Today's News - Thursday 9 July 2020
Today's News - Thursday 9 July 2020
Our Backyard
JobKeeper will be extended for businesses shutdown in the wake of the Melbourne lockdowns but the second phase of the scheme will remain “national, not local”. The Prime Minister provided no details today but confirmed any changes to the JobKeeper wage subsidies will not be based on geography. The Morrison Government is currently considering a Treasury report into next steps for the $1500 a fortnight jobs subsidy that was finalised before the latest spike of cases in Melbourne.
Westpac will offer lucrative savings rates to young Australians wanting to save more money to buy their first home. From July 8, the country’s second largest bank will offer an ongoing variable savings rate of 3 per cent to people under the age of 30 — a deal that’s 1.25 per cent better than anything else on the market. Westpac Life account holders under the age threshold will be able to access the premium rate if their monthly balance increases and they make five debit transactions from a linked Westpac spending account. A minimum rate of 2.4 per cent will be offered if the account conditions are not met. The advertised spend and save rate applies to all balances of up to $30,000.
The Federal Government is considering bringing forward planned income tax cuts, after Treasurer Josh Frydenberg's acknowledgement that plunging most Victorians back into lockdown will cost the economy billions of dollars. In May, Mr Frydenberg warned a return to shutdowns across the country would cost $4 billion per week, and this morning he said the lockdowns would account for about a quarter of that. The Treasurer estimates Melbourne's lockdowns could cost the economy $1 billion a week.
Tax breaks:
- The first stage of the income tax cuts has already been implemented, giving millions of Australians a tax cut of up to $1,080.
- The second stage, which is scheduled to begin in July 2022, cuts taxes for people earning between $90,000 and $120,000, and raises the threshold on the lowest tax rate.
- The final stage would see people earning less than $200,000 pay no more than 30 cents for every dollar they earn, with stage three alone estimated by the Parliamentary Budget Office to cost the Government $95 billion in lost revenue between 2024 and 2030.
Neobank 86 400 is launching a new capital raising of more than $34 million aimed at funding its plans to expand aggressively in the critical mortgage market. It will soon open up a new capital raising round, working with Morgan Stanley, after an earlier raising of $34 million this year. Mr Bell said it aimed to close the raising this half, and the money was mainly being raised to fund regulatory capital, which banks must hold to fund lending. “More than 60 per cent of any money that we raise goes towards regulatory capital,” Robert Bell [CEO] said. At June 30, 86 400 had settled $30 million in home loans and approved a further $10 million, but Mr Bell said most of the lending had occurred in the last six weeks or so, and he expected a sharp increase in the months ahead after it lifted the number of mortgage brokers on its panel. In its first year, 86 400 has raised more than $300 million in deposits, and Mr Bell said that taking into account other facilities it had in place or was planning, it would have the capacity to write more than $1 billion in home loans.
Despite the Prime Minister's plans for a skills-led COVID-19 economic recovery, Australia's biggest and oldest vocational education provider, TAFE, has had courses and budgets slashed, a new survey has found, with students saying it resembles a "ghost town". An Australian Education Union survey has found 81 per cent of TAFE staff had their departments' budgets cuts in the past decade. Half of staff said class sizes had increased even with the cuts.
Moreover, Up to 40 per cent of apprentices could lose their jobs by the end of this year without an economic recovery and an extension of employer subsidies, including JobKeeper payments. The analysis of real-time data predicts the number of young people starting apprenticeships will fall by 36 per cent this year, compared to last year. That means 54,000 fewer apprenticeships starting across Australia in 2020 – 97,000 compared to 151,000 last year. The National Australian Apprenticeship Association has also conducted a survey of 30,611 employers of apprentices and trainees. It found apprentices were more than twice as likely to rely on the JobKeeper payment than the rest of the working population. The data showed that 154,000 apprentices and trainees (56 per cent) were benefiting from JobKeeper.
Victorian Premier Daniel Andrews has flagged that many students and their families are likely to return to home learning, but says a final decision is yet to be made. Yesterday, the Premier announced state school prep to year 10 students in the metropolitan Melbourne and Mitchell Shire areas would get an extra week of holidays while authorities assess the next steps. Returning to home learning is "probably more likely rather than less likely", the Premier said. The decision will be made based on Chief Health Officer advice and assessing data. The Victorian Principals Association president says schools are "better prepared" for a possible return.
At least 100 Chinese international students have "escaped" from Melbourne to Sydney ahead of the Victoria–NSW border closure, due to fears of being "stranded" and unable to catch flights home to China, according to travel agencies from the Chinese community. Many Chinese students who "fled" Victoria told the ABC they paid between $200 and $800 to travel agencies to ferry them to NSW in small groups by car, just days before NSW Premier Gladys Berejiklian announced her decision to close the state's border on Monday. Some parents have asked scalpers for flight tickets from Sydney to Shanghai costing up to $12,000.
US aluminium giant Alcoa has flagged its prepared to battle with the Australian Tax Office (ATO) in court after its local operations were hit with a $921 million tax bill that could easily grow above $1 billion if the agency issues administrative penalties next month. The tax bill applies to Alcoa of Australia Limited (AoA), which is 60 per cent owned by Alcoa and 40 per cent owned by ASX-listed Alumina. The ATO says the company owes $214 million in back taxes, plus interest worth $707 million.
An eastern suburbs lawyer has admitted to fleecing a dead client's estate of millions of dollars meant for charity so he could buy a Bondi mansion, renovate it and splurge $40,000 on furniture. Mark Leo O'Brien, 63, formerly of Edgecliff firm Harrington Maguire and O'Brien, has pleaded guilty to misappropriating clients' trust money intended to go to a charity helping spinal injury victims, St Vincent de Paul Society and eye doctors. He then falsified receipts and letters of thanks from the organisations. He also used part of the $6 million he fraudulently obtained to pay off mortgages on a North Bondi apartment, financially prop up his ailing firm, and set up a self-managed super fund for himself and his wife Therese, 62, who is also facing separate charges. Mrs O'Brien's case, which is different to O'Brien's, will involve allegations she knew of her husband's wrongdoing. She is yet to enter a plea.
A 14-year-old girl has been charged with murder her after 10-year-old cousin’s mutilated body was found in northwest NSW. The 14-year-old’s mother returned to her NSW farmhouse in the town of Gunnedah early Wednesday morning to find her daughter’s body while her own daughter was missing. The teenager will face a children’s court today after she was refused bail in the case. In Aust-ralia, the age of criminal responsibility — the age below which a child is deemed incapable of having committed a crime — is set at 10.
World News
The Chinese embassy has slammed government travel advice warning Australians they are at risk of "arbitrary detention" in China, labelling the advisory "disinformation" and "ridiculous". The Department of Foreign Affairs and Trade (DFAT) issued the new advice on Tuesday, directing it at Australians in mainland China. The Chinese embassy says law-abiding Australians have nothing to worry about.
A shipping container which had been converted into a "torture chamber", complete with a dentist's chair, pliers, scalpels and handcuffs, has been found by Dutch police. Six men have been arrested following the grim finding. Authorities said police conducted the raid before the chamber was used. Police made the find after cracking an encrypted code used by criminals. Encrypted messages identified potential victims, who police say they notified. In total, seven containers were found in the raid.
A man with COVID-19 escaped supervised hotel isolation to go supermarket shopping and take selfies on a 70-minute escapade around Auckland’s CBD. The 32-year-old man, a New Zealand citizen and now the country’s latest coronavirus case, had arrived back from India on a flight from New Delhi to Auckland on July 3. He skipped managed isolation at Auckland’s Stamford Plaza hotel on Tuesday night and took selfies in the aisles of a Countdown supermarket where he bought male grooming products. The day after his walkabout, on Wednesday, the man tested positive to coronavirus and will face charges
Brooks Brothers, the 200-year-old company that dressed nearly every US president, filed for bankruptcy protection on Wednesday (US time), the latest major clothing seller to be toppled by the coronavirus pandemic. Founded in New York in 1818, Brooks Brothers survived two world wars, the Great Depression and even managed to stay afloat as dress standards eased in the office. But the pandemic pushed it into Chapter 11 bankruptcy protection with so many stores closed and, with millions working from home, a crisp suit pushed to the very bottom of shopping lists. Brooks Brothers will permanently close more than a quarter of its 200 stores.
Warren Buffett announced on Wednesday (US time) that he donated $US2.9 billion ($4.2 billion) worth of stock to non-profit groups, as the 89-year-old billionaire investor continues to follow through on his pledge to give away nearly all his fortune to philanthropic causes by the time he dies.
Covid-19
NSW wedding, funeral restrictions could be reviewed in light of coronavirus outbreaks. NSW authorities have reportedly put “everything on the table” when it comes to coronavirus restrictions in the state, raising speculation certain freedoms could be rolled back.
A Melbourne hospital has shut as health authorities scramble to deal with a coronavirus outbreak at the private health facility. Four patients and a staff member tested positive for COVID-19 at the Moreland Rd site in Brunswick, the Department of Health confirmed. Contact tracing is under way, while the hospital remains closed to new admissions.
The World Health Organization (WHO) is acknowledging there is "evidence emerging" of coronavirus spreading through the air. The WHO has previously said the virus that causes COVID-19 spreads primarily through small droplets expelled from the nose and mouth of an infected person, that quickly sinks to the ground. WHO says their guidance will be updated in coming days. One of the scientists who signed the open letter said health professionals were reluctant to acknowledge air transmission.
- Travel restrictions are being reinstated in parts of Europe in response to a rising number of coronavirus infections. Austria's chancellor, Sebastian Kurz, has announced travel restrictions on those coming from Romania and Bulgaria after authorities identified 170 cases linked to recent arrivals from those countries.
- Serbian police have fired tear gas at protesters after being pelted with flares and stones as thousands protested despite warnings such gatherings could spread coronavirus infections. Violence erupted on Tuesday evening (local time) when a crowd stormed Parliament in Belgrade to protest against plans to reimpose a lockdown following a new spike in COVID-19 cases.
- The US reported a new record of more than 60,000 daily confirmed cases of coronavirus on Tuesday (local time), according to Johns Hopkins University. The previous highest tally was 55,220, which the US recorded on July 2.
- Beijing has rolled out new closed-environment booths for sample collection of nucleic acid tests, creating a safer and more comfortable working environment for medics as they continue to test residents for COVID-19. The new booth is called the Red Cross First Aid Station and takes up an area of about two square-meters. It looks like a traditional ticket booth.
- Indonesia has reported another record high of 1,863 new coronavirus cases, bringing the national total to 68,000 while the Government is pushing ahead with plans to reopen the tourist island of Bali. Fifty people died in the last 24 hours, bringing the death toll to 3,359, the highest in South-east Asia.
- Britain's Prime Minister Boris Johnson has denied trying to blame care home workers for the spread of COVID-19 and says he takes full responsibility for his Government's response to the coronavirus outbreak. Around 20,000 people are confirmed to have died of coronavirus in care homes in England and Wales since the beginning of the outbreak.
https://www.news.com.au/world/coronavirus
Property News
North Sydney’s tallest building has been approved by the NSW government, with a 42-storey commercial office block to tower over the new Victoria Cross Metro Station within four years. Planning Minister Rob Stokes announced the approval on Wednesday while touring the cavernous metro construction site almost 50 metres underground with Transport Minister Andrew Constance. Mr Stokes said the development above the $476 million Metro station would transform the North Sydney CBD, making it more pedestrian friendly.
New Zealand's housing market is defying predictions of a slump, for now at least, as thousands of citizens living abroad flock home to the COVID-free nation. Home values gained 7.4 per cent in June from a year earlier, only slightly down on the 7.7 per cent annual growth rate in May, government-owned property research company Quotable Value said on Wednesday. Prices rose 1.3 per cent over the past three months, taking the average to $NZ738,018 ($696,000). In Auckland, home to a third of New Zealand's five million people, house prices climbed 5.4 per cent in the year and 1.5 per cent in the quarter, lifting the average to $NZ1.08 million. Wellington saw gains of 10.4 per cent from June last year.
Market News
Australia's second-largest superannuation fund is preparing to dump its shares in companies that derive more than 10 per cent of their revenue from thermal coal mining as it embarks on the most aggressive immediate climate push of any large local investor. First State Super, which holds $130 billion in retirement savings, is distributing a new climate plan among its members detailing initiatives to shield their money from the threats of global warming, including setting a 30 per cent emissions-reduction target across its investment portfolio by 2023 and a 45 per cent cut by 2030.
Australian shares have dropped for the third straight day, with investors cautiously hitting the "pause button" after significant gains in the past few weeks.
The ASX 200 index closed down by 1.5 per cent, or 92 points, at 5,920 points. The major banks were the biggest drag on the market, after they agreed to a four-month extension for customers struggling to repay their loans due to the the economic hit from COVID-19. Shares in ANZ (-2.1pc), the Commonwealth Bank (-1pc), NAB (-2pc) and Westpac (-1.8pc) all fell sharply.
Supermarket giants Coles (+2.4pc) and Woolworths (+1pc) saw their share price lift despite reimposing purchase limits — on toilet paper, pasta, milk and other goods — at their Victorian supermarkets in response to panic buying.
Some of the weakest performers were Domain (-9.8pc), as well as retailers such as Super Retail Group (-4.9pc) and Premier Investments (-4.4pc).
The Australian dollar had slipped (-0.2pc) to 69.3 US cents by 4:30pm AEST, partly due to a stronger greenback and Melbourne's six-week lockdown to contain its spike in COVID-19 cases.
Westpac also provided a forecast on the economic impact of the Melbourne lockdown. Its chief economist Bill Evans said the Australian economy was likely to shrink by 4.2 per cent this year — a slight downgrade from his previous estimate (-4pc).
As large parts of the United States report tens of thousands of new coronavirus infections, Wall Street investors decided to cash out. The Nasdaq briefly climbed to a new record high on Tuesday (local time), but ultimately fell by 0.9 per cent in the final hour. The S&P 500 shed 1.1 per cent, its first fall in six days — while the Dow Jones index closed 1.5 per cent (or 397 points) lower.
Spot gold lifted (+0.7pc) to $US1,795.13 an ounce, around its highest level since September 2011.
Michael Tran
Director Relationships
Judo Bank