KIWIS SHAPE UP FOR AUKUS; EXPORT FILLIP
NZ looks at AUKUS technology options
New Zealand is sizing up opportunities to contribute to the three-nation AUKUS defence partnership, through its space and technology sectors. Australian and NZ Defence and Foreign Ministers met on February 1, where the potential for co-operation on Pillar 2 of AUKUS (advanced technologies) was discussed. Defence Minister Richard Marles said Australia, the US and the UK were open to the contributions of other countries, including from the Five Eyes countries, such as New Zealand and Canada. NZ Defence Minister Judith Collins said her country had an active space and technology sector, which assisted “quite a few countries” in the defence sector, such as in the area of telecommunications.
Export prices on the rebound
In a positive indicator for the Australian economy, export prices in key commodities have rebounded strongly, led by higher demand for iron ore, coal and gas. The Australian Bureau of Statistics (ABS) said the export price index rose 5.6 per cent in the December 2023 quarter, while the import price index rose by just 1.1 per cent. For the full year, however, export prices fell by 4.8 per cent and import prices were down by 3.1 per cent. Over the quarter, higher industrial activity in China drove increased demand for Australian iron ore, while rising global steelmaking lifted demand for coal. Rural export prices fell slightly, while surplus global supplies of lithium contributed to a 19 per cent drop in export prices of crude fertilisers and minerals.
Hobart the place for lowest inflation
Official figures for the December quarter have revealed a substantial drop in the rate of inflation, according to the ABS. The Consumer Price Index rose by 4.1 per cent over the 12 months to the end of 2023, well down from the 5.4 per cent CPI increase recorded for the September quarter. Rental and electricity prices, however, both rose by around seven per cent over the year. Annual inflation rose sharply post-Covid, hitting a peak of 7.8 per cent in December 2022. Among Australian cities, Hobart recorded the lowest level of annual inflation, at 3.3 per cent, and Adelaide the highest, at 4.8 per cent, in the latest ABS figures.
Bowen flags new vehicle fuel efficiency standards
Cars and light commercial vehicles imported into Australia will be forced to abide by new vehicle efficiency standards mandated by the Federal Government. Climate Change and Energy Minister Chris Bowen said the proposed standard would deliver cheaper-to-run cars, and push car makers to give Australian motorists more choice of new cars, utes and vans that used less fuel. He said the proposed standard would not apply to used or existing vehicles, and worked by providing car companies with targets for average emissions per kilometre from new vehicles sold. The Minister said the US had a similar standard in place for 50 years; in Australia, the new rules would apply by January 1, 2025.
Employer superannuation tax breaks costing $28 billion - Treasury
Concessional taxation of employer superannuation contributions cost the Federal Budget more than $28 billion annually in forgone revenue, according to Department of Treasury estimates. Rental deductions account for $27.1 billion in forgone revenue, according to the 2023-24 Tax Expenditures and Insights Statement, which analyses the effect of large tax expenditures and deductions. Capital gains tax exemptions for the main residence (including the discount component) collectively amounted to $47.5 billion, while concessional taxation of superannuation entity earnings cost more than $20 billion in forgone revenue. Negative tax expenditures (increased tax payable) were highest for customs duty ($2.16 billion) and the luxury car tax ($1.18 billion), the Treasury paper shows.
PM plays down speculation on negative gearing
Meanwhile, the Prime Minister has hosed down suggestions of reforms to negative gearing rules, amid proposed amendments to the stage-three tax legislation. Anthony Albanese told a media interview that the government was supportive of the current rules, and that negative gearing encouraged investment in housing. He said negative gearing was a “supply measure”, and not about equity, which was addressed through other measures in the tax system.