Rateseeker August 2022 Business News Round-up
This month our top stories cover the demand rise for CBD offices along with the ATO cracking down on tax-cheats. In welcome news the automotive industry’s bodies welcome electrification of vehicles to combat emissions, while business credit applications slump 2%.
Missed the latest news? Here are the biggest stories below.
Australia’s CBD office demand is rising, but supply is soaring.
As living with the COVID-19 virus becomes anew normal, demand for CBD office space has been rising, despite the numbers at first glance which may suggest otherwise.
According to data from the Property Council of Australia ( PCA), Australia’s CBD vacancy rate in the six months to July was 12.0%, compared to 11.3% in the previous half-year.
The city-by-city figures were:
- Canberra 8.6% higher than pre-pandemic
- Sydney 10.1% higher
- Melbourne 12.9% higher
- Brisbane 14.0% lower
- Adelaide 14.2% lower
- Perth 15.8% higher
The PCA stated that tenant demand for CBD office space has been on the rise – but that the available office space coming onto the market has been growing at an even faster rate, which has been pushing up the vacancy rate.
The supply of office space across Australia’s capital cities has been above the historical average in four of the last five half-yearly reporting periods.
A new supply is forecast to remain above-average in the next reporting period, before falling to below-average levels in 2023 and 2024.
ATO cracks down on businesses dodging their tax responsibilities.
The Australian Taxation Office has warned businesses it is using tip-offs from members of the public to crack down on the shadow economy.
The ATO said it had received 43,000 tip-offs about black economy behaviour in the last financial year, with the most common reports being for businesses:
- Demanding cash from customers
- Paying workers in cash
- Making sales but not declaring them
The industries that received the most tip-offs were:
- Building and construction
- Hairdressing and beauty services
- Cafés and restaurants
- Road freight transport
- Management advice and related consulting services
ATO assistant commissioner Peter Holt said it’s not just businesses the ATO is watching.
“We know that many customers also demand to pay in cash and ask for discounts to avoid paying tax, and we also know that many workers are demanding cash, especially where there is a shortage of labour,” he said.
The ATO
“Our message is — regardless of which party is driving the behaviour — it’s illegal and we’re on to it.”
Automotive bodies embrace the age of electrification
In great news for the planet, Australia’s peak national and state automotive organisations have reached agreement about how to electrify the country’s fleet of cars, trucks and other vehicles.
The organisations have all agreed to a series of fundamental principles, including:
- Embracing the electrification of the Australian motor vehicle fleet
- Maintaining the repair and efficiency of the legacy internal combustion engine fleet
- Opposing bans that limit consumer choice
- Supporting the federal government to develop an electrification transition strategy
- Ensuring government targets are consistent, realistic and evidence-based
- Mandating CO2 targets (not electric vehicle targets)
Electric vehicle sales have been growing rapidly, but still only represent just a sliver of the vehicle market, according to data from the Electric Vehicle Council.
With sales of plug-in electric vehicles soaring to huge numbers had tripled from 6,900 in 2020 to 20,665 in 2021.
The interest that increased the electric vehicle market share to only 2.0%, from 0.8%.
Falling demands in business loans could mean wavering confidence
Business credit demand has fallen year-on-year, according to the Equifax Quarterly Commerical Insights report for the June quarter.
The number of business loan applications actually rose 2.0%, however, trade credit applications fell 2.3% and asset finance applications fell 9.1%.
As a result, overall business credit applications fell 2.0%, which was the first decline in five quarters.
Equifax’s general manager of commercial and property services, Scott Mason, said business credit demand was relatively strong in April and May, before falling away in June.
Speaking about the significant drop in asset finance applications, Mr Mason said this was the first year since 2019 that businesses haven’t had access to the instant asset write-off.
” This could reflect decreasing business confidence in the face of rising rates and inflation, and may be a forerunner to lower demand in Q3,”
Scott mason – equifax general Manager
“As a result, many businesses likely purchased assets over the past two years that don’t need to be replaced or upgraded, and the fall in applications this quarter reflects this,”
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