Good morning! We're back with a brand new edition after a short hiatus due to unforeseen circumstances. We're excited to be back in action and we'd love your continued support to keep bringing you the latest news.

Today's reading time is 7 minutes. - Miko Santos

WEATHER

THIS MORNING HEADLINES:

• Major Airports Brace for Disruption as Qantas Engineers Strike. Qantas engineers are planning nationwide strikes at Australia's major airports to protest years of wage freezes despite the airline's profits and demand fair pay for their skilled work.

• Australia Urges Citizens to Leave Lebanon Amid Rising Tensions with Israel. The war between Lebanon and Israel has worsened, with hundreds killed in Israeli airstrikes that have raised international concern with calls to de-escalate, while Australia urges its citizens to leave Lebanon immediately.

  
  

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POLITICS
Australian Housing Policy Debate Heats Up as Negative Gearing Speculation Swirls

Negative gearing has emerged as the political hot potato the Albanese government did not need. Speculation on changes to the decades-long-standing tax policy are under scrutiny.

The Key points:

• Negative gearing and capital gains tax reported to be considered for changes within Treasury

• Prime Minister Anthony Albanese and Treasurer Jim Chalmers quick to hose down speculation

• Government maintains its $32 billion Homes for Australia Plan as the best way to ramp up housing supply

• Changes may weaken supply of housing, opposition parties and property industry groups warn. Prime Minister Anthony Albanese and Treasurer Jim Chalmers are under pressure regarding changes to negative gearing-a tax policy that allows property investors to deduct rental losses from their taxable income. Both men have moved to temper speculation, arguing that the government is more interested in increasing housing supply than in altering existing tax arrangements.

In an interview with radio, Mr. Albanese said: "I have no plans to do it. It's not our policy." He further declared, "My concern with proposed changes to negative gearing is that it won't assist supply. And indeed the work that the Property Council have done is that it would dampen supply."

Even Treasurer Jim Chalmers said, when pinned down on the question, "We've got a housing policy and that's not in it." "We think that the highest priority needs to be building more homes. Housing supply is our big priority as a government," declared Chalmers, pointing to $32 billion of investment the government is making in housing.

The controversy blew up after it emerged that Treasury was considering possible negative gearing and capital gains tax changes. Both Albanese and Chalmers clarified that while public servants may examine various options in policy areas, no directives have been issued to review negative gearing.

Big Picture: Housing policy approaches by the government reflect broader economic concerns, including inflation management and cost-of-living pressures. In such a complex economic environment, with the most recent inflation figures falling to 2.7%, decisions about housing policy will be critical in shaping Australia's economic future and the financial health of its citizens.

TOUR DE INTERNATIONAL

🇨🇳 China Conducts Long-Range ICBM Test in Pacific Ocean. It announced that China had test-launched an intercontinental ballistic missile over the Pacific as part of its annual training, and this did not run counter to international law and was directed against no country.

🇮🇱 Tel Aviv Targeted in Unprecedented Missile Attack from Lebanon. The missile fire at Israel, including one directed at Tel Aviv, from Hezbollah came as a response to the recent strikes by Israel within Lebanon, marking a major escalation in the ongoing conflict between both sides.

🇺🇸 Zelenskiy Denounces North Korea and Iran for Arming Russia in UN Address. Ukrainian President Volodymyr Zelenskiy addressed the UN Security Council, asserting that talks alone cannot end the war with Russia and that forceful action is necessary to achieve peace, while also criticizing North Korea and Iran for supplying arms to Russia.

ECONOMY
Australian Inflation Hits 3-Year Low as Energy Prices Plummet

Australia's inflation has fallen to its lowest level in three years, laying out a possible easing of pressures on household economies. According to the latest figures from the Australian Bureau of Statistics, the annual inflation rate has fallen significantly owing to declines in the prices of fuel and electricity.

The Key points:

• The annual inflation rate fell to 2.7% in August 2024, down from 3.5% for July.

• Electricity prices had the largest recorded annual fall of -17.9% in December 2023 due to government rebates.

• Automotive fuel fell 7.6% compared to August 2023

• Rent prices increased 6.8% over the year

Australia's Consumer Price Index rose 2.7% in the 12 months to August 2024, the weakest inflation since August 2021. The fall was broadly based on large falls in electricity and fuel prices: record falls in electricity from government rebates, with fuel prices also falling significantly. But price rises were recorded for categories such as housing and food, while rental markets were still quite competitive in most capital cities.

Big Picture : This is because cooling inflation may be implying that the pressures within the economy over the last couple of years could be easing. Still in this light, the erratic nature of price changes in all industries still suggests an intricate economic landscape wherein a decrease in energy costs precedes upticks in essential costs-like housing-therefore placing added pressure on the need for ongoing economic management and policy adjustment to keep growth balanced and affordable for Australians.

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ENERGY
Energy Bill Relief: Albanese Defends 'Power Bill Welfare' as Inflation Drops

The 18% decline in the price of electricity-one of the highly contributing factors to the recent decline in inflation-raises a number of questions regarding how effective and sustainable the relief measures the government has implemented on energy bills have been.

The Key points:

• 18% drop in power prices largely due to government's Energy Bill Relief

• Long-term sustainability of "power bill welfare" called into question

• Government defends interventions in energy market, including caps on coal and gas prices

• Debate between use of government subsidy vs. market structural adjustments

But the reduction has largely been due to the Energy Bill Relief program availed by the government, besides opening a debate for the long-term feasibility of such interventions or whether it amounts to good economic management.

Big Picture: The energy price debate serves to emphasize broader challenges the government is facing in striking a balance between immediate cost-of-living pressures and a sustainable, market-driven solution for the future of Australia's energy landscape and economic policies. Indeed, how governments navigate this balance might shape Australia's energy landscape and economic policy for years to come.

WAIT, THAT’S NOT ALL!

• Kangaroos Leap to Top of AFLW Ladder with 69-Point Win Over Blues. North Melbourne ran riot against Carlton in an AFLW clash, slotting the opening nine majors of the match as it held the Blues goalless across a seven-quarter period to register the league's largest win to date.

• Sydney Think Tank Unveils Latest Asia Power Rankings in 2024 Report. The Lowy Institute has released its 2024 Asia Power Index, evaluating countries' influence in the rapidly growing Asian region based on various factors including economic, military, cultural, and diplomatic powers.

• South Australia Abortion Law Debate: Thousands Rally at Parliament House. A proposed bill to change South Australia's abortion laws, requiring live delivery instead of termination after 27 weeks and 6 days of pregnancy, has sparked a large rally and intense debate among supporters and opponents.

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