Today's News - Tuesday 21 July 2020
Today's News - Tuesday 21 July 2020
Our Backyard
More than 5 million Australians will learn the future of what ongoing income support they will get through the coronavirus economic downturn today — and it will be less than what they have been receiving over the past four months. Prime Minister Scott Morrison will unveil changes to the JobKeeper and JobSeeker payments on Tuesday, extending their lives beyond September. A lower rate and tighter eligibility requirements for the JobKeeper wage subsidy, currently paid to 3.5 million workers, will feature. The JobSeeker unemployment benefit will also be tweaked.
JobKeeper will have new two-tiered payments follows revelations in a report to be released today that a million casual workers scored a pay rise worth up to $7,700 on JobKeeper.
Millions of workers will keep receiving the JobKeeper wage subsidy until the end of March in a dramatic extension of the $70 billion program under a fresh eligibility test to ensure the payments go to those in genuine need.
Retaining the JobKeeper wage subsidy in its current form would leave Australia with zombie businesses and jobs, a Treasury review of the program found, while warning the scheme had unhealthy incentives which could hold back the economy's recovery. The review, completed just before the fresh outbreak of coronavirus cases in Victoria, found while JobKeeper had been pivotal to keeping firms and jobs in place during the worst of the pandemic, its design was not well suited to better times.
A deficit of more than $200 billion for the current financial year is expected to be confirmed in Mr Frydenberg's budget update on Thursday, almost four times the previous record of $54.5 billion set under the Rudd government following the global financial crisis.
Economists have warned hundreds of thousands of Australian businesses could face imminent closure if COVID-19 support measures are tapered too early. A Deloitte Access Economics report has flagged nearly 10 per cent of the country’s businesses face the risk of failure if JobKeeper and loan repayment deferrals schemes end in September. Deloitte noted an estimated 240,000 businesses predominantly in hospitality, professional services and transport industries were at high risk of closure.
With restrictions now in place, we have seen Australian’s spend their money on assets in lieu of holidays. One thing the wealthy are spending up on is luxury cars. Sales of Mercedes Benz cars hit a record in June, as the next graph shows. BMW, Audi and Lexus too. Which is a weird thing to happen in a recession, if you think about it.
As the next graph shows, owner occupiers are still hitting auctions hard. Lending to owner occupiers is up 6 per cent, even though investor lending is actually falling.
Latest figures by the Australian Prudential Regulation Authority (APRA) show more than $25 billion has been siphoned from the country’s near $3 trillion wealth pool, with the Australian Taxation Office being hit with 3.6 million claims since its inception in April.
Singapore's public housing authority will soon be using Western Australian sand for new homes as the first shipment of construction sand left the Port of Geraldton last night. More than one million tonnes of sand from a quarry in Walkaway, in the state's Midwest region, will be exported as part of a 12-month contract between Perth-based Australasian Sands International (ASI) and CRG Contractors Pte Ltd, which has a supply contract with Singapore's Housing and Development Board. Singapore has to import the raw construction material, which is used in concrete, as it does not have the right sand for building projects. Companies across Australia will have to work together to secure larger supply contracts in the future.
Rubber gloves used in Australia's fight against coronavirus could be produced by slave labour, corporate watchdogs warn, after the United States banned imports of products from the world's largest manufacturer. Malaysia's Top Glove, which is estimated to produce one in five gloves globally, had a detention order imposed on its products by US Customs and Border Protection (CBP) on July 15. Australian journalists facing jail in Malaysia were investigating mistreatment of migrant workers.
Residents of 18 properties including a block of flats at Wamberal have been ordered to evacuate their Central Coast homes for at least a month after huge surf washed away about 30 metres of beach.
More than 131 tonnes of illegal tobacco was seized and destroyed in the 2019-2020 financial year, the leaves representing an attempt to undercut the Federal Government by $171 million in tax. ATO officers, with the help of police in NSW, Victoria, Queensland and border force officers, executed 19 search warrants and found more than 74 hectares of illicit tobacco growing in hot spots across regional NSW, Victoria and Queensland.
Australian miner South32 has flagged nearly $130 million of write-downs amid doubts about the economic viability of its manganese alloy smelters across South Africa and Tasmania. The world's largest producer of manganese ore, which is mainly used in steel production, paint and glass colouring, said on Monday it had pushed back the completion of a review into its TEMCO manganese alloy smelter in Tasmania's Bell Bay due to the coronavirus pandemic while its South African smelter, Metalloys, has been placed on temporary care and maintenance.
A landmark review into Australia's national environment laws has called for a major overhaul, including establishing an "independent cop" to oversee them. The independent review into the 20-year-old Environment Protection and Biodiversity Conservation Act (EPBC), released this morning, also flagged legally enforceable "national standards" to stop the decline of Australia's natural environment.
The 124-page interim report comes 20 years after the laws were first implemented by the Howard government. The Federal Government has accepted some recommendations, but rejected the report's call for an independent regulator.
Multinational company Unilever has started winding down its operations at the Weis ice cream factory in Toowoomba. The first stage of the factory shutdown happened this month with 93 staff reduced to 70. Staff are involved in a partnership between the company and TAFE Queensland to help them find new careers.
World News
Finance officials from the Group of 20 countries have called for all official bilateral creditors to implement fully a short-term debt freeze for the world's poorest countries, but stopped short of extending the initiative into next year. Sources briefed on the G20 meeting said there was strong support for extending the standstill beyond the end of 2020, given the severity of the economic fallout from the coronavirus pandemic, but the group's final communique said only that the issue would be considered in the second half of 2020. It also said nothing about growing calls for cancelling - not just deferring - the debts of some of the poorest countries. The Debt Service Suspension Initiative, agreed by G20 ministers in April, has proven challenging to implement, with only 42 of 73 eligible countries expressing interest thus far, saving just $US5.3 billion ($7.57 billion) in service payments instead of the $US12 billion initially promised.
Israeli police used water cannons to disperse demonstrators around Prime Minister Benjamin Netanyahu's residence on Saturday as protests mounted against him over alleged corruption and his handling of the coronavirus crisis. Hit by high unemployment, a sharp rise in COVID-19 cases and reimposed coronavirus curbs, Israelis have taken to the streets in almost daily demonstrations against the government. Public anger has been compounded by corruption alleged against Netanyahu, who went on trial in May for bribery, fraud and breach of trust - charges he denies.
The popular video-sharing app, TikTok, is insisting the Chinese Communist Party does not have access to users' personal information. The company's head of public policy for Europe, Theo Bertram, said TikTok isn't available in China, and all data is stored in the United States.
The UK has suspended immediately and indefinitely its extradition treaty with Hong Kong and is extending its arms embargo from mainland China to the territory it once occupied. Britain's arms embargo includes a ban on the export of items used for controlling riots that could be used against democracy protesters including shackles, firearms, smoke grenades and equipment used for interception. The embargo was first introduced for mainland China after the 1989 Tiananmen Square massacre.
Indian authorities have been accused of using the country's surging coronavirus pandemic as a chance to round up and hold critics protesting against Narendra Modi's treatment of minorities. India's coronavirus restrictions, which have closed the courts, have left lawyers unable to file bail applications or even meet their detained clients, The New York Times reported. Before the coronavirus reached India, the country was rocked by protests over new citizenship laws which make it easier for non-Muslim migrants to become citizens. Millions protested, with critics claiming it was evidence of Modi's anti-Muslim agenda. Tensions erupted in February, with communal violence in Delhi which killed scores, most of them Muslim.
Sudan's decision to lift the death penalty and flogging as punishment for gay sex has been hailed by LGBT+ activists as a promising sign after almost four decades of Islamist rule, with calls for prison sentences to be abolished as well. Others criticised the relaxation of the law in the conservative nation, where a transitional government has promised to lead the country to democracy after the toppling last year of autocrat Omar al-Bashir, who had been in power since 1989.
Covid-19
A COVID-19 vaccine developed by scientists at Oxford University is safe and has produced an immune response in early-stage clinical trials in healthy volunteers, preliminary results say. The experimental vaccine, called AZD1222, was administered to healthy adults aged 18-55 years with no history of COVID-19. It did not prompt serious side effects and produced antibody and T-cell immune responses. Several countries have signed agreements with AstraZeneca to produce the vaccine.
A nail salon in Carlingford Court, in Sydney's north-west, and a medical centre in Cabramatta, in Sydney's south-west, were both closed for cleaning overnight after confirmed COVID-19 cases visited each site.
https://www.abc.net.au/news/2020-07-21/sydney-news-tuesday-morning-briefing-21-july/12473944
- The French Government has made face masks obligatory in retail stores and other enclosed public spaces, amid new coronavirus outbreaks across the country. Masks were already required in museums, on public transport, in cinemas, places of worship, and other enclosed spaces. A fine of 135 euros ($150) can be levied against those who don't comply.
- Indigenous communities comprising half a million people around the world are especially vulnerable to the new coronavirus pandemic, often due to poor living conditions, the World Health Organization (WHO) has warned.
- River cruises are making a quiet comeback on the Danube River after the COVID-19 pandemic brought global tourism to a standstill. Holiday makers are adapting to strict new safety measures, with Germany's Nicko Cruises the first to restart Danube trips last month.
- Express COVID-19 testing is available for some passengers at Russia's busiest airport as part of a project aimed at allowing air travel and tourism to resume safely. The Russian Direct Investment Fund (RDIF) and Moscow's Sheremetyevo Airport said the diagnostic tests which give results in one hour would be available for all passengers on domestic flights at Terminal B from Monday.
- The European Parliament will withhold support for any deal struck by EU governments on the bloc's huge coronavirus stimulus package if it fails to meet certain conditions, its leader said on Monday. An EU summit spilled into its fourth day on Monday, as member countries wrangled over a proposed 1.8 trillion euro ($2.9 trillion) package for the European Union's next long-term budget and a coronavirus economic recovery fund.
- China's latest coronavirus outbreak has spread to a second city in the far western region of Xinjiang, even as numbers remain stable in the capital Beijing. One of the 17 new cases reported on Monday was in the ancient Silk Road city of Kashgar, the regional Government said on its official microblog.
- Mexico's Health Ministry has reported 5,311 new confirmed coronavirus infections and 296 additional deaths. That brings the total number of cases in the country to 344,224 and 39,184 deaths.
- Malaysia is considering making face masks compulsory in public following the emergence of 13 new coronavirus clusters since the Government relaxed broad curbs on movement and businesses last month, Prime Minister Muhyiddin Yassin says.
- The all-female Afghan Robotics Team, which has won international awards for its robots, has designed a low-cost ventilator as the coronavirus pandemic hit the war-torn nation. It took the team almost four months to finalise the ventilator, which is partly based on a Massachusetts Institute of Technology (MIT) design, and they received guidance from experts at Harvard University.
- Authorities in Catalonia have called for more than 96,000 people in three towns to stay at home, as coronavirus cases continue to rise in one of Spain's worst-hit regions.
- The coronavirus pandemic has found fresh legs around the world, as confirmed deaths pass 600,000 and countries from the US to South Africa to India struggle to contain a surge of new infections.
- Iranian health officials have played down their President's estimate that some 25 million people have been infected with coronavirus in the country. They said the figure was based on serological blood tests that measure exposure to the illness, which cannot be relied on to show the current state of disease.
- Florida has reported more than 10,000 new cases of COVID-19 for the fifth day in a row, even as President Donald Trump says the virus is coming under control. The state reported 12,000 new cases on Sunday (local time).
Property News
Leasing:
- a 1267 sq m industrial unit in a newly developed complex at 6/26 Sterling Road, Minchinbury from a private investor. The unit was leased for three years plus a three-year option at a starting rent of $115 per sq m net.
- a 344 sq m site at Unit 7, 4 Huntley Street, Alexandria from a private landlord. The lease term is two years.
- a 1,657 sq m facility at 39 Lyn Parade, Prestons from a private investor. The company, which specialise in the manufacturing of switchboards have signed a five year lease plus a five year option $145 per sq m net.
- RMJ Mechanical Repairs has signed a new lease for a 660 sq m warehouse at 94-96 Chapel Street, Marrickville from a private investor for $212 sq m gross.
Sales:
- CPlusC Architectural Workshop Pty Ltd has snapped up a 182 sq m, including 36 sq m outdoor terrace on a 147 sq m vacant, freehold mixed-use building in at 466 Cleveland Street, Surry Hills from a private investor for under $2.5m. There is a current DA in place for a dental practice and the building will benefit from the new Light Rail being constructed along Devonshire Street, connecting the East to Central Station and the CBD.
- Karamin Pty Ltd has sold a freestanding 2378 sq m building at 42-46 Alfred Road, Chipping Norton to a local buyer for $7.75 million. The building has a low site coverage and the factory has the ability to be split into two separate areas and will be leased to Gleeman Truck Parts.
- A private owner has sold a retail investment at 94-96 Anderson Avenue, Panania to Pannania Properties Pty Ltd for $2.75 million.
- A private owner has sold a retail investment at shop 160, 806 Bourke Street, Waterloo to Happywood Holiday Pty Ltd for $1.01 million.
Market News
Australian shares have fallen as cautious investors digest the continuing surge in Victoria's COVID-19 cases while awaiting key economic updates this week.
Yesterday, the benchmark ASX 200 index closed 32 points (or 0.5 per cent) lower at 6,002 points. The Australian dollar had slipped (-0.1pc) at 69.88 US cents.
Most sectors were in the red, with energy (-2.7pc), telecommunications (-2.4pc) and consumer discretionary (-1pc) suffering the steepest losses. Some of the best-performing stocks were Resolute Mining (+4.8pc) and Afterpay (+3.2pc), BlueScope Steel (+3pc) and Nine Entertainment (+2.9pc). On the flip side, Viva Energy (-5.7pc), TPG Telecom (-5.3pc), Bendigo and Adelaide Bank (-5.2pc), Super Retail Group (-4.8pc) and Ooh!Media (-4.2pc) were the worst performers.
However, the banking and energy stocks were the biggest drags on the market, including Commonwealth Bank (-0.8pc), Westpac (-1.2pc), ANZ (-1.2p), NAB (-1.6pc), Santos (-3.6pc) and Woodside Petroleum (-2.6pc).
Gold has retreated (-0.1pc) to $US1,806.84 an ounce, though spot prices had risen for six weeks in a row.
Brent crude oil dropped (-0.6pc) to $US42.87 per barrel.
Gordon Fraser, co-head of global emerging markets equities at BlackRock, began betting on stocks in countries such as India, Indonesia, Russia and Mexico, which have been among the worst hit by the pandemic, but with prospects to recover because of their "very flexible economies." These countries have sustainable levels of debt, floating exchange rates, as well as resilient populations used to dealing with economic shocks, he said in an interview.
Michael Tran
Director Relationships
Judo Bank