Today's News - Thursday 2 July 2020
Today's News - Thursday 2 July 2020
Our Backyard
The cost of fresh food, healthcare, education and childcare could increase under a bold plan to overhaul the tax system. The New South Wales Review of Financial Relations has released its draft today with 15 recommendations, after it was ordered by NSW Treasurer Dominic Perrottet last year. The major overhaul may see the GST increase or be extended to other areas. To pass, it would require unanimous support from Federal and State Governments. Today's report outlining the proposal also suggests replacing stamp duty with land tax.
The website for the Australian Tax Office (ATO) has crashed due to high demand on the first day of the 2020-21 financial year. Apologising for the inconvenience, the ATO said the site was "currently experiencing a high volume of traffic". It appears only the page where returns are lodged is out of operation, with other pages on the ATO's website still running as normal.
The Consumer Data Right, which launched yesterday, will allow customers of the large four banks open access to their transactions, with smaller banks expected to follow suit in the next 12 months. From November 1, customers will also be able to access and share their mortgage, personal loan and joint account data. This access, and the ability to share it with other banks and budgeting tools, is expected to allow Australians to compare and switch between services with more ease and encourage competition between service providers – which should lead to better prices. Customers can compare and contrast themselves or use accredited financial technology companies to make decisions. Nearly 40 of these companies are in the process of being accredited for the program by the ACCC.
NAB will "mothball" two major office towers for the foreseeable future, including its Melbourne Docklands headquarters, as Victoria faces increasing restrictions amid a possible second outbreak of coronavirus. The bank notified staff on Wednesday that from July 14 it would indefinitely stop using its Docklands offices at 700 Bourke Street and 800 Bourke Street, known as the Rubik's Cube due to its colourful exterior. The two buildings house a large proportion of NAB's 34,000 strong workforce. All staff who have been working out of those two buildings in recent weeks have been asked to relocate to the bank's older office tower at 500 Bourke Street in the Melbourne CBD. The vast majority of large companies have asked staff to work from home where possible for public health reasons. NAB is believed to be the first major Australian employer to mothball a large tenancy to save on costs such as electricity, cleaning and security. It is still paying rent.
Suncorp Group chief executive Steve Johnston is moving to put his stamp on the financial conglomerate, unveiling a restructure that will result in the departure of insurance boss, Gary Dransfield. Mr Johnston also reiterated he had no plans to sell Suncorp's banking arm, despite some market calls for it to be divested, as he announced Commonwealth Bank executive Clive van Horen had been poached to run the bank. Suncorp on Wednesday said it was adopting a new operating model and leadership structure aimed at improving performance and speeding up its digital transformation.
Global property group Lendlease is showing significant cracks from the COVID-19 pandemic, issuing a warning it could book a full-year loss of between $230 million to $340 million across its three key businesses. The group said profit after tax and before one-off pandemic-related costs would be between $50 million to $150 million, which is sharply down on the $497 million profit booked for the same time last year. However, it said there were signs of green shoots, with new projects such as the $22 billion Google project in San Francisco moving to the next development phase. Lendlease chief executive Steve McCann said it had been a tough year across all three business platforms - development, construction and investment- "and clearly COVID's had a significant impact".
Scott Morrison “deliberately” drew on wartime language as he announced a new $270 billion plan over the next decade to boost Australia’s defence. Speaking from Canberra today, the Prime Minister outlined the nation’s plan to build up the Australian Defence Force and move to a greater focus on its efforts on the Indo-Pacific region. He warned that we need to prepare for a “more dangerous” world after the COVID-19 pandemic, adding that “we will never surrender” our freedoms.
A last minute union attempt to forestall cuts to weekend penalty rates for shop staff has failed. The national industrial tribunal on Wednesday rejected a bid by the Shop, Distributive and Allied Employees Association to push back a final 15 percentage point cut to Sunday penalty rates until workers in the sector get a minor boost to their minimum wage in February. The cuts, which will affect the more than 240,000 shop workers who do Sunday shifts, are the final tranche of a set of cuts to equalise Saturday and Sunday penalty rates that the Fair Work Commission decided in 2017.
Low-paid workers in industries including cleaning and security who lose their jobs when their indirect employers like hospitals and shopping centres change contractors are entitled to redundancy pay under a new court ruling. The Federal Court on Wednesday ruled against an appeal from cleaning services giant Spotless, which had lost two large contracts and laid off staff in without making redundancy payments after losing two major contracts in 2014 and 2015. Ordinarily workers get redundancy pay that starts at four weeks' wages and can reach 16 weeks under the default employment standards if their job is no longer required. But contracts for building services like cleaning and security change hands regularly as building owners search for cheaper providers.
Oil Search on Wednesday said it would reduce its total workforce by more than 550 full-time jobs – cutting employee numbers from 1649 to 1222 immediately with a further 137 positions to be culled by December. The head of Australian-listed energy producer Oil Search said the axing of one in three workers was a painful but necessary decision in order to ride out a prolonged period of devastation facing the global oil and gas industry.
Major hardware chain Bunnings is dumping Victorian native timber products from its shelves after the Federal Court ruled timber was felled illegally, putting dozens of jobs in jeopardy. In late May, the court ruled the state-owned VicForests had breached laws governing timber harvesting and ordered a stop to logging in several regions. The Victorian timber industry has been decimated in the past year with the Andrews Government's policy phasing out native-timber logging by 2030. VicForests says the decision could put 170 jobs at risk.
Federal Labor leader Anthony Albanese says the party will restore $84 million cut from ABC funding if it wins the next federal election. His comments came after the ABC announced it would cut up to 250 jobs to deal with the budget shortfall. The Coalition says there has been no funding cut and the ABC's budget is increasing.
A royal commissioner has said it is "breathtaking" that despite community confusion over the meaning of the Watch and Act bushfire alert, it is not expected to be updated for another two years. The bushfire royal commission has previously heard evidence that the Watch and Act direction was difficult for people in a fire zone to understand, because it gave conflicting instructions, to observe the fire and take action to leave. Research on the advice warnings is underway and the results will be implemented by 2022. Work is also underway to make the advice levels nationally consistent.
A team of more than two dozen South Australian nurses and paramedics is heading to Victoria to help fight a series of coronavirus outbreaks in suburbs across Melbourne. In total, 29 clinicians have flown out for Melbourne amid warnings from Victorian Premier Daniel Andrews that the entirety of the eastern state may have to go into a renewed coronavirus lockdown if the number of COVID-19 cases there continues to rise. A further 20 South Australian contact tracers will help investigate the Melbourne outbreaks, but remain in Adelaide.
Target is shutting its doors at another one of its sites, adding to the long list of closures announced earlier in the year. The store in Adelaide’s western suburb Fulham Gardens will shut next month, according to reports from The Advertiser, making way for a Woolworths, Dan Murphy’s and a variety store.
A major blackout saw a Northern Territory town without power for 17 hours, leaving businesses reeling from a loss of stock and residents frustrated at a lack of communication from mining firm Rio Tinto. Nhulunbuy MLA Yingiya Guyula called on the mining giant to "provide compensation for loss of income" to businesses hit hard by last week's power outage in Nhulunbuy and nearby Indigenous communities. Business owners say they have lost thousands of dollars due to recent blackouts.
A teenage girl has died after she was hit by a bus on the NSW south coast yesterday afternoon. Emergency services were called to South Street, Ulladulla, following reports a child had been hit by a bus outside a school, NSW Police said.
Severe weather warnings are in place for much of South Australia and parts of Victoria. A pair of powerful cold fronts is also leaving south west Western Australia windy and wet. These cold fronts are moving across the Great Australian Bight towards the south east. Ahead of these systems it is unseasonably warm with parts of the New South Wales coast seeing maximums of 20C – that’s 5C above average for midwinter.
World News
Nineteen people are dead and six injured after an explosion at a medical clinic in the north of the Iranian capital Tehran. A gas leak at the Sina Athar Clinic caused the blast, which then led to a fire, Tehran Deputy Governor Hamid Reza Goudarzi told state television. There were 25 employees inside the clinic when the explosion happened. Fifteen women and four men have been confirmed dead. This is the second gas explosion around the capital, Tehran, in the past week.
https://www.abc.net.au/news/2020-07-01/iran-gas-explosion-kills-19/12409092
Israeli Prime Minister Benjamin Netanyahu has signalled he will delay annexing parts of the West Bank as the country grapples with rising coronavirus infections and reports of hesitation in Washington about the plan. Netanyahu had previously named July 1 as the date when Israel would begin building settlements in the West Bank under Israeli sovereignty. But according to Israeli state broadcaster Kan, the Prime Minister hinted to his fellow Likud MPs that annexation would be delayed.
Chinese-Australians accused of subversion or secession activities in Australia such as pro-democracy rallies are likely to come under the microscope of authorities if they attempt to return to Hong Kong. Article 38 states the law will apply to "offences under this law committed against the Hong Kong Special Administrative Region from outside the region by a person who is not a permanent resident of the region". The law is broad enough to apply to all Australians but in practice is likely to only apply to those with Chinese heritage.
Yesterday it was revealed Chinese researchers had found a new and concerning strain of swine flu. Named genotype 4, or G4, it is genetically descended from the H1N1 swine flu strain that caused a pandemic in 2009. It possesses “all the essential hallmarks of being highly adapted to infect humans,” said scientists at Chinese universities and China’s Centre for Disease Control and Prevention. Over a period of seven years, researchers took thousands of swabs from pigs in slaughterhouses in Chinese provinces and a veterinary hospital, allowing them to isolate 179 swine flu viruses. The G4 virus was observed to be highly infectious, replicating in human cells and causing more serious symptoms in ferrets – which experience similar symptoms to humans – than other viruses. Tests also showed that any immunity humans gain from exposure to seasonal flu does not provide protection from G4. Already one-in-10 people who worked with pigs in China are said to have contracted G4.
An elite German commando sub-unit will be disbanded after an investigation found it had a culture of far-right extremism. The move came after a May police raid in which weapons, explosives and ammunition were seized from the home of a KSK regiment soldier in the eastern state of Saxony. Military investigators began looking into the unit in 2017, after reports of a party where members of the regiment gave Hitler salutes and listened to right-wing extremist music. A KSK captain had written to Germany's Defence Minister, asking her to intervene. The country is trying to stem a rise in violent far-right ideology.
Social media giant Facebook has banned a network of the far-right "boogaloo" activists as it also pledges to audit its hate speech controls in response to a high-profile advertising boycott from companies including Starbucks and Coca-Cola. The company said had removed 220 Facebook accounts, 95 Instagram accounts, 28 Pages and 106 groups that that comprise the violent boogaloo-affiliated network. YouTube this week banned a number of high-profile white supremacist figures from its platform.
Belgium's King has expressed regret for the violence carried out by the country when it ruled over what is now Congo. Later in the day, the bust of a former monarch held responsible for the death of millions of Africans was taken off public display. As Belgium marked the 60th anniversary of the end of its colonial rule in Congo, King Philippe became its first monarch to express remorse over the bloodshed. King Leopold II is estimated by some historians to have been responsible for the deaths of 10 million Congolese. King Philippe's apology and the removal of Leopold's statue came as Congo marked the 60th anniversary of its independence.
The European Union's bid to make a free trade agreement with Australia conditional on Canberra taking tough action on climate change has been undermined by a new report which warns the bloc is "not on track" to meet its own emissions reduction commitments. Fresh analysis by the EU's statistics agency found the 27-nation group might not achieve its target of cutting pollution by 40 per cent by 2030 unless extra measures are enacted to accelerate the pace of progress.
Harvey Weinstein and his former studio’s board have reached a nearly $US19 million ($28 million) settlement with dozens of his sexual misconduct accusers, New York state's Attorney-General and lawyers in a class-action lawsuit said. The agreement was announced by New York Attorney-General Letitia James and Chicago attorney Elizabeth A. Fegan. The deal, if approved by judges in federal courts, would permit accusers to claim from $US7500 to $US750,000 from the $US18.8 million settlement.
Covid-19 news
One in ten Melburnians in COVID-19 hotspot suburbs are still refusing to be tested as the state prepares for a new lockdown from midnight this morning. Acting chief medical officer Paul Kelly confirmed the surprisingly large number of residents declining to take the free tests again today. And he’s revealed one of the groups that are refusing testing are parents who don’t want their kids tested despite less invasive saliva tests being offered in Victoria.
Moreover, Victorians from coronavirus hot spot suburbs will face fines of up to $11,000 or possible jail time if they enter NSW from midnight this morning.
Australia’s acting chief medical officer has downplayed fears of a “second wave” of coronavirus after Victoria recorded the single largest increase of community transmissions in 24 hours since the COVID-19 pandemic began. Another 20 cases with no identified source were diagnosed yesterday in the state, taking the total number of cases contracted through community transmission to 301. It comes as 73 new coronavirus cases were diagnosed in Victoria overnight, with about 300,000 residents living in hot spots around Melbourne set to go into lockdown from midnight in an attempt to flatten the curve.
- Global tourism revenues are expected to fall by up to $3.3 trillion due to COVID-19 restrictions, with the United States standing to lose the most, according to a UN study. The 'COVID-19 and Tourism' report released by The United Nations Conference on Trade and Development (UNCTAD) is based on three scenarios for the industry — they relate to lockdown measures lasting either 4, 8 or 12 months. In those scenarios, revenues would fall $US1.17 trillion, $US2.22 trillion and $US3.3 trillion respectively, or between 1.5 to 4.2 per cent of the world's gross domestic product (GDP).
- A groom has died and more than 100 guests tested positive for coronavirus after a wedding turned into a super-spreader event in India's eastern state of Bihar, local media reported. The man, said to be a software engineer working near the capital New Delhi, reportedly had symptoms of the virus before the wedding ceremony on June 15 and he died in the days after the wedding.
- The mayor of a Colombian town has been praised after he turned his own son, nephew and a close friend in to the police for breaking a curfew imposed to curb the spread of coronavirus. There have been more than 95,000 confirmed cases of the virus in Colombia and more than 3,300 people have died.
- Anti-vaccine protesters have taken to the streets of Johannesburg to voice their concern over Africa's first human trials for a potential coronavirus vaccine. Last week, the University of the Witwatersrand in partnership with Oxford University rolled out South Africa's first clinical trial, which will consist of 2,000 volunteers.
- Northern Ireland's first minister Arlene Foster has called on her deputy to apologise for undermining coronavirus restrictions at the funeral of a member of her Sinn Fein party and ex-Irish Republican Army (IRA) prisoner which attracted large crowds. The Northern Ireland Government, led by Sinn Fein and its rival Democratic Unionist Party (DUP), allowed up to 30 people at funerals from Monday, including some friends but only when no household or family members of the deceased were there.
- There are no commercial flights to Timbuktu, whose remote location in the Sahara Desert has long made the town's name synonymous with the ends of the Earth. But health officials say the global pandemic has managed to reach there all the same. Already there are more than 500 cases including at least 9 deaths, making it Mali's largest outbreak outside the capital of Bamako.
- Wigan, the 2013 FA Cup winners now in the English second division, have entered bankruptcy protection due to the financial impact of the coronavirus pandemic, and only a month after being taken over by a Hong Kong-based consortium. The northern English club is currently 14th in the League Championship with six games remaining of the season.
Property News
The real estate trust sector’s new kid on the block, HomeCo, is pivoting into aged care and supermarket-anchored neighbourhood shopping centres, inking $186 million in new deals as it evolves into a full-fledged diversified fund manager. HomeCo, whose hyper-convenience shopping centre model grew out of Woolworths' failed Masters hardware sites, is undertaking a $140 million capital raising and $30 million security purchase plan to fund a series of acquisitions that will flesh out its diversified portfolio and property management platform.
The coronavirus-induced slide in Australian housing values accelerated last month, as more sellers put their homes on the market. CoreLogic's monthly home value index showed a 0.7 per cent fall in values nationally, led by a 0.8 per cent drop in capital city prices. Melbourne and Perth had the biggest property price falls of 1.1 per cent. CoreLogic analyst Eliza Owen says the consensus view is that prices will fall a total of 10pc during the coronavirus recession. Data out this week shows owner-occupiers are picking up a bit of the slack created by investors dropping out of the property market. Credit to owner-occupiers grew by 0.5 per cent in May while loans to investors fell 0.3 per cent. Recent ABS data show first time buyers continue to make up around a third of that owner-occupier home loan demand.
Market News
The S&P 500 and Nasdaq indexes closed higher on Wednesday (US time) to kick off the third quarter as increasing optimism for a safe and effective COVID-19 vaccine eased concerns that another round of business lockdowns was likely. Pfizer's shares rose more than 3 per cent after the drugmaker said a COVID-19 vaccine being developed with German biotech firm BioNTech showed promise and was found to be well-tolerated in early-stage human trials.
The Dow Jones Industrial Average fell 77.91 points, or 0.3 per cent, to 25,734.97, the S&P 500 gained 15.57 points, or 0.50 per cent, to 3,115.86 and the Nasdaq Composite added 95.86 points, or 0.95 per cent, to 10,154.63. It sets up the ASX for gains, with futures at 6.28am AEST pointing to a gain of 41 points, or 0.7 per cent, at the open.
Michael Tran
Director Relationships