Today is the day the six-month fuel excise holiday comes to an end.
Australian motorists will receive the unwanted gift of a 25.3-cents-a-litre price rise at the bowser due to indexation and the GST – a hangover of an electioneering budgetary measure introduced by the last government – and are now fully exposed to the vicissitudes of the global energy environment.
The Albanese Government has been pressed to extend the fuel tax relief, but this would blow a $5.8 billion hole in the budget and Treasurer Jim Chalmers said this was too great a cost.
He has, however, written to the Australian Competition and Consumer Commission (ACCC), requesting that it increase monitoring of fuel retailers as the excise lifts.
Bank of England to the rescue
In what seemed like better news, US markets have received a boost from an old ally – the Bank of England has pledged to buy longer-term UK government bonds to stabilise financial markets and the pound, which reached a new low of near-parity with the greenback earlier this week. The BoE’s express aim was to restore some order to global markets.
"Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability," it said.
"This could lead to an unwarranted tightening of financial conditions and a reduction in the flow of credit to the real economy."
Observers noted that perhaps the central bank wouldn’t have had to take such measures if the new UK government hadn’t decided to extend government borrowing to deliver tax cuts, which are fuel to the bonfire of inflation while being a blunt instrument to support those who would be worst hit in a recession.
At any rate, the BoE’s actions caused a buying spree on Wall Street, with the S&P 500 gaining for the first time in seven days (+2%) and following a low ebb yesterday.
The Dow was up 1.9%, to 29,684, while the Nasdaq gained 2.1%, closing at 11,052.
This all means Australian stocks are likely to have a good day – indeed, ASX futures were up as much as 1.5% to 6,558 this morning.
European share markets were also buoyant yesterday, with the FTSEurofirst 300 index lifting by 0.3% after falling nearly 2% earlier in the day.
Tensions are still running high following the damage to the two Nord Stream gas pipelines as European states cast doubt on Russia.
The UK FTSE 100 index also gained 0.3% on the BoE bond-buy-up news.
ICAC to be up and running next year
Legislation for a national integrity commission – one of the key pillars of the last election campaign – has been introduced and a federal ICAC (Independent Commission Against Corruption) is expected to be up and running by the middle of 2023.
Attorney General Mark Dreyfus introduced the bill to parliament yesterday and he said to ABC radio this morning: “I’m looking to get support from every single member of the House of Representatives and every single senator because that will strengthen this massive improvement to Australia’s integrity processes.
“The more support there is in the parliament, the more confidence that Australians will have that this is what we’ve said it is – a powerful, transparent and independent anti-corruption commission.”
In other news
Major currencies rose against the US dollar overnight, including the Euro, which was up as much as US$0.9749, the Aussie dollar, which was near 65.20 US cents at the US close and the Japanese yen, which was stronger at JPY144.10 to the dollar at the US close.
Oil prices rose as the US dollar eased and fuel inventory figures showed larger-than-expected US drawdowns. The US Energy Information Administration says that US crude stocks fell by 215,000 barrels in the last week.
Brent crude gained US$3.05 or 3.5% to US$89.32 a barrel, while US Nymex rose US$3.65 or 4.6% to US$82.15 a barrel.
Base metal prices were mixed, with copper gaining 1.3% on the back of a weakened US dollar, and lead up 5.4%. On the other side of the ledger were zinc (-0.2%) and nickel (-0.1%).
Gold futures were up US$33.80 an ounce or 2.1% to US$1,670.00 an ounce, spot gold was trading near US$1,660 an ounce and iron ore futures fell by 19 US cents or 0.2% to US$98.52 a tonne.