When the Australian dollar rises, business operating conditions tend to deteriorate. Conversely, as the Australian dollar falls, conditions tend to improve. That certainly has been the case in recent months. As in the past, Australian dollar acted as a shock absorber for trade-exposed sectors.

Sales are humming and profitability is improving, mirroring the recent improvement in labour market conditions. The lower Australian dollar has helped the tourism, agricultural and manufacturing sectors but there are still big challenges with the dollar expected to fall even further in 2017. According to the Reserve Bank of Australia (RBA) a higher Australian dollar could complicate the country’s economic transition for many months.

“Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 is helping the traded sector,” the RBA’s July monetary policy statement said. “These factors are all assisting the economy to make the necessary economic adjustments.”

Australia’s growth is expected to remain at trend with low interest rates helping the retail sector and pushing housing construction to record highs as per the Deloitte Access economics June Business outlook.

RBA is expected to cut the interest rates in the month ahead anchoring long term inflation expectations.

Just when CFOs were wrapping their heads around a world that has grown more volatile and uncertain since 2008, the Brexit bombshell adds another degree of difficulty. More than 80 per cent of leading chief financial officers say global market volatility and local political uncertainty are hampering business investments.

The Deloitte survey of 61 CFOs, covering the first half of 2016, also found 40 per cent support fiscal stimulus to boost non-mining business investments; 30 per cent thought budget repair was more important.

Tax reform was the top pre-election issue with reducing the company tax rate regarded as the most important followed by personal taxes, and the state and territory tax system.

Of those surveyed, 75 per cent expected the value of the Australian dollar to fall over the next 12 months, while 94 per cent believed interest rates would be at or below current levels in 12 months’ time.

Concern is growing in the superannuation industry that the federal government’s plan to introduce a lifetime $500,000 ceiling on after-tax super contributions may be hard to administer, adding to the pressure on the government from the revolt against the change from some backbenchers.

The Australian Institute of Superannuation Trustees said that while it supported the “intention” behind a plan to introduce the ceiling, it harboured concerns about the ability of super funds to implement the policy and the backdating of the cap to 2007.

AIST is supportive of the intention behind the $500,000 cap but they have concerns particularly around timelines and cost of implementation for funds, The AIST said that replacing the lifetime cap with an annual $50,000 non-concessional contributions limit would be easier to administer.

According to an AIST spokesperson, it will be easier to monitor the status of contributions made over the course of a year to a member’s fund, than over a lifetime. Another key measure of lowering the pre-tax contributions limit to $25,000, would hurt older savers.

The Financial Services Council, which represents bank-controlled super funds, also raised concerns over the implementation of the $500,000 lifetime cap. Watering down the $500,000 lifetime cap as well as the annual concessional limit on contributions would significantly reduce the Budget savings from super reform, while overwhelmingly benefiting the wealthiest Australians:

The proposed $25,000 cap on pre-tax super contributions will have most effect on older men with higher incomes. Nearly four in five of those making pre-tax contributions of more than $25,000 a year are aged 50 or over. Of these, more than half have already accumulated super balances of more than $500,000. Few of these people will ever qualify for an age pension.

Instead, high annual caps mainly create tax-planning opportunities for people who already have enough resources to fund their own retirement. A $500,000 lifetime cap on post-tax contributions would also help to align super tax breaks with the Government’s stated objective for superannuation: to supplement or substitute for the age pension.

The biggest telecommunications company Telstra says it will acquire the network firm CBO Telecommunications, known for its capabilities in Wi-Fi and other technology in mine sites, for an undisclosed sum.

Telstra is Australia’s seventh-largest company according to Reuters, and is looking to tap into the resource sector’s thirst for automation and boost production as a slump in commodity prices force miners to reduce costs.

“This downturn has created an once-in-a-lifetime shift, where miners are looking to technology innovation to help them future-proof their operations,” Telstra’s global industries head David Keenan said in a statement.

Commodity prices have slumped this year on fears of oversupply and slowing economic growth in China, the world’s second-largest economy. Telstra is forming a mining technology unit from the acquisition and has also hired Rio Tinto’s former head of automation technology Eric Nettleton, and Anglo-American’s recent head of technology and innovation Jeannette McGill.

These investments are part of their strategy to create a significant global mining technology product and services business. Telstra said it was committed to helping the industry transition to a digital future. Telstra will also undergo its first major brand shakeup in five years as it looks to pivot away from being viewed as a telecommunications business towards a technology company.

US cloud computing giant Salesforce is all set to ramp up its investment in Australia as it bids to make the country its launching pad for further expansion in the Asian region.

The highest profile and fastest growing pioneer of the cloud-hosted software which is a $US54 billion valued company, is looking at the Asian region to be a key driver of its plans to push its revenue well past the $US10 billion mark and will make its Australian operations the hub of its plans. As per the company Australia represents an ideal location to manage the regional expansion of the company, which had relied predominantly on US revenue in its early years.

The company is currently serving larger, international enterprise clients, it has found customers demanding a strong presence in their key markets. APAC in general is very important in terms of the company’s future and Australia is the hub of that strategy.

The Kingfisher project is a large scale solar project being proposed for South Australia. The genie is out of the bottle. There will be a burst of activity now in large scale solar battery projects. The combination of solar and storage means the facilities can compete on two levels of providing clean energy and dispatchable power, either to household or large energy users, in some cases avoiding the costs of grid upgrades.

The battery component of these projects provides greater energy security and energy quality, load shifting and management of ramp rates which is critical for major energy users with large swing loads.

Australian infrastructure investor Lyon Group says it plans to build the world’s biggest solar plus storage project in South Australia in the next two years, and sees a huge future for combined solar and battery storage plants.

Lyon Group’s David Green – which worked on developing a soon-to-be built 30MW solar plant and 1.4MW/5.3MWh lithium battery storage facility near Cooktown, in far north Queensland, before selling it to German-based company Conergy – plans a series of other projects and claims a pipeline of more than 300MW of solar and up to 60MW of battery storage.

The first new project is planned for South Australia, with a 100MW solar PV plant to be combined with a battery storage array of up to 40MW, Green says the plant could be in operation near Roxby Downs by early 2018, and there are plans for other similar projects around the country. The first stage of what is known as the Kingfisher project – 20MW of solar PV plus a minimum 2MW battery storage  – is expected to be running late next year.


AMP Capital’s diversified property fund (ADPF) has purchased $250 million of Sydney’s industrial assets, saying that the industrial property market will continue to strengthen.

The fund manager purchased six Sydney based warehouse/logistics assets, located in a mix of areas with future urbanisation potential.

The assets were close to existing and proposed infrastructure, and in land constrained markets, which would benefit from future rental and capital growth. Over the next five years, the fund remains focused on executing upon its strategy to become the pre-eminent wholesale diversified fund in the Australian market.

New Zealand shares charted new highs recently and Australian shares also made more modest gains, tracking positive overseas leads and traders’ expectations of monetary easing. The S&P/ASX 200 index rose 33.5 points to 5522.3 by 0150 GMT. The benchmark has gained 0.61 percent in morning trade and has traded in positive territory for 10 of the past 11 sessions. After the Brexit, interest rates moved lower globally and the main change has probably been the Fed staying on hold. The RBA is thought to have an easing bias and interest rates are key driver of the share market.

Gold miners weighed on the index, but other sectors all rose, with the health, retail and financial stocks all showing gains. In the healthcare sector Cochlear Ltd, which manufactures implants to treat hearing loss, added 2.89 percent and biopharmaceutical researcher CSL Ltd climbed 2.1 percent. Retailers Woolworths and Wesfarmers rose 1 percent and 0.4 percent respectively. Agribuisness company Graincorp Ltd added 1.3 percent. Gold miners traded lower after spot gold reached three-week lows. Newcrest Mining Ltd fell 3.66 percent. Western Australian gold juniors Regis Resources Ltd and Northern Star Resources Ltd lost substantially with Regis down 6.95 percent and Northern Start down 6.2 percent.

Shares in stevedore Qube Holdings Ltd rose 5.9 percent after Australia’s antitrust watchdog gave the green light to a Qube’s buyout of rail freight giant Asciano Ltd, as part of a global consortium. Asciano shares rose 1 percent.

New Zealand’s benchmark S&P/NZX 50 index rose 0.7 percent or 50 points to 7,222.20, tracking positive leads offshore and as investors were cheered by the prospect of lower interest rates for longer.

Panama, a popular tax haven, has decided to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAC), which is now seen as “gold standard” for co-operation in tax administration.

Taking a significant step forward in implementing its commitment to tax transparency, Panama on July 15 conveyed to the OECD, a club of rich nations, its intention to form part of the convention.

However, under the MAC, Panama will not take up information exchange obligations automatically, but on request, extending the network simultaneously with some 100 countries.

The commitment to automatic exchange remains only with those countries with which Panama decides to do so bilaterally, according to Panama Government. Reacting to this development, Pascal Saint-Amans, Director of the OECD’s Centre for Tax Policy and Administration said: “We very much welcome Panama’s request to join the Convention. Signing and ratifying the Convention will be a very significant step forward in implementing its commitment to tax transparency and effective exchange of information”.

The MAC is the most comprehensive multilateral instrument available for all forms of tax co-operation to tackle tax evasion and avoidance, and guarantees extensive safeguards for the protection of taxpayers’ rights. Already 98 other countries including India and jurisdictions have joined the Convention.

Closely behind British Virgin Islands, the Central American country of Panama has been the second most popular domicile for the anonymous shell companies controlled by the rich and famous including national leaders and celebrities, the recent expose of financial documents, dubbed ‘Panama Papers’ showed.

The Palaszczuk Government is doubling an incentive for Queensland businesses to employ apprentices and trainees as part of the Government’s drive to create jobs. Premier Annastacia Palaszczuk said the Government’s scheme offering a 25% payroll tax rebate for employing apprentices or trainees would be doubled to 50%.

Ms Palaszczuk said the higher incentive would be available for 12 months backdated to 1 July this year and would also apply to all apprentice and trainees, including those hired under the scheme announced in last year’s State Budget.

“While apprentice and trainee wages are generally exempt from payroll tax, employers can claim the rebate based on the total exempt wages bill of any new apprentices or trainees they employ,” she said. “For this financial year any employer in the state with apprentices or trainees on staff will be able to claim a 50% rebate. “By doubling the rebate my Government is making it even more attractive for employers to hire and keep apprentices and trainees and grow their businesses.

“For some businesses, this incentive could make the difference between hiring or not hiring a young person and giving them a start to their career. “Treasurer Curtis Pitt said more than 2,400 businesses had claimed the original 25% rebate since it was introduced last year, proving its popularity.

“The total value of the rebate until the end of May was almost $7 million, which is $7 million that is able to be reinvested back into those businesses,” Mr Pitt said. “The doubling of the rebate for hiring apprentices and trainees makes Queensland’s payroll tax system even more attractive.

“Our state already has a highly competitive payroll tax regime with the lowest rate of all states and territories at 4.75% and a $1.1 million exemption threshold that’s higher than those in NSW, Victoria, South Australian and Western Australia.

“Those states or territories with a higher threshold have higher payroll tax rates.

“Increasing the rebate to 50% doubles the benefit to employers, equating to around $500 to $1,000 per year per apprentice or trainee which again is money that is able to be reinvested into a business.”

The Premier said her Government was determined to boost skills and create jobs, particularly in regional Queensland. “My Government has restored the Skilling Queenslanders for Work and we have committed $100 million for the Back to Work
program including providing up to $15,000 for long-term unemployed Queenslanders given a job in our regions.

“It’s an investment in regional economies and the future of Queensland.

“This gives our young people a greater chance of gaining employment and training and helps unlock the jobs of the future.

“It will help to tackle youth unemployment and allow us to develop a skilled workforce to support economic growth for Queensland in coming years.”