Turnbull launches debt reduction plan and denies leadership threat, ANZ raises mortgage rate: Economy Roundup

Opposition leader Malcolm Turnbull has confirmed his leadership position within the Liberal party and has launched a four-point plan in order to reduce government spending and debt.

Turnbull was joined by shadow treasurer Joe Hockey, who has been the subject of speculation regarding a possible leadership challenge. But Hockey said that “Malcolm has my absolute, unqualified support”.

The debt reduction plan involves reducing red tape for small businesses, reducing government waste, scrutinising government spending to create a balance between public and private industries and ensuring spending is held accountable.

He said that the “excessive burden of red tape” was the most common complaint heard from small businesses, and that if the opposition returns to government he would work to make business easier for SMEs.

He also said that if the opposition returns to government, a new parliamentary budget office would be created similar to the US Congressional Budget Office that would scrutinise government spending.

“We will get the balance right between public and private spending,” he said. “We are going to bring the percentage of GDP represented by government spending back down to less than 25%, which is where it was when we were in government.”

“Would Kevin Rudd have embarked on so much reckless spending if [there had been an] independent watchdog appraising and reporting the real consequences?”

Shares open flat after weak Wall Street results

The Australian sharemarket opened flat today after similar results in the US and Europe, but rose higher after news unemployment dropped to 5.7%.

The benchmark S&P/ASX200 was up 54 points or 1.15% to 4749.7 at 12.00 AEST, while there was more good news in the market as the Australian dollar struck a 14-month high overnight at US90c. However, the dollar moved back down to US88c before the release of unemployment figures.

ANZ shares rose 0.8% to $24.03, while Commonwealth Bank gained 1% to $51.80. Westpac dropped 0.5% to $25.39, as Wesfarmer gained 0.5% to $26.24.

ANZ has lifted its home loan rates by 25 basis points following the Reserve Bank of Australia’s decision to lift the official cash rate by the same amount on Tuesday.

The Commonwealth Bank of Australia, National Australia Bank and Westpac have also said their interest rates are now under review following the RBA’s decision.

High Court of New Zealand rules against Westpac

In New Zealand, the High Court ruled against Westpac in a court case involving finance transactions between the bank and the New Zealand Inland Revenue Department.

The total cost of the decision will be about $750 million, with the company now forced to pay for four separate transactions. The bank has been challenging the allegations by the tax authorities for some time.

“The judgment released by the High Court in Auckland found in favour of the Commissioner of Inland Revenue (CIR) on four representative transactions,” Westpac said in a statement to the ASX.

In the US, Wall Street has posted weak results despite a two-day rally fuelled by rising gold prices. The Dow Jones Industrial Average fell 0.06% to 9725.20, while the S&P closed up 0.26% to 1057.48.