affect revenue forecasts in the upcoming Mid-Year Economic and Fiscal Outlook, as well as the Government’s timeframe for achieving a Budget surplus.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN LABOR PARTY, ROY HILL IRON ORE PTY LTD

Turnbull rejects ‘slash and burn’ approach to spending

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Original article by David Uren
The Australian – Page: 2 : 26-Nov-15

The Australian Government does not intend to include deep cuts in spending in its December 2015 Budget update. Prime Minister Malcolm Turnbull said on 25 November that spending cuts must not compromise economic growth. Westpac chief economist Bill Evans does not believe that Australia’s "AAA" credit rating is under threat.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE

Sober outlook for economy

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 8 : 25-Nov-15

Australia’s trend growth rate has usually been regarded as being around three per cent. However, the Treasury has confirmed that the December 2015 Budget update will be based on expectations of a potential growth rate of 2.75 per cent. Meanwhile, Reserve Bank governor Glenn Stevens forecasts that investment yields and global interest rates will remain low for some time. He has also warned Baby Boomers that they cannot expect to keep enjoying growth in dividends unless the companies they invest in are prepared to embrace more risk.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA, AUSTRALIAN BUSINESS ECONOMISTS INCORPORATED, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, UNITED STATES. CONGRESSIONAL BUDGET OFFICE, GREAT BRITAIN. DEPT OF THE TREASURY

Fed, China fears hit iron ore, copper

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Original article by Jacob Greber, Stephen Cauchi
The Australian Financial Review – Page: 1 & 13 : 19-Nov-15

The latest downturn in the iron ore price will put pressure on Australia’s terms of trade as Treasurer Scott Morrison prepares to release a Budget update in late 2015. Budget forecasts in May were based on an average iron ore price of $US48 per tonne in 2015-16. Although the price of the steel input rebounded to around $US60 in July, it has fallen to $US45.58 in mid-November. Slower growth in wages will also impact on government revenue.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIAN BUREAU OF STATISTICS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RIO TINTO LIMITED – ASX RIO, UNITED STATES. FEDERAL RESERVE BOARD, BLOOMBERG LP

Treasurer hints at lower economic growth trend

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Original article by Jacob Greber, Primrose Riordan
The Australian Financial Review – Page: 5 : 18-Nov-15

The Australian economy’s trend growth rate has traditionally been regarded as being around 3.25 per cent. Treasurer Scott Morrison says the economy is currently expanding by 2.3 per cent, but this would need to rise above three per cent for government revenue to be sufficient to balance the Budget. The Treasury has previously forecast that the Budget will return to deficit by the early 2020s, although this is based on an economic growth rate of 3.5 per cent over the five years from 2018-19.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD

Budget blowout of $5b if growth 3pc

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Original article by Jacob Greber
The Australian Financial Review – Page: 3 : 17-Nov-15

The Australian economy’s trend growth rate has traditionally been regarded as 3.25 per cent. Reserve Bank Governor Glenn Stevens and Treasury secretary John Fraser have both recently warned that the nation’s "potential" growth rate could slow in coming years. Economic modelling by PwC has concluded that a trend rate of three per cent would result in Budget revenue being around $A5bn lower than expected each year.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY

Budget bottom line to take $5b hit

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Original article by Laura Tingle
The Australian Financial Review – Page: 4 : 2-Nov-15

The Australian Government’s mid-year Budget review is expected to include lost revenue and spending costs of about $A5bn over the next four years. Some informed sources have suggested that this figure could even be within the range of $A6bn to $A8bn. Much of the cost blowout is expected to be included in the 2015-16 Budget.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, DELOITTE ACCESS ECONOMICS PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF EDUCATION AND TRAINING

CFOs lose patience with pace of reform

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Original article by Jacob Greber, Lucille Keen
The Australian Financial Review – Page: 3 : 16-Jul-15

A quarterly survey of CFOs by Deloitte shows that nearly 74 per cent of respondents think the Australian Government should act more quickly to reduce the Budget deficit. This compares with 54 per cent 12 months earlier. Meanwhile, 56 per cent of CFOs do not expect the small business measures in the May 2015 Budget to do much to boost business investment. However, 68 per cent anticipate that their company’s revenue will rise in the next year.

CORPORATES
DELOITTE TOUCHE TOHMATSU LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, BUSINESS COUNCIL OF AUSTRALIA, AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY

Don’t hoard super, says Morrison

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Original article by Laura Tingle
The Australian Financial Review – Page: 1 & 4 : 25-May-15

Some 90 per cent of people on lower incomes will be adversely affected by measures in the Australian Government’s 2014 and 2015 Budgets, according to research by the National Centre for Social & Economic Modelling. Changes to the pension assets test will hit retirees with significant assets in particular, but Social Services Minister Scott Morrison argues that they should rely on their superannuation savings rather than the age pension.

CORPORATES
UNIVERSITY OF CANBERRA. NATIONAL CENTRE FOR SOCIAL AND ECONOMIC MODELLING, AUSTRALIA. DEPT OF SOCIAL SERVICES, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET