More calls of “dead cat bounce” in commentary around this week’s building approval numbers will put a dampener on whatever positivity can be derived from the findings. As we heard earlier in the week, building approvals jumped in February thanks to a 65 per cent surge in apartment approvals, which outweighed a 4 per cent drop in house permits. BIS Oxford Economics took its fairly typical cautionary line, saying this is more likely an anomaly than the start of a trend.
BIS isn’t doing off-the-plan apartment salespeople any favours with its latest analysis of apartment value growth, finding two out of three sold in Melbourne the last eight years have made no price gains. In Sydney, one in four apartments have sold at a loss since 2015.
Unlike Gerry Harvey, Scentre Group chief exec Peter Allen reckoned at yesterday’s AGM in Sydney that tax cuts are unlikely to boost retail spending in the short term, saying we’ve an election to get through before the cuts become a reality.
Westpac’s chief economist Bill Evans was more upbeat; he said surpluses, tax cuts and infrastructure are just what the doctor ordered for the Australian economy. The Centre for Independent Studies’ John Humphreys has also given the budget a tick, saying subsequent boosts in productivity will mean the tax cuts will cost less to deliver. This summation by The Australian’s David Uren on how the budget will bring relief from tax bracket creep is also worth a read.
The real attention however, needs to be paid to what the man most likely to be residing in The Lodge come June, Bill Shorten had to say in his budget reply last night. These heavy-hitters seemed to think so; a much larger cohort of Australia’s business leaders and wealthy turned up for the Shorten Show than for any of his previous annual budget reply speeches over the past few years.
The Australian’s Dennis Shanahan described the reply in five words: “target rich, buy off poor”. In a nutshell, Shorten intends to give more to lower-income workers below $41k, is committing billions to health (to for example, make cancer treatment free or more affordable), and ignore the government’s proposed tax breaks for higher income earners. According to today’s AFR editorial, it’s a plan that ignores basic tax principles to win votes.
Lendlease is facing a class action brought by Maurice Blackburn alleging it breached continuous disclosure laws in its ongoing bid to offload its engineering business. Harry Triguboff had a better day yesterday; he unveiled his first Melbourne development on King Street, where he plans to build serviced apartments.