Good morning! Let’s start the week…
1. Hitting the reset button on the budget. Expect to hear plenty from senior ministers this week on the budget, and even some conciliatory noises on some of the savings measures, including the school kids bonus and the GP payment. The government has now fully accepted its failure to sell the budget to the country – Joe Hockey’s “poor people don’t drive” disaster being the climax last week – and they are about to redouble their efforts on getting it through. There’s one big difference between now and three months ago: Tony Abbott has the country’s attention, with his approval rate soaring over the past month.
2. It comes as the Australian consumer is poised for a comeback, at least according to Westpac’s Redbook, a deep-dive analysis of its monthly consumer sentiment survey. Westpac is forecasting a gain in per capita retail sales as consumer sentiment continues to recover in the coming weeks. Some concessions on the budget could help here, too, although it’s a delicate balancing act, because the starting point is that all of these savings measures were needed to save the economy in the medium-term. Here’s the forecast:
3. But self-imposed frugality won’t help. One of the big themes for Australian consumers has been paying down debt over the past couple of years, and this has led to patchy times for cafes and restaurants, one of the best economic indicators in the monthly retail sales data, because it gives a measure of how ebullient people are feeling. But while there are bums on seats in the restaurants, many chefs report consumers are having light meals or even sharing small amounts of food, and this example of three girls who shared $99 worth of entree orders (no drinks) at Sydney’s most expensive Italian last week will be depressingly familiar to many restaurateurs. A resurgence in confidence might help address it.
4. To the markets, and ASX futures are up very slightly, 10 points to 5633, ahead of the start of the week’s trade. It follows a flat day’s trade in the US on Friday, with the S&P dead level at the close, the Dow shedding a bit and the Nasdaq gaining a bit. This week in Australia the market focus will be on the RBA’s minutes from its August board meeting, out tomorrow. Greg McKenna has more on the week ahead here.
5. Globally, the annual Economic Policy Symposium is on at Jackson Hole, Wyoming, the scene for Ben Bernanke’s announcement of the QE program in 2010. Janet Yellen will speak at the event, the theme for which is labour market dynamics – something economists are watching closely in the US at the moment, with weak wages growth remaining a key missing plank of a more robust recovery in the American economy. More here.
6. Advice to startups looking for media coverage: maybe you don’t need it. There are all sorts of reasons that press coverage for early-stage companies might create more trouble than it’s worth, including that it puts you on competitors’ radars, and many young companies end up changing direction anyway, which could cause embarrassment if it follows a blaze of publicity over an initial idea that needs to get canned for whatever reason. More here.
7. Renewable energy target on the chopping block. The AFR reports this morning that the federal government is moving towards dropping the RET altogether, rather than just scaling it back – a decision that would have significant implications for investment pipelines. Elsewhere, The Australian reports Malcolm Turnbull’s media reforms are likely to be delayed until next year.
8. It wasn’t me, says Miranda Kerr. The model says she wasn’t behind the Packer-Gyngell punch-up. Kerr admitted to to The Sunday Times Style magazine in London that her and James Packer “were friends”, but not lovers. She said she’s single but is on good terms with her ex and father of her child, Orlando Bloom. Who just also happened to get in a fight with Justin Bieber, this time definitely over Miranda.
9. A weird round of self-congratulation broke out in Australia yesterday following the Wallabies’ 12-all draw with the All Blacks in the first Bledisloe Cup Test on Saturday night in Sydney. There was a lot of talk about how Australia had managed to stop the Kiwis winning 18 Test matches in a row. Faint praise. Australia should have won that game – New Zealand don’t give you many chances to beat them; when the opportunities present themselves, winning teams take them.
10. Bill Gates has taken the ice bucket challenge, the viral ablutions meme which is raising awareness and money for ALS. It starts with Gates watching Mark Zuckerberg challenging him to do it, and then Gates “designs” a contraption to dump the water on his head before challenging, amongst other, Elon Musk.
Enjoy your Monday. I’m on Twitter: @colgo
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