INTEREST rate cuts, lower petrol prices and a surging sharemarket have spurred consumer sentiment to a 13-month high in February, says Westpac, predicting more rate cuts are on the way.

The Westpac Melbourne Institute Index of Consumer Sentiment increased by 8 per cent in February from 93.2 in January to 100.7 in February.

“This is a much stronger result than we had expected,” chief economist Bill Evans said.

“It represents the first time since February last year that we have seen a majority (albeit minuscule) of optimists over pessimists,” he said.
“This lift in confidence should allay any concerns that rate cuts, in the current environment of record low rates, can be a negative for confidence,” Mr Evans said.

“The idea that households would be unnerved by the implication that authorities might be responding to a surprise deterioration in economic circumstances seems to be strongly disputed by this result.”

After the federal budget last May, the consumer sentiment index plummeted 6.8 per cent. The index this month climbed 1 per cent above its reading in April just prior to the budget.

The price of petrol has fallen 21 per cent in the last two months, while the share price index has lifted 9.7 per cent since the January survey, Mr Evans said. He added that these two factors helped increase confidence levels in respondents who held a mortgage.

The official interest rate cut at the Reserve Bank’s February board meeting also boosted consumer confidence towards buying a house. The index tracking views on ‘time to buy a dwelling’ jumped by 9.7 per cent to reach its highest level since February 2014, Mr Evans said.

“Similarly, the index of house price expectations jumped by 6.9 per cent to reach its highest level since September 2014.”

Mr Evans said Westpac expects a second official rate cut in March, although he recognised a respectable case for the RBA to pause for a month or two to assess developments in the booming housing market.

“The most important point is that February is not the end of this rate cut cycle with another cut extremely likely over the next three months”, Mr Evans said.
This news story is reprinted from www.theaustralian.com.au
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The number of homes approved to be built has fallen in December, but less than analysts expected, official data shows.
The Australian Bureau of Statistics data showed the number of buildings approved declined a seasonally adjusted 3.3 per cent to 17,753 in December.
The result falls short of forecasts by economists surveyed by Bloomberg, who predicted a 5 per cent fall in approvals during the month.
The figures come after home approvals hit an all-time high in November, when they rose a seasonally adjusted 18,245 approvals in the month. The November approvals were driven by strong numbers in the volatile apartment sector, which have fallen 9.7 per cent in December.
However, over the 12 months to December, building approvals were up 8.8 per cent, the Australian Bureau of Statistics said, far ahead of expectations of an increase of 5.1 per cent.
Approvals for private sector houses were flat in December, and ‘other dwellings’, which includes apartment blocks and townhouses, fell 9.7 per cent after two months of strong gains.
JP Morgan economist Tom Kennedy said a significant fall in multi-unit dwelling was not surprising after gains of 17 and 31 per cent in the previous two months.
“When you look at the composition it was pretty close to what everyone was expecting – quite a high decline in high density approvals,” he said.
Mr Kennedy had expected activity in the housing sector to stay strong in 2015, but now expects only a very mild boost.
But that could be changed by the Reserve Bank of Australia cutting the cash rate.
“You could see some type of resurgence in the property sector and in the construction sector,” he said.
St George senior economist Hans Kunnen was pleasantly surprised by the December building approvals numbers, considering a 7.7 per cent gain in November.
“They’re always volatile, but if you only drop three per cent after an almost 10 per cent rise the month before then you’re getting a heck of a lot of building approvals and that contributes towards jobs and housing activity this year,” he said.
Mr Kunnen said low interest rates are continuing to have an impact on the housing sector.
“It assists the case for not cutting the cash rate but there are a lot of other risks out there that people see and it is hard to know exactly what the Reserve Bank is focusing on,” he said.
This news story is reprinted from www.businessspectator.com.au
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Apple’s Australian tax bill more than doubled last year after 12 months of strong profits but flat revenue.
The local operation, Apple Pty Ltd, paid out $80.3 million in income tax in its last financial year, an increase of $43.9 million (121 percent) over the $36.4 million it coughed up in the previous year, according to its annual report to the Australian Securities and Investments Commission (ASIC).
The tax hike came courtesy of a major increase in pre-tax profit, which hit $251.9 million, a rise of $163.4 million (184.6 percent) from $88.5 million.
The fluctuating Aussie dollar was the big factor in the rise: Apple booked an unrealised foreign exchange gain of $106.4 million in the 2014 financial year, up significantly from a $46.9 million loss the previous year.
An Apple Australia spokesperson agreed that currency fluctuations had an effect on its results, and declined to comment further.
Apple is one of a number of technology companies currently under scrutiny locally and internationally for its taxation practices.
“The majority of profit that should be taxed in Australia is shifted to Ireland. And that profit is not subject to tax in Ireland or anywhere in the world,” University of Sydney taxation law lecturer Dy Antony Ting told CRN following Apple’s 2013 annual report.
The Australian Tax Office last week revealed it has investigated 25 international technology companies over the past 18 months for tax avoidance as part of its ongoing crackdown on elaborate cross-border tax structures and profit shifting.
The ATO was given extra resources by the Government last year to embed auditors within the local offices of multinational companies in order to stamp out the use of legal loopholes that allow global enterprises such as Google and Apple to minimise the amount of tax they pay in Australia.
Treasurer Joe Hockey at the time said Australia was missing out on up to $3 billion as a result of these schemes. Corporate tax is the second-largest source of federal government revenue in Australia behind income tax.
This news story is reprinted from www.itnews.com.au
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Prime Minister Tony Abbott claims Labor has ‘let the cat out of the bag’ and revealed potential plans to hike taxes if elected into government.
Shadow treasurer Chris Bowen has declared the era of ‘Santa Claus’ politics over, admitting tough decisions would have to be made to return the budget to surplus.
The Australian people don’t believe in an opposition that pretends to return to surplus without spending cuts and tax increases, he said.
Mr Abbott is calling on Labor to reveal its tough decisions instead of merely blocking budget measures such as the Medicare changes in the Senate.
Opposition leader Bill Shorten says he will release Labor’s tax policies ‘in good time’ before the 2016 election but prefers targeting big business over GP taxes and university overhauls.
This news story is reprinted from www.skynews.com.au
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Anti-gambling campaigners have slammed the NSW opposition’s plan to more than halve taxes on racing bets.

The tax on every $100 wagered would be slashed from $3.22 to $1.28 should Labor win the March election, bringing the state into line with Victoria, leader Luke Foley says.

Reverend Tim Costello, chief of World Vision Australia, says gambling is already out of control.

“One way of at least bringing back some benefits from this complete loss of control is taxation,” he told AAP.

“It places a cap on gambling, discourages it and returns some benefits to the community.

“The public good is not served by cutting gambling taxes.”

He suggested the racing industry could be better served by raising taxes on competing forms of gambling.

NSW Greens MP John Kaye said the racing industry doesn’t deserve a tax break.

“This is public money feeding problem gambling and facilitating the mistreatment of animals,” he said.

Mr Foley has said the predicted $100 million a year loss in revenue would be offset by the generation of 2000 jobs in the racing industry.

Premier Mike Baird has said he will consider a possible gambling tax cut in the June budget.

This news story is reprinted from au.news.yahoo.com

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The Australian Capital Territory Civil and Administrative Tribunal (ACAT) has lowered the penalty tax for a couple who operated an investment property while living overseas, but found that being unaware of a tax was no excuse for a failure to pay.
In 2012, Geoffrey Wade and Siew Imm Tan were living in Singapore due to personal circumstances. In April that year, they used an agent, PRD Nationwide, to rent out their Australian property. For two years, from May 2012 to May 2014, the property was leased, and they were liable to pay land tax for the two years.
Neither the couple nor their agent notified the state tax department of the rental agreement within the required 30 days of its commencement. Once the couple were aware of their tax liability, in early 2014, they began paying the land tax off immediately, in installments.
The Commissioner for ACT Revenue decided to impose a penalty tax on Wade and Tan above the default 25% of unpaid tax, at 50%. The 50% rate usually applies if the taxpayer isn’t able to provide a reasonable excuse for failing to pay their land tax, and the mistake was caused by a failure of the taxpayer to take reasonable care.
If a taxpayer intentionally disregards tax law, they are usually charged a penalty at 75% of the unpaid tax. The penalty rate can increase to 90% in certain circumstances.
Wade and Tan disputed the 50% penalty rate, arguing that their agent, acting on their behalf, should have notified ACT Revenue that their property was being rented.
They contended that the legislation which saw them incur a penalty of 50% was irrelevant, as it referred to an owner that had not notified the Commissioner of a rental property, not an agent that had not notified the Commissioner.
However, the Commissioner argued that owners were still responsible for declaring a rental property, even in the case where there has been a failure to do so by the agent. Tan and Wade, it was contended, had failed to take reasonable care, and had an obligation to independently figure out their tax obligations.
Ultimately, the Tribunal considered the couple’s exceptional circumstances: Tan and Wade had to remain overseas, were unable to access mail from the Commissioner, and had been let down by their agent (who did not appear as a witness). It also noted that Tan and Wade had not heard of land tax, and upon realising they had a tax obligation, immediately began paying their land tax.
It was, however, also noted that the couple had failed to take reasonable steps to ensure they met their tax obligations, and that they couldn’t receive a full remission of their penalty tax.
The Tribunal decided to remit 40% of the penalty tax imposed, which meant they were required to pay a 40% penalty tax, rather than the 50% sought by ACT Revenue.
This news story is reprinted from www.propertyobserver.com.au
The Abbott government is considering changes to migration rules that would allow local firms to employ skilled foreigners for as long as a year without applying for the 457 skilled worker visa, The Australian Financial Review reports.
The new temporary visa proposal from the Department of Immigration and Border Protection would also reportedly allow foreign workers to bypass language and skills requirements and remove requirements for companies to prove the position cannot be filled by a local.
Should the government proceed with such a plan it will likely be warmly welcomed by employers, but derided by unions.
“There are already significant problems with graduate employment in professions such as dentistry, computer science, medicine and engineering,” skilled migration researcher Bob Birrell told the AFR.
“Liberalisation such that being mooted is going to crash head-on with that situation. The government is going to have some angry professional associations on its hands.”
This news story is reprinted from www.businessspectator.com.au
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