RBA cash rate below 1pc tipped

Original article by Matthew Cranston
The Australian Financial Review – Page: 8 : 23-May-19

Financial markets have priced in a 25 per cent chance that the Reserve Bank of Australia will reduce the cash rate three times by the end of 2019. However, economists are sceptical as to whether a cash rate of one per cent or less would provide sufficient economic stimulus to meet the central bank’s revised growth forecast of 2.75 per cent. Commonwealth Bank economists say that an interest rate cut in June would help to stabilise house prices and stimulate the economy in the second half of the year.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, JP MORGAN AUSTRALIA LIMITED, IFM INVESTORS PTY LTD, ERNST AND YOUNG, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Rate cut will be little help, says Westpac

Original article by James Eyers, James Frost
The Australian Financial Review – Page: 1 & 17 : 7-May-19

The futures market has priced in a 38 per cent chance that the Reserve Bank will reduce the cash rate on 7 May. Westpac CEO Brian Hartzer warns that a rate cut will have limited impact on economic growth and consumer spending, given that the cash rate is already at a historic low. He argues that government spending has been a key driver of economic growth, but the political debates needs to have a greater focus on measures that will drive private sector growth and investment. Shadow treasurer Chris Bowen says the fact that interest rates could potentially fall further demonstrates the "real concern" about the economy under the Coalition.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN LABOR PARTY, JP MORGAN AUSTRALIA LIMITED, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, CLIME ASSET MANAGEMENT PTY LTD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Resources boom gives government wriggle room

Original article by David Uren
The Australian – Page: 4 : 7-Mar-19

Higher commodity prices in 2018 resulted in nominal GDP growth of 5.5 per cent for the calendar year. The mid-year Budget update in December had forecast nominal GDP growth of 4.75 per cent in 2018-19 and just 3.5 per cent in 2019-20. Treasury is likely to revise these forecasts in the April 2019 Budget, although it is expected to scale back economic growth forecasts in response to the national accounts data for the December quarter. Meanwhile, company and personal income tax revenue rose by 11.8 per cent and 7.6 per cent respectively in 2018.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA

Nation’s economic success little more than good luck

Original article by David Uren, Joe Kelly
The Australian – Page: 1 & 2 : 8-Oct-18

Business Council of Australia CEO Jennifer Westacott argues that the nation’s GDP growth is primarily due to factors such as population growth, consumption and government spending, rather than productivity gains. She notes that productivity growth has fallen to its lowest levels since the 1970s, and she has stressed the risks facing the domestic economy. Westacott and Australian Chamber of Commerce & Industry CEO James Pearson have both highlighted the federal government’s failure to deliver on policies such as the national energy guarantee and company tax cuts.

CORPORATES
BUSINESS COUNCIL OF AUSTRALIA, AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY, UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH, AUSTRALIAN LABOR PARTY, DELOITTE ACCESS ECONOMICS PTY LTD

Exports revive wage hope

Original article by Jacob Greber
The Australian Financial Review – Page: 1 : 7-Jun-18

The latest GDP data shows that the Australian economy expanded by one per cent in the March quarter and 3.1 per cent year-on-year. The economy recorded nominal growth of 2.2 per cent for the quarter, while real net national disposable income per capita rose by 1.5 per cent. Despite the better-than-expected GDP data, the Reserve Bank is still widely tipped to leave the cash rate on hold until at least late 2019, although growth in wages may be a key factor in the timing of any change in monetary policy.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, MACQUARIE UNIVERSITY

Plea to revive growth economy

Original article by Laura Tingle
The Australian Financial Review – Page: 1 & 10 : 27-Jul-17

Members of the Business Council of Australia’s board have called for the corporate tax rate to be reduced in order to lift the nation’s economic growth rate to at least three per cent. They argue that the economy needs to expand at such a rate to increase wages and create jobs. BCA president Grant King adds that regulatory and industrial relations reform is necessary to encourage jobs growth, particularly given the impact of digital disruption on the labour market.

CORPORATES
BUSINESS COUNCIL OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESFARMERS LIMITED – ASX WES, ENERGYAUSTRALIA PTY LTD, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY

Morrison needs to go micro if he wants big results

Original article by Stephen Anthony
The Australian Financial Review – Page: 39 : 3-Jan-17

Federal Treasurer Scott Morrison needs to focus on stimulating growth in Australia’s productivity which can be achieved by more rigorous commitment to budget repair and taxation reform. Government spending must be curtailed and more attention must be paid to waste reduction. It would be desirable to establish an independent parliamentary infrastructure office whose role would be to coordinate infrastructure projects. More competition is needed in sectors which still use restrictive business and labour practices.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, INDUSTRY SUPER AUSTRALIA PTY LTD

No more rate cuts: Morrison

Original article by John Kehoe
The Australian Financial Review – Page: 1 & 6 : 10-Oct-16

Federal Treasurer Scott Morrison believes that the Reserve Bank of Australia should cease reducing the cash rate, arguing that monetary policy has reached the limit of its effectiveness in stimulating the economy. He says the focus should now shift to fiscal policy. The central bank has reduced the cash rate twice in 2016 but left it on hold at 1.5 per cent in October. Morrison notes that the heads of other central banks have acknowledged the declining effectiveness of monetary policy.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA, BANK OF ENGLAND, GREAT BRITAIN. OFFICE OF THE PRIME MINISTER, GROUP OF TWENTY (G-20), INTERNATIONAL MONETARY FUND, PEOPLE’S BANK OF CHINA, UNITED STATES. FEDERAL RESERVE BOARD

Stevens: we’re kidding ourselves

Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 6 : 11-Aug-16

Glenn Stevens has warned that more investment is needed to stimulate economic growth. The departing governor of the Reserve Bank of Australia (RBA) said on 10 August 2016 that monetary policy cannot revive economic growth on its own, and fiscal reforms are also needed. It is also necessary to curb demand for debt among companies and households. Stevens will leave the RBA in September, and will be succeeded by deputy governor Philip Lowe.

CORPORATES
RESERVE BANK OF AUSTRALIA

Morrison worried about growth

Original article by Jacob Greber, Mark Mulligan
The Australian Financial Review – Page: 1 & 4 : 31-May-16

Economists forecast that the Australian economy expanded by just 0.6 per cent in the March 2016 quarter. Data to be released on 31 May is tipped to show GDP growth of 2.7 per cent year-on-year during the quarter, compared with three per cent previously. Treasurer Scott Morrison has used the slowing economy to defend the Federal Government’s push to reduce the corporate tax rate. He has also criticised Opposition Leader Bill Shorten for opposing tax cuts that would stimulate economic activity.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIAN BUREAU OF STATISTICS, RESERVE BANK OF AUSTRALIA