Here’s what you need to know today

• Yesterday Australia’s Reserve Bank held the cash rate steady at 4.35%, in a move that surprised no-one. While annual inflation is back at 2.8%, the RBA made the point that excluding temporary cost of living relief, underlying inflation is at 3.5% (above the RBA’s target of 2-3%). (ABC News)
  
  

• Other comments of note from the RBA’s meeting: Australia has the second-highest underlying inflation of any major advanced economy, and the RBA pointed to government spending as the main reason why. (AFR) The RBA also expressed surprise that demand for home loans has grown despite rising interest rates. (AFR)
  
  

• One of Australia’s most successful CEOs is calling it a day. Don Meij took Domino’s from a local franchise of an American pizza chain to an international pizza giant in its own right and made it a growth stock for Aussie investors. Meij spent 40 years with Domino’s, including 22 as CEO. His supporters will tell the story of how he listed the business in 2005 at a $135 million valuation and today it is worth $3 billion. His detractors will tell you Domino’s was worth $14 billion in September 2021, only to lose 80% of its value over the past 3 years. (AFR)
  
  

• Commonwealth Bank is looking to get into the advertising market. Specifically it plans to start selling ad space on its ATM screens, in its mobile app and on screens in branches. This follows a similar move by Woolworths, Coles and Chemist Warehouse to use their scale and foot traffic to muscle in on the multi-billion dollar advertising market. CBA also plan to use de-identified payments data from their 7 million customers to better target ads. (AFR)
  
  

• The Australian government released its new Defence Workforce Plan that gives the ADF an additional $600 million to increase its intake from 5,500 recruits a year to 9,000 and to increase the median service length from 7 years to 12 years. Given Australia is already behind its recruiting targets, this may be easier said than done. (Capital Brief)
  
  

• The Albanese government has announced it cut spending on Big 4 consulting firms by $890 million since coming into office in 2021-22. That is almost half of what the previous government spent on outsourcing this work, which is now being completed by 8,800 public servants. (Capital Brief)
  
  

• Ukrainian officials reported their first military engagement with North Korean troops, marking the first time a foreign military has been directly involved in the Ukraine conflict since Russia invaded in 2022. (Financial Times)

What the…?

At some point, we might need to just have a standing section of this email titled, ‘latest good news about Ozempic’. The headline today comes from the Wall Street Journal: Doctors Wish More People Over 65 Took Ozempic. (WSJ)

Currently, 9% of Americans aged of 65 take GLP-1 drugs, but with some early studies suggesting GLP-1 drug may reduce the risk of dementia and the fact that obesity can be a gateway to cancer and cardiovascular disease, some US doctors are suggesting more older adults should be taking it.

Investing is a lifelong journey

Here’s what you can learn today.

31% of companies are not paying tax in Australia. How do they do it?

The Australian Taxation Office’s latest corporate transparency report was released last week, and it was a mixed-bag. Whatever your thoughts on corporate tax, there’s something in there for you.

• If you think companies are unfairly maligned, you can point to last year being a record with Australian companies paying $100 billion in tax, up 17% from the previous year.

• If you think companies should pay more, you can point to 31% of Australia’s 4,000 largest corporations paying no tax at all.

This article is an analysis of the ATO’s transparency report by Kerrie Sadiq, Professor of Taxation at Queensland University of Technology. In it, Sadiq offers insight into the methods Australia’s largest companies use to avoid paying tax, including transfer pricing and a liberal use of deductions and offsets.

Here’s one more fact to leave you with: the industry where the largest proportion of companies paid no tax in the 2022-23 financial year? ‘Mining, energy and water’ where 46% of companies with revenue above $100 million paid no tax.

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