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Business news and updates: Daily roundup (July 26, 2021)

Dynamic Business brings you a daily rundown of the most recent business news and developments from Australia and around the world. Here’s the roundup for July 26: 

Tasmania ranked Australia’s best economy: CommSec

According to a new study, Tasmania has maintained its position as Australia’s best-performing state economy. Tasmania has been named the best economy for the sixth quarter in a row in CommSec’s State of the States survey.   

Four of the eight economic indicators show that Tasmania is in the lead: relative population growth, equipment investment, relative unemployment, and housing starts.   

The island also ranked second on another two indicators – construction work and retail spending.

Australian fossil fuel extraction companies received $1.4 billion from the government between 2012-18: Study

Between 2012 and 2018 fossil fuel extraction companies received $1.4 billion in research and development tax credits from the Australian government, a study revealed.

Among the projects funded by Commonwealth and state governments are work on coal ports, railways and power stations, and research into “clean coal” or “coal innovation”.

In 2018, the most recent year for which data was available, Australian fossil fuel companies were holding on to $880 million in R&D tax credits that could be used in future years on top of what they had claimed.

That’s in addition to the $1.4 billion already received, for a total of well over $2 billion. It’s a substantial well-hidden public investment in fossil fuel R&D, the study found.

Shift unemployed to disaster relief: Labor

Labor wants welfare recipients living in lockdown areas automatically bumped onto higher COVID-19 disaster relief payments.

The opposition also wants the federal government to automatically move people back onto JobSeeker and waive the waiting period when the lockdowns end.

Currently, people receiving government payments aren’t eligible for disaster relief and have to choose one or the other.

Labor’s social services spokeswoman Linda Burney says it should be simplified. 

$4.6 billion in JobKeeper went to businesses at the height of the COVID-19 pandemic

Businesses and nonprofits were eligible for JobKeeper if their turnover fell below a certain threshold or was expected to fall below a certain limit.  

In March 2020, the federal government announced a $1,500-per-week salary subsidy as portions of the economy began to shut down.   

Around one million businesses and nonprofits were using JobKeeper by the mid-2020.   From April through June of last year, 365,477 enterprises and organisations received JobKeeper, with a turnover that did not fall below threshold levels.  

When compared to the same period in 2019, 157,650 JobKeeper employers had an increase in turnover.

Australia records biggest rise in housing rents in more than 22 years

The cost of renting a home in Australia surged over the past 12 months despite COVID-19 price hike moratoriums, creating an “unsustainable” situation while incomes languished.

Nationally, rental rates jumped 6.6 per cent over the year to June – the highest annual growth since January 2009, CoreLogic data shows.

Perth recorded the nation’s second-highest average rate increase over the 12 months, with prices up 16.7 per cent. 

Petrol to get cheaper thanks to OPEC decision to increase oil production

Australian petrol is expected to get cheaper after a decision to increase global fuel production.

The NRMA said petrol prices could fall by as much as four cents per litre thanks to the decision by the Organisation of Petroleum Exporting Countries (OPEC) to increase production volumes.

Chipotle customers are reporting ingredient shortages amid high beef and shipping costs

Customers say Chipotle locations are out of key ingredients like rice and steak.

A nearby location had both ingredients, and Chipotle told Reuters that these were not a reflection of overall supply chain problems.

The entire restaurant industry is facing supply chain issues, causing shortages and impacting customers.

The chain told Insider shortages were due to “national transportation delays,” that are impacting the entire industry.

Biden’s China containment plan comes into view

The Joe Biden administration is bidding to win back estranged allies and counter Beijing’s rising influence through two new big initiatives that if implemented as envisioned will more starkly divide the region into pro and anti-China camps.

United States officials are now hammering out the details of a major proposed pact on digital services, one that would seek to set rules for cross-border flows of information, digital privacy and artificial intelligence standards in Asia. 

The pact would explicitly exclude China.

China’s Didi facing scrutiny: report

According to a source, Chinese regulators may slap Didi Chuxing with a harsher penalty than Alibaba’s record fine, which came only weeks after the company’s contentious IPO in New York.  

Despite China’s opposition, Didi launched in New York on June 30 and saw a 10% increase in its stock price. 

Only a few days later, Beijing launched an investigation into the company, alleging cybersecurity concerns, and demanded that its software be pulled from app stores.   

Citing people familiar with the situation, Bloomberg News reported that Didi’s choice to go public despite Beijing’s dissatisfaction was seen as a threat to the leadership.

China has launched investigations into several other US-listed Chinese tech companies as it beefs up its network security regime and tries to rein in some of its massively influential and popular tech apps.

China orders Tencent to end exclusive music contracts

Tencent promised on its social media account to “conscientiously abide by the decision.”

Regulators are stepping up enforcement of anti-monopoly, data security, financial and other rules against Tencent, e-commerce giant Alibaba Group and other companies that dominate entertainment, retail and other industries.

Regulators have publicly warned major companies not to use their market dominance to keep out new competitors.

Tencent was blocked by regulators on July 10 from combining its game platforms Douyu and Huya on the grounds that it might reduce competition.

New unicorns riding high in India

The US$1.3 billion stock market listing of online food delivery company Zomato highlighted the emergence of India’s unicorns, or startup companies with valuations of over US$1 billion. 

International investors are warming to India’s growing pro-startup regulations and large market, especially after being burned by China’s crackdown on high-tech firms, most notably Beijing’s squeezing of ride-hailing app Didi Global after it just listed on the New York Stock Exchange. 

Zomato’s initial public offering (IPO), India’s first internet unicorn to list, was oversubscribed more than 38 times when it made its Bombay Stock Exchange (BSE) debut, gaining more than 51% on its IPO price of US$1.02

India’s Zomato shares soar in red-hot start

Shares in Zomato gained as much as 80% on their first day of trading on Mumbai’s stock exchange. The listing comes a little over a week after the food delivery company launched its IPO to raise $1.3 billion. 

The stock ended the day about 65% above its offer price, giving the company a market value of about $13 billion.

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Yajush Gupta

Yajush Gupta

Yajush is a journalist at Dynamic Business. He previously worked with Reuters as a business correspondent and holds a postgrad degree in print journalism.

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