FISCAL POLICY – AUSTRALIA

Decade of despair: 10 giant surpluses needed to wipe debt

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Original article by David Uren
The Australian – Page: 1/ & 6 : 12-Jul-16

A report produced by Tony Makin and Julian Pearce of Griffith University highlights the challenge confronting the Australian Government in reining in the national debt. They estimate that it would need to achieve surpluses equivalent to 2.2 per cent of GDP each year over the next decade in order to eliminate net debt. This is much higher than the average surpluses achieved by the Coalition government of John Howard and the Labor governments of Bob Hawke and Paul Keating.

CORPORATES
GRIFFITH UNIVERSITY, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY

AAA: Six months to get budget under control

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Original article by Jacob Greber, Phillip Coorey
The Australian Financial Review – Page: 1 & 6 : 8-Jul-16

Treasurer Scott Morrison says the Federal Government will still aim to achieve a Budget surplus in 2020-21, in order to avert the loss of Australia’s coveted triple-A credit rating. Standard & Poor’s has downgraded the nation’s credit rating outlook to "negative" and warned that it will closely monitor the government’s fiscal performance over the next 6-12 months. The ratings agency also indicated that Australia’s "AAA" rating may be at risk due to the nation’s rising foreign debt.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, STANDARD AND POOR’S CORPORATION, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY, AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSION, AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY, WESTERN AUSTRALIA. DEPT OF THE PREMIER AND CABINET

Hung parliament lifts risk of credit downgrade

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Original article by David Uren
The Australian – Page: 1 & 4 : 5-Jul-16

Standard & Poor’s is tipped to review Australia’s "AAA" credit rating in the wake of the federal election. S&P has indicated that the nation’s credit rating may be downgraded unless the next government can implement measures to reduce the Budget deficit. Fitch Ratings has also warned of the potential for a downgrade if a hung parliament results in policies that further increase the deficit. However, Moody’s notes that Australia’s government debt remains much lower than the majority of developed economies.

CORPORATES
STANDARD AND POOR’S CORPORATION, FITCH RATINGS LIMITED, MOODY’S INVESTORS SERVICE INCORPORATED, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, RESERVE BANK OF AUSTRALIA

Labor admits bigger deficits prompting AAA warnings

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Original article by Phillip Coorey
The Australian Financial Review – Page: 4 : 9-Jun-16

The Federal Opposition has conceded that the budget deficit will increase over the next four years under its 10-year economic plan. However, it expects to eliminate the deficit in 2020-21, and argues that its policies will have a much greater net benefit to the budget bottom line over a decade than the Australian Government’s plans to reduce the company tax rate. Finance Minister Mathias Cormann has warned that the Opposition’s higher deficit over the next four years could jeopardise Australia’s triple-A credit rating.

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

Labor plan would blow out deficit

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 8-Jun-16

The Australian Government’s proposal to progressively reduce the company tax rate to 25 per cent is a key element of its 10-year economic growth plan. The Opposition will release its own 10-year economic growth strategy on 8 June 2016, which is expected to include an increase in the Budget deficit over the next four years before a return to surplus within a decade. Labor will also announce policies such as welfare reforms and changes to the national broadband network.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, LIBERAL PARTY OF AUSTRALIA, ESSENTIAL MEDIA COMMUNICATIONS PTY LTD

Stop digging, we’re deep enough in this fiscal hole

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Original article by Judith Sloan
The Weekend Australian – Page: 24 : 21-May-16

The Australian Government’s policies means the nation faces cumulative budget deficits of $A85bn over the next four years, although this is based on GDP and revenue projections that are unlikely to be realised. The May 2016 Budget papers also show that the deficit will blow out to $A584bn in 2019-20, compared with $A499bn in 2016-17. Australia is almost certain to lose its triple-A credit rating long before 2025-26, when the deficit will top $A647bn. However, the Australian Labor Party’s election policies would ensure that the Budget is even worse off than under a Coalition government.

CORPORATES
AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN GREENS, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, COUNCIL OF AUSTRALIAN GOVERNMENTS

Labor to revive 12 per cent super guarantee

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Original article by Phillip Coorey
The Australian Financial Review – Page: 4 : 11-May-16

Shadow treasurer Chris Bowen has told the National Press Club that the Australian Labor Party will act quickly to release a mini-Budget if it wins the federal election on 2 July 2016. He also indicated that Labor will reinstate plans to lift the employer superannuation contribution to 12 per cent. The Australian Government put this policy on hold after abolishing the mining tax. The super guarantee has been increased from nine per cent to 9.5 per cent, but at present it is not slated to rise to 12 per cent until 2025.

CORPORATES
AUSTRALIAN LABOR PARTY, NATIONAL PRESS CLUB (AUSTRALIA)

Tables turn: Now Labor promises to protect AAA rating

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 10-May-16

Shadow treasurer Chris Bowen will address the National Press Club on 10 May 2016, where he will deliver his reply to the Australian Government’s Budget. Bowen will indicate that if the Opposition wins the federal election it will release the mid-year budget update by October, rather than in December. He will stress the need to reduce the Budget deficit in order to ensure that Australia retains its coveted triple-A credit rating. He will also question the merits of the Government’s proposal to progressively reduce the corporate tax rate.

CORPORATES
AUSTRALIAN LABOR PARTY, NATIONAL PRESS CLUB (AUSTRALIA), AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, MOODY’S INVESTORS SERVICE INCORPORATED, STANDARD AND POOR’S CORPORATION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA

Ratings groups keep their powder dry

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Original article by Jacob Greber
The Australian Financial Review – Page: 3 : 5-May-16

Rating agencies Standard & Poor’s and Moody’s will assess the Australian Government’s May 2016 Budget before deciding whether to review the nation’s coveted "AAA" credit rating. National Australia Bank’s Alan Oster says the Budget measures should be sufficient to avoid a ratings downgrade, but adds that Australia’s credit rating outlook could potentially be revised. Meanwhile, Moody’s forecasts 3.7 per cent growth in nominal GDP in 2016-17, while the Treasury expects 4.25 per cent growth.

CORPORATES
STANDARD AND POOR’S CORPORATION, MOODY’S INVESTORS SERVICE INCORPORATED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. DEPT OF THE TREASURY, TD SECURITIES, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, DEUTSCHE BANK AG

Budget to reopen uni fees fight

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 6 : 29-Apr-16

The Australian Government’s May 2016 Budget will include the deregulation of university fees. However, fees may be capped rather than allowing universities to set their own fees. The Senate rejected the Government’s previous attempt to fully deregulate higher education fees, which was a key initiative in the highly unpopular 2014 Budget. The Budget will also include reduced funding for schemes such as the Higher Education Participation & Partnerships Program and the Promoting Excellence in Learning & Teaching in Higher Education program.

CORPORATES
AUSTRALIA. DEPT OF EDUCATION AND TRAINING, AUSTRALIAN LABOR PARTY, UNIVERSITY OF TASMANIA