Pollies return for policy showdown; Tesla tops sales; spring auctions stumble

Pollies return for policy showdown; Tesla tops sales; spring auctions stumble

News in brief

Electric vehicles outsold petrol or diesel vehicles in August for the first time, while the Tesla Model Y became Australia’s best-selling vehicle, ahead of the Toyota RAV4 and HiLux. There were 27,078 EVs sold in August, compared to 25,824 petrol-only and 23,608 diesel-only vehicles.

Fear-o-meter

AMP Chief Economist Dr Shane Oliver on last week's rise in bond yields, with the Australian 10-year bond yield hitting levels not seen since 2011.

 

"The rise in bond yields has a number of implications for Australia. First it's bad news for the federal and state governments as it means public debt interest costs will rise even faster at a time for the states when their stamp duty revenue is going the other way. Public debt interest is the fastest growing major spending item in the Federal Budget currently accounting for around 5% of tax revenue but set to rise further. The more bond yields rise the faster the public debt interest bill will rise and the more tax revenue it will take up leaving less left over for welfare payments and other government spending.

 

Second it means higher corporate borrowing costs which can act as a dampener on company profit growth.

 

Thirdly, it means that banks are likely to raise their fixed mortgage rates which will reduce the attractiveness of fixed rate mortgages as an alternative to variable rate mortgages at a time when the latter are likely to rise further with RBA rate hikes.

 

Finally, it could pressure the share market as the risk premium offered by shares over bonds was already very low."

Fear & Greed Q+A today

After plenty of headlines about sticky inflation and impending rate hikes, Stephen Koukoulas shares five things businesses can be positive about, starting with capex spending:

 

"The thing that's come through in the data, not just last week in the national accounts, but just sort of the momentum of the last six to twelve months has been capital expenditure increasing.

 

Now, why does that matter? Well, it matters probably most importantly because it does allow for firms to be more productive. They're not investing in data centres or warehouses or machinery, plant and equipment for fun. They're doing it to make their business more profitable, to expand their operations. And with that, the economy expands.

 

So the fact that CapEx was up 10.5% in the year to June this year, and expectations for next financial year, so 26-27 financial year, are for another 15% growth in capital expenditure. That's a sort of fundamental driver of productivity, of output."

Federal parliament returns this week with a packed agenda. The government will release draft laws giving Australians the ability to switch off the algorithms deciding what appears in their social media feeds. Platforms would have to regularly offer users the choice of an algorithmic feed or simply posts from accounts they follow, while facing tougher responsibilities to reduce online harm.

 

Meanwhile, the Coalition is proposing an 80 per cent cut to tobacco excise, arguing Australia’s high cigarette taxes have fuelled a booming black market. Parliamentary Budget Office modelling commissioned by the Coalition suggests the cut could actually raise an extra $22 billion over nine years as smokers return to legal cigarettes. One Nation proposed a 75 per cent excise cut last month.

 

And we can also expect to hear plenty about Labor's move to soften its proposed 30% minimum tax on discretionary trusts. Trusts could avoid it by permanently fixing how income is distributed among beneficiaries.

Greed-o-meter

Rank	Model	August sales	YoY change %
1	Tesla Model Y	6,414	+176
2	Toyota RAV4	5,470	+32.9
3	Toyota HiLux	4,833	+0.2
4	Toyota Prado	2,475	+21.7
5	Ford Ranger	2,440	-50.6
6	BYD Sealion 7	2,213	+56.6
7	Chery Tiggo 4	2,012	+13
8	Geely EX5	1,947	+385.5
9	GWM Haval Jolion	1,891	+21.1
10	Zeekr 7X	1,748	New

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Listen to today's episode 🎧 

Spring selling season has started quietly, with capital city auction volumes down more than 30% from the same weekend last year. The preliminary clearance rate was just 52.7%, as expectations build for another RBA rate hike.

 

A Canstar comparison found the cost of the same Woolworths grocery basket rose 8.5% between March last year and July this year, well ahead of annual wages growth of 3.3%.

 

An ABC investigation has uncovered tampered gift cards being sold at major supermarkets, with scammers stealing redemption codes and draining the cards after customers activate them.

 

Giorgia Meloni has become Italy’s longest-serving prime minister of an uninterrupted government since World War Two - after just 1,413 days in office. Italy has churned through 68 governments in 80 years.

 

Robots are coming for plenty of jobs, but apparently pizza makers are safe for now. A string of robotic pizza businesses has collapsed, with machines proving surprisingly clumsy at a job humans already do very efficiently.

Source: FCAI and Electric Vehicle Council, reported on Drive