BUDGET – AUSTRALIA

Shorten outbids on tax, health

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 5-Apr-19

Opposition Leader Bill Shorten has used his Budget reply speech to advise that Labor will not support the second and third stages of the federal government’s income tax package. However, Labor will increase the low- and middle-income tax offset for people earning less than $37,000 year, while it will match the government’s rebate for those earning $48,000 to $90,000. Meanwhile, Labor will increase Medicare funding by $2.3bn over four years, in order to reduce the cost of cancer treatment and to list more cancer drugs on the Pharmaceutical Benefits Scheme

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF HUMAN SERVICES. MEDICARE AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Lack of company tax cut biggest gripe

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Original article by Ben Butler, Joyce Moullakis, Damon Kitney
The Australian – Page: 24 : 4-Apr-19

Business Council of Australia CEO Jennifer Westacott has reiterated the need for corporate tax cuts in the wake of the April 2019 Budget. She has described Australia’s current two-tiered company tax system as "bizarre", and notes that other nations are reducing their corporate tax rate while Australia’s remains one of the world’s highest. Meanwhile, the Australian Retailers Association’s executive director Russell Zimmerman says consumer spending should receive an immediate boost from the federal government’s proposed increase in the low- and middle-income tax offset.

CORPORATES
BUSINESS COUNCIL OF AUSTRALIA, AUSTRALIAN RETAILERS ASSOCIATION, AUSTRALIAN BANKING ASSOCIATION, THE AUSTRALIAN INDUSTRY GROUP, SUNCORP GROUP LIMITED – ASX SUN, MYOB GROUP LIMITED – ASX MYO, MORTGAGE CHOICE LIMITED – ASX MOC, STOCKLAND – ASX SGP

Market backs rate cuts over fiscal stimulus

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Original article by Sarah Turner
The Australian Financial Review – Page: 9 : 4-Apr-19

The April 2019 Budget has not had much impact on monetary policy expectations, with financial markets still pricing in two interest rate cuts by August 2020. Sally Auld of JP Morgan says the Budget’s fiscal stimulus measures are unlikely to completely offset the impact of factors such as the downturn in housing prices, slowing construction activity and weak growth in real incomes. Meanwhile, economists are more bearish about the economic growth outlook than the Treasury.

CORPORATES
JP MORGAN AUSTRALIA LIMITED, AUSTRALIA. DEPT OF THE TREASURY, RBC CAPITAL MARKETS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA, AUSTRALIAN LABOR PARTY

Shorten’s magic pudding

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Original article by Simon Benson, Joe Kelly
The Australian – Page: 1 & 4 : 4-Apr-19

Tax relief for Australians with annual income of less than $40,000 will be a key focus for Labor leader Bill Shorten in his Budget reply speech on 4 April. Workers whose income is below this threshold will be offered more generous tax cuts than those outlined in the Budget. Meanwhile, the federal government has announced that the one-off cash payment cash for pensioners, single parents and carers to offset rising energy costs will be extended to Newstart recipients. This will add about $80m to the cost of the Budget measure.

CORPORATES
AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF FINANCE

Flatter scales an incentive to work more

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 8 : 4-Apr-19

Labor contends that the 10-year tax cuts package outlined in the April 2019 Budget is regressive as it will reduce the tax burden of people on high incomes. The current income tax brackets would be replaced by just three in mid-2024. University of Canberra labour economist Phil Lewis argues that while the tax system would be slightly less progressive under the Coalition’s plan, it would reduce the disincentive to earn more. Sinclair Davidson from the Institute of Public Affairs in turn says that flatter personal income tax rates would reduce bracket creep.

CORPORATES
AUSTRALIAN LABOR PARTY, UNIVERSITY OF CANBERRA, INSTITUTE OF PUBLIC AFFAIRS LIMITED, DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY

Stunning lost opportunity on innovation

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Original article by Ben Potter
The Australian Financial Review – Page: 1 & 6 : 4-Apr-19

Former Innovation Science Australia chairman Bill Ferris has criticised the April 2019 Budget’s lack of policy announcements regarding innovation. He describes it as a missed opportunity to address declining investment in innovation by both government and business. Ferris argues that innovation is a key driver of productivity. The federal government will also reduce funding for the R&D tax incentive program by a further $1.35bn over four years. Krish Patel of Element 8 Group warns that government policy is forcing business start-ups to outsource R&D work offshore.

CORPORATES
INNOVATION SCIENCE AUSTRALIA, ELEMENT 8 GROUP, AUSTRALIAN TAXATION OFFICE, CSIRO, GEOSCIENCE AUSTRALIA

Hopes for higher pay revised down

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Original article by David Marin-Guzman
The Australian Financial Review – Page: B8 : 3-Apr-19

The April 2019 Budget papers show that the federal government has scaled back its wage growth forecasts since the mid-year economic and fiscal outlook. It now expects wages to grow by 2.5 per cent in 2018-19 and 2.75 per cent in 2019-20. Wages growth in 2020-21 in turn is expected to be 3.25 per cent. In contrast, the Reserve Bank has forecast wages growth of about 2.5 per cent until 2020, and 2.6 per cent by mid-2021. Meanwhile, the unemployment rate is forecast to be five per cent over the forward estimates period, while the labour participation rate is expected to ease to 65.5 per cent in 2018-19.

CORPORATES

To surplus with love

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Original article by Simon Benson
The Australian – Page: 1 & 5 : 3-Apr-19

The federal government’s April 2019 Budget has forecast a surplus of $7.1bn in 2019-20, and accumulated surpluses of $45bn over the four-year forward estimates period. The government also expects net debt to be reduced to zero by 2029-30. Highlights of the Budget include tax relief for individuals, dual-income families and small businesses, an additional $100bn worth of funding for infrastructure projects and $525m to create 80,000 apprenticeships in sectors that are experiencing skills shortages.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF FINANCE

Top tax rate for 13.3 million will be 30pc

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Original article by Joanna Mather
The Australian Financial Review – Page: B3 : 3-Apr-19

The April 2019 Budget includes some $302m worth of tax relief over the next decade, including the $144m tax package announced in 2018. Individuals will benefit from an immediate increase in the low- to middle-income tax offset, with the tax cut to be available when they lodge tax returns for 2018-19. The 32.5 per cent income tax bracket will be reduced to 30 per cent from 1 July 2024, and an estimated 70 per cent of taxpayers will be in this bracket. Just six per cent will pay the highest marginal tax rate of 45 per cent from mid-2024.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY

Start-ups reveal their federal budget wish-lists

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Original article by Liz Main
The Australian Financial Review – Page: 19 : 2-Apr-19

Clarification concerning research and development tax incentives is one of the biggest points of interest for technology start-ups with regard to the federal government’s April 2019 Budget. Des Hang, the CEO and co-founder of vehicle subscription service Carbar, says it is too easy for larger companies to be able to claim tax breaks under the R&D incentive scheme. Investment in better education programs is something else that the technology sector wants to see, along with immigration reform.

CORPORATES
CARBAR, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, ATLASSIAN CORPORATION PLC, 99DESIGNS PTY LTD, FINTECH AUSTRALIA PTY LTD