GRACosway Weekly Wrap Up

2 June 2017
The Coalition entered the week trailing Labor in the most recent Newspoll, 47 to 53 per cent on a two-party preferred (2PP) basis – an unchanged result from previous polling in mid-May. Both the Government and Labor’s primary vote has remained constant on 36 per cent each, while 28 per cent of voters signalled their preference for minor parties. A special poll revealed 85 per cent of voters want the Government’s $6.2 billion bank levy to be extended to apply to foreign financial institutions operating in Australia. Introduced to Parliament this week, the bank levy legislation prescribes a quarterly tax rate of 0.015 per cent, preventing moves to increase the rate without parliamentary support.

Prime Minister Malcolm Turnbull defended recent Budget tax measures in a keynote address to the Committee for Economic Development of Australia (CEDA) 2017 State of the Nation Conference this week, citing “unsustainable deficits and mounting debt” as the impetus for the reforms. He indicated government spending will fall to 25 per cent of GDP by 2019/20, while average real growth in spending under the current Government is presently lower than the average recorded for the previous five governments. In his own address, Treasurer Scott Morrison echoed Mr Turnbull’s reference to restrained real growth in spending and commended the Government’s “restraint and discipline.”

The Prime Minister visited Singapore this week to hold annual leaders’ talks with Singaporean Prime Minister Lee Hsien Loong, and delivered a keynote address at the opening of the 16th Shangri-La Dialogue – the largest Indo-Pacific annual gathering of defence ministers, defence force chiefs and security officials. Mr Turnbull outlined the Australian Government’s vision for a stable region and emphasised the value of open economies. See the media release here.

In international news, United States President Donald Trump has announced the US will withdraw from the 2015 Paris climate agreement, a UN accord signed by nearly 200 countries, including Australia. Mr Trump indicated his Government would begin negotiations to re-enter the arrangement or draw up a new agreement “on terms that are fair to the United States, its businesses, its workers, its people, its taxpayers.” At home, Minister for the Environment and Energy Josh Frydenberg has re-stated Australia’s commitment to the agreement, while saying the announcement will not affect US-Australia relations. See the media coverage here.

Queensland Premier Annastacia Palaszczuk has reached a royalties agreement regarding the proposed $16.5 billion Adani Carmichael coalmine. Under the agreement, Adani will reportedly pay an annual flat royalty rate of $5 million for five years, with any deferred royalties paid with interest. The Premier indicated the agreement is about “delivering jobs” and using the royalties for investment in “frontline services, infrastructure and renewables”. Queensland Treasurer Curtis Pitt has written to Federal Resources Minister Matt Canavan, confirming that the State Government will facilitate any loan payments made between the Commonwealth and Adani under the Federal Government’s Northern Australia Infrastructure Facility (NAIF). See the media coverage here.

NSW Premier Gladys Berejiklian has announced a package of reforms to improve housing affordability for first home buyers. Key features of the package include the abolishment of stamp duty on homes up to $650,000; stamp duty relief for properties up to $800,000; and $10,000 grants for builders and purchasers of new homes under certain thresholds. Additionally, the package abolishes insurance duty on lenders’ mortgage insurance; requires foreign investors to pay higher duties and land tax; and abolishes investors’ deferral of stamp duty payments on off-the-plan purchases. See the media release here.

The Victorian, ACT and Tasmanian parliaments sit next week.

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