RETAIL SALES RECOVER; KIWI RETURN
Retail sales on the recovery path
Retail sales in Australia are rising again, increasing 1.3 per cent seasonally-adjusted in the month of September, according to ABS figures. Lockdowns in NSW, Victoria and ACT, however, contributed to a 4.4 per cent drop in retail turnover over the September quarter. The latest monthly national increase was achieved despite falls in retail sales of 2.1 per cent in Victoria and 12 per cent in the ACT. Meanwhile, total online retail sales rose 3.4 per cent for the month, with September sales at $4.3 billion – seasonally-adjusted more than double the level of pre-pandemic figures.
Kiwi visitors returning to Australia
Quarantine-free arrivals from New Zealand into Australia have recommenced from 1 November, re-opening one of the nation’s most popular international travel routes. Visitors who produce a negative Covid-19 test, and with the approved vaccination, can enter Australia without quarantine. Trade and Tourism Minister Dan Tehan said that pre-Covid, in 2019, Australia hosted 1.43 million visitors from NZ, spending $1.6 billion in the domestic economy. Mr Tehan also said the number of Australian passport applications had spiked in October, with more than 102,000 applications up almost 25 per cent on September figures; there was also strong demand for the international Covid-19 Vaccination Certificate, with more than 700,000 certificates generated in less than two weeks.
Federal Budget position ahead of expectations
Statements for the first quarter of the 2021-22 financial year have revealed that Australia’s budgetary position was tracking ahead of Treasury estimates. Figures released by the Minister for Finance, Simon Birmingham, show that the underlying cash balance (deficit) was almost $8 billion lower than expectations to the end of September. The report takes into account the Federal Government’s response to the Delta outbreak from July, with total payments so far almost $12 billion up on expectations. Total income tax revenue for the three-month period, however, was almost $18 billion ahead of expectations, reflecting a more resilient economic performance.
RBA plays down inflation fears
Reserve Bank of Australia Governor Philip Lowe has moved to quash fears of rising inflation, saying that the RBA would not increase the cash rate until actual inflation was sustainably within the 2-3 per cent target range. In a statement on monetary policy Dr Lowe said last quarter’s headline Consumer Price Index rate of three per cent was being affected by higher fuel prices, higher prices for newly-constructed houses and disrupted global supply chains. Sustained higher inflation would also rely on a tighter labour market to generate wages growth.
Iron ore price slide hits trade surplus
Australia’s monthly trade surplus in September fell for the first time in six months, as the value of exports decreased six per cent through a decline in iron ore prices. The Australian Bureau of Statistics reported that the nation’s trade surplus, which has remained buoyant during Covid-19, fell almost $2.5 billion to $12.2 billion. Monthly imports fell two per cent, attributable to global supply chain constraints. Trade in services, however, registered a small increase through a rise in transport and travel services.
Move for uniform global company tax rate
Prime Minister Scott Morrison has joined with other leaders of the G20 nations to endorse a range of tax reforms in the Organisation for Economic Co-operation and Development (OECD), including a minimum corporate tax rate of 15 per cent. Under the reforms, OECD members agreed to a new tax system to help ensure that multinationals paid their fair share of tax globally and in Australia. Treasurer Josh Frydenberg said the reforms would put a floor on the ‘race to the bottom’ on corporate tax rates and would support the domestic and global economy. Australia’s corporate tax rate stands at 30 per cent, with a reduced rate for eligible small businesses.