ABS Release 26/10/2009

Producer Price Indexes, Australia, Sep 2009

FINAL (STAGE 3) COMMODITIES

• Increased by 0.1% in the September 2009 quarter
• It is mainly due to price increase in electricity, gas and water (+12.1%), bakery product manufacturing (+10.4%) and petroleum refining (+6.0%).
• Partially offset by price decrease in computer services (-7.1%) and industrial machinery and equipment manufacturing (-5.0%)
• Increased by 0.2% through the year to September quarter 2009

INTERMEDIATE (STAGE 2) COMMODITIES

• Decreased by 0.6% in the September quarter 2009
• It is mainly due to price decrease in coal mining (-19.4%), property operators and developers (-2.9%), iron and steel manufacturing (-6.7%), and computer services (-5.5%).
• Partially offset by price increase in oil and gas extraction (+19.0%), petroleum refining (+6.0%) and electricity, gas and water supply (+4.5%)
• Decrease by 4.9% through the year to September quarter 2009.

PRELIMINARY (STAGE 1) COMMODITIES

• Decreased by 0.5% in the September 2009 quarter
• It is mainly due to price decrease in coal mining (-19.4%), iron and steel manufacturing (-6.7%), property operators and developers (-2.9%) and metal ore mining (-13.0%)
• Partially offset by price increase in oil and gas extraction (+19.0%), electricity, gas and water supply (+6.1%) and petroleum refining (+6.2%)
• Decreased by 7.5% through the year to September quarter 2009.

The case Employment Investment Company Pty Ltd v CofT highlights the need to maintain supporting documents – the taxpayer was found guilty of not declaring amounts deposited into the companies bank account for GST purposes, even though there was no supporting documents for any of the amounts.

GSTR 2009/4 and case GXCX v CofT both highlight the position of the ATO in relation to holding items for dual purposes and the application of GST – eg residential properties constructed for sale purposes (so GST is claimed on costs of construction) that are subsequently rented out – it is important to note that while the ATO (under Div 129 of the GST Act) accepts that a dual purposes is possible, holding property to rent with an intention to later sell does not meet this requirement.

Harmonised Unemployment Rates (HURs), OECD - Updated: October 2009

The unemployment rate for the OECD area was 8.6% in August 2009, 0.1 percentage point higher than the previous month and 2.3 percentage points higher than a year earlier.

In the Euro area, the unemployment rate was 9.6% in August 2009, 0.1 percentage point higher than the previous month and 2.0 percentage points higher than in August 2008. For the United States, the unemployment rate for September 2009 was 9.8%, 0.1 percentage point higher than the previous month and 3.6 percentage points higher than a year earlier. For Japan, the rate was 5.5% in August 2009, 0.2 percentage point lower than the previous month and 1.4 percentage points higher than in August 2008.

The ATO has released data regarding the new Private Ancillary Funds and methods of gaining Deductible Gift Recipient under this new category.  This replaces Prescribed Private Funds.

In the case of Weston vs C of T, the taxpayer was found guilty of not meeting his Superannuation Guarantee obligations for his employees who were itinerant farm workers.  He had claimed that they were contractors in the first instance and in the second instance that he had paid them additional funds for themselves to manage their superannuation – both arguments were rejected.

In the case of FFWX v C of T, the trustee of a superannuation fund was found to have received dividends from a private company that were special income.  The share price paid for the shares in the private company was not considered to be arms length.  The private company only held shares in a public company that paid considerable dividends

In the case of Roy Morgan Research Pty Ltd v C of T, a clear definition is established regarding whether contractors are employees for the purposes of an employers’ liability to pay the Superannuation Guarantee (the case was favourable to the ATO).

The Australian market got off to an uncertain opening and reached an intraday peak in the late morning, before sliding for the rest of the day. The All Ordinaries finished Friday 20 points lower.

The S&P/ASX 200 closed 23.5 points down. The Utility sector stayed in the black, with winners including AGL Energy (+$0.09) and APA Group (+$0.06). The Material sector saw BHP Billiton (+$0.30), Fortescue (+$0.08) and Orica (+$0.31) hold their heads above water, but Newcrest (-$0.91), Lihir (-$0.08), Incitec Pivot (-$0.09), Alumina (-$0.06) and OZ Minerals (-$0.07) went backwards. The Financial sector slid, with losers including Commonwealth Bank (-$0.24), Westpac (-$0.14), National Australia Bank (-$0.17), ANZ (-$0.35), QBE (-$0.38), Macquarie Group (-$1.17) and AMP (-$0.20). Bank of Queensland (+$0.65) defied the gloom. In the Industrial sector, Leighton (-$0.49), Toll (-$0.21) and Asciano (-$0.06) were sold down. The Consumer Discretionary sector saw Crown (-$0.20) and Billabong (-$0.27) fall while Harvey Norman (-$0.32) was savaged; however, Pacific Brands (+$0.07) fared better. The Consumer Staples sector saw a dip in Wesfarmers (-$0.27).

Friday was a quiet day for company news. BHP Billiton has made a conditional offer via a Scheme of Arrangement for all of the shares of United Minerals (+$0.36) at $1.30/share for an approximate value of $204M. The Directors of United Minerals have agreed unanimously to recommend the BHP offer in the absence of a superior proposal. Harvey Norman announced that sales from the franchised stores, commercial divisions and other sales outlets totalled $1.5B for the three months to 30-Sep-09, up 4.3% on the pcp. Like-for-like sales increased 2.1%.

THE Australian share market has closed slightly lower as investors took profits amid nervousness about the strength of companies reporting financial results in the United States.

At 1615 AEDT, the benchmark S&P/ASX 200 index had fallen 15.7 points, or 0.33 per cent, to 4,752.9, and the broader All Ordinaries index dropped 8.8 points, or 0.18 per cent, to 4,754.5.

On the Sydney Futures Exchange, the December share price index futures contract had reversed 15 points to 4757, on a volume of 25,089 contracts, according to preliminary calculations.

Stocks that did well today included importers who were benefiting from the higher Australian dollar.

Stocks performing poorly were those highly leveraged to earnings in the US.

In the resource sector, global miner BHP Billiton fell 31 cents to $37.85, and Rio Tinto rose 20 cents to $61.50.

Junior iron ore explorer United Minerals was suspended from trading, amid speculation BHP Billiton Ltd may be set to seek control of the company. United last traded at 91 cents.

Polaris Metals hovered at 62 cents after the company’s board was unable to decide which of two takeover bids for the iron ore explorer was superior.

Nickel producer Minara Resources was up 5.5 cents at $1 after it said it was cautious about the prices of the commodity.

Among the major banks, National Australia Bank added 25 cents to $31.60, Westpac surrendered 18 cents to $26.12, ANZ ejected 12 cents to $24.62, and Commonwealth Bank was up 19 cents at $53.16.

Elsewhere in the financial services sector, Australia’s biggest annuities provider, Challenger Financial Services Group, firmed 15 cents at $3.58 after the company said it had put in place the structure and had the money to grow existing businesses and buy new ones in the economic recovery.

ABS Release 12/10/2009

Lending Finance, Australia, Aug 2009

AUGUST 2009 COMPARED WITH JULY 2009

HOUSING FINANCE FOR OWNER OCCUPATION

The total value of owner occupied housing commitments excluding alterations and additions decreased 0.2% in trend terms and the seasonally adjusted series fell 1.7%.

PERSONAL FINANCE

The trend series for the value of total personal finance commitments increased 1.0%. Fixed lending commitments rose 1.3% and revolving credit commitments rose 0.7%;

The seasonally adjusted series for the value of total personal finance commitments increased 4.1%, with increases in revolving credit commitments (up 4.5%) and fixed lending commitments (up 3.6%).

COMMERCIAL FINANCE

The trend series for the value of total commercial finance commitments decreased 0.3%. Revolving credit commitments fell 0.9%, while fixed lending commitments recorded no change in percentage terms;

The seasonally adjusted series for the value of total commercial finance commitments increased 5.6%. Both fixed lending commitments and revolving credit commitments increased, up 7.6% and 1.0% respectively.

LEASE FINANCE

Lease finance commitments decreased 0.7% in trend terms and the seasonally adjusted series decreased 9.4%.

Income tax return for all entities where one or more prior year income tax returns were outstanding as at 30 June 2009.

If all outstanding prior year returns have been lodged by this date, the system will reset the 2009 return due date as per the normal program.

Eligible for self-assessed deferral.

Income tax return for all entities prosecuted for non-lodgment of prior year income tax returns and advised of a lodgment due date of 31 October 2009.

· Some prosecuted clients may have been given a different lodgment due date. Please refer to the letter you received on this matter for the applicable due date;

· Payment (where required) for individuals and trusts in this category is due as per their notice of assessment;

· Payment (where required) for companies and superannuation funds in this category is due on 1 December 2009;

Annual investment income report, due date for lodgment.
Departing Australia superannuation payments (DASP) annual report.
Franking account return due date for lodgment where:

The return is a disclosure only (no amount payable), and the taxpayer is a 30^thJune balancer.

PAYG withholding annual report no ABN withholding (NAT 3448), due date for lodgement.
PAYG withholding from interest, dividend and royalty payments paid to non-residents (NAT 7187) annual report, due date for lodgment. This report advises amounts withheld from payments to foreign residents for:

interest and unfranked dividend payments that are not reported on an annual investment income report (AIIR), and royalty payments.

PAYG withholding annual report – payments to foreign residents (NAT 12413), due date for lodgement. This report advises amounts withheld from payments to foreign residents for:

· entertainment and sports activities

· construction and related activities, and

· Arranging casino gaming junket activities

Lost members report for the period 1^st January to 30^th June 2009.

ABS Release 7/10/2009

Housing Finance, Australia, Aug 2009

VALUE OF DWELLING COMMITMENTS

August 2009 compared with July 2009:

§ In trend terms, the total value of dwelling finance commitments excluding alterations and additions increased 0.2%. Investment housing commitments increased 1.4%, while owner occupied housing commitments decreased 0.2%.

§ In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions increased 0.7%. An increase was recorded in investment housing commitments, up 7.6%, while owner occupied housing commitments fell 1.7%.

NUMBER OF DWELLING COMMITMENTS

August 2009 compared with July 2009:

§ In trend terms, the number of commitments for owner occupied housing finance decreased 0.1%;

§ In trend terms, the number of commitments for the purchase of established dwellings fell 0.4%, while the number of commitments for the construction of dwellings rose 1.8%;

§ In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell, decreasing from 25.3% in July 2009 to 24.7% in August 2009;

§ In original terms, the number of fixed rate loan commitments as a percentage of total owner occupied housing finance commitments decreased from 7.2% in July 2009 to 6.3% in August 2009.

According to Glenn Stevens, Governor Monetary Policy, at its meeting today, the Reserve Bank Board decided to raise the cash rate by 25 basis points, to 3.25 per cent.

THE Australian share market closed stronger on Tuesday, but was well off its early highs after the central bank raised interest rates.

The benchmark S&P/ASX 200 index closed up 18.3 points, or 0.4 per cent, at 4591.60, while the broader All Ordinaries index gained 17.9 (0.39 per cent) to 4597.20.

On the Sydney Futures Exchange at 1615 AEDT, the December share price index contract was 24 points higher at 4607 on a volume of 26,846 contracts.

The Reserve Bank of Australia today announced an increase of 25 basis points to the interbank overnight cash rate.

The cash rate will rise to 3.25 per cent, from 3 per cent, where it had been since a series of cuts ended in April this year. However, the rate rise was not expected to have a lasting effect on shares.

The Big Four in banking ended mixed. ANZ added 20 cents to $23.30 and Westpac gained 51c to $25.18, but National Australia Bank lost 11c to $29.09 as Commonwealth Bank fell 18c to $49.50.

Property companies ended mostly lower, although Westfield gained 24c to $13.30.

Stockland dropped 4c to $3.83, Mirvac lost 1.5c to $1.565 and GPT Group fell 0.5c to 63c.