ECONOMIC INDICATORS – AUSTRALIA

National cost of pandemic response to reach $327bn over five years

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Original article by Patrick Commins
The Australian – Page: 4 : 5-Mar-21

The Parliamentary Budget Office estimates that the combined net debt of Australia’s three levels of government will blow out to almost $1.3tn in the five years to 2024. Federal, state and local governments are forecast to collectively spend some $327bn on COVID-19 measures over the five-year period. The independent budget watchdog now expects the national net operating balance across all levels of government in 2020-21 to be a deficit of 11.1 per cent of GDP; it had previously forecast a surplus of 1.7 per cent of GDP for the current financial year.

CORPORATES
AUSTRALIA. PARLIAMENTARY BUDGET OFFICE

Inflation Expectations increase to 3.7% in February – higher in Country Regions than Capital Cities

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Original article by Roy Morgan
Market Research Update – Page: Online : 5-Mar-21

In February, Australians expected inflation of 3.7% annually over the next two years, up 0.1% points on January, and the highest since February and March 2020 (4.0% for both). Inflation Expectations are now 1% point below their long-term average of 4.7%. Inflation Expectations have now increased by 0.5% points in the last six months, the fastest increase for the index since late 2016/early 2017 when the index increased by 0.6% points in only two months. Inflation Expectations are higher in Country Regions of Australia (4%) than in the Capital Cities (3.5%) and this is borne out in each mainland State. The largest gap of 1% point is within South Australia with Inflation Expectations of 4.4% in Country SA (the highest figure for any area) compared to only 3.4% in Adelaide. The next largest gap of 0.8% points is within Western Australia, with Inflation Expectations of 4% in Country WA compared to only 3.2% in Perth – the lowest figure for any Capital City. In both Victoria and Queensland there is a gap of 0.6% points between Country Regions and the respective Capital Cities. Inflation Expectations are 4.2% in Country Victoria compared to 3.6% in Melbourne and 3.9% in Country Queensland compared to only 3.3% in Brisbane. The smallest gap of only 0.3% points between the two areas is in NSW. Country NSW has Inflation Expectations of 4% compared to 3.7% in Sydney and in-line with the national average.

CORPORATES
ROY MORGAN LIMITED

ANZ-Roy Morgan Consumer Confidence declines 1.5pts to 109.9 during Victoria’s 5 day lockdown and border closures

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Original article by Roy Morgan
Market Research Update – Page: Online : 17-Feb-21

ANZ-Roy Morgan Consumer Confidence fell 1.5pts to 109.9 on February 13/14. Consumer Confidence is now 0.5 points below the 2021 weekly average of 110.4, yet remains 0.8pts higher than the same week a year ago (109.1). Now 25% (down 1ppt) of Australians say their families are ‘better off’ financially than this time last year, while 27% (down 1ppt) say their families are ‘worse off’ financially. In addition, 37% (down 3ppts) of Australians expect their family to be ‘better off’ financially this time next year, and 14% (up 1ppt) expect to be ‘worse off’ financially. Some 19% (down 1ppt) of Australians expect ‘good times’ for the Australian economy over the next 12 months, while 20% (up 1ppt) expect ‘bad times’. Meanwhile, 42% (down 1ppt) of Australians say now is a ‘good time to buy’ major household items, while 25% (down 1ppt) say now is a ‘bad time to buy’.

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

Smaller funds hit in super grab

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Original article by Lachlan Moffet Gray
The Australian – Page: 13 & 17 : 9-Feb-21

Data from the Australian Prudential Regulatory Authority shows that a total of $36.4bn was withdrawn from superannuation funds via the federal government’s early access scheme. This was well below the Treasury’s initial forecast of more than $42bn. Members of Australian­Super withdrew more than $5bn in total, although this accounts for just 2.5 per cent of the industry giant’s assets. In contrast, some $21.18m was withdrawn from the Grosvenor Pirie Master Superannuation Fund, which equates to 14 per cent of its asset base.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY,AUSTRALIA. DEPT OF THE TREASURY,AUSTRALIANSUPER PTY LTD,GROSVENOR PIRIE MASTER SUPERANNUATION FUND

Roy Morgan Business Confidence down 2.7pts to 120.5 in January – Majority of businesses expect good times for the next 12 months

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Original article by Roy Morgan
Market Research Update – Page: Online : 9-Feb-21

In January 2021, Roy Morgan Business Confidence was down 2.7pts (-2.2%) to 120.5 – the first decline in the index since August 2020, after four straight months of gains. Despite the fall Business Confidence is now 7.1pts above the long-term average of 113.4, and 18.9pts higher than it was a year ago (101.6). A clear majority of 61.7% of businesses expect ‘good times’ for the Australian economy over the next 12 months, and 52.9% of businesses said the next 12 months is a ‘good time to invest in growing the business’. On a State-based level Business Confidence is higher in all States than a year ago and significantly higher in NSW, Victoria, WA and SA – up by at least 15% in all four States compared to January 2020. Business Confidence is now highest in Western Australia at 140.6 in January and has increased by 27.6pts (+24.5%) from a year ago. Victoria is also in a far better position than a year ago according to the State’s businesses, with Business Confidence up 25.1pts (+25.5%) to 123.7. In 2021 Business Confidence in both New South Wales, up 18.8pts (+18.7%) to 118.9 and South Australia, up 26.7pts (+29%) to 118.7 is starting the year in a much stronger position than 2020.

CORPORATES
ROY MORGAN LIMITED

Unemployment down to 11.7% in January – lowest since March 2020, but under-employment increases again

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Original article by Roy Morgan
Market Research Update – Page: Online : 8-Feb-21

The latest Roy Morgan employment series data shows that 1.68 million Australians (11.7% of the workforce) were unemployed in January 2021 (down 44,000 on December). In addition, 1.44 million Australians (10.0% of the workforce) were under-employed – working part-time but looking for more work. This was an increase of 81,000 on a month ago and an increase of 154,000 over the last two months. Meanwhile, some 12,675,000 Australians were employed in January (up 26,000 from December). The rise in employment was driven by an increase in full-time employment, up 46,000 to 8,197,000; part-time employment was down 20,000 to 4,478,000. Roy Morgan’s unemployment figure of 11.7% for January is over 5% points higher than the current ABS estimate for December 2020 of 6.6%.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIAN BUREAU OF STATISTICS

Rise in failures a pointer to future

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Original article by Patrick Commins
The Australian – Page: 17 : 15-Jan-21

Michael Fung of PwC and Sal Algeri from Deloitte expect the rate of business failures in Australia to be higher than usual in 2021. The federal government has wound back some of the COVID-19 support measures that helped businesses to stay afloat during the virus-induced economic downturn, while the JobKeeper scheme is slated to be phased out in March. Data from the Australian Securities & Investments Commission supports the view that a rise in insolvencies is likely; an average of 60 companies were placed in external administration in the final two weeks of 2020, compared with 13 during the same period in 2019.

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PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, DELOITTE TOUCHE TOHMATSU LIMITED, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Tax bonus eases pain of lockdown

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Original article by Sid Maher, Patrick Commins
The Australian – Page: 1 & 5 : 11-Jan-21

Treasurer Josh Frydenberg says the federal government delivered some $7bn worth of tax cuts to Australian workers in the second half of 2020. This includes about $1.1bn under the stage-two tax cuts and $5.9bn via the Low and Middle Income Tax Offset. Treasury estimates that the tax cuts will boost GDP by around $3.5bn in 2020-21. The tax relief is likely to have contributed to a surge in retail spending during the half-year, despite the impact of COVID-19 lockdown restrictions. Citigroup expects consumer spending to have risen by seven per cent in November, with data to be released on 11 January.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, CITIGROUP PTY LTD

Spending holds up despite outbreaks

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Original article by Patrick Commins
The Australian – Page: 4 : 7-Jan-21

Spending by ANZ cardholders increased by 6 per cent in December over November, with spending by Victorian cardholders up nearly five per cent and spending in New South Wales up two per cent. Spending by South Australian cardholders rose by 16 per cent, while Queensland spending was up 10 per cent. Spending on entertainment was up almost 25 per cent, while spending on accommodation was up 20 per cent.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Covid laggards beat Aussies to top of the class for economic performance

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Original article by Patrick Commins
The Australian – Page: 6 : 21-Dec-20

Data from the OECD shows that Australia’s real GDP contracted by 4.2 per cent over the first nine months of 2020. In contrast, real GDP in the US and Brazil declined by just 3.5 per cent and 4.1 per cent respectively during this period, despite the fact that they have been hit much harder by COVID-19 case numbers and deaths. The economies of many countries also rebounded more quickly in the September quarter than Australia, despite having been hit harder in the June quarter. Elliot Clarke of Westpac attributes this to Australia’s tougher lockdown restrictions and the second wave in Victoria.

CORPORATES
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, WESTPAC BANKING CORPORATION – ASX WBC