The Australian share market experienced a downturn today, with the ASX dropping following recent budget announcements. Commonwealth Bank (CBA) shares notably plunged by 8 per cent, despite the institution reporting a $2.7 billion quarterly profit. This sharp fall was primarily driven by concerns over increased bad debt buffers and anticipated economic headwinds, alongside the potential impact of new budget measures on its lending growth. Commonwealth Bank, one of Australia’s largest financial institutions, provides a broad range of banking services to retail, business, and institutional clients. Its operations encompass lending, deposits, payments, and wealth management across the nation. UBS further cautioned that CBA, along with Westpac, faces significant exposure to proposed negative gearing changes.
The federal budget continues to be a focal point, drawing sharp criticism from Liberal leader Angus Taylor. Mr Taylor lashed out at Treasurer Jim Chalmers’ budget, signalling his party’s intent to oppose proposed changes to Capital Gains Tax (CGT) and negative gearing. Independent MP Allegra Spender also raised concerns, suggesting that start-ups could suffer under the proposed reforms. Meanwhile, Mr Chalmers indicated that future tax relief might continue to preference those who derive income from salaries, rather than assets.
Former Treasury boss Ken Henry voiced his support for increased asset taxes, commending Mr Chalmers’ courage in reforming property taxes. However, Mr Henry urged the Labor government to subsequently pursue more substantial income tax cuts for workers and businesses. In other market news, healthcare provider Healius has revised its guidance downwards, and a court ruling has mandated that Zip, the buy-now-pay-later provider, must change its name. Additionally, BlackRock is leading the process to sell Akaysha, Australia’s largest battery player, which boasts 2.9 gigawatts of capacity and is expected to command a multi-billion-dollar valuation.
