DRIVE TO DUMP GOODS TARIFFS; TAX REPRIEVE
Push to dump nuisance tariffs on imported goods
While the United States has been imposing tariffs on imported goods, Australia has been working to remove them. Treasurer Jim Chalmers said the Federal Government was making progress on removing so-called nuisance tariffs, having abolished 500 so far. In a media interview, Dr Chalmers said the government would look to build willingness and consensus within its upcoming economic reform roundtable to remove or cut remaining nuisance tariffs, imposed mostly on household goods. He said the tariffs were essentially a tax on workers and families, pushing up compliance costs on business.
RBA warns on low productivity, labour constraints
Australia’s central bank has warned that sluggish productivity and labour constraints continue to weigh on the domestic economy. The Reserve Bank of Australia monetary policy board said that growth in labour unit costs remained high, and availability of workers remained a constraint for a range of employers. The RBA noted that inflation was easing, but international trade policy developments were likely to have an adverse effect on global economic activity, with a risk that businesses and households delayed expenditure. While acknowledging the economic uncertainty, the RBA board reduced the cash rate to 3.6 per cent.
Chalmers knocks out any changes to CGT, negative gearing
Ahead of tax discussions at this week’s economic reform roundtable, Treasurer Jim Chalmers has quashed any suggestions of major tax reforms in the housing area. Dr Chalmers ruled out any taxation of the family home, saying that it was a reform that no sensible government would touch. He also said that the government had not changed its position or policy on negative gearing, despite public approaches to do so. The Treasurer also ruled out changes to the capital gains tax on housing investments.
Australian governments united on tariffs, free trade
Federal, state and territory trade and investment ministers from around Australia have committed to free trade and a strengthening of the nation’s anti-dumping regime. Meeting in Darwin, the Ministerial Council on Trade and Investment acknowledged that tariffs harmed domestic economic competitiveness and were a recipe for slower growth and higher inflation. The national forum committed to advancing an Australia-European free trade agreement, with stronger market access for Australian agriculture. It also supported a review of the Australia-China free trade agreement, and continued discussions towards concluding closer economic ties with India.
Public sector wages outpacing private industry
Wages growth has continued to outstrip the rate of inflation in Australia, with wages rising by 3.4 per cent over the year to June 30. Latest figures from the Australian Bureau of Statistics’ Wage Price Index show that wages in the private sector rose by 3.4 per cent, but by 3.7 per cent in the public sector over the 12 months to June. Annual wages growth over the past 15 years peaked at 4.2 per cent in the December quarter of 2023. On an industry basis, wages in electricity, gas, water and waste services – dominated by the public sector – rose by the highest rate, at five per cent, while finance and insurance services recorded the lowest growth, of 2.6 per cent. Headline inflation was measured by the Consumer Price Index at an annual rate of 2.1 per cent in the same 12-month period.
Unemployment eases in July
Australia’s rate of unemployment bucked the recent jobless trend in July, falling from 4.3 to 4.2 per cent seasonally adjusted. The Australian Bureau of Statistics previously reported that unemployment had been steadily rising in recent months since hitting four per cent in December last year. Unemployment rates, however, varied widely across Australia in July: Victoria’s jobless rate rose to 4.6 per cent, while Tasmania recorded the lowest rate of unemployment at 3.8 per cent. In New South Wales, Australia’s largest economy, the monthly unemployment rate fell to four per cent.