Welcome to our newsletter. While the race that stops a nation is always a highlight of early November, on the economic front the Labor government’s first Budget, handed down in late October, has been a talking point (not much of the talk is favourable).
Treasurer Jim Chalmers’ first Budget was delivered against a backdrop of rising cost of living pressures here in Australia and continuing turmoil on the global economic front. The UK reversed its promised tax cuts that spelled the end of Liz Truss’ brief tenure as Prime Minister. She was replaced by the more economically credible Rishi Sunak. In the US, media reports suggested the US Federal Reserve will scale back its aggressive interest rate hikes in December. Both events were welcomed by financial markets, but the same challenges remain. Escalating war in Ukraine, energy supply shortages, rising inflation and interest rate hikes to fight it, still point to a likely recession in the US and elsewhere. Oil prices continue to rise as OPEC restricts supply, with Brent Crude up about 13% this month, but recession fears are moderating the price pressures.
In Australia, economic signals are mixed. Reserve Bank assistant governor, Luci Ellis said in a speech that Australia’s ‘’neutral” cash rate should be at least 2.5%. The rate is already at 2.85% after 25-basis point rises in October and November, and further increases are expected. Unemployment rose slightly to 3.5% in September, perhaps indicating labour shortages are easing – there’s a lot of business owners who hope this is the case.
REMINDER
If you are a company director and have not obtained your Director Identification Number yet – the final date before penalties apply is 30 November 2022 – time is running out – don’t leave it to the last minute. Penalties of $13,200 can apply after that date. You’ve had plenty of reminders.
