Two contractors building shelters designed to protect personnel from artillery fire and FPV drones in the Zaporizhzhia region, southeastern Ukraine, on March 24, 2024.
Ukrinform/NurPhoto via Getty Images
Ukraine was too slow to build strong defenses in areas like Kharkiv, critics said.
They said that Ukraine should have had defenses two or three lines deep, instead of one.
Construction companies are racing to build more before Russia can advance further.
Ukraine was too slow to build the crucial fortifications that could hold back advancing Russian troops, according to critics.
Recent reports have shown Ukrainian soldiers complaining about the lack of defenses in two regions where Russia is gaining ground.
The first is Donetsk, in eastern Ukraine, which has been the scene of some of the most intense fighting. The second is the area near the city of Kharkiv, which had been relatively quiet until recently.
One Ukrainian commander complained on Sunday that promised defenses in Kharkiv were missing. The result was that Russian soldiers "just walked in," per the BBC.
Further south in Donetsk, a Ukrainian soldier described a rout that left 100 dead or missing as their position had hardly any fortifications, the Associated Press reported.
Opposition lawmakers put the blame on Zelenskyy's government for not acting sooner.
Ivanna Klympush-Tsintsadze, an MP for the opposition European Solidarity party, said they "finally" started building fortifications in February — too late, she said, per Politico Europe.
Rostyslav Pavlenko, another European Solidarity MP, told the outlet they had been urging the government to build on an "industrial" scale since last summer.
John Hardie, deputy director of the Russia Program at the Foundation for Defense of Democracies, told BI that Ukraine "certainly" should have started digging in "far" sooner.
He said the role of defensive lines was all the more important given Ukraine's well-known issues finding enough soldiers.
"With proper fortifications, you can defend with fewer men," he said.
A race against time
Last November, Ukrainian President Volodymyr Zelenskyy called for faster construction of fortifications on all major fronts, and the government formed a new group meant to get it done quickly.
However, it doesn't seem to have worked.
Construction companies that agreed to work under dangerous conditions were hard to find, the AP reported earlier this month.
Those that did take on the work had to work fast and navigate multiple levels of bureaucracy to get paid, the report said.
A construction company director in one area of heavy fighting said Ukraine started way too late — the fortifications should have been put up a decade ago, when Russia first began to attack, he said.
"This is all a big question for our leadership: Why didn't they purchase the equipment that military engineers needed to do their jobs? Why did they wait until they just gave it to us?" he told the AP, which granted him anonymity to discuss a sensitive matter.
Oleg Syniehubov, governor of the Kharkiv region, was more blunt, telling the AP: "There was no time."
Ukraine's Agency for Reconstruction and Development of Infrastructure did not immediately respond to a request for comment from Business Insider.
Manpower may trump fortifications
Some experts dispute the significance of deep fortifications on the battlefield, arguing that manpower is the real deciding factor.
According to Sergej Sumlenny, founder of the European Resilience Initiative Center, a German think-tank, Ukraine's defensive line in Kharkiv has held up reasonably well despite only being one later deep.
He said building a defensive line all along Ukraine's 745-mile front would not be realistic, so Ukraine has to pick its spots.
Tim Willasey-Wilsey, a visiting professor at the War Studies department of King's College London, said the vastness of the front meant the pivotal factor would be how fast and well each side could rush defenders to areas that needed them.
Larry Page is the founder of one of the most influential tech companies in the world.
The quirky, soft-spoken computer scientist cofounded Google with Sergey Brin in 1998. As Google evolved into a multi-billion-dollar juggernaut, Page stayed at the helm, first as Google's CEO and later running its parent company, Alphabet.
In 2019, Page stepped down from his role at Alphabet and handed over control to Sundar Pichai. (He remains a board member and controlling shareholder of the company.)
In the years since stepping down, Page has become a virtual recluse. He spent much of the pandemic holed up on his private Fijian island, Tavarua, and burned through hundreds of millions of dollars on a futuristic car company called Kittyhawk, which shut down in 2022.
So who is Larry Page and how did he get to where he is today? Here's his story.
Page's early life
Both of Page's parents worked at Michigan State University.
Education Images/Universal Images Group via Getty Images
Page was born on March 26, 1973, the second son of Gloria and Carl Page — who both taught computer science at Michigan State University.
The Pages filled their home with computers and tech magazines that enthralled Larry from a young age.
They enrolled Page in a Montessori school, a program that fosters independence and creativity.
Page now credits "that training of not following rules and orders, and being self-motivated and questioning what's going on in the world" as influencing his attitude and work.
At 12, Page read a biography about the brilliant inventor Nikola Tesla, who died in debt and obscurity. The ending made him cry and inspired Page not only to want to build world-changing technologies but to have the business sense to know how to promote them.
"I figured that inventing things wasn't any good," he has said. "You really had to get them out into the world and have people use them to have any effect."
Besides tinkering with electronics, Page also played saxophone while growing up and has said his musical training contributed "to the high-speed legacy of Google."
Page and Sergey Brin create Google
Google co-founders Sergey Brin and Larry Page met as students at Stanford.
Associated Press
During his time as an undergrad at the University of Michigan, Page started mulling the future of transportation, something he's still interested in.
He joined the school's solar car team and suggested that Michigan build a monorail-like "personal rapid-transit system" between its campuses.
Google's parent company, Alphabet, has developed self-driving cars through Waymo, the company formerly known as the Google Self-Driving Car project. Alphabet also dabbled in data-driven transportation improvements through Sidewalk Labs, which abandoned its ambitious plan for a high-tech neighborhood in Toronto in 2020.
After graduation, Page headed west to Stanford for his Ph.D., where he met Sergey Brin in 1995.
The two became close friends, geeking out about computer science.
When he was 23, Page woke up from a dream wondering if he could "download the whole web."
So he started working on an idea to rank webpages by their inbound links, instead of by how many times they contained a queried word. He enlisted Brin's help, and they started collaborating on a search engine they initially called BackRub.
Soon, BackRub became Google, a play on the mathematical term "googol" which signifies 1 followed by a hundred zeroes.
The endeavor reflected Page and Brin's mission "to organize the world's information and make it universally accessible and useful."
Both Page and Brin have been known as "burners," or avid attendees of the free-wheeling art festival Burning Man.
The year after incorporating Google, they created the first-ever Google Doodle to let people know they weren't around to do damage control if the site broke — they had retreated to the Nevada desert for the festival.
Page's leadership roles at Google
Page served as CEO of Google from its founding until 2001, and again between 2011 and 2015.
Associated Press
In the past, Page has admitted that he's better at big-picture ideas than management, partly because he doesn't enjoy dealing with people. As a leader, he focused on results and has an affinity for ultra-ambitious ideas.
When Page was first CEO, he wrote down the following management rules that guided him:
Don't delegate: Do everything you can yourself to make things go faster.
Don't get in the way if you're not adding value. Let the people actually doing the work talk to each other while you go do something else.
Don't be a bureaucrat.
Ideas are more important than age. Just because someone is junior doesn't mean they don't deserve respect and cooperation.
The worst thing you can do is stop someone from doing something by saying, "No. Period." If you say no, you have to help them find a better way to get it done.
Page ran Google as CEO until 2001, when Eric Schmidt was brought in to lead the company as its "adult supervision."
Brin and Page were wary of all the CEO candidates, but they took Schmidt to Burning Man and felt that at least he'd be a good fit for the company.
Page wasn't happy about having to relinquish his CEO spot at first. Eventually, though, he became comfortable being less involved in the company's day-to-day management.
Page remained actively involved in Google's product and vision during that time.
He orchestrated the acquisition of Andy Rubin's company, Android, without telling Schmidt until he'd sealed the deal.
But after 10 years, Page decided to take back the CEO title in 2011.
Page reorganizes Google
Page helmed Google's parent company, Alphabet, until Sundar Pichai eventually took over as CEO.
Andrew Kelly/Reuters
Page reorganized the company's senior management, and before the end of 2012, the company had launched several new endeavors.
They included Google Plus, its first Chromebook laptop, Google Glass, high-speed-internet service Fiber, and more.
Page continued leading Google until 2015 when the company blew up its corporate structure, and Page became the CEO of the parent company Alphabet instead. Brin would take over as president.
In a letter to investors introducing Alphabet, Page wrote: "For Sergey and me this is a very exciting new chapter in the life of Google—the birth of Alphabet. We liked the name Alphabet because it means a collection of letters that represent language, one of humanity's most important innovations, and is the core of how we index with Google search!"
He added that "alpha" itself is an investment return above the benchmark — exactly what they would be striving for with Alphabet.
In his role as CEO of Alphabet, Page spent much of his time researching new technologies, meeting and enlisting really smart people, and imagining what Alphabet's next moonshot bet might be.
In the letter he wrote to investors introducing Alphabet, Page also said, "In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed." That meant Page was also spending time scouting talent for chief executive roles for Alphabet's many divisions.
Page's personal life
Google cofounder Larry Page and his wife, the scientist Lucinda Southworth
C Flanigan/FilmMagic
Throughout it all, Page has kept information about his personal life closely guarded. In a rare event in 2013, however, he opened up about having vocal cord paralysis.
The condition makes his voice softer than it used to be and makes long monologues difficult.
In 2007, Page married Lucinda Southworth, a research scientist. The couple rented out a private island in the Caribbean and invited 600 guests. Virgin Group founder Richard Branson was Page's best man.
Page isn't particularly showy with his wealth, but he lives well. He reportedly owns multiple homes in the Palo Alto area.
Page owns a mansion that spans 8,149 square feet, with six bedrooms and six bathrooms that he purchased in 2005 for $7 million. A couple of years later, Page built another, more "eco-friendly" home on the property that is close to 6,000 square feet and includes an elevator, a roof with solar panels, and a rooftop garden.
In September 2021, one of Page's properties caught fire and was partially destroyed by fire.
At the time, it was also unclear who — if anyone — was living in the mansion. The city of Palo Alto issued a violation notice that the home should not be used for business purposes that October.
Page's flashiest purchase is perhaps the 194-foot superyacht called "Senses," which he bought for $45 million in 2011 with a helipad and Jacuzzi on its deck.
Page has since sold the yacht and downsized to an array of smaller vessels, according to people familiar with his activities.
Page, Brin, and Schmidt have purchased at least eight private jets between them.
In 2006, court documents revealed that Schmidt had to help settle an argument between the Google co-founders, who were bickering about what size beds the "party plane" needed. They also wanted to outfit the plane with hammocks and a cocktail bar.
Investments and philanthropy
Page has also dedicated part of his wealth to causes he believes in.
In 2004, he started The Carl Victor Page Memorial Foundation in honor of his father.
Carl Page died soon after Larry left for grad school because of complications caused by polio he contracted as a child.
Page has also spoken out about his father's influence in shaping his career. "My dad was really interested in technology," Page said at Google I/O in 2013.
"He actually drove me and my family all the way across the country to go to a robotics conference," he said. "And then we got there and he thought it was so important that his young son go to the conference, one of the few times I've seen him really argue with someone to get in someone underage successfully into the conference, and that was me."
The persistence paid off.
Alphabet's search engine ads machine pumps out so much money that the company can afford to spend on "other bets" that Page is passionate about, like building smarter home appliances, spreading internet through its Project Loon balloons, and extending human life.
He's also long been fascinated by flying cars and launched Kittyhawk, a mysterious flying-car startup, under the name Zee Aero in 2010. At first, Page would regularly pop into Kittyhawk's office to experiment on the workbench, but as the years went on, he began showing up less often. Then Kittyhawk shut down in 2022.
Life after Google
Google cofounder Larry Page bought Cayo Norte, an island in Puerto Rico.
Hugh Langley/Business Insider
In December 2019, Page and Brin announced in a letter that they were stepping down from their respective roles as Alphabet CEO and president.
"Alphabet and Google no longer need two CEOs and a President," the pair wrote. They added that it was time for them to "assume the role of proud parents—offering advice and love, but not daily nagging!"
Since stepping down, Page has largely kept out of the public eye, sharing his post-Alphabet endeavors with a small group of confidantes.
Page owns at least five islands across the Caribbean and the South Pacific. He owns a majority stake in the leaseholder corporation of Tavarua, an island in Fiji, where he and his family holed up during the pandemic. Page also bought Cayo Norte, a large private island in Puerto Rico, for around $32 million through a limited liability company, US Virgin Island Properties, that he's been using to buy islands. He also owns an organic farm, Atomic Farm.
As of April 2024, Page's net worth of $143 billion put him at No. 7 on Bloomberg's Billionaires Index.
The Superalignment team at OpenAI is now without both of its chiefs, machine learning researcher Jan Leike and cofounder Ilya Sutskever.
NurPhoto/Getty Images
Machine learning researcher Jan Leike and scientist Ilya Sutskever just resigned from OpenAI.
Their team's job, essentially, was to make sure humans are safe from OpenAI's superintelligence.
The team was racing to make sure AI remains aligned with mankind's interests.
It's too soon to say what major departures at OpenAI mean for the company, or if Sam Altman plans to replace the people in these roles with new staffers. But this isn't a great day for AI doomsayers.
OpenAI cofounder Ilya Sutskever, the company's chief scientist, said on X on Tuesday that he "made the decision to leave OpenAI." Calling it "an honor and a privilege to have worked together" with Altman and crew, Sutskever bowed out from the role, saying he's "confident that OpenAI will build AGI that is both safe and beneficial."
The more abrupt departure came from Jan Leike, another top OpenAI executive. On Tuesday night, Leike posted a blunt, two-word confirmation of his exit from OpenAI on X: "I resigned."
Leike and Sutskever led the superalignment team at OpenAI, which has seen a number of other departures in recent months.
"We need scientific and technical breakthroughs to steer and control AI systems much smarter than us," OpenAI said of superalignment in a July 5, 2023 post on its website. "To solve this problem within four years, we're starting a new team, co-led by Ilya Sutskever and Jan Leike, and dedicating 20% of the compute we've secured to date to this effort."
So it follows that part of the duo's work was to, in OpenAI's words, "ensure AI systems much smarter than humans follow human intent."
And the fact that there aren't such controls in place yet is a problem OpenAI recognized, per its July 2023 post.
"Currently, we don't have a solution for steering or controlling a potentially superintelligent AI and preventing it from going rogue. Our current techniques for aligning AI, such as reinforcement learning from human feedback, rely on humans' ability to supervise AI," read OpenAI's post. "But humans won't be able to reliably supervise AI systems much smarter than us, and so our current alignment techniques will not scale to superintelligence. We need new scientific and technical breakthroughs."
Leike — who worked at Google's DeepMind before his gig at OpenAI — had big aspirations for keeping humans safe from the superintelligence we've created.
"It's like we have this hard problem that we've been talking about for years and years and years, and now we have a real shot at actually solving it," Leike said on an August 2023 episode of the "80,000 Hours" podcast.
On his Substack, Leike has outlined how the alignment problem —when machines don't act in accordance with humans' intentions — can be solved and what's needed to solve it.
"Maybe a once-and-for-all solution to the alignment problem is located in the space of problems humans can solve. But maybe not," Leike wrote in March 2022. "By trying to solve the whole problem, we might be trying to get something that isn't within our reach. Instead, we can pursue a less ambitious goal that can still ultimately lead us to a solution, a minimal viable product (MVP) for alignment: Building a sufficiently aligned AI system that accelerates alignment research to align more capable AI systems."
Sutskever, Leike, and representatives for OpenAI did not immediately respond to requests for comment from Business Insider, sent outside regular business hours.
Russian President Vladimir Putin's top economic officials are outshining those in his military, wrote an analyst.
Russia's economy appears resilient three years into its war with Ukraine.
In contrast, Russia and Ukraine are fighting a war of attrition when Putin had expected a quick victory.
Russia's President Vladimir Putin on Sunday appointed Andrei Belousov, a civilian economist with no military experience, as the country's defense minister.
It shows Russia's wartime economy is here to stay and that Putin expects the country's military-industrial complex to be a key pillar of the economy.
Putin, who has styled himself to be a macho alpha male, may also be facing an awkward situation in which brains beat out brawns among his top brass.
As Alex Kliment at Eurasia Group's GZERO Media put it in a Monday report, "since the invasion of Ukraine, Putin's nerds have performed better than his jocks."
"Right from the start, Russia's generals and spies — poorly prepared, badly informed, and deeply corrupt — screwed up what was meant to be a short victorious war," wrote Kliment, who was formerly a Russia analyst at the Eurasia Group.
In comparison, Russia's economic war with the West appears to be faring much better, as the country's economy still seems resilient even amid sweeping sanctions.
This is in large part thanks to the "stars of the math class," led by top Russian central banker Elvira Nabiullina and finance minister Anton Siluanov, who have done "the seemingly impossible," wrote Kliment.
"They kept the Russian economy afloat despite crippling Western financial sanctions. They held the line as the 'War Machine' became central to the economy," he added.
Russia reported GDP growth of 3.6% in 2023, rebounding from a 1.2% contraction in 2022 — the year it invaded Ukraine.
Reports from Russia suggest the country's economy is primarily driven by wartime activities that generate demand for military goods and services, subsidies that steady the economy, and sharp policy-making.
Putin's focus on Russia's economy will be on full display when he visits China on Thursday.
The Russian leader is expected to be accompanied by a large trade delegation, new defense minister Belousov, Siluanov, and Nabiullina, among others, according to Russian media reports.
The S&P/ASX 200 Index (ASX: XJO) enjoyed a successful hump day this Wednesday, rebounding after some heavy falls earlier in the week. By the end of trading, the ASX 200 had added a healthy 0.35%, pushing the index back up to 7,753.7 points.
This happy Wednesday for ASX shares comes after an equally rosy night up on Wall Street last night.
The Dow Jones Industrial Average Index (DJX: .DJI) had a great Tuesday, gaining 0.32%.
It was even better for the Nasdaq Composite Index (NASDAQ: .IXIC), which rose 0.75%.
But let’s get back to the local share market with a checkup on how the various ASX sectors performed today.
Winners and losers
Despite today’s market rises, we still had a handful of sectors that went backwards.
The first and worst were industrial shares. The S&P/ASX 200 Industrials Index (ASX: XNJ) had a day to forget, tanking by 0.63%.
Energy shares also copped some apathy, with the S&P/ASX 200 Energy Index (ASX: XEJ) shrinking 0.54%.
Financial stocks were on the nose too, illustrated by the S&P/ASX 200 Financials Index (ASX: XFJ)’s 0.25% retreat.
But that’s it for the losers. Turning to the winners now, and it was mining shares that won the race. The S&P/ASX 200 Materials Index (ASX: XMJ) surged by a happy 1.35% today.
Healthcare stocks were another bright spot. The S&P/ASX 200 Healthcare Index (ASX: XHJ) soared 0.8% higher by the closing bell.
Consumer discretionary shares had a great day too. The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) ended up banking a 0.76% gain.
ASX communications stocks were a happy lot as well, with the S&P/ASX 200 Communication Services Index (ASX: XTJ) enjoying a 0.67% lift.
Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.
Should you invest $1,000 in Ansell Limited right now?
Before you buy Ansell Limited shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Ansell Limited wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Idp Education, Pro Medicus, and REA Group. The Motley Fool Australia has recommended Ansell, Idp Education, Premier Investments, Pro Medicus, and REA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
Well, last night was one of the biggest nights of the year on both the political and economic calendars â Federal Budget night. It’s the night when the Treasurer tells us what the government intends to collect in terms of taxes. And where it intends to spend this money in government expenditure.
In other words, it’s a list of both economic winners and losers thanks to government intervention in the economy for the next financial year.
Last night was the Labor Party’s second budget since coming to power in the 2022 Federal election. It was also the second surplus the government has posted in as many years. This one represents a $9.3 billion difference between what the government takes out of the economy and what it puts back in expected over the coming financial year.
Since the budget is such a huge part of the economy, it can have significant impacts on the share market. Not to mention on individual ASX shares. So today, let’s discuss which ASX shares are set to benefit the most from what was announced last night.
First up, the budget implements the revamped ‘stage three’ tax cuts that have been on the cards for a while now. This will result in every Australian income taxpayer receiving a tax cut beginning on 1 July. In addition, every household in the country will also be eligible for a $300 energy bill rebate.
Which ASX shares are winners from last night’s federal budget?
For one, this will probably benefit energy generators and retailers like AGL Energy Ltd (ASX: AGL) and Origin Energy Ltd (ASX: ORG). That’s because consumers arguably won’t feel the full brunt of their energy use over the 12 months from 1 July.
But more money in pockets from both the tax cuts and the energy rebates will probably disproportionately flow through to consumer discretionary shares. Those might include Harvey Norman Holdings Ltd (ASX: HVN), JB Hi-Fi Ltd (ASX: JBH), Premier Investments Limited (ASX: PMV) and Super Retail Group Ltd (ASX: SUL).
But perhaps the centrepiece of last night’s Budget was the ‘Future Made in Australia’ policy. According to AMP economist Shane Oliver, this $22.7 billion program consists of a package of measures. These include tax breaks, loans, subsidies and cuts to red tape to facilitate additional investment in Australian critical mineral production and processing.
These critical minerals are all commodities needed for future-facing technologies like green hydrogen, renewable energy generation and rechargeable battery manufacturing. They include lithium, cobalt, rare earths, nickel and vanadium.
Most ASX shares that are involved in the mining, production or processing of one or more of these ‘critical’ commodities stand to be potentially massive winners from last night’s budget.
That’s probably why we saw big share price gains for the likes of Arcadium Lithium plc (ASX: LTM), Lynas Rare Earths Ltd (ASX: LYC) and Fortescue Ltd (ASX: FMG) today.
Foolish takeaway
So these are just some of the shares that might benefit the most from last night’s budget. We saw a notable market reaction for many of these shares today in response, but only time will tell exactly how much these shares will tangibly benefit from what was announced by the government last night.
Should you invest $1,000 in Agl Energy Limited right now?
Before you buy Agl Energy Limited shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Agl Energy Limited wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Harvey Norman and Super Retail Group. The Motley Fool Australia has recommended Jb Hi-Fi and Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
Well, only 364 days until the 2025 Federal Budget! Start the countdown.
And, as a finance, economics and policy nerd, I’m only very slightly kidding!
But before we get to that, let’s take a look at what the Treasurer announced overnight in the 2024 Federal Budget.
The headlines?
Well, there’s a $9.3b Budget surplus. Given the size of our national debt and inflation pressures, that’s a good thing.
And, as we all well and truly know by now, every (income) taxpayer will get a tax cut from July 1. They’ll cost $105 billion over the next five years.
The new ‘what’s in it for me’ for everyone is a $300 saving on our energy bills (and $325 for one million small businesses), which will cost the Budget about $3.5 billion.
That’s the biggest of the big stuff announced yesterday, but it’s not the whole thing.
The government’s other ‘signature policy’, the focus-group-named ‘Future Made in Australia’ program will cost $23b over a decade.
Additionally, there’s $3b for additional medicines to be included in the Pharmaceutical Benefits Scheme, the previously announced $3b reduction in HECS/HELP debts and $1.9b in rent assistance. There’s also the best part of $1b for victims of domestic violence, and another $1b for more housing.
That’s a lot of ‘stuff’ to take in. And the numbers are mind-boggling.
Oh, and the bad news? This year’s surplus is expected to be the last one for yonks. Indeed, the cumulative surplus of the next 4 years is forecast at $112 billion, wiping out this year’s surplus a dozen times over.
Unfortunately, the Treasurer seems to have not received, or misplaced, my letter from yesterday. There is no Sovereign Wealth Fund. No structural Budget balance, and no plan to pay down the national debt.
And while the Budget was relatively restrained, there is spending in this Budget that will, unfortunately, put upward pressure on inflation. (Yes, the Treasurer said otherwise, but I don’t know how you put extra money into the economy from tax cuts and energy rebates and have it magically not put upward pressure on inflation, even if you think they’re justified).
I was asked on radio this morning: “You’ve been watching Budgets for years⦠what’s your verdict on this one?”
My answer: It’s better than it could have been, but not as good as it should have been.
How so? Let me explain.
I’m a broken record on Stage 3 tax cuts, but one more time: they’re unaffordable and irresponsible, because they add to the national debt and â notably at this time in particular â are inflationary.
The $300/$325 energy rebate/subsidy is not means-tested. There are plenty of people in our country who need every spare dollar the government can give them. And plenty of people who don’t. Giving everyone some money is politically convenient, but not economically responsible.
The Budget is still expansionary, despite the surplus. Which at first blush doesn’t seem possible. The reason is that the surplus comes primarily from sales of commodities to overseas customers. The ‘domestic balance’ is still stimulatory, overall.
And as I’ve written before, the ‘Future Made in Australia’ thing is very, very likely to be a waste of money. If there are new, profitable, things that business could be doing, it already would. And if it’s not profitable, there’s only a very slight chance that government subsidies can make it so⦠without those subsidies going on forever. And they’re subsidies that could otherwise be spent elsewhere or, more preferably, banked to help lower the national debt.
(Also, any assets – human and financial – that are dragged toward these subsidised activities would likely be coming from higher value activities elsewhere, so we lose, twice.)
Those are the very real downsides for the economy and the country from this Budget.
But it’s also true that the Treasurer (and his ministerial colleagues) could have spent more of the extra revenue on other things. That they didn’t, should count for something (yes, it’s a function of low expectations and bitter experience that ‘it could have been worse’ is a positive, but here we are!).
Much of the new spending is objectively worthwhile, too, on social and welfare grounds. Not everything needs an economic return to be justified.
It is, overall, a bit of a nothing Budget, though. Some handouts, as we’re used to expecting, but not that much in the way of newly announced spending. A surplus, which is welcome, but not particularly large, and not as a result of government policy⦠more just luck, internationally and domestically.
Not much ambition. No signature policies. No great nation-building. And no Sovereign Wealth Fund, unfortunately. But also, on the other side, no (new) grandiose spending plans of any significant scale.
So, a bit⦠nothing.
For all of that, every taxpayer and every household gets some extra cash from July 1. If that feels to you like a pre-election Budget, you’re not alone. I could be wrong, but this seems designed to make us all feel like we’re a little better off (even if it’s funded by national debt!), without scaring the horses.
And the investing takeaways? It’s really rare that any Federal Budget changes the outlook for the long-term investor. And that’s the way I feel about this one, too. In the short term, retailers might get a little bump when the tax cuts are spent and when people find they’ve got a few bucks left over from lower energy prices. Builders and building materials companies may benefit if the government’s plans for more housing come to fruition. Green energy and green metals may benefit â eventually â from some of the ‘Future Made in Australia’ piggybank, but that’s years away, and it’s unclear if the Opposition will support it, or retain it if they win the next election.
The bigger question for investors from any Budget should be ‘How does this impact the Australian economy over the next 5, 10 and 20 years?’.
The answer? It doesn’t change the outlook much, at all. Which isn’t as good as it sounds, given we have a large and growing national debt (and national interest bill). At some point we may need to reckon with the can that’s been kicked down the road by successive governments, but it shouldn’t (needn’t) derail our investing plans.
So, that’s a wrap. I’ll send the Treasurer my letter again next year. Hopefully with some time to think about it, he, and the Shadow Treasurer, might have an opportunity to plan for an even brighter future.
Wondering where you should invest $1,000 right now?
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…
Motley Fool contributor Scott Phillips has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
M142 HIMARS launches a rocket on Russian position on December 29, 2023 in Ukraine.
Serhii Mykhalchuk/Global Images Ukraine via Getty Images
Ukrainian officials say the ban on US weapons firing into Russia is exposing them to attack.
Russia invaded Kharkiv this past weekend, weeks after Ukraine said it was massing troops on the border.
Parliament official Oleksandra Ustinova said Ukraine could only watch as Russia prepared for the assault.
Ukrainian parliamentary officials are pushing the Biden administration to remove restrictions on Kyiv striking targets in Russian territory with its arsenal of US weapons, Politico reported.
In an interview published Tuesday, the outlet quoted two parliamentarians, David Arakhamia and Oleksandra Ustinova, who were visiting Washington to gather support for the request.
Ustinova, head of Ukraine's special parliamentary commission on arms and munitions and leader of the Holos opposition party, spoke repeatedly on the struggles Kyiv has faced because of the strike ban.
"We saw their military sitting one or two kilometers from the border inside Russia, and there was nothing we could do about that," Ustinova told Politico.
Russia launched an offensive in the northeastern region of Kharkiv over the weekend, capturing several settlements and targeting bridges in the area. The renewed incursions come more than a year after Ukraine retook the region in mid-2022.
But the Russian advance has rankled some Ukrainians, who questioned why the area seemed lightly defended after videos emerged of Moscow's troops crossing over unopposed. Ukrainian media reported that the top general responsible for the region's defense was sacked on Tuesday.
Speaking to Politico, Ustinova said the Russians had become "smart now because they know there is a restriction for Ukrainians to shoot at the Russian territory."
"And we saw all of their military equipment sitting one or two kilometers from the border and there was nothing we could do," she said.
Some observers say Moscow's goal on the northern front may be to establish a "buffer zone" that prevents Ukrainian forces from attacking the Russian border instead of pushing toward Kharkiv city.
It also gives the Kremlin space to wheel in artillery that can get in range of Kharkiv city. Ustinova told Politico that Russia aimed to make Kharkiv a repeat of the battle of Mariupol, where fighting was so intense that much of the eastern city was effectively leveled.
"You're giving us a stick, but you will not let us use it," she said.
Washington-based think tank Institute for the Study of War concurred in a Sunday assessment that Russia was able to advance in Kharkiv due to the strike ban for NATO weapons.
"Russian offensive efforts to seize Vovchansk are in large part a consequence of the tacit Western policy that Ukrainian forces cannot use Western-provided systems to strike legitimate military targets within Russia," it wrote.
Ukraine has been attacking targets beyond the border — more recently on Russia's oil facilities — but only with its own drones.
Washington and its allies fear that allowing Ukraine to attack Russian soil with Western equipment would cross a red line with Moscow.
While it's not immediately clear if this would lead to all-out war, other methods for the Kremlin to strike back include organizing terror attacks with radical groups embedded in the West.
To that end, some weapons systems, like the US-supplied HIMARS launchers given to Ukraine, were tweaked before delivery to prevent them from firing into Russia.
The policy has been criticized as a means of effectively shielding Russia from significant Ukrainian counterattack. Still, two anonymous US officials told Politico that the Biden administration isn't changing the rules.
"The assistance is for the defense and not for offensive operations in Russian territory," one official said, per Politico.
The White House did not immediately respond to a request for comment sent outside regular business hours by Business Insider.
Kyiv has largely relied on Western-supplied equipment to stave off Russia's advance, saying US artillery has played a major role in its defense. The US recently earmarked some $25.7 billion in military equipment and weapons for Ukraine as part of a new $61 billion tranche of aid that was held back for months in Congress.
If you’re looking to bolster your investment portfolio’s returns, then it could be worth looking at the ASX 200 share in this article.
That’s because analysts at Bell Potter believe that a total return in excess of 20% is possible over the next 12 months.
Which ASX 200 share is the broker bullish on?
The stock in question is Eagers Automotive Ltd (ASX: APE). It is an automotive retailer with a significant network of dealerships sprawling across Australia.
According to a note from this morning, the broker has reiterated its buy rating on the ASX 200 share with a slightly trimmed price target of $14.75 (from $15.20).
Based on its current share price of $12.55, this implies potential upside of 17.5% for investors between now and this time next year.
But the returns won’t stop there according to Bell Potter. It expects Eagers Automotive to pay 74 cents per share fully franked dividends in FY 2024, FY 2025, and FY 2026.
This represents 5.9% dividend yields at current prices and boosts the total 12-month return to approximately 23.5%.
To put that into context, a $20,000 investment would turn into almost $25,000 if Bell Potter is on the money with its recommendation.
What is the broker saying?
Bell Potter notes that the ASX 200 share is due to hold its annual general meeting next week. In previous years, the company has provided a trading update at the event and the broker expects this to be the case this year.
The note reveals that its analysts are expecting a relatively flat start to FY 2024 compared to the same period last year. It said:
Eagers will hold its AGM next week on Wednesday, 22nd May and as per usual we expect the company to provide a trading update for the year-to-date (ytd). We expect underlying net profit before tax for the first four months of 2024 to be roughly in line with the pcp as we see the positive of much stronger Toyota sales in Australia for the ytd (up 45% versus pcp) to be largely offset by the negatives of a lower contribution from BYD (due to the clearance of Atto 3’s) and any impact from the cyber security incident in late 2023.
Nevertheless, the broker believes its shares are undervalued based on its current 11x earnings multiple and deserves to trade at 12.5x earnings. It said:
We have reduced the multiples we apply in the PE ratio and EV/EBITDA valuations from 13x and 6x to 12.5x and 5.75x and also increased the WACC we apply in the DCF from 9.0% to 9.2% given the uncertainty around the trading update and the potential for the ytd performance to be flat to slightly down. The result is a 3% decrease in our PT to $14.75 which still >15% premium to the share price so we maintain our BUY recommendation.
Should you invest $1,000 in Eagers Automotive Ltd right now?
Before you buy Eagers Automotive Ltd shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Eagers Automotive Ltd wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Eagers Automotive Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
Many of Australia’s top brokers have been busy adjusting their financial models and recommendations again. This has led to the release of a number of broker notes this week.
Three ASX shares that brokers have named as buys this week are listed below. Here’s why their analysts are feeling bullish on them right now:
According to a note out of Macquarie, its analysts have retained their outperform rating and $48.50 price target on this gaming technology company’s shares. The broker is feeling confident ahead of the company’s half year results release this week. It is expecting a result in line with consensus expectations. This will mean earnings growth of approximately 6% year on year. After which, the broker believes Aristocrat is well positioned to accelerate its growth thanks to the diversity of its portfolio. This is expected to offset any competitive pressure in the key North American market. The Aristocrat share price is trading at $40.60 at the time of writing.
Analysts at UBS have retained their buy rating and $330.00 price target on this biotherapeutics giant’s shares. This follows the release of a quarterly update from the company’s collections partner, Terumo. It notes that Terumo’s update revealed that it has ramped up the rollout of CSL’s new Rika collection platform to more centres in the United States. In fact, the ramp up appears to be ahead of schedule, with the FY 2024 target already reached. This can only be good news given the benefits of the new technology on plasma yields. The CSL share price is fetching $284.02 on Wednesday afternoon.
A note out of Bell Potter reveals that its analysts have retained their buy rating on this auto retailer’s shares with a trimmed price target of $14.75. Unlike Aristocrat Leisure, a reasonably mixed update is expected from Eagers Automotive next week. Bell Potter is expecting the company’s underlying net profit before tax for the first four months of 2024 to be broadly in line with the prior corresponding period. This is due to strong Toyota sales in Australia being largely offset by the negatives of a lower contribution from BYD and any impact from its cyber security incident. Nevertheless, due to its low earnings multiples and big dividend yield, the broker feels its shares are great value at current levels and retains its buy recommendation. The Eagers Automotive share price is trading at $12.54 on Wednesday.
Should you invest $1,000 in Aristocrat Leisure Limited right now?
Before you buy Aristocrat Leisure Limited shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Aristocrat Leisure Limited wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended CSL and Eagers Automotive Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
