When the Australian dollar rises, business operating conditions tend to deteriorate. Conversely, as the Australian dollar falls, conditions tend to improve. That certainly has been the case in recent months. As in the past, Australian dollar acted as a shock absorber for trade-exposed sectors.

Sales are humming and profitability is improving, mirroring the recent improvement in labour market conditions. The lower Australian dollar has helped the tourism, agricultural and manufacturing sectors but there are still big challenges with the dollar expected to fall even further in 2017. According to the Reserve Bank of Australia (RBA) a higher Australian dollar could complicate the country’s economic transition for many months.

“Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 is helping the traded sector,” the RBA’s July monetary policy statement said. “These factors are all assisting the economy to make the necessary economic adjustments.”

Australia’s growth is expected to remain at trend with low interest rates helping the retail sector and pushing housing construction to record highs as per the Deloitte Access economics June Business outlook.

RBA is expected to cut the interest rates in the month ahead anchoring long term inflation expectations.

Just when CFOs were wrapping their heads around a world that has grown more volatile and uncertain since 2008, the Brexit bombshell adds another degree of difficulty. More than 80 per cent of leading chief financial officers say global market volatility and local political uncertainty are hampering business investments.

The Deloitte survey of 61 CFOs, covering the first half of 2016, also found 40 per cent support fiscal stimulus to boost non-mining business investments; 30 per cent thought budget repair was more important.

Tax reform was the top pre-election issue with reducing the company tax rate regarded as the most important followed by personal taxes, and the state and territory tax system.

Of those surveyed, 75 per cent expected the value of the Australian dollar to fall over the next 12 months, while 94 per cent believed interest rates would be at or below current levels in 12 months’ time.

Concern is growing in the superannuation industry that the federal government’s plan to introduce a lifetime $500,000 ceiling on after-tax super contributions may be hard to administer, adding to the pressure on the government from the revolt against the change from some backbenchers.

The Australian Institute of Superannuation Trustees said that while it supported the “intention” behind a plan to introduce the ceiling, it harboured concerns about the ability of super funds to implement the policy and the backdating of the cap to 2007.

AIST is supportive of the intention behind the $500,000 cap but they have concerns particularly around timelines and cost of implementation for funds, The AIST said that replacing the lifetime cap with an annual $50,000 non-concessional contributions limit would be easier to administer.

According to an AIST spokesperson, it will be easier to monitor the status of contributions made over the course of a year to a member’s fund, than over a lifetime. Another key measure of lowering the pre-tax contributions limit to $25,000, would hurt older savers.

The Financial Services Council, which represents bank-controlled super funds, also raised concerns over the implementation of the $500,000 lifetime cap. Watering down the $500,000 lifetime cap as well as the annual concessional limit on contributions would significantly reduce the Budget savings from super reform, while overwhelmingly benefiting the wealthiest Australians:

The proposed $25,000 cap on pre-tax super contributions will have most effect on older men with higher incomes. Nearly four in five of those making pre-tax contributions of more than $25,000 a year are aged 50 or over. Of these, more than half have already accumulated super balances of more than $500,000. Few of these people will ever qualify for an age pension.

Instead, high annual caps mainly create tax-planning opportunities for people who already have enough resources to fund their own retirement. A $500,000 lifetime cap on post-tax contributions would also help to align super tax breaks with the Government’s stated objective for superannuation: to supplement or substitute for the age pension.

The biggest telecommunications company Telstra says it will acquire the network firm CBO Telecommunications, known for its capabilities in Wi-Fi and other technology in mine sites, for an undisclosed sum.

Telstra is Australia’s seventh-largest company according to Reuters, and is looking to tap into the resource sector’s thirst for automation and boost production as a slump in commodity prices force miners to reduce costs.

“This downturn has created an once-in-a-lifetime shift, where miners are looking to technology innovation to help them future-proof their operations,” Telstra’s global industries head David Keenan said in a statement.

Commodity prices have slumped this year on fears of oversupply and slowing economic growth in China, the world’s second-largest economy. Telstra is forming a mining technology unit from the acquisition and has also hired Rio Tinto’s former head of automation technology Eric Nettleton, and Anglo-American’s recent head of technology and innovation Jeannette McGill.

These investments are part of their strategy to create a significant global mining technology product and services business. Telstra said it was committed to helping the industry transition to a digital future. Telstra will also undergo its first major brand shakeup in five years as it looks to pivot away from being viewed as a telecommunications business towards a technology company.

US cloud computing giant Salesforce is all set to ramp up its investment in Australia as it bids to make the country its launching pad for further expansion in the Asian region.

The highest profile and fastest growing pioneer of the cloud-hosted software which is a $US54 billion valued company, is looking at the Asian region to be a key driver of its plans to push its revenue well past the $US10 billion mark and will make its Australian operations the hub of its plans. As per the company Australia represents an ideal location to manage the regional expansion of the company, which had relied predominantly on US revenue in its early years.

The company is currently serving larger, international enterprise clients, it has found customers demanding a strong presence in their key markets. APAC in general is very important in terms of the company’s future and Australia is the hub of that strategy.

The Kingfisher project is a large scale solar project being proposed for South Australia. The genie is out of the bottle. There will be a burst of activity now in large scale solar battery projects. The combination of solar and storage means the facilities can compete on two levels of providing clean energy and dispatchable power, either to household or large energy users, in some cases avoiding the costs of grid upgrades.

The battery component of these projects provides greater energy security and energy quality, load shifting and management of ramp rates which is critical for major energy users with large swing loads.

Australian infrastructure investor Lyon Group says it plans to build the world’s biggest solar plus storage project in South Australia in the next two years, and sees a huge future for combined solar and battery storage plants.

Lyon Group’s David Green – which worked on developing a soon-to-be built 30MW solar plant and 1.4MW/5.3MWh lithium battery storage facility near Cooktown, in far north Queensland, before selling it to German-based company Conergy – plans a series of other projects and claims a pipeline of more than 300MW of solar and up to 60MW of battery storage.

The first new project is planned for South Australia, with a 100MW solar PV plant to be combined with a battery storage array of up to 40MW, Green says the plant could be in operation near Roxby Downs by early 2018, and there are plans for other similar projects around the country. The first stage of what is known as the Kingfisher project – 20MW of solar PV plus a minimum 2MW battery storage  – is expected to be running late next year.

 

AMP Capital’s diversified property fund (ADPF) has purchased $250 million of Sydney’s industrial assets, saying that the industrial property market will continue to strengthen.

The fund manager purchased six Sydney based warehouse/logistics assets, located in a mix of areas with future urbanisation potential.

The assets were close to existing and proposed infrastructure, and in land constrained markets, which would benefit from future rental and capital growth. Over the next five years