Aurelia Butler

SYDNEY (Reuters) -PricewaterhouseCoopers (PwC) Australia has named at least 67 current and former staff involved in the leak of confidential government tax plans in an unpublished letter to lawmakers, according to a spokesperson for the firm on Monday.PwC Australia provided a list naming four former partners involved in the leak, as well as a list of 63 current and former staff who received at least one email containing confidential information relating to Australia’s 2016 Multinational Anti-Avoidance Law. The lists came in response to questions from a senate committee, the PwC spokesperson confirmed to Reuters, after their submission to the panel was earlier reported on Monday by the Australian Financial Review.PwC, one of the world’s “big four” audit and advisory firms, is battling to contain the fallout from a scandal in Australia, after a former partner, who had been consulting with the federal government on new tax laws targeting corporate tax avoidance, shared confidential drafts with colleagues to drum up business around the world.A cache of 144 pages of partially redacted emails released in May revealed that dozens of staff were working to help multinational companies sidestep a new Australian tax law in concert with PwC firms in the United States, Britain, Singapore and Netherlands. Acting PwC chief executive Kristin Stubbins publicly apologised last week for the scandal and directed nine partners to go on leave pending the outcome of the investigation into the confidentiality breaches. Some, but not all, of the nine partners directed to go on leave last week were also named in the submission to the senate committee.Australia’s largest pension fund last week froze future work with PwC, widening the fallout and raising the risk that private-sector clients could follow a growing list of government agencies reviewing or pausing their work with the firm.The senate panel, which is due to meet on Wednesday, also requested the names of companies who received confidential Australian tax information. A PwC spokesperson said the firm had nothing further to add when asked whether these companies were named in the submission.Paul McNab, one of the four former partners, told Reuters in an email that he had no opportunity to respond before PwC released his name.”It is noteworthy that the firm has taken this action to name former partners only,” he said in the email.”I trusted that the information shared with me as a partner of the firm would comply with any confidentiality agreements that may have been in place with Treasury.”A spokesperson later told Reuters that McNab late on Monday ended his employment with law firm DLA Piper by mutual agreement. He had joined the firm after leaving PwC in 2020. More

The comments came as investors and economists become more concerned about municipal debt risks following local government financing vehicle (LGFV) debt repayment stresses seen in provinces such as Guizhou and Yunnan. LGFVs are typically investment companies that raise money and build infrastructure projects on behalf of local governments.”At present, local government debt is unevenly distributed, with some local governments seeing relatively high debt risks and large debt repayment pressure,” Xinhua said, citing an unnamed finance ministry official. “We have urged relevant local governments to take the responsibility… and hold the bottom-line of preventing systemic risks,” the report said, adding that China has left enough room to deal with risks and challenges.According to U.S. economics and policy research firm Rhodium Group, at least 102 Chinese cities faced difficulties in managing their debt-servicing costs last year, reining in China’s ability to use fiscal stimulus to spur the economy’s post-COVID recovery. The interest burdens of the northwestern city of Lanzhou and the southwestern city of Guilin outpaced their fiscal capacity last year, Rhodium said.”Our fiscal revenue has not recovered to the 2019 level, but the fiscal expenditure increases year by year. (We) must keep tightening our belt,” Xinhua said, citing Jin Hannan, head of the finance bureau in Tongshan county, Xianning in China’s Hubei province. More

1. Saudi output cut promise sends oil prices higherOil prices climbed sharply on Monday after Saudi Arabia, the world’s top exporter, pledged over the weekend additional production cuts from July, likely tightening the market further in the second half of the year.The Saudis announced on Sunday its output would drop to 9 million barrels per day next month, a cut of around one million barrels a day from its production levels in May. The kingdom’s energy minister also noted that the cut could be extended.Meanwhile, the Organization of the Petroleum Exporting Countries and their allies, including Russia, agreed at a weekend meeting to bring down its overall production goals by 1.4 million barrels per day from January 2024.The group, known as OPEC+, has been attempting to give additional support to oil prices, which have been slipping in recent months due to concerns over slowing global growth and sluggish demand.By 05:03 ET (09:03 GMT), U.S. crude futures traded 2.26% higher at $73.36 a barrel, while the Brent contract added 2.15% to $77.77 per barrel.2. Biden signs debt limit billWith the U.S. only days away from a potentially damaging default, President Joe Biden officially signed into a law a bill raising the country’s $31.4 trillion debt ceiling.The pen stroke marks the denouement of a weeks-long drama in Washington that has had global markets nervously watching every twist and turn. The Treasury Department had warned that the federal government could run out of money to pay its bills by June 5 if lawmakers failed to lift the debt limit.Fraught negotiations between Biden and Republican House Speaker Kevin McCarthy resulted in legislation that managed to work its way through both chambers of Congress despite outspoken opposition from both hardline conservatives and progressives. The measure suspends the borrowing limit until 2025 and caps some government spending.3. Futures mixed after strong week on Wall StreetU.S. stock futures were mixed on Monday after the major indices posted solid gains to close out the prior week, thanks in part to the debt ceiling deal and a stronger-than-anticipated May jobs report.By 05:04 ET, the Dow futures contract gained 38 points or 0.11%, while S&P 500 futures dipped by 1 point or 0.01% and Nasdaq 100 futures slipped by 36 points or 0.25%.The S&P 500 jumped by 1.45% on Friday, pushing the benchmark index up to its best week since March. The broad-based Dow Jones Industrial Average also surged by 2.12% and the tech-heavy Nasdaq Composite gained 1.07%.Along with the debt limit progress in Washington, data on Friday showed that the U.S. economy added 339,000 jobs last month, far more than estimates. Wage growth also eased.The numbers signaled that the world’s largest economy may not be heading toward a recession and indicated that the Federal Reserve could pause a long-running campaign of interest rate hikes at its June policy meeting. Both factors helped boost investor sentiment.4. China’s services sector activity accelerates in MayGrowth in China’s services sector sped up in May, a private survey showed on Monday, as the relaxing of anti-COVID measures continued to push up consumer demand and employment in the services industry.The Caixin services purchasing managers’ index (PMI) rose to 57.1 in May from 56.4 in April, beating expectations for a reading of 55.2. The index grew for a fifth straight month after China relaxed most anti-COVID restrictions at the beginning of 2023.China’s services sector fared much better than its manufacturing industry, which saw activity contract during the month. Manufacturing is by far the country’s biggest economic driver, with weakness in the sector potentially heralding a slowdown in the economy’s nascent post-pandemic recovery.5. Apple to announce ‘mixed reality’ headsetAttention will turn later today to Apple’s (NASDAQ:AAPL) developer conference at its California headquarters, where the tech behemoth is preparing to unveil a new “mixed reality” headset that has been seven years in the making.The device aims to bring together augmented reality, which imprints digital images on to the real world, and virtual reality, which immerses users in a computer-generated simulation.Apple typically announces new software updates at its annual event, but this time the company will reveal its newest piece of hardware since the launch of the Apple Watch in 2015. Speculation surrounds the impact of the release, with observers wondering if the headset will spark a resurgence in interest in AR/VR technology that has been supplanted recently by a frenzy around generative artificial intelligence.Reports say the device won’t be cheap: The cost is estimated to be as much as $3,000. More

Some US banks are preparing to sell off property loans at a discount even when borrowers are up to date on repayments, following multiple warnings that the asset class is the “next shoe to drop” after the recent turmoil in the US regional banking industry.HSBC USA is in the process of selling off hundreds of millions of dollars of commercial real estate loans, potentially at a discount, as part of an effort to wind down direct lending to US property developers, according to three people familiar with the matter.Meanwhile, PacWest last month sold $2.6bn of construction loans at a loss. And a clutch of other banks are making it easier to execute similar sales in the future by changing the way they account for commercial property debt. Typically, banks are reluctant to accept losses on big blocks of loans that will retain their full value as long as borrowers make repayments on time. But some are being convinced to take the plunge amid fears of an increase in delinquencies — especially on debt secured against office properties that have experienced falling demand due to the enduring popularity of working from home.Here’s what else I’m keeping tabs on today:Apple: The tech giant is expected to unveil a “mixed-reality” headset, its most important new product for 13 years. Read a preview of the launch.Economic data: Figures from the Institute for Supply Management’s non-manufacturing index are expected to confirm activity in the US services sector expanded for the fifth consecutive month. Five more top stories1. Oil prices are rising today after Saudi Arabia said it would cut production by 1mn barrels a day, following the conclusion of a 2-day meeting of producer countries in Vienna yesterday. Brent crude, the international benchmark, is up $1.05 at $77.18 per barrel in London while West Texas Intermediate, the US marker, is up more than $1 a barrel at $72.76. Read more on the outcome of the fractious Opec+ meeting.2. The Directors Guild of America, the union representing film directors, yesterday said it had reached a tentative contract deal with Hollywood studios. The agreement includes a “substantial increase” in royalties for dramatic programmes on streaming services and a statement that “generative AI cannot replace the duties” performed by directors. Read more on the contract talks. 3. Rishi Sunak will seek to exert British “leadership” over the artificial intelligence debate when he meets US president Joe Biden later this week, including the idea of hosting a global AI regulatory body in the UK. George Parker has more from the prime minister’s agenda in Washington.AI regulation: Lawmakers must remember that businesspeople are principally concerned with profit rather than societal impact, writes Marietje Schaake, international policy director at Stanford University’s Cyber Policy Center. A dotcom redux?: The hype over AI inevitably recalls the dotcom bubble, writes John Plender, but there is much about the buzz that is healthy.4. President Andrés Manuel López Obrador’s Morena party is set to win a gubernatorial election in Mexico’s most populous state, according to preliminary results released last night. The vote was seen as a crucial test ahead of national polls next June, when voters will choose a president, congress and leaders of nine states.5. Russia’s army claims to have defeated a large-scale Ukrainian offensive in the eastern Donetsk region. The uptick in military activity in the conflict comes as Kyiv prepares for an anticipated counteroffensive operation which has been months in the planning. Read the latest on the Ukraine conflict.The Big Read

Crude oil pollutes the shoreline of an estuary at B-Dere, Ogoni, Nigeria, in 2020. Leigh Day is bringing a case against Shell on behalf of the Ogale and Bille communities over oil spill pollution © George Osodi/Bloomberg

The volume of international litigation relating to environmental and climate issues has grown rapidly over the past few years, with claimants seeking compensation from companies for environmental damage. But these legal fights are also becoming a business opportunity for those who want to make money from climate-related claims, backed by investors ranging from pension funds to family offices. Not everyone thinks this development is a welcome one.We’re also reading . . . US debt ceiling: Debt is an everything, everywhere, all at once problem, writes Rana Foroohar, and issues with both public and private debt need to be discussed together.Arctic tensions rise: In a series of interviews with the Financial Times, senior western policymakers express fears that the era of Arctic exceptionalism is over.Work & Careers: Pilita Clark is considering a radical new response to the build up of unread emails.Chart of the dayProductivity is expected to barely grow this year across mature economies, according to one US-based research group, with this weakness set to continue. The Conference Board cited the rising cost of capital and ongoing economic and geopolitical uncertainty and said growth from generative artificial intelligence could take a decade or more to kick in.Take a break from the news

How to set long-term goals, good leadership practice as well as the business, history, culture and psychology of influencing are among the topics covered in the FT’s monthly round up of the latest business titles. Additional contributions by Tee Zhuo, Annie Jonas and Vita Dadoo Lomeli More

TOKYO (Reuters) – Japan will not detail a time frame for balancing the primary budget in its mid-year economic policy for the second consecutive year, showed a draft seen by Reuters, underscoring Prime Minister Fumio Kishida’s focus on bolstering the economy.The plan comes amid speculation that Kishida could call a snap election in coming months to solidify his grip on power within Japan’s ruling party.”The absence of a target year highlights the fact that the government lacks a sense of crisis over Japan’s fiscal situation,” said Atsushi Takeda, chief economist at Itochu Economic Research Institute.”Given the government’s struggle to secure funding sources for Kishida’s key policy agenda such as childcare, policymakers may find it even more difficult to stipulate a target year.”The annual policy, to be adopted by Kishida’s cabinet this month, is widely considered a key gauge of the government’s will to restore fiscal health.Until 2021, the government pledged to achieve a primary budget surplus – which excludes new bond sales and debt servicing costs – by the end of fiscal 2025, a target analysts see as unlikely.The time frame was removed last year as Japan ramped up spending to cushion the economic blow of the COVID-19 pandemic.”We will not abandon the flag of fiscal reform and we will aim for the previous fiscal reform target,” showed the draft outline of this year’s policy framework.”(Supporting the) economy must come before (fixing Japan’s) finances. The current target year must not distort options for macroeconomics policy,” it said, calling for close attention to rising prices and the economic situation at home and overseas.The framework also called for reviewing progress on comprehensive reform of economy and finances, as fiscal 2024 marks the end of the three-year period of estimated expenditure which provides the assumption for annual budget compilation.The budget-balancing goal has served as a gauge for the government to finance policy expenditure without relying on new debt.Japan remains an outlier among advanced nations in weaning their economies off pandemic-related fiscal and monetary support.The International Monetary Fund (IMF) has called on Japan to take a more targeted approach in supporting households hit by the pandemic. More