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5 things you need to know today

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Published on: Wednesday, May 10, 2017

  • Last night, Treasurer Scott Morrison delivered his second Federal Budget. A surplus of $7.4 billion is expected by 2020-21. The major banks and workers were dubbed as some of the 'biggest losers' from the Budget measures. The top five banks were hit with a $6.2 billion tax, to be raised over the next four years, while the Medicare Levy will rise by 0.5 percentage points in July 2019 for workers (except the lowest paid) to fund the NDIS. Read Peter Switzer’s article today for more Budget insights.
  • The Budget decision to slap Australia’s five biggest banks with a $6.2 billion levy over four years has raised concerns about the banks passing on the cost to consumers, and hurting shareholder returns (The Australian). Anna Bligh, the chief executive of the Australian Bankers Association, said that the new levy is a “direct attack on jobs and growth” and a “political tax grab to cover a budget black hole”. Treasurer Scott Morrison said the levy is part of a broader package which plans to improve fairness and accountability. This includes a register for banking executives and increased fines for misconduct. Bank shares fell heavily yesterday on leaked reports about the new bank levy. 
  • Citigroup economist Josh Williamson said the retail sector is “verging on recession”, following yesterday’s lacklustre retail sales figure. Retail trade or sales fell by 0.1% in March after falling 0.2% in February. Retail spending is up 2.1% year-on-year, the weakest growth in almost four years. Retail leaders aren’t using the word recession to describe the retail sector, but say consumers are “watchful” due to concerns including higher household debt, weaker wages growth, and the geopolitical environment. (AFR). 
  • Global oil prices fell 1.2% on Tuesday as investors awaited monthly reports on supply and demand from OPEC and the US Energy Information Administration (EIA) due this week. Brent crude fell US61 cents, or 1.2%, to US$48.73 a barrel, while US Nymex fell US55 cents, or 1.2%, to US$45.88 a barrel.
  • At 0700 AEST on Wednesday, the share price futures index was up 19 points, or 0.33 per cent, at 5,845.

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