TODAY, May 10, the first public hearing on the Regional Comprehensive Economic Partnership Agreement (RCEP), will be held by the Joint Standing Committee on Treaties.

The RCEP is a regional free trade agreement between Australia and the countries of ASEAN, China, Japan, the Republic of Korea and New Zealand.

Committee Chair Mr Dave Sharma MP said, "RCEP is a significant agreement, covering almost a third of the world’s population and GDP. It is truly comprehensive, covering trade in goods and services, investment, economic and technical cooperation, promoting electronic commerce, and capturing the most recent advances in international trade in relation to intellectual property, competition and government procurement."

The RCEP is expected to enhance the economic benefits Australia already enjoys because of existing trade agreements with many of the parties to the RCEP, as well as open new opportunities for Australian businesses seeking to engage in the region.

Australian Government witnesses will speak at the public hearing in Parliament House. Further information on the inquiry can be found on the inquiry website.

Public hearing details:

Date: Monday, 10 May 2021
Time: 10am–1pm
Location: Committee Room 1R6, Parliament House

The hearing can be accessed online via the Parliament of Australia website.

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WITH the Federal Government suggesting international borders will not open until 2022, it is critical that internationally focused tourism businesses across Australia receive clarity on continued government support in order to give them certainty in planning for their future recovery.

“The government is indicating our international borders will be closed to visitors until at least the end of the year and while many tourism businesses are surviving with domestic visitation, there is a group of uniquely exposed businesses who receive little or no benefit from the current domestic travel stimulus programs,” ATEC managing director Peter Shelley said.

“While we welcome these stimulus initiatives which are helping drive domestic travel, there are many tourism products which domestic travellers are simply not booking, like day tours and attractions. Plus we have the inbound tour operator cohort who are unable to pivot their business model to benefit from domestic travel support programs.

“While these businesses have welcomed the support packages offered by the government so far, they are crying out to know if this support will continue until international borders reopen.

“Without this certainty, they have no confidence to invest in their future or begin planning for our industry’s restart, let alone continuing to hold on to the rubble of their businesses."

Mr Shelley said inbound tour operators (ITOs) were particularly exposed and will have no revenue until the borders reopen.  These businesses are crucial to the export tourism supply chain given they connect Australian tourism products to our lucrative international markets, he said.

“ITOs are the businesses which sell Australian tourism product across the world," Mr Shelley said. "They continue to manage strong forward booking enquires for future international visitors despite not having any revenue.

"They are not asking for much, just the clarity of knowing if they will receive ongoing support to sustain operations until borders open.  This knowledge will mean they can make the hard decisions about their ability to survive or if they should simply wind up their operations.

“This small cohort of ITO businesses influence, convert and manage unique Australian itineraries which are featured on the websites and in travel brochures of thousands of Aussie Specialist travel agencies around the world.

“We view this cohort of ITOs as critical strategic assets for Australia’s inbound tourism industry and without certainty in the form of ongoing government support, we will see more of these businesses close their doors, significantly eroding Australia’s competitiveness as a global tourism destination.

“ATEC is anxiously awaiting the details of the Federal Budget which will be a clear indicator of the Government’s understanding of tourism’s plight.”

www.atec.net.au

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THE Foreign Affairs and Aid Subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade is holding the next stage of public hearings into the military coup in Myanmar on Thursday, May 13, 2021.

Representatives from the Department of Home Affairs, Department of Foreign Affairs and Trade, and the Department of Defence will appear to provide detail on the Australian Government’s response to the unfolding crisis.

Chair of the Subcommittee, Dave Sharma MP, said the submissions from community groups and experts have helped inform Australia’s approach in supporting a cessation of violence and a return to democratic rule in Myanmar.

"Last month we heard from a wide range of diaspora groups, human rights organisations and leading experts who shed light on the deeply concerning developments in Myanmar," Mr Sharma said. "With ASEAN having now assumed a diplomatic role in resolving this crisis, the Subcommittee is keen to hear from Australian government departments about how we can best support ASEAN efforts to restore civilian rule in Myanmar."

Further information about the inquiry can be found on the Committee’s website.

Public hearing details

Date: Thursday 13 May 2021
Time: 11am to 12.30pm AEST
Location: Committee Room 2R1, Parliament House, Canberra

The hearing will be broadcast live at aph.gov.au/live.

 

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CORELOGIC today announced its estimate of the total value of residential real estate in Australia has reached $8.1 trillion.

The surge in value follows the recent broad-based capital gains witnessed across the country, with many markets now at their peak.

CoreLogic head of research, Eliza Owen, said, “The Australian dwelling market has reached fresh record highs for the past four months, but the end of April marked the first time the total value of Australian housing broke the $8 trillion dollar mark.

“This puts Australian residential property at around four times the size of Australian GDP, and around $1 trillion more than the combined value of the ASX, superannuation and commercial real estate stock combined,” Ms Owen said.

CoreLogic data shows in the three months to April, national home values rose 6.8 percent, which is the highest quarterly dwelling growth rate since December 1988.

“The increase in the value of residential real estate has put Australian home owners in a strong equity position, with the RBA estimating just 1.3 percent of housing loans to be in a negative equity position at the start of 2021. However for many Australians looking to get a foot on the property ladder, the continued strength in the market is putting home ownership further out of reach despite record low mortgage rates. Wages growth simply isn’t keeping pace,” Ms Owen said.

www.corelogic.com.au

 

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THE 2021-22 Northern Territory Budget sets the scene for fiscal consolidation, with modest new spending and a proposed hard debt ceiling offering a glimpse of things to come, according to CPA Australia general manager external affairs, Jane Rennie.

Dr Rennie said, “There’s an element of thrift to some of the budget measures which may make it harder for the government to achieve its ambition of a $40 billion economy by 2030.

“Now is the time for expansionary fiscal policy. The Territory lags behind other states and territories on a number of economic indicators and COVID is far from over. We think it’s too early to tighten the public purse strings.”

The centrepiece of the budget is $1.6 billion in infrastructure investment. Rennie said, “When it comes to public infrastructure this is not a huge sum of money and is likely to have limited impact on jobs and growth. More investment in public infrastructure may be needed in coming budgets.”

Another challenge for the Territory’s economic recovery is attracting and retaining labour. Some $2 million is allocated to a Critical Worker Support Package, which includes training and payments to attract workers from interstate but may not be sufficient.

“Labour shortages are an Australia-wide issue right now. The Territory is competing with other regions in the battle to attract workers. This won’t be the only budget to offer inducements,” Dr Rennie said.

According to Dr Rennie, the success of labour incentives will be determined by factors such as, “Are the incentives attractive enough, is the incentive pool big enough, is affordable housing available, as well as appropriate support and infrastructure for new workers and their families."

The Territory’s net debt is expected to reach $9 billion in the next financial year – $1 billion lower than expected in the last budget.

Dr Rennie said, “With the cost of borrowing so low at present, we don’t consider the size of the Territory’s debt concerning. Nor are we concerned about the forecast $1.36 billion deficit for 2021. Additional borrowing to properly fund some of the budget measures is preferable to underinvesting.”

The government used the budget to flag its intention to legislate a hard debt ceiling of $15 billion.

“Measures like this don’t allow for events beyond the government’s control, such as natural disasters, and may need to be unwound," Dr Rennie said.

At a time when many small businesses are struggling to access finance, CPA Australia welcomed the expansion of the Local Jobs Fund to provide concessional loans and financing to small and emerging businesses. Also singled out for praise is the $12 million in funding allocated to continue the Aboriginal Ranger Grants program.

“Initiatives such as this embed environmental sustainability into Australia’s economic recovery while supporting a pro-growth, pro-jobs, economic rebuild,” Dr Rennie said.

About CPA Australia

CPA Australia is one of Australia’s leading professional accounting bodies and one of the largest in the world. CPA has more than 168,000 members in over 100 countries and regions, supported by 19 offices globally. Core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. CPA engages with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. cpaaustralia.com.au

 

 

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THE Australian Small Business and Family Enterprise Ombudsman Bruce Billson said insurance premiums would be more affordable for small businesses in Northern Australia, under a new Federal Government scheme to launch next year.

Mr Billson welcomed plans for a reinsurance pool to be backed by a $10 billion Federal Government guarantee to cover cyclone and flood damage across Norther Australia from July 1, 2022.

He said the scheme, which is broadly in line with a recommendation in ASBFEO’s Insurance Inquiry, will make a significant difference.

“This is certainly a welcome step in the right direction when it comes to ensuring essential insurance coverage is accessible to small businesses,” Mr Billson said.

“Our Insurance Inquiry revealed that small businesses have been crippled by rising insurance costs and some can’t get it at all. A reinsurance pool will go some way to addressing this key barrier for small businesses in Northern Australia.”

Mr Billson said he also recognised barriers still exist for SME insurance coverage in other parts of Australia.  

“In the course of our Insurance Inquiry, we spoke to over 800 small businesses – about 12 percent of those were from Northern Australia,” Mr Billson said.

“That means there are still many small businesses out there experiencing difficulties with accessing necessary insurance coverage.

“My office is ready and willing to work collaboratively with the government, relevant agencies and the insurance industry towards making essential insurance products affordable and accessible for small businesses across the country.

“Ultimately insurance is a necessity for small businesses to operate, which is why it is vital these products are accessible so they are protected when things go wrong.”

www.asbfeo.gov.au

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THE Queensland Resources Council (QRC) has welcomed the Federal Government’s announcement of a $100 million, four-year renewal of its Junior Minerals Exploration Incentive (JMEI).

“This is great news for Queensland explorers who are bringing amazing new technology like remote sensing, machine learning, and bio-indicators to the field,” QRC chief executive Ian Macfarlane said.

“The program will give eligible exploration companies access to tax incentives to attract new investors into the sector and potentially benefit 500-plus mineral exploration companies currently operating across Queensland.”

Mr Macfarlane said around 70 percent of exploration companies in Queensland have a market capitalisation value of less than $500 million, meaning they’re eligible to apply for tax incentives under the renewed JMEI program.

“Exploration is like the research and development of the minerals industry - it’s how we uncover new geological knowledge – so it’s great to see the Federal Government recognise the importance of exploration by renewing this program for another four years,” he said.

“The renewed funding will place Queensland mineral explorers in a stronger position to find that next big discovery.

“The last major minerals discovery in Queensland was almost 30 years ago, when Glencore’s Ernest Henry copper mine was discovered near Cloncurry in 1993, so we’re well overdue.”

Mr Macfarlane said the announcement of new federal funding, coupled with the Queensland Government’s Collaborative Exploration Initiative, provided explorers with much-needed financial incentives to keep exploring and developing potential new pipelines of opportunity for Queensland.

He congratulated the national peak body for exploration AMEC for the leading role it had played in securing additional exploration funding.

“This announcement also fits in well with the $125 million in federal funding announced last year through the Exploring for the Future initiative which focussed on exploration for the Barkly-Isa-Georgetown project,” Mr Macfarlane said.

Mr Macfarlane said Queensland had an abundance of minerals in high demand that have the potential to supply Australia and trading partners such as Canada, India, Japan and the EU with the critical minerals of the future.

“Explorers are currently looking for minerals such as cobalt, indium and Rare Earth Elements as well as metals like copper and gold which are all crucial components in renewable energy technology and are used in everyday devices such as smartphones and batteries,” he said.

www.qrc.org.au

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THE Parliament’s Intelligence and Security Committee will hold a public hearing tomorrow as part of its Review of the Intelligence Oversight and Other Legislation Amendment (Integrity Measures) Bill 2020.

The Committee will hear from Dr Kieran Hardy, Professor George Williams AO, the Law Council of Australia, the Inspector-General of Intelligence and Security, the Commonwealth Ombudsman, the Attorney-General’s Department and the Department of Home Affairs.

Further information on the inquiry can be obtained from the Committee’s website.

Public hearing details:

Thursday, 6 May 2021
10am - 3pm
Committee Room 2R1, Parliament House, Canberra

A program for the hearing can be found here and the hearing will be broadcast live on the Parliament of Australia website

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INVESTMENT properties often contain tens of thousands of dollars worth of tax deductions that only a trained eye would detect, according to Australian provider of tax depreciation schedules, BMT Tax Depreciation.

Tax depreciation is the natural wear and tear of property and assets. It is one of the highest tax deductions available to property investors who can claim it for up to 40 years.

BMT Tax Depreciation CEO, Bradley Beer, said tax deductions could be concealed behind walls, in ceilings, under floors and on roofs. The combined value of these deductions can reach tens of thousands of dollars over their lifetimes and make a significant difference to a property investor’s bottom line.

Mr Beer said underfloor heating was an unseen depreciable asset that is quite often overlooked.

“It would be reasonable to expect a depreciation deduction of around $10,000 for underfloor heating for an average-sized house,” Mr Beer said.

The re-stumping of a home is a way to rectify settled stumps due to soil movement or damaged wood.

“Re-stumping is usually required for older properties and typically produces a depreciation deduction in the vicinity of $13,000,” Mr Beer said.

“Inconspicuous re-wiring and re-plumbing may also be required for an older property, or when a property has been damaged. These items could produce a total depreciation deduction of $16,000.

“It’s hidden deductions such as these that can produce valuable deductions in older properties. Even if the improvements were completed by a previous owner, the current owner can still claim them.

“There are also extra deductions for solar pool heating that’s usually tucked away on the roof. Solar pool heating typically produces a total depreciation deduction of around $7,000,” Mr Beer said.

It is also common for a rural property to have its own sewerage treatment assets and tanks, but these can easily go unnoticed as they are ‘out of sight, out of mind’.

“Underground sewerage treatment tanks and piping can produce a total depreciation deduction of $11,600,” he said.

Mr Beer explained that BMT’s expert staff complete physical site inspections to accurately identify both the obvious and obscure depreciable items.

“Almost every inch of a property is depreciable,” Mr Beer said. “But with such a large range, comes numerous complexities. We need to look at the property size and type, unique features, construction dates and the legislative requirements to ensure depreciation is claimed accurately. This is why a site inspection is so important.

“My key message to investors is to never rule out depreciation. Throw out the idea that your property might be too old or your haven’t owned it for long enough – these are simply myths. And as we can see, thousands of deductions can be found where you can’t see them.”

bmtqs.com.au

 

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AUSTRALIAN housing values lifted by 1.8 percent in April according to CoreLogic’s national home value index, with the monthly pace of capital gains easing from a 32-year high in March (2.8%). 

Although growth conditions have slowed, housing values are still rising at a rapid pace, up 6.8 percent over the past three months to be 10.2 percent higher than the COVID low in September last year.

CoreLogic’s research director, Tim Lawless, said the pace of capital gains could slow further over the coming months as inventory levels rise and affordability constraints dampen housing demand.

“The slowdown in housing value appreciation is unsurprising given the rapid rate of growth seen over the past six months, especially in the context of subdued wages growth," Mr Lawless said. "With housing prices rising faster than incomes, it’s likely price sensitive sectors of the market, such as first home buyers and lower income households, are finding it harder to save for a deposit and transactional costs.”

There is already some evidence of fewer first time buyers in the market, with the Australian Bureau of Statistics reporting a -4.0 percent fall in the value of first home buyer home loans through February, the first drop since May last year.

Despite the slowdown, positive housing market conditions remain geographically broad-based with every capital city and ‘rest-of-state’ region continuing to record a lift in dwelling values over the month. 

Darwin (2.7%) and Sydney (2.4%) recorded the largest month-on-month rise in dwelling values, while Perth values recorded the lowest rate of growth amongst the capital cities at 0.8%.

The four smallest capital cities recorded double digit annual growth (Adelaide 10.3%, Hobart 13.8%, Darwin 15.3% and Canberra 14.2%), reflecting a smaller COVID-related disruption and an earlier start to the growth phase last year.  Melbourne is recording the lowest level of annual growth (2.2%) due to a larger downturn, attributable to the extended lockdown period last year.

The broad trend of houses outperforming the unit sector continued through April as higher density styles of housing experienced less demand amidst elevated supply across some inner city precincts.  At the combined capital city level house values (8.6%) have risen at double the pace of unit values (4.3%) over the first four months of the year.

“A preference shift away from higher density housing during a global pandemic is understandable, however a rise in flexible working arrangements also seems to be supporting greater demand for houses around the outer-fringes of capital cities. Relatively weak investor activity, compounded by a supply overhang in some high-rise precincts, is also dampening price growth in unit markets,” Mr Lawless said.

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