As it happened: Lawyers, accountants, real estate agents target of new money laundering laws

Australia's share market has closed higher with share prices in Telstra lifting and CBA hitting a record high.

The S&P/ASX 200 index closed up 0.9 per cent at 7829.7 points.

CBA closed up 1.8 per cent at $128.69, a record high close after hitting $129,97.

Telstra finished up 2.2 per cent at a three-month high of $3.73 after announcing price hikes for its customers with mobile phone plans.

The Bank of England's Jonathan Haskel says tight jobs market means inflation is likely to be higher than 2 per cent target "for quite some time" and that Britain's battle against inflation remains incomplete.

"I would rather hold rates until there is more certainty that underlying inflationary pressures have subsided sustainably," said Haskel, a member of the Bank's monetary policy committee (MPC), in a speech at King's College London.

He warned that the return to the official target set by the government would be temporary amid pressures from a tight jobs market.

CBA's Kristina Clifton says several other BoE officials are scheduled to give speeches this week including chief economist Huw Pill on Wednesday and Catherine Mann on Thursday.

"Financial markets are currently pricing around a 66 per cent chance of BoE interest rate cut at the next meeting on August 1," she said.

"However we favour a later start to the rate cutting cycle in September because there is uncertainty around the strength of the labour market and services inflation is still very high."

Three private surveys measuring how the economy is faring were released today and all paint the picture of an economy that continues to soften, says CBA's Gareth Aird.

NAB's June Business Survey; Westpac and Melbourne Institute's July Consumer Sentiment Survey and Seek's June Employment Dashboard are not signaling happy times.

"Business conditions eased again in the June NAB Business Survey to sit comfortably below their long run average," Mr Aird notes.

"Westpac Melbourne Institute's consumer sentiment dipped a little in July to remain deeply in the pessimistic zone.

"Consumer confidence index has been stuck at levels consistent with a recession or major negative economic shock over the past 18 months. That picture remained unchanged in July.

"Households remained deeply concerned about both family finances and economic conditions over the next 12 months. 

"And elevated inflation and heightened concerns over interest rates rising further continue to supress consumer sentiment."

The Stage 3 tax cuts and energy rebates were having "no discernible positive impact on consumer sentiment".

"The time to buy a major household item index is stuck near record low levels (82.1 in July) and well below its long run average of 124.4.

"Expectations around house price appreciation are still sitting at bullish levels, consistent with further growth in home prices.

"There is a deep mismatch between the underlying demand for housing and growth in the supply of homes. Indeed house price outcomes are largely divorced from the performance of the broader economy."

Job ads continued their trend decline in June and the number of applicants per job ad pushed higher again in May.

According to Seek, job advertisements fell by 1.5 per cent in June.

Job ads have trended lower since mid 2022.

Seek job ads are down by 17.1 per cent over the year to June and now sit 36.2 per cent below their peak, Mr Aird noted.

"The trend lower in job ads points to rising unemployment over the period ahead," he said.

"The number of applicants per job ad continued to march higher in May (latest available). Applicants per job ad are up by 61.6 per cent over the year and a whopping 210.9 per cent from their cyclical low in mid 2022."

As property prices surge to record highs in many parts of Australia, the idea of home ownership has become a pipe dream for many people.

Figures from CoreLogic show the nation's median dwelling price rose by a further 0.7 per cent in June.

Across the past financial year, dwelling values jumped 8 per cent.

Here's an article which breaks down how much income you need to purchase property in each of Australia's capital cities:

The Real Estate Institute of Australia (REIA) says the federal government needs to be careful not to hurt businesses as part of its crackdown on money laundering.

"Introducing blanket compliance requirements on all real estate businesses appears once more to be taking a sledgehammer to a walnut," REIA Deputy President Hannah Gill said.

"The Attorney General himself has said today that he has no knowledge and there is no evidence to substantiate that money laundering is driving house price growth."

"The last thing we want is Australian homes falling into the hands of sophisticated criminals with legitimate buyers who are hardworking Australian families and individuals missing out.

"This is especially the case when housing is in such short supply. Nevertheless, compliance programs introduced as a consequence of this fight this needs to be based on the cost versus the benefits."

The Attorney Generals speech identified that just $228 million in property had been seized by the financial crime regulators.

"The Australian residential property market is worth in excess of $10 trillion. This is 0.00228 per cent of the total market," she said.

"The AUSTRAC strategic brief identifies the real estate asset over the real estate agent is high risk but goes on to say that once more they cannot price the size of the problem. "

Global butter prices have surged to record levels but according to Rabobank, Australian dairy farmers are unlikely to cash in — and consumers are set to pay more.

The Oceania spot price for butter has risen about 35 per cent this year and has now gone beyond $US7,000 a tonne ($A10,400/tonne) for the first time.

Despite having a large domestic dairy industry, Australia is a net importer of butter and last year imported a record 47,500 tonnes.

For more, here's the story by Matt Brann and Warwick Long:

Iran's latest election took place amid heightened geopolitical tensions.

Although more than 61 million Iranians aged 18 or older were eligible to vote in the presidential election, the first round of voting on June 28 saw the lowest turnout in Iran since the 1979 Islamic Revolution.

Can it's new so-called "reformist" president, Masoud Pezeshkian, usher in change and improve its standing with the West?

The 69-year-old heart surgeon defeated the conservative candidate, Saeed Jalili, in the contest to choose a successor to the late president Ebrahim Raisi, who died in a helicopter crash in May.

Read my analysis today about whether the new president will make any difference to Iran's domestic and foreign policy stance:

Australia is continuing to fall behind global standards on anti-money laundering and counter terrorism financing measures, with cash, banks, luxury goods, real estate and casinos providing continued channels for money laundering.

In a speech to the National Press Club, Attorney-General Mark Dreyfus said Australia is at risk of being "grey-listed" by the international Financial Action Task Force for failing to meet global standards.

AUSTRAC's second NRA released today, Terrorism Financing in Australia: National Risk Assessment, found that retail banking, remittance and exchanging cash remain the preferred avenues to move funds.

The risk assessments are designed to help businesses understand the methods that criminals use to launder proceeds of crime or fund extremist violence.

AUSTRAC says most of these illicit funds go to overseas terrorist organisations and affiliated groups.

Social media and crowdfunding platforms have also become integral to fundraising terrorist activities.

"Crimes like money laundering and terrorism financing erode trust in Australia's financial system and the security of the Australian population. Criminals might be persistent, but so are we," AUSTRAC chief executive Brendan Thomas said.

"That's why AUSTRAC has worked with the national intelligence community, law enforcement and regulatory agencies, together with industry and international financial intelligence units to build these risk assessments.

He said the NRAs will help strengthen Australia's anti-money laundering and counter terrorism financing (AML/CTF) regime, which is a key component of the national, cooperative approach to countering serious and organised crime.

Currently, Australia is one of only five countries – including China, Haiti, Madagascar and the United States – that don't regulate high risk professions like lawyers, accountants, real-estate agents and gemstone dealers as part of our AML/CTF regime.

Australian Criminal Intelligence Commission data shows the value of the domestic Australian drug market is worth at least $12.4 billion a year.

The exploitation of digital currencies is also allowing criminals to move funds quickly, cheaply and with what they perceive as a degree of anonymity.

The federal government has proposed reforms to simplify Australia's AML/CTF framework and extend it to higher risk services, including professional services provided by lawyers, accountants and real estate agents.

Transparency International Australia (TIA) has welcomed the government's reforms.

"Financial crime impacts all of us," said Clancy Moore, CEO of TIA.

"When kleptocrats, criminals and corrupt officials hide their ill-gotten gains in Australia, it robs local communities of money for essential services and distorts our economy.

"Too often, lawyers, accountants, and real-estate agents choose to look the other way, actively support, or unknowingly enable criminals to launder their proceeds of crime in Australia.

"It's time to close this massive loophole in Australia's financial system."

My colleague Daniel Ziffer wrote detailed feature covering the issue: https://www.abc.net.au/news/2024-05-06/new-laws-to-stem-money-laundering-through-real-estate/103800070

You can also listen to David Lipson from ABC AM program interview this morning with Brendan Thomas:

The decline in job mobility is generally considered a bad thing for the economy.

When people change jobs, economists assume that, in general, it will be to a higher paying role more suited to a worker's skill set, thus boosting productivity across the economy.

"Outside the post-pandemic jump, job mobility has trended downwards over multiple decades," notes job website Indeed's Asia-Pacific economist Callam Pickering.

"Australian workers today are more conservative in the job choice and more loyal to their employer than was common decades ago. It also suggests that the economy itself is less dynamic than it once was."

So why are we staying put with our current employer?

Pickering says it's not because of a lack of opportunity.

"The recent decline in job mobility is perhaps a surprise given that the Australian economy continues to create an incredible number of jobs," he continues.

"There are plenty of opportunities available for those who want a new job. And we know that changing jobs is often the best way to get a substantial pay rise, which seems useful in a cost-of-living crisis.

"That suggests that Australians are more concerned about the job market and are more likely to prioritise job security over new opportunities, even if they are more highly paid."

So, unless someone's got something already lined up, they're less likely to jump ship in the hope of finding a better job.

Some data out from the Australian Bureau of Statistics today highlights how things are becoming tougher for those looking for a job or to change jobs.

The data was collected in February and is an annual snapshot of labour mobility and "potential workers".

First, on labour mobility, the proportion of workers switching jobs in the year to February 2024 fell for the first time in three years, slumping 1.5 percentage points back to about 8 per cent.

About 1.1 million people changed employer over that year, and the rate of job switching was back about pre-COVID levels.

Despite the reputation of younger generations flitting between employers, there's been a structural downtrend in job switching since the late-1980s, with a further downward leg since the global financial crisis.

Younger workers have been a key driver of this trend, with 12.6% of 15 to 24-year-olds changing jobs, well down than the high of 15.9% in the pandemic and typical rates above 20% when you go back two decades.

It's not surprising that workers are more reluctant to shift jobs, with more potential workers out there to compete against.

The ABS found there were 1.9 million "potential workers" in February 2024, up by about 100,000 from the same time a year earlier.

That's despite only 555,000 being considered unemployed, which the ABS defines as available to start work and actively looking for it.

"Of the people who wanted to work, just over 1 million people were available to start work straight away, and an additional 483,000 people were available to start within four weeks but not immediately. The remaining 330,000 people said they weren't going to be available for more than a month," the ABS head of labour statistics Bjorn Jarvis noted.

The ABS data show there were 810,000 people in February 2024 who wanted to work, were available to start either immediately or within four weeks, but did not actively look for work.

The main reasons given were because people were attending an educational institution (197,000 people, or 24%), caring for children (112,000 people, or 14%), or had a long-term health condition or disability (98,000 people, or 12%).

Business conditions edged down further in the month, continuing the long running trend since peaking in late 2022, according to NAB's Monthly Business Survey for June 2024.

Business conditions fell 2pts to +4 index points and are now below the long-run average.

The fall was driven by declines in employment (down 6pts to 0 index points) and profitability indices (also down 1pt to +2 index points) while trading conditions were broadly flat at +10 index points (unrounded).

“Business conditions continued their now long running easing trend in June,” said NAB Head of Australian Economics Gareth Spence.

“They are now below average, reflecting the slowing in the economy through late 2023 and early 2024.”

“Of note is the sharp decline in the employment index in the month. While its only one month’s read, the employment index is now below its long-run average and may be signaling that the broader slowing in the economy is flowing through more strongly to labour demand.”

However, business confidence – driven by a broad-based increase across industries - rose sharply in the month to its highest level since early 2023.

Business confidence was up 6pts to +4 index points driven by an increase in 7 out of 8 industries.

The jump was led by increases in manufacturing and wholesale while the remaining industries saw 6pts+ increases except for construction which declined 3pts.

In trend terms, the goods distributions sectors – wholesale and retail - remain weakest and the only two industries in negative territory at -7 index points.

“Business confidence rose relatively sharply in the month and is now back into positive territory and at its highest level since early 2023,” Mr Spence said.

"Other activity indicators were mixed in the month. Forward orders were flat at -6 index points (unrounded) while capex fell 5pts to 0 index points. Capacity utilisation edged up and remains well above average at 83.5 per cent.

“Forward orders remain well into negative territory and have been there for some time.

"The key driver of weak forward orders over recent months have been the retail and wholesale sectors, though manufacturing weakened further in the month and is also now very weak.”

Labour cost growth eased to 1.8 per cent in quarterly equivalent terms (from 2.3 per cent in May) and purchase cost growth also eased to 1.3 per cent (from 1.7 per cent).

Product price growth fell to 0.7 per cent overall (from 1.1 per cent). Retail price growth was broadly stable at 1.5 per cent, while recreation & personal services prices fell to 0.7 per cent (from 1.1 per cent).

“Encouragingly, the key price and cost growth measures reversed their increase from last month,” Mr Spence said.

“That said, retail price growth was broadly stable and is high despite the weaker activity outlook and confidence in the industry. However, also important for consumer prices on the services side, recreation and personal services price growth fell back to 0.7 per cent on a quarterly basis.”

“Overall, our take on the survey is that it continues to signal another soft quarter in Q2."

Telstra customers are set to pay more for mobile plans after the telecommunications giant announced price hikes.

Telstra shares closed flat yesterday, but in late morning trade, were up 2.3 per cent to $3.74.

The change in pricing will be introduced for postpaid customers from August 27 this year. The change for prepaid customers will come into effect from October 22.

Customers will be out between $2 to $4 per month, with premium plans set to have the highest price jump from $95 per month to $99 per month.

Basic plans will rise from $62 to $65, essential plans will rise from $72 to $75, and bundle plans will increase from $50 to $52.

Starter plan prices will remain unaffected by the price hikes, with the monthly rate staying at $50.

Telstra noted that over the past five years, network traffic on its mobile network has increased by around 3.5 times and continues to grow by 20 per cent a year.

To help manage this demand growth, the company invested $1.3 billion in mobile spectrum in FY 2024 to support more data and faster speeds.

As the company announced on May 21, its mobile plan will no longer be linked to an inflation-linked annual review.

"In making these price changes, Telstra has balanced cost of living pressures it knows some of its customers are experiencing, with its need to continue to invest to manage technology evolution and continued strong customer demand on its mobile network," CEO Vicki Brady said in a statement to the ASX on Tuesday.

Telstra's decision arrives after Optus hiked its postpaid mobile phone plans in May.

In May, Telstra announced it would sake about 10 per cent of its 31,000 strong workforce. More on that here:

The Westpac–Melbourne Institute Consumer Sentiment Index dipped 1.1 per cent to 82.7 in July from 83.6 in June, with family finances again under pressure, and a big jump in interest rate rise expectations.

"Sentiment remains stuck in the same deeply pessimistic range that has dominated for two years now," said Westpac senior economist, Matthew Hassan.

"The July update shows that fears of persistent inflation and further interest rate rises are again weighing more heavily on the consumer mood, offsetting any boost from the arrival of the stage 3 tax cuts and other fiscal support measures.

"While these measures came into effect from July 1, many consumers would not have seen any cash flow impacts so far given that payment cycles – for both incomes and for the electricity and rent expenses set to receive more cost of living support – are often fortnightly or monthly."

The component indexes show the latest sentiment dip centered around family finances.

The sharpest fall was in the "family finances vs a year ago" sub-index, which dropped 8.4 per cent, giving back almost all last month's promising 9.7 per cent lift.

At 63.5, the sub-index remains at "extremely weak levels".

"Consumer expectations for their finances also deteriorated. The 'family finances, next 12 months' sub-index declined 4.5 per cent to 92.1, the weakest read since the end of last year," Mr Hassan said.

"On a combined basis, the two sub-indexes tracking finances declined to their weakest level since November."

Other components improved slightly, with consumers a little less pessimistic about the economic outlook and around attitudes towards spending.

The sub-index tracking assessments of the "economic outlook, next 12 months" rose 3.6 per cent to 81.4, while the "economic outlook, next 5 years" sub-index nudged up 0.5 per cent to 94.5.

The "time to buy a major item" sub-index lifted 3.1 per cent to 82.1 but remains well below its long-run average of 124.

The most striking move in the month was again around consumer views on the interest rate outlook.

The Mortgage Rate Expectations Index tracks consumer expectations for variable mortgage rates over the next 12 months.

It jumped 12.8 per cent in July, marking the steepest monthly rise since Westpac began running this question in every survey at the start of 2022.

The Index has surged 30 per cent in just three months, from a below-average read of 122.8 in April to 159.2 in July (the average historically is 143.8).

"That sudden hawkish turn is the sharpest we have seen in the last seven years," Mr Hassan said.

"The detailed responses show about just under 60 per cent of consumers expect mortgage rates to rise over the next year."

Many of today's best performing stocks are in the resources sector.

Shares of Sims (+4.6%), Iluka Resources (+2.6%) and Arcadium Lithium (+2.4%) have risen sharply in morning trade.

Tech and communications stocks are also doing well, including Life360 (+2.2%) and Telstra (+2.1%).

On the flip side, today's worst performers are uranium stocks Deep Yellow (-3.5%) and Boss Energy (-2.6%), along with the electronic payments company Block (-1.4%).

The Australian share market has begun its day moderately higher after Wall Street hit new record highs overnight.

The ASX 200 index was up 0.6% to 7,810 points, by 10:20am AEST (essentially clawing back much of yesterday's losses).

Nearly every sector is trading higher, led by materials (+0.8%), tech (+0.8%) and financials (+0.7%).

The only sector to fall in morning trade is utilities (-0.3%).

• ASX 200: +0.6% to 7,811 points (live figures below)
  
• Australian dollar: +0.2% to 67.4 US cents 
• Wall Street: Dow Jones (-0.1%), S&P 500 (+0.1%), Nasdaq (+0.3%)
• Europe: FTSE (-0.1%), DAX (flat), Stoxx 600 (flat)
• Spot gold: +0.2% to $US2,363/ounce 
• Brent crude: flat at $US85.71/barrel 
• Iron ore: -1.7% to $US108.50/tonne
• Bitcoin: -0.2% to $US56,524

Prices at around 10:15am AEST.

Live updates on the major ASX indices:

If you need a refresher about what happened on markets yesterday, here's Alan Kohler's finance report from the 7pm News.

Basically, the All Ords fell 0.7% yesterday as lower oil and iron ore prices weighed on resources stocks.

As usual, Alan included some nifty charts. One of them shows US Vice-President Kamala Harris is now seen as more likely than Joe Biden to get the top job, according to betting markets.

However, they trail well behind Donald Trump.

A man accused of setting up a sham company used to steal $1.7 million from Australian scam victims has admitted deleting crucial messages and accused police of lying about messages they found on his phone.

The stunning testimony was given by Hassan Mehdi during days of tense cross-examination in a civil lawsuit in the NSW Supreme Court.

Mr Mehdi maintains his innocence but was pressed on whether he'd changed his story after the ABC broadcast new information, and whether he'd intentionally deleted messages, backdated documentation or withheld evidence of a bank account.

He's a Melbourne-based Pakistani man who founded a business called Supercheap Security in 2021 and later created a bank account with NAB.

For more, here's the story by Michael Atkin:

Skydance Media and Paramount Global have agreed to merge, the companies announced late on Sunday, in the hopes of "energising" Paramount's offerings.

Many of you may know Paramount as the studio behind The Godfather, Breakfast at Tiffany's and a huge list of other films. It's also the owner of Network 10 (the home of shows like MasterChef and The Project), and the streaming service Paramount+.

And in case you're wondering, Skydance is a film production company founded by David Ellison (the son of Oracle co-founder Larry Ellison).

His company was Paramount's financial partner on several major recent movies (including Top Gun: Maverick, Mission: Impossible — Dead Reckoning and Star Trek Into Darkness).

The merger is quite complex and involves a few steps.

Firstly, Skydance and its deal partners will purchase a company called National Amusements (which holds the Redstone family's controlling stake in Paramount) for $US2.4 billion in cash.

Skydance will then merge with Paramount, offering $US4.5 billion in cash or stock to shareholders.

It will also provide an extra $US1.5 billion for Paramount's balance sheet.

Shares of Paramount fell 5.3% to $US11.18 overnight. (Those are the 'Class B' shares, which don't come with any voting rights).

The 'Class A' shares are owned by the Shari Redstone and her family (through their company National Amusements).

For more info, you can read the ABC's article here: