New reports from the Parliamentary Budget Office and the Treasury have called into question key figures in the federal budget, with the reports raising the prospect of a blowout in the 2016/17 budget.
According to the reports, the federal budget assumes a short term increase in commodity prices followed by a steady decline, leading to a budget surplus of $5 billion for fiscal year 2017.
Weaker commodity prices, however, would lead to deficit of between $5 billion to $22 billion, with significant tax increases or budget cuts needed to make up the shortfall.
This shows there is a coal and iron ore bubble that has made the Australian budget numbers look much better than they really are. As the miners keep digging, and more hot air comes out of commodity prices, that drives most of that massive gap,” says Deloitte Access Economics director Chris Richardson.
Telstra has warned of potential job losses as part of a restructure, according to an internal memo to staff from chief operation officer Brendon Riley.
Under the proposed changes, which will be rolled out between now and July 1st, the telecommunications giant is set to redirect resources to high-growth businesses such as wireless and network services and away from loss making divisions such as its Sensis directories business.
“Our traditional businesses are coming under increasing margin pressure and the largest portion of our budget is spent supporting them. This is not a sustainable business model and we have an obligation to redefine our contributions to Telstra,” Riley says.
Myer chief executive Bernie Brookes has announced the retail giant is set to launch an aggressive stocktake sale in attempt to lure customers from competitors such as Target, in a bid to grow its share of consumer discretionary spending.
“The pleasing part for us is that it will coincide with our very aggressive stocktake sale, which will make sure we’re still in play in an active way over the course of the next couple of months,” Brooks said.
The news came as Myer reported sales were up 0.5% to $652.5 million for the quarter ending April, up 0.4% on a same store basis.
The Dow Jones Industrial Average is down 0.53% to 15,306.40. The Aussie dollar is down to US97 cents.
Andrew Sadauskas is a former journalist at SmartCompany and a former editor of TechCompany.
