Federal Treasurer Jim Chalmers yesterday warned that the Middle East conflict was already having serious consequences for the Australian economy, that may become “severe”. He warned of higher inflation, slower economic growth and the potential for rising unemployment. The higher increase in prices is likely to trigger higher interest rates, economists said.
Chalmers also said the upcoming federalbudget on May 12 would include tax, productivity and savings goals, though it is somewhat hostage to the global economic turmoil. Having spent late last week in Washington for a G20 summit, Chalmers said the budget will be about supply chain vulnerabilities and supply side reforms.
The Treasurer said that consultation has begun on a new policy to allow every taxpayer to deduct $1,000 for their tax return without providing receipts, which was a promise from last year’s federal election.
How much does it cost to run an EV compared to a vehicle with a petrol or diesel engine? Given the elevated cost of fuel, the gap in the price per kilometre is widening, according to a report in The Australian.
Petrol / Diesel
Cost (¢/km)
1
Ford Ranger
21.9
2
Toyota HiLux
21.9
3
Isuzu D-Max
24.3
4
Ford Everest
21.6
5
Toyota LC Prado
23.1
6
Mazda CX-5
15.5
7
Mitsubishi Outlander
15.9
8
Chery Tiggo 4
15.3
9
Hyundai Tucson
13.8
10
MG ZS
14.7
Electric vehicle
Cost (¢/km)
1
Tesla Model Y
2.3
2
BYD Sealion 7
2.5
3
Tesla Model 3
2.0
4
Kia EV5
2.7
5
Geely EX5
2.5
6
BYD Atto 3
2.2
7
BYD Seal
2.2
8
BYD Dolphin
1.9
9
MG 4
2.0
10
Kia EV3
2.3
Source: The Australian
Fear & Greed Q+A today
On the way AI is changing businesses in Australia - and the role of leaders in bringing about change within their organisations.
We’re seeing exceptional leaders in this country that are really showcasing ownership right from very senior levels and boards. Leaders like Vicki Brady at Telstra are doing an incredible job at embedding AI and really putting it into practice.
They’ve created a blueprint and they’re really creating incredible shift in terms of the culture of the organisation and the way that they have an AI platform to base their business off. And that’s about leadership — not just expecting middle management to drive the change, but really owning it from the top and enabling the organisation to move forward.
Fear & Greed is partnering with the Microsoft AI Tour this week at the ICC in Sydney. Click here to find out more.
National Australia Bank has flagged a big jump in bad or impaired loans ahead of its first half results next month, with customers under stress over higher energy prices. It came after Westpac made a similar announcement last week.
The country’s largest Chinese carmaker, BYD Australia, has hit 100,000 sales, three-and-a-half years after it delivered its first vehicle. While the first 40,000 sales took two-and-a-half years, the next 60,000 took just 13 months.
The country’s largest listed data centre operator, NextDC, wants to raise $1.5 billion in fresh equity, on top of $1.7 billion in debt, to support its growth plans building the digital infrastructure needed to support AI. It follows a major deal to provide support to one of the big tech companies.
US negotiators including JD Vance were on the way to Pakistan overnight with the intention of holding further talks on ending the war, according to US President Donald Trump, though given Iranian state media has said that Tehran has no plans to participate, the situation is unclear.
The dating app Tinder has a new goal – win back women onto the site and make it less of a boys club. After years of declining numbers – Tinder has gone from a peak of 65.4m monthly active users in 2021 to 50.5m last year – the app, owned by Match group, is introducing a series of new features include double dates, video calls and connecting via share interests to help attract younger Gen Z users and women, according to a report in the Financial Times.
Fear-o-meter
Paul Bloxham, HSBC Chief Economist (Australia, NZ & Global Commodities)
Stagflation describes what it sounds like - a stagnant economy with high inflation. In this state, growth is low or negative, the unemployment rate is high and inflation is high too. A very unpleasant combination, particularly if it persists.
The quintessential example episode was in the 1970s. Will Australia now suffer stagflation? In the short run, our forecast is for two of the three, with GDP falling, high inflation, and a rising (albeit still low) unemployment rate - a much milder version than occurred in the 1970s.
We see GDP falling in Q2, the unemployment rate rising and inflation spiking. As we see it, a 'stagflationary' shock has arrived. Could it be genuine 'stagflation' - like the 1970s? This depends on how persistent it is. And, importantly, on what policymakers do next.
The sharp rise in fuel prices, due to the Middle East conflict, is expected to feed through to sharply higher inflation in coming months. It is also expected to weaken growth, partly by weighing heavily on household disposables incomes, but also by squeezing business profit margins.
It is still early days to see this showing up in the key economic activity indicators (which are typically lagged), but it has already clearly driven a sharp negative shock to consumer and business confidence.
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