Interest rates: Company directors say tax cuts to prolong rate pain

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Economic uncertainty and the energy transition are among the top issues being debated in our biggest boardrooms.

Already a subscriber?The federal government’s tax cuts that come into force on July 1 are likely to prolong interest rate pain for Australian households, as uncertainty over energy policy, the economy and geopolitics keep business investment and projects on hold, several company directors say.

Director of Whitehaven Coal, Bellevue Gold and 29Metals, Fiona Robertson, also warns there are still significant cost pressures for business, making bringing down inflation hard. “I do think it’s going to be very difficult, harder than we anticipate to bring inflation back within the RBA’s range.”“I always struggle with the analogy of a soft landing because it implies a single plane coming in and landing. I actually think a better way to think about it is, it’s more like a squadron, with different planes,” he says.“A lot of households are actually travelling through this period in reasonable shape. NAB’s numbers are the same as ours.

Guthrie says a dip in critical mineral prices, combined with the persistent cost pressures, is holding back the energy transition as well.“We’re in a dip for lithium, we’re in a dip for rare earths. We’re in a dip for nickel. “One of the problems with the transition is that the costs are often borne by smaller groups,” he says.

Vanessa Guthrie says the dip in critical minerals prices and the persistent cost pressures are holding back the energy transition.“The actual target, the number is a bit of a moot point. If we got to 42 per cent or 44 per cent, the number is somewhat irrelevant. We need to maintain certainty in government policy, for investment over the long term,” she says.

 

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