Business to PM: Get economy moving

Original article by John Kehoe
The Australian Financial Review – Page: 3 : 20-Dec-19

The Business Council of Australia has called on the federal government to maintain its surplus goal as part of its Budget submission. The BCA has urged the government to help stimulate the economy through the adoption of an investment allowance, reducing red tape for infrastructure projects, and by making structural changes to the tax system over the longer-term. The BCA’s submission also calls for measures to boost workers’ skills, along with a new industry policy.

CORPORATES
BUSINESS COUNCIL OF AUSTRALIA, WOODSIDE PETROLEUM LIMITED – ASX WPL

Surplus to survive $30bn blow

Original article by Simon Benson
The Australian – Page: 1 & 4 : 16-Dec-19

The federal government’s mid-year economic and fiscal outlook is forecast to confirm that the Budget will remain in surplus for the next four years. However, government revenue is expected to be up to $30bn lower than projected in the 2019 Budget, due to expectations that global and domestic economic growth will be lower than was forecast in April. Growth in wages is also expected to be lower than was forecast in the Budget. Meanwhile, the government is expected to maintain its forecast that the price of iron ore will average $US55 a tonne in 2019-20, even though it is significantly higher at present.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FINANCE, DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIAN LABOR PARTY

Federal budget could be set for $30b boost: CBA

Original article by Matthew Cranston
The Australian Financial Review – Page: 8 : 12-Dec-19

The Commonwealth Bank has upgraded its federal Budget surplus forecasts. Chief economist Michael Blythe says the surplus for fiscal 2020 is now likely to be $17.1bn rather than $7.1bn, while the surplus for the following year is set to be $19.1bn rather than $11bn. Blythe adds that factors such as strong jobs growth and the low inflation rate will boost the Budget bottom line by about $30bn over the next four years. He notes that government revenue will also be bolstered by a much higher iron ore rice than was forecast in the April 2019 Budget.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, S&P GLOBAL RATINGS

RBA chief has confidence in consumers

Original article by David Rogers, James Glynn
The Australian – Page: 23 : 11-Dec-19

George Tharenou of UBS says the Reserve Bank of Australia is likely to reduce the cash rate twice in the first half of 2020, to a record low of 0.25 per cent. He adds that the federal government’s mid-year Budget update is unlikely to include any "material" fiscal stimulus. Meanwhile, RBA governor Philip Lowe concedes that it is taking longer than usual for consumers to spend the extra cash from the three interest rate cuts in 2019 and the federal government’s income tax offset. However, he expects consumer spending to increase.

CORPORATES
RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD

Slide in wages could risk tax cuts, surplus

Original article by Matthew Cranston
The Australian Financial Review – Page: 9 : 10-Dec-19

The Wage Price Index growth rate for 2019-20 is forecast to be 2.75 per cent, but wages increased by just 2.2 per cent in the September quarter. Westpac economist Bill Evans expects the federal government to downgrade its wage growth forecast in the mid-year budget update; he warns that this in turn may affect the size of the surplus and the Coalition’s ability to bring forward the second stage of its income tax cuts package. Evans notes that the price of iron ore is trading well above the government’s forecasts, which will help offset any revenue shortfall from slowing wages growth.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, DELOITTE ACCESS ECONOMICS PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, AUSTRALIA. DEPT OF FINANCE

PM wins an AAA-rating for his responsible approach to stimulus

Original article by Patrick Commins
The Australian – Page: 6 : 28-Nov-19

S&P Global Ratings has praised the federal government’s commitment to a balanced Budget rather than pursuing stimulus measures. The ratings agency has warned that any fiscal stimulus that led to a change in the trajectory of the Budget could jeopardise Australia’s coveted triple-A credit rating. Anthony Walker, S&P’s director of sovereign ratings, has also warned that fiscal stimulus is likely to affect the nation’s ability to respond to future unforeseen economic shocks.

CORPORATES
S&P GLOBAL RATINGS, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, RESERVE BANK OF AUSTRALIA

Tax breaks to fast-track big projects

Original article by Simon Benson
The Australian – Page: 1 & 6 : 14-Nov-19

The federal government will provide a concessional tax rate of 15 per cent for foreign investments in qualifying infrastructure projects that are worth more than $500m. This will include ­energy, transport, water and communications projects. Meanwhile, Treasurer Josh Frydenberg will use the Sir John Downer Oration in Adelaide on 14 November to urge greater co-operation between the federal and state governments to address inefficiencies in the economy. He will also stress the need for responsible fiscal management.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY

Fast-track personal tax cuts: banks

Original article by John Kehoe
The Australian Financial Review – Page: 5 : 7-Nov-19

The second stage of the federal government’s income tax package is slated to take effect in mid-2022. However, Westpac’s chief economist Bill Evans has urged the government to begin phasing in the tax cuts from July 2020 to boost consumer spending and stimulate the economy. Commonwealth Bank economist Gareth Aird also argues that the government should bring forward some of the legislated tax cuts. Shadow treasurer Jim Chalmers says Labor has been advocating this for months.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY

Monetary policy beats fiscal stimulus

Original article by Matthew Cranston
The Australian Financial Review – Page: 4 : 24-Oct-19

Treasury secretary Steven Kennedy is upbeat about the outlook for the Australian economy. He has told the Senate estimates committee that the economy is growing ‘modestly’ and it should continue to strengthen. Kennedy also contended that monetary policy is still a better option for boosting economic growth than fiscal stimulus. He also stressed the need for structural reform and an increase in labour productivity.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. SENATE STANDING COMMITTEE ON ECONOMICS, RESERVE BANK OF AUSTRALIA

Global risks high, but Fed will avert recession

Original article by David Rogers
The Australian – Page: 25 : 23-Oct-19

Northern Trust’s chief economist Carl Tannenbaum expects the US Federal Reserve to reduce official interest rates in late October. Financial markets anticipate more monetary policy easing, but Tannenbaum says the Federal Reserve will put further rate cuts on hold. He is also confident that interest rate cuts will enable the US economy from going into recession. Tannenbaum has also questioned whether the Australian government should still be focusing on returning the Budget to surplus in an environment of low interest rates and a slowing Chinese economy.

CORPORATES
NORTHERN TRUST CORPORATION, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT