FISCAL POLICY – AUSTRALIA

Coalition defuses debt bomb

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Original article by Simon Benson
The Australian – Page: 1 & 2 : 2-Apr-19

Prime Minister Scott Morrison has rejected suggestions that the April 2019 Budget will be a ‘cash splash’ ahead of the federal election, stressing the government’s track record for fiscal discipline. Meanwhile, the Budget papers are forecast to show that Australia’s net debt will be reduced to zero by 2028-29 under the Coalition, compared with $370bn at present. The Budget is expected to remain in deficit for 2018-19, although it is likely to be lower than the $5.2bn that was forecast in the mid-year update. The government is tipped to bring forward the second and third stages of its tax cuts package.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FINANCE, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE, AUSTRALIAN LABOR PARTY, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, AUSTRALIAN FEDERAL POLICE, AUSTRALIAN SECURITY INTELLIGENCE ORGANISATION

$20bn resources boost to budget

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Original article by Simon Benson
The Australian – Page: 1 & 4 : 29-Mar-19

The federal government’s April 2019 Budget bottom line is expected to be boosted by a sharp rise in earnings from resource and energy exports. The value of such exports is forecast to have grown by about $20bn since the December quarter, due to a rise the prices of key commodities. Meanwhile, the Budget is set to include $2.2m worth of additional funding for road safety programs over the next four years, with about half of this to be allocated to regional projects. The government will also establish an Office of Road ­Safety.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, AUSTRALIA. DEPT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT, VICTORIA. DEPT OF PREMIER AND CABINET

PM’s war chest to reach $70bn

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Original article by Simon Benson, David Uren
The Australian – Page: 1 & 4 : 28-Mar-19

The Commonwealth Bank of Australia estimates that the federal government could post a combined surplus of about $60bn between 2019-20 and 2021-22. CBA adds that the government could have up to $70bn at its disposal for spending initiatives during the upcoming election campaign, including scope for up to $6bn in additional tax cuts. Meanwhile, economists at National Australia Bank have flagged the possibility that the Budget will be returned to surplus in 2018-19, which is a year earlier than the government has forecast.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY, DELOITTE ACCESS ECONOMICS PTY LTD

Risky bet tax cuts tip for budget

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 8 : 18-Mar-19

A report from Deloitte Access Economics suggests that there is scope for the federal government to include tax cuts of up to $12bn a year in the April 2019 Budget. The government has previously committed to $144bn worth of personal income tax cuts over six years, and Chris Richardson of Deloitte Access Economics says one option would be to bring forward these tax cuts by three years. Shane Oliver of AMP Capital Investors agrees that the Budget could feature tax cuts, saying it would be unlikely to affect the timing of a return to a surplus.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD, AMP CAPITAL INVESTORS LIMITED, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG

Tax cuts key as economy struggles

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Original article by Adam Creighton, David Uren
The Australian – Page: 4 : 13-Mar-19

The Commonwealth Bank’s chief economist Michael Blythe says the federal government should use its April 2019 Budget to announce more aggressive tax cuts than previously flagged. His view is backed by AMP’s Shane Oliver, who has called for tax cuts worth $6bn for people on low and middle incomes. Blythe has also disputed claims of a ‘per capita’ recession, arguing that key economic indicators suggest otherwise. He adds that despite lower GDP growth in 2018, real net national disposable income per capita increased by 2.1 per cent.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AMP CAPITAL INVESTORS LIMITED, UBS HOLDINGS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA

Budget surplus on track, says Frydenberg

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Original article by Lucas Baird
The Australian Financial Review – Page: 5 : 23-Jan-19

Treasurer Josh Frydenberg remains confident that the federal government will return the Budget to surplus in 2019-20. This is despite domestic and global headwinds, including the International Monetary Fund’s latest downgrade of its global economic growth forecast. Frydenberg also used a Sydney Institute speech to warn that the domestic economy cannot afford Labor’s proposed $200bn package of tax increases. He added that unlike Labor, the Coalition will increase health, education and infrastructure spending without increasing taxes.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, INTERNATIONAL MONETARY FUND, SYDNEY INSTITUTE, AUSTRALIAN LABOR PARTY

Slowdown threatens budget surplus

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Original article by John Kehoe
The Australian Financial Review – Page: 3 : 10-Jan-19

Fitch Solutions has cast doubt upon the federal government’s timetable for a return to a Budget surplus. The government expects a surplus equivalent to 0.2 per cent of GDP in 2019-20, but Fitch has forecast that factors such as slowing economic growth will result in a deficit equivalent to 0.1 per cent of GDP for the financial year. The firm warns that increased government spending and slowing global economic growth will also delay the return to a surplus. Fitch’s forecast of a 2018-19 deficit equivalent to 0.3 per cent of GDP is in line with the government’s projections.

CORPORATES
FITCH SOLUTIONS, FITCH RATINGS LIMITED, AUSTRALIA. DEPT OF THE TREASURY, UBS HOLDINGS PTY LTD, DELOITTE ACCESS ECONOMICS PTY LTD, RESERVE BANK OF AUSTRALIA

PM’s $9.2bn tax cut plan for election

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Original article by Ben Potter, Michael Roddan
The Australian – Page: 1 & 4 : 18-Dec-18

Analysis of the Mid-Year Economic and Fiscal Outlook suggests that the federal government may announce some $9.2bn worth of income tax cuts over four years prior to the 2019 election. The figures for ‘decisions taken but not yet announced’ also suggest that an additional $1.4bn may be set aside for spending that could potentially be directed toward marginal seats. To date, the government has announced policy measures worth around $16bn in total. However, economists have cautioned against committing to expenditure on the basis of revenue gains that may not be sustained.

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

Coalition $30bn in the black

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Original article by Simon Benson, David Uren
The Australian – Page: 1 & 2 : 17-Dec-18

The federal government’s mid-year economic and fiscal outlook is expected to show that increased company tax revenue and reduced spending will result in a Budget surplus of about $4bn in 2019-20, compared with a previous forecast of $2.2bn. The surplus is expected to total $30bn over the next four years, up from the $15.3bn surplus that had been forecast in the May 2018 Budget. Meanwhile, the deficit for 2018-19 could be just $5bn, down from previous expectations of $14.4bn. The mid-year budget update will be released on 17 December.

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

War chest to help schools, hospitals

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Original article by David Uren, Michael Roddan
The Australian – Page: 1 & 4 : 29-Nov-18

Prime Minister Scott Morrison has indicated that an improved Budget position will allow the federal government to increase its investment in essential services. Amongst other things, Morrison has flagged a $37m funding increase for schools over 10 years and an extra $30bn for hospitals over five years. The Budget bottom line has been bolstered by higher revenue, but Martin Whetton of the ANZ Bank says the government may opt to use some of this windfall to finance new spending initiatives in the lead-up to the 2019 election.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN LABOR PARTY, MOODY’S INVESTORS SERVICE INCORPORATED, STANDARD AND POOR’S FINANCIAL SERVICES LLC, AUSTRALIA. DEPT OF THE TREASURY, GROUP OF TWENTY (G-20), FINANCIAL STABILITY BOARD