Tiwi elders lose cultural heritage case against Santos; household spending falls in December: as it happened

The S&P/ASX 200 closed down slightly -0.03% or -2.00 points to 7,496.30

These were the biggest winners and losers today:

The index is is currently 1.79% below its 52-week high.

The All Ordinaries was flat at close.

Santos finished +3.7% following today's developments on its gas pipeline (you can catch up on the news below).

Worth noting that today is Martin Luther King day - a public holiday in America - so US markets are closed until Tuesday US time.

Have a good evening and see you tomorrow

More on that new CommBank report we mentioned earlier.

Let's take a closer look at the data and what it tells us about where the economy could be heading this year.

It shows the sectors with the greatest decline in spending in December were household goods (-16%), recreation (-6.5) and food and beverage (-2.7%).

These were only partly offset by an increase in transport (+1%), insurance (+0.6%) and health (+0.2%).

CBA Senior Economist Belinda Allen said households are feeling the pinch after successive interest rate rises:

"With the pace of economic growth in Australia moderating and the full impacts of November’s rate rise yet to flow through to the consumer, we expect a further slowdown in the pace of household spending over the coming months."

The bank believes that slowdown, along with moderating inflation means the RBA could begin lowering interest rates this September by 75bp, and a further 75bp in first half of 2025.

If our last post has you pondering your current employment situation...you're in luck.

New figures show the jobs market is still strong, although softening.

ANZ-Indeed Job Ads rose by 0.1% in December but have fallen by 14.9% over the year.

Indeed Senior Economist, Callam Pickering said:

"Around 80% of this decline was driven by New South Wales and Victoria, with both states experiencing a much larger decline in Job Ads than other states and territories."

Talent and skills shortages mean it's still a good market for jobseekers, though strong population growth has helped plug the gap between labour demand and supply that emerged after the pandemic.

ANZ Senior Economist, Catherine Birch:

"While the labour market is easing, there are no signs of a sharp deterioration approaching. Vacancies per unemployed person declined to 0.68, a two-year low, but this is still double the pre-COVID level"

Overall, job ads are still 36.5% above pre-pandemic levels from February 2020.

The data shows the biggest declines were in the food preparation & service sectors, software development and personal care, which more than offset gains in therapy and education job ads.

There are a few telltale signs, according to this article by my colleague Widia Jalal:

• Harassment and bullying 
• Lack of compassion or humanity
• Compounding negative experiences
• Observed mistreatment towards others
• Unrealistic levels of work pressure and associated stress
• The idea that staff should do whatever it takes to get the job done
• The notion that employees are disposable if they cannot perform or cope
• Status or prestige awarded for tolerance that normalises unhealthy competition
  

As everyone heads back to work after summer holidays, it's a time when employees might be reassessing their work situation in light of an overly stressful job or problematic boss.

The article also has some handy hints to deal with a toxic workplace.

Interestingly, new laws as of April 2023 put the onus on employers to identify and manage hazards and risks to workers’ psychological health and safety and maintain a mentally safe workplace.

Santos has won a case brought by several Tiwi elders, just as the federal government is looking into the offshore regulatory approvals system for oil and gas projects.

The government opened submissions for the first stage of this review only a few days ago on January 12.

It will look into the process that oil and gas companies go through when they are seeking environmental approvals for offshore projectsion, specifically the consultation process with impacted parties such as First Nations communities.

"We want to ensure titleholders consult and engage in a meaningful way when developing environment plans," it says.

"Consultation requirements must be clear so that consultation activities are targeted and effective."

The lobby group for offshore oil and gas exploration has been raising concerns that projects are being delayed by challenges to environmental approvals.

Just today, while welcoming the Santos ruling, Energy Producers took aim at "activists" for delaying projects, and  raised concerns about "vague and ambiguous regulations".

The gas industry's lobby group says a court victory by Santos today is "a win for Australia", and is also raising concerns about "vague and ambiguous regulations".

Santos had been forced to halt construction of part of a pipeline for its $5.7b Barossa gas project.

That was as several Tiwi elders challenged the pipeline in court, claiming it would impact cultural heritage in waters west of their archipelago in northern Australia.

It was the second challenge to the Barossa project made by Tiwi elders working with environmental lawyers.

The Tiwi elders case against the pipeline has now been thrown out of court, with a judge ruling their concerns were not backed up by evidence. Pipeline laying can now resume.

“This brings to an end a period of significant uncertainty, substantial delays and costs incurred for the project as a result of a broken offshore environmental regulatory system,” Australian Energy Producers chief executive Samantha McCulloch said in a statement just released.

She said the oil and gas industry was effectively working with Traditional Owners already but "activists" were expoliting loopholes to challenge projects. Environmentalists deny they are doing this.

"Vague and ambiguous regulations cannot be allowed to continue holding up important energy projects," Ms McCulloch said.

"We look forward to working with the Australian Government through its review of the offshore regulatory approvals system to ensure regulations provide clarity and certainty for industry while maintaining comprehensive and meaningful consultation with Traditional Owners and stakeholders."

Successive interest rate rises and an early holiday splurge at the sales (hello Black Friday!) seems to have contributed to a big drop in household spending in December.

The data out this afternoon from Commonwealth Bank shows their Household Spending Insights (HSI) Index fell 3.9% overall last month, with the biggest fall in household goods (down 16%) including furniture and household appliances.

Here is the gas company's response to the ruling today in the Federal Court of Australia.

As the company indicates, the company's victory against several Tiwi elders means it can keep laying its pipeline for the $5.7b project in waters north of Australia.

There had been an injunction against working on a section of the pipeline near the Tiwi Islands during this challenge, but that was dropped today when the elders lost their case.

The victory is a rare win for Santos, who lost a separate challenge by Tiwi elders over the drilling of the gas plant.

That saw the drilling approval go back to offshore gas regulator NOPSEMA for re-approval, which is now granted.

Santos is back out of its trading halt after making this statement to the ASX.

It's up 2.65% mostly on the ruling.

Earlier in the blog I mentioned that US markets were buoyed on Friday (their time) by cooler-than-expected results from their latest producer prices reports, and suggested that the Federal Reserve could be cutting interest rates.

But what do producer prices have to do with it?

Here in Australia we're used to our monthly inflation figures being called the consumer price index, but in the US, producer prices do what it says on the tin — look at price changes for producers (aka, those who are responsible for producing our goods).

On Friday, producer prices in the US fell because of declining costs for certain things, like diesel and food, and that suggests that inflation is continuing to subside (because the lower the producer price, the lower the consumer price).

The data from the US Labor Department also showed that prices for services were unchanged for the third month in a row, and implied that a recent uptick in consumer prices was likely a blip.

All in all, that's got economists expecting that the key price measures that the Fed tracks for its 2% inflation target only rose moderately in December, meaning the economy appears to be on track in winning its inflation war.

Overall, the producer price index dipped by 0.1% in December, and increased by just 1% year-on-year.

Stripping out the volatile items also showed that the core producer price index rose by just 0.2% and 2.5% annually — all suggesting that the Fed could be cutting interest rates sometime this year.

The gas company's shares surged by around 2% in late morning trade, just after it won its Barossa gas pipeline case against several Tiwi Islands elders.

The decision in the Federal Court of Australia means the company can now resume drilling all of its pipeline for the $5.7b project in waters north of Australia.

Now the company's shares are in a temporary trading halt "pending a further announcement".

We'll keep you updated.

New analysis from property analytics firm CoreLogic shows how landlords saw better returns in 2023 than property flippers.

This graph shows rental value growth versus property price growth last year and all the way back to 2013.

As you can see, last year rents topped property prices but it was very neck and neck with 8.3% growth versus 8.1% growth.

The year before, rents boomed even more at a time when property prices actually dropped down after that boom in 2021.

Australia's residential real estate is now worth $10.3 trillion.

There were almost 490,000 sales in 2023, CoreLogic estimates.

Property values have been largely slowing since May, however it is also taking less time to sell a place, probably because stock is limited for buyers. Discounting is down, CoreLogic reports, but so are clearance rates.

Today's ruling means the gas company can resume construction of its pipeline, which will be used to pipe gas to Darwin before being shipped as LNG to buyers in South Korea and Japan.

Hello, Nadia Daly here with you to see out this Monday afternoon in business news.

First up, let's take a look at an announcement that impacts the offshore oil and gas industry.

The government has released new proposed legislation it hopes can strengthen anti tax-avoidance laws by adding amendments to the Petroleum Resource Rent Tax (a tax levied on Australia's offshore oil and gas projects).

Those amendments will clarify that "exploration for petroleum excludes feasibility studies" and "tighten the treatment of mining, quarrying and prospecting rights for income tax depreciation purposes", according to the government.

The idea is the offshore LNG industry will pay more tax sooner, according to a statement from the government today.

The Treasurer Jim Chalmers said:

"The resources sector makes a substantial contribution to Australia’s national economic prosperity, including through investment, jobs, energy supply and corporate and other taxes, and these changes will ensure this continues.

The reforms will deliver a fairer return to the Australian people from the resources they own, provide certainty to industry and ensure Australia remains a reliable investment partner."

If you want to read through the proposed legislation and offer your feedback you can take a squiz here  - it's open for consultation until the 9th of February.

And this ABC article from last year has some good background on the origins of the tax and what it's designed to do:

For the past week I've been extensively covering issues affecting some customer accounts with online retailer The Iconic, with a number of accounts breached and fraudulent transactions made without permission.

The Iconic confirmed last week that it does not require those who have their payment details saved to their accounts to be re-validated before making a purchase, which explains how so many customers have ended up out of pocket by hundreds of dollars.

But The Iconic isn't the only retailer who saves your account details online to make your shopping experience easier.

So, how can you protect yourself online, and how did this issue with The Iconic unfold in the first place?

Don't worry, I've got you covered with everything you need to know below 👇

In breaking news, the Federal Court of Australia has dismissed a challenge by three Tiwi elders who were trying to stop gas giant Santos laying a pipeline near their islands off northern Australia.

The elders, in tandem with a team of lawyers and underwater archaeologists, were claiming that the pipeline would disturb intangible cultural heritage, such as songlines, and even potentially damage underwater cultural heritage sites.

However, in a searing decision, Justice Charlesworth dismissed the claims about underwater cultural sites "entirely", and ruled that Santos' existing approvals with regulator NOPSEMA had taken cultural heritage into account.

Building on a section of the pipeline near the Tiwi Islands, north of Darwin, had been at a halt while the case was heard.

The ruling means construction can now resume.

Santos has been approached for comment.

This pipeline challenge was the last hurdle for Santos, as it tries to complete its beleaguered $5.7 billion Barossa gas project. Every second day the project was sitting waiting, it was reportedly costing the company $1 million.

The challenging Tiwi elders were supported by the Environmental Defenders Office. The applicants have now been ordered to pay Santos costs.

Santos stock is up 0.5% today to $7.58.

Based on the latest consumer spending and producer price data out of the US, Barclays is now predicting the Federal Reserve will look to cut interest rates in March.

Barclays had predicted the Fed would be cutting rates in June, but a note from its research team says with signs disinflation is continuing (that is, inflation softening), it suggests that the upcoming core personal consumption expenditure index (PCE, which measures the prices for people living in the US) will also be softer than expected.

That means there are policy implications that will follow, according to the Barclays team, who have now brought forward their expectations of the first rate cut from June to March.

"We think governor [Christopher] Waller's comments will likely confirm the narrative that disinflation is giving the FOMC the confidence to begin easing at the end of Q1," the note read.

(Mr Waller is a member of the Fed Reserve's board and will be speaking on January 16, US time, and FOMC stands for Federal Open Market Committee, aka the group who decide on the Fed's monetary policy.)

However, Barclays also believes the FOMC will remain cautious than what the market is currently predicting, and expects data coming out this week will show the US economy is still resilient — especially when December's retail sales figures are published later this week, which will likely "confirm the strength of US consumers".

Forgive the pun headline, but Super Retail Group is having a seriously positive day on the markets so far — it's up 5.5% to $16.69 a share as of 11:30am AEDT.

If you're unfamiliar with the name, Super Retail Group is the parent company of Supercheap Auto, BCF, Rebel Sport and Macpac.

The reason for the retailer's super surge today is thanks to a tasty little trading update, forecasting its revenue for the first half of the financial year to reach a staggering $2 billion.

Looking at profit (before tax), the retail group is expecting it to come in around $200-203 million after record first-half sales.

One thing to note is these figures are preliminary, and Super Retail will release its final first half results for the financial year on February 22.

The group's CEO and managing director Anthony Heraghty says the company has "no drawn bank debt and a positive cash balance at the end of the first half".

"The Group has traded well over the cyber sales and Christmas holiday trading period," he said in a release to the ASX.

"We maintained positive like-for-like sales growth in the first half, however cost of living pressures on the consumer did lead to a more constrained retail trading environment at the end of the second quarter.

"Despite this, our customer proposition and the resilience of the lifestyle and leisure categories in which we operate underpin our performance in challenging economic conditions where consumers are sharpening their focus on value."

We'll have to wait and see just how super a day Super Retail Group has on the markets, but so far, so good according to investors.

If you're one of the millions of Australians who rent where they live (🙋‍♀️), SQM Research has some slightly good news for you this morning.

Fresh data out today from the researcher shows the national vacancy rate has increased to 1.3% in December — up from the 1.1% in November.

Overall, the total number of rental vacancies across Australia is now at 39,797 properties, up from the 33,471 in November.

Granted, the rental market is still incredibly tough (as anyone who has tried looking for somewhere to live recently can attest), but here's how the capital cities looked in December, according to SQM's data (by vacancy rate % / no. of vacancies):

• Sydney: 1.7% (12,097)
• Melbourne: 1.5% (7,824)
• Brisbane: 1.2% (4,117)
• Perth: 0.5% (969)
• Adelaide: 0.6% (950)
• Canberra: 2.1% (1,293)
• Darwin: 1.9% (491)
• Hobart: 1.1% (314)
• National: 1.3% (39,797)

Meanwhile, capital city asking rents rose by another 1.3%, meaning rents have risen by 14.2% in the past year.

The national median weekly asking rent is now $611.38 a week, with Sydney coming in at the highest of $1,022.35 per week.

The local share market opened lower on Monday, down -0.3% to 7,479 points as of 10:20am AEDT.

(For live figures at any time, head to the top of the blog.)

As expected, energy stocks are leading the early gains for the sectors, up 0.6% thanks to higher oil prices.

Both consumer non-cyclicals and consumer cyclicals have gained 0.3%, while technology is up 0.1%.

The rest of the sectors are in the red, with the biggest losses going to healthcare (-0.6%), basic materials (-0.6%), industrials (-0.6%), and utilities (-0.4%).

Other early losses have gone to real estate (-0.3), academic and educational services (-0.2%) and financials (-0.1%).

As for the top performers so far in the opening minutes:

• Boss Energy +8.6%
• Paladin Energy +7.9%
• Super Retail +4.6%
• Premier Investments +2.8%
• JB Hi-Fi +2.4%

And the worst performers in the early session:

• Chalice Mining -5.5%
• Alumina -3.2%
• Healius -3.1%
• Pilbara Minerals -2.8%
• IGO -2.6%