Productivity Commission’s GST bombshell could revolutionise state grants
The report of Australia’s Productivity Commission into the way goods and services tax (GST) receipts are shared will, if adopted, entail a major revenue spike for Western Australia (WA). WA has seen its GST grants from the Commonwealth grants fall to less than 30 cents in the dollar GST raised in the state at times, but the Productivity Commission’s recommendations could see WA’s GST grant revenue increase by as much as A$3.6 billion a year (US$2.8 billion).
Expanded CLF could boost RMBS demand as sovereign supply shifts
A marginal – but surprising – expansion of the committed liquidity facility (CLF) provided to banks by the Reserve Bank of Australia (RBA) for 2018 could boost demand for CLF-qualifying credit, a Deutsche Bank research note suggests. A concurrent marginal easing of demand for sovereign bonds should easily be offset by expected reduced supply, analysts believe.
New dawn in the West
In March this year, Western Australia (WA) had its first change of government in eight years. Following the September delivery of his first budget, the state’s treasurer, Ben Wyatt, talked to KangaNews about the new government’s targets of financial prudence, and how its revenue and expenditure measures should reassure investors, markets and rating agencies.
Major banks expect domestic retail to remain AT1 focus
In the wake of a brace of recent additional tier-one (AT1) deals from big-four Australian banks, heads of funding tell KangaNews they expect the domestic retail market to continue to provide the bulk of this type of capital. This is despite a massive oversubscription greeting a rare foray into foreign-currency AT1 issuance by Westpac Banking Corporation (Westpac).
Institutional investors circling social-benefit surge
The arranger of Australia’s latest social benefit bond (SBB) says institutional investors are taking a more proactive interest in the asset class – though substantial allocations remain a work in progress. The frequency of impact-investment transactions has grown in 2017, but to attract the institutional investor base market participants say more scale is still needed.
Read more: Institutional investors circling social-benefit surge