ASX to rise, tech extends rally in New York
Australian shares are set to extend their advance as the US tech sector continued to march higher, bolstered by the Trump administration's latest efforts to ease trade tensions.
In addition, semiconductor shares gained on hopes for a data centre push in the Middle East, backed by President Doanld Trump. Shares in Nvidia were more than 5 per cent higher, extending its rebound in the last month to more than 17 per cent.
The stock market is 'gonna go a lot higher', Trump noted during his visit to Saudi Arabia, citing an 'explosion of investment and jobs' as he announced Saudi Arabia would commit to investing $US1 trillion in the US.
Investors are likely to be forced to chase the stock rally sparked by this weekend's US-China trade truce after mostly missing out on last month's rebound, Bank of America strategists said. A survey conducted before the trade talks in Geneva showed fund managers were a net 38 per cent underweight on US stocks, the most in two years.
Market highlights
ASX futures are pointing up 23 points or 0.3 per cent to 8315.
All US prices near 2.40pm New York time.
Today's agenda
First-quarter wage price data will be released at 11.30am. NAB said it expects WPI growth of 0.8 per cent quarter-over-quarter, a tenth below the RBA's 0.9 per cent q/q pick and in line with consensus.
'Wages growth was just 0.7% q/q in Q4, a tenth below the RBA's February forecast. We see underlying private sector wages growth running at a similar pace and a little below the RBA's February outlook.'
Top stories
Chalmers defiant as pressure builds on $3m super tax | Teal MP Allegra Spender has implored the treasurer to rethink the tax while some Labor MPs have misgivings about proceeding with the policy.
Melbourne parking to jump $1000 a year in budget slug | Industry groups warn the Allan government's planned hike in traffic congestion tax and a property levy will set back Melbourne's recovery.
| Traders now expect 'just' three rate cuts in Australia after the US-China trade deal, but investors are still worried about the health of the global economy.
| The CFMEU's ACT branch has been placed into full administration and its secretary demoted in a shock move responding to a sharp fall in membership.
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Sky News AU
an hour ago
- Sky News AU
Tax on superannuation robs retirees of self-respect by turning them into wards of state, a ploy straight out of the socialist playbook
If you earn more than $350 a week and are not yet old enough for retirement, you are classified as a "taxable person" by the Australian government. The income tax the Australian Taxation Office claws from your pay packet provides services for non-taxable citizens, be they young, old, poor or infirm. The social compact, in which the nation insures its citizens against misfortune, works well as long as the number of net-contributors and net-recipients remains in balance. Yet the inescapable fact is that the number of taxpayers relative to the number of non-taxpayers will shrink over the next half century as Australians grow older and fewer future taxpayers are born. The old-age dependency ratio, which measures the number of people aged 65 and over for every 100 working-age people, is expected to increase from 26.6 per cent to 38.2 per cent by 2062. This explains why Jim Chalmers is looking to retirement savings rather than income, as he seeks ways to increase government revenue. The $4.4 trillion we have collectively invested in superannuation is too tempting to resist. The government's plan to extract money from superannuation savings by taxing unrealised gains on investments is partly born out of desperation and partly because taxing and spending are what socialist governments like to do. The $3 million threshold will fool few. The Treasurer's refusal to link it to inflation means it will eventually apply to most superannuation savers. Like all forms of taxation, it will transfer wealth from private citizens to the public purse, where it will be spent on the whim of politicians and bureaucrats rather than at the discretion of individuals. Taxing people's retirement savings is particularly egregious. Thrifty individuals who forgo spending during their working years to provide for the necessities of old age should be given every incentive to do so. Every self-funded retiree is one less recipient of public pensions. Those who accumulate enough capital are more likely to maintain their private health insurance payments and enjoy the added comforts of private aged care homes. A tax incentive for working-age individuals to save reduces the burden on future generations of taxpayers. When the government pockets that tax, it improves the books in the short term but creates a long-term public liability. The costs quickly add up. The nominal lifetime cost of paying the average pension is $430,000 for men and $550,000 for women. When you add to that the average cost of public health in retirement ($140,000 for men, $180,000 for women) and aged care, the case for allowing people to look after themselves becomes clear. Yet the explicit assumption in Treasury's forecasts is that an expanded welfare state will provide those things. Treasury's 2023 Intergenerational Report (IGR) frames the ageing population as an inevitable fiscal and economic burden — a "challenge" that will strain public finances, depress productivity, and expand the cost of government services. In the Treasury's perverse logic, the absence of tax on superannuation savings is branded as an expenditure. Yet, if we follow this twisted line of thinking and assume that refraining from taxing superannuation is a cost to the state, it must be set against the money the government will save on pension spending. As the report concedes, while the cost of public pensions is expected to increase by an average of 1.4 per cent of GDP in most OECD countries by the middle of the century, in Australia, it will decrease from 2.3 per cent of GDP in 2022-23 to two per cent in 2062-63. For this, we must thank the Hawke and Keating Labour governments, who had the foresight to use both carrots and sticks to encourage workers to save for retirement. Today, 44 per cent of retirees claim the full government pension, while 25 per cent are self-funded. By 2063, however, those figures are expected to be reversed, as 43 per cent of retirees will be fully self-funded, and only 21 per cent will rely on the state, according to the IGR forecast. The report misses a fundamental opportunity: to recognise older Australians not as dependants but as contributors. From the outset, the report assumes that an ageing population means fewer workers, slower economic growth, and ballooning government expenditure on health, aged care and pensions. It tells us, for example, that government payments for health, aged care, and the NDIS will rise from 6.2 per cent to 10.7 per cent of GDP over the next 40 years. It forecasts the need to double the size of the care workforce, funded primarily through public outlays. It fails to explore how those costs might be reduced, or at least better managed, with the right incentives to encourage personal responsibility. It ignores the potential for Australians of independent means to contribute more directly to their own health and aged care costs if given the freedom and incentive to do so. There is no meaningful discussion of co-contribution models, private health strategies, or reforms that might allow wealthier retirees to opt out of publicly funded care in favour of private arrangements. If government policy continues to penalise thrift and reward dependency, we should not be surprised that more Australians turn to the public purse. The government appears to accept the rise in state dependency as a given. The old are to be cared for, not empowered. Indeed, this will become a self-fulfilling prophecy if the government discourages people from saving for retirement. It presents us with a fatalistic vision of a dystopian welfare state, the kind of future Robert Menzies railed against in 1942 Forgotten People radio talk, a world in which an all-powerful State "will nurse us and rear us and maintain us and pension us and bury us". Menzies's objection to the dependency-driven welfare state was not primarily fiscal or even against the evils of big government. It was that it robbed individuals of the dignity that comes from paying their way in life and the freedom to strive for something better. 'If the motto is to be 'Eat, drink and be merry, for tomorrow you will die, and if it chances you don't die, the State will look after you; but if you don't eat, drink and be merry and save, we shall take your savings from you', then the whole business of life would become foundation-less,' he said. If today's Liberal leaders remain true to the principles of their intellectual founder, they will oppose Chalmers' superannuation tax unconditionally. Taxing paper profits that may never be realised is fundamentally unfair. Nick Cater is a senior fellow at Menzies Research Centre and a regular contributor to Sky News Australia
Sydney Morning Herald
an hour ago
- Sydney Morning Herald
Australians curb their enthusiasm for US holidays
Flight Centre chief executive Graham Turner said business travel to the US was holding up, but fewer Australians were booking holidays there. 'Certainly compared to the pre-Trump era, everything that we see … is the leisure market in particular is down. There's no doubt that April and May have been down,' Turner said. 'US carriers have increased their capacity [to Australia] over the last six to 12 months, and there's no doubt they'll be suffering a bit. 'There's been cheaper airfares through sales and there will be [more] over the next few months unless things dramatically improve.' More than a million Australians visited the US last year. The country's latest official figures show 291,230 Australians visited the US from January to April, down 0.2 per cent on the same period last year. In April, Australian visitor numbers to the US grew 1 per cent year-on-year to 89,363. Meanwhile, 83,460 Americans arrived in Australia this March, making the US the second-largest source of visitors behind New Zealand. Australia's favourite destinations over the same period were New Zealand, Indonesia and Japan. Mitchell said young people most affected by the cost of living were choosing cheaper destinations such as Latin America or Asia, instead. He said the April slump in the Australian dollar sparked by Trump's tariff wars had 'spooked a lot of people' from booking trips to the US. 'The feedback we're getting is the US is an expensive destination to go to, with the service taxes and the tipping. And I think that word of mouth has honestly been getting around for a while now,' Mitchell said. He said even those who could afford to visit the US were cutting back on costs. 'I don't think it's stopping some people from going there, but it probably does change how they travel a bit. They might not go for 2½, three weeks; they might go for two weeks. They might not go five-star, they might go four-star or three-star,' he said. Qantas, which operates about 40 return flights a week between Australia and the US, said demand for US travel was holding up locally. Chief executive Vanessa Hudson recently said the airline was feeling optimistic about demand for the US, and 'business-purpose travel and business travel in premium cabins remains strong'. The airline said this year's sale for flights to the US had outperformed similar sales last year. Loading Michael Feller, an ex-diplomat and foreign policy adviser, said the second Trump presidency had caused enormous damage to US soft power and prestige. But he said it was difficult to trace that into consumer behaviour beyond unique cases like Canada. 'Boycotts are really tricky,' said Feller, who is now chief strategist at Geopolitical Strategy, which provides advice to companies around the world. 'US products are ubiquitous. And when you consume a quintessential US product like Coke, it's manufactured and bottled in Australia. And then there are other quintessential products like iPhones, which are manufactured and assembled in China. So, it's hard to disentangle 'Brand US'.' Despite gloom over Trump's trade wars, Feller said there were two silver linings for Australia. Loading 'The Australian consumer will probably benefit from Trump's trade wars insofar as cheap Chinese goods will be dumped on our shores, leading to lower costs,' he said. 'And if Trump cracks down on international students, those students will presumably look to a country like ours to study.'
The Age
an hour ago
- The Age
Let's get rid of this embarrassing King's birthday holiday
Polar winds, rain and snow aside, most of Australia is going to appreciate today's public holiday and give little thought to the reason behind it. I'm going to ruin that a bit by stating categorically that it is a ridiculous and embarrassing holiday. While the US is approaching 250 years of independence, Australia still pauses to celebrate the birthday of a British king, flouncing around in ceremonial garb like the petulant George III in the Broadway hit Hamilton. Only he's not singing 'You'll be back' because we never really left! For a long time, supporters of an Australian republic spoke with dewy eyes of the day King Charles would finally supersede his mother – convinced that the very sight of the perpetual English prince as king would kick-start the movement once more, and propel Australia relentlessly away from its British colonial past. That has not occurred. That was another time and place – when there was less to distract us from reality, and more vigorous debate about Australia's history, values, and future. Nowadays, any reference to national debate is condemned as elite tut-tutting. On Australia Day this year, journalist David Penberthy condemned those who questioned the appropriateness of the date as 'haranguing' the vast majority who just want to 'sit around and have a couple of quiet ones'. He might be right, but what a half-hearted democracy that is: greedily grasping the freedom to celebrate – watching the footy or 'burning a few snags with mates' – without ever turning our minds to how that celebration is generated. How do we explain to the millions of migrants who come to call Australia home – the backbone of our nation – why it is so culturally important to celebrate a public holiday with mates and beers and snags, and so culturally inappropriate to enquire about the origin of the holiday? Because, like it or not, today's sleep-in comes courtesy of agreeing to keep an indulged English prince (as he was for 73 years) as your King. The position may be symbolic, ceremonial and relatively powerless. But however you spin it, he is our King, and he is the Australian head of state because of the privileges and status bestowed on him by his people. Endorsing an unelected, hereditary figurehead clashes with how most Australians want to portray themselves; most importantly, it clashes with the quintessentially Australian idea that everyone is entitled to a fair go – our abbreviated and informal version of the US's 'life, liberty and the pursuit of happiness'.
