Economy

Federal government drops “Google tax” from budget; Woolies to slash 400 more jobs after disappointing quarterly results: Midday Roundup

Engel Schmidl /

The federal government has reportedly shelved plans for a UK-style “Google tax”, and is likely instead to opt for new disclosure laws for companies suspected of engaging in international tax minimisation.

The news comes less than a month after Federal Treasurer Joe Hockey flagged the possibility of extending the GST to “intangibles” such as media downloads. Another option highlighted by the Treasurer was a 30% company tax rate to profits earned from activity within Australia but declared overseas, a scheme known as a “diverted profits tax”.

However, according to a report in The Australian Financial Review, the federal government is now looking at requiring companies such as Google, Apple and Microsoft to disclose more details about their operations.

If accurate, the new policy position appears similar to one of the suggestions made in a recent discussion paper published by The Greens, which called for companies that engage in international tax minimisation to be publicly named and shamed.

 

Woolies to slash 400 more jobs after disappointing quarterly results

 

Woolworths has announced plans to cut 400 full-time backroom and office roles, following a drop in the retailer’s third-quarter sales and intensifying competition from Coles and Aldi.

The ABC reports the cuts come on top of 400 job losses previously announced in July last year.

The cuts come after Woolworths announced a 2% drop in third-quarter sales, with consolidated sales for the quarter coming in at just under $15 billion.

The falls were led by a 3.3% fall in sales at the company’s key supermarket division to $11.8 billion, a 35% collapse in the value of petrol sales, and a 4% drop in sales at the company’s Big-W variety store chain.

“We will turbo-charge our ‘lean retail’ model by investing more than $500 million into delivering lower prices, better service and more attractive offers,” Woolworths’ chief executive Grant O’Brien said.

 

Shares down on open

 

Aussie shares have traded lower this morning, off the back of a negative lead from Wall Street overnight.

Tristan K’Nell, head of trading at Quay Equities, said in a statement he won’t be surprised to see some “bargain hunting” from investors this afternoon.

“Market turnover into lunch was very strong at $2.362 billion,” K’Nell said.

“The market has been sold off pretty hard this morning, given we also saw weakness yesterday in the final hour and a half.”

The S&P/ASX 200 benchmark was down 90.3 points to 5736.2 points at 12.20pm AEST. On Tuesday, the Dow Jones closed 142.2 points lower, down 0.79% to 17928.2 points.

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