Australia’s economy raced ahead last quarter as consumers and businesses spent with abandon, lifting output back above where it was last year when pandemic lockdowns tipped the country into its first recession in three decades, Reuters reported. The economy expanded by a real 1.8% in the three months to March, data from the Australian Bureau of Statistics (ABS) showed on Wednesday. The solid back-to-back quarterly growth helped annual output climb 1.1% to A$525.7 billion ($408.05 billion), a major turnaround from last year's recession low of $468.3 billion.
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Months after sweeping changes to insolvency laws, the budget revealed the government will re-examine what should happen when businesses go bust, ABC.net reported. Robyn Erskine, partner at insolvency firm Brooke Bird, said that it was disturbing the government was again raking over the systems used when businesses need to be wound up. "They're back having a look at that regime, only months after the introduction, and that creates uncertainty in the marketplace," she argued.
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The Presbyterian Church of Queensland, which runs aged care operator PresCare, has been placed in receivership after the sale of three properties fell short, leaving it unable to pay debts owed to a creditor, the Australian Financial Review reported. PCQ was unable to meet the terms of a contract with its partner, real estate investment trust Catalyst Health, triggering the insolvency. Catalyst and PresCare had entered into several sale and lease back deals in recent years.
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Australia unveiled a big-spending budget that aims to run the economy red hot, joining the U.S. and Europe with a fiscal-monetary tandem that seeks to drive unemployment down to levels rarely seen in the past 50 years, Bloomberg News reported. Treasurer Josh Frydenberg’s 2021-2022 fiscal blueprint aligns both economic orthodoxy with the political needs of a government facing an election in the next year.
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Nomura Holdings Inc. announced business partnerships at home, Australia and New Zealand as Japan’s biggest brokerage seeks to move past a $2.9 billion hit from the implosion of Archegos Capital Management, Bloomberg News reported. Nomura signed an agreement with three regional Japanese banks to set up a joint venture to provide remote financial consulting services. It also struck up an alliance with investment bank Jarden Securities Ltd. to provide services such as stock and bond underwriting for clients in Australia and New Zealand, it said in separate statements on Monday.
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Australia’s fiscal authorities are taking a leaf out of U.S. Treasury Secretary Janet Yellen’s playbook in deploying spending to push the economy toward maximum employment, a stance that keeps policy aligned with the Reserve Bank, Bloomberg News reported. Treasurer Josh Frydenberg says he will deliver a “jobs budget” on Tuesday that’s expected to boost spending on roads and railways to support hiring and extend income-tax breaks for low and middle income earners to keep them spending.
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Australia’s trade minister said the country’s international borders may not completely open until the second half of 2022, a longer-than-anticipated closure that would be a blow to the airline and tourism industries, Bloomberg News reported. In an interview with Sky News early on Friday, Dan Tehan was asked when Australia’s borders might open. “The best guess would be in the middle to the second half of next year, but as we’ve seen throughout this pandemic things can change,” Tehan said, according to audio of the conversation sent by his office.
Liberty Steel Group said on Wednesday that it had appointed a committee to restructure and refinance the group after Greensill Capital, its biggest lender, filed for insolvency in March, Reuters reported. The move comes after Sanjeev Gupta’s family conglomerate GFG Alliance announced that its Australian unit had agreed terms to refinance its exposure to Greensill. Liberty Steel, which is also under the GFG umbrella, said in a statement that four new board directors would form a Restructuring and Transformation Committee (RTC) to focus on fixing or selling underperforming units.
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Australia's corporate watchdog accused Westpac Banking Corp. of insider trading while financing a A$16 billion ($12 billion) energy grid privatisation in 2016, the latest in a series of regulatory problems for the country's No. 2 lender, Reuters reported. The Australian Securities and Investments Commission (ASIC) said Westpac knew it had won the contract to help two pension funds buy Ausgrid, a state-owned power supplier to millions of people around Sydney, for two hours while it bought A$12 billion of derivative products to support the deal.
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Australian insolvency and restructuring experts say that reforms announced on Monday designed to help struggling companies at risk of collapse would benefit from adopting US-style bankruptcy options, the Australian Financial Review reported. Treasurer Josh Frydenberg announced steps to overhaul insolvency laws, including a strengthening of schemes of arrangement to better support the so-called debtor-in-possession model for large companies.