Rates on hold (for now); home insurance crisis; peace deal 1.5 pages long
News in brief
A Senate inquiry into proposed tax changes by the government has heard that Australia risks losing the battle for talent and global capital, if the capital gains tax discount is reduced for assets outside property.
One in four Australians won’t be able to afford to insure their home against climate risks unless local councils and governments, as well as homeowners, take action to mitigate risks.
The competition regulator has sued fast food chain Grill’d in the Federal Court for allegedly making misleading claims about donations to an environmental cause.
The Bureau of Meteorology has officially declared an El Nino event in the Pacific Ocean, typically meaning drier conditions in central and eastern Australia in winter and spring.
The memorandum of understanding between the US and Iran runs for about a page and a half, is a very general document, and might have already been signed, according to US Vice President JD Vance.
Fear-o-meter
Luci Ellis, chief economist, Westpac: “The final sentence of the media release added the clause “including increasing the cash rate target further if required” to the usual remark about doing what is needed to achieve its policy goals. In the opening statement to the post-meeting media conference, Governor Bullock repeated this point. This drafting decision is unusual for an RBA statement, and a stronger steer than in recent communication. It suggests that the [monetary policy board] wanted to hose down recent speculation that they are done hiking rates."
Paul Bloxham: chief economist, HSBC: “The RBA seems to be in 'wait and see' mode. Waiting to see the full impact of the tightening already delivered and of the other shocks to the economy ... We find it interesting that the statement essentially suggests that the extent of the slowing in growth is largely as the RBA had been expecting."
Marc Jocum, Global X ETF investment strategies: “This is not the RBA relaxing in a hammock on a tropical island with a pina colada in hand, declaring victory over inflation. It’s more like a firefighter standing outside a house after seemingly containing the flames, watching carefully for embers that could reignite the blaze.”
Fear & Greed Q+A today
On the $2 trillion world of royalties investing, giving investors access to everything from energy and mining, through to film, TV and music:
“Whenever a song is created, two copyrights are created. The sound recording — what you actually hear — and then the copyright related to the lyrics and the melody.
On the back of those two copyrights, basically anybody who provided input to the song will be granted their own royalty over the song. So Justin Bieber, his songwriter, record label, producers and so on.
Every time you hear that song played on the radio or streamed on Spotify or played in a live performance, each of those royalty owners is getting paid a percentage from the proceeds that song is making.
As a royalty investor, you can actually go out and buy those royalty income streams such that whenever you hear the song being played, you're getting a percentage of the revenue from it.”
The Reserve Bank of Australia has left the cash rate at 4.35 per cent as the economy starts to show signs of slowing after three hikes earlier this year. The decision was unanimous among the voting board members.
The central bank is still worried about price pressures. Headline and underlying inflation are still too high and while oil prices have eased, they remain above where they were prior to the Middle East conflict.
There are also signs that some companies experiencing cost pressures are putting up the price of goods, and others will follow. Governor Michele Bullock yesterday would not rule out another rate hike.
However, the central bank said that growth in consumer spending is slowing and momentum in the housing market has shifted. The unemployment rate was higher than expected in April, though Bullock said it was still a "bit tight".
Greed-o-meter
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