Welcome to AGR’s February 2026 Insights Newsletter.
For this month, we have focused our articles on the Transport & Logistics sector, which included in this newsletter for ease – provide commentary on “Growing your Transport Fleet through Tough Times” and “Leasing or Buying – Structuring Heavy Vehicle Fleet Renewal“.
We have also included some general Advisory pieces for those clients not specific to the Transport industry.
My Commentary for February
The RBA did not take long after the December 25 Quarter CPI numbers were released to increase official interest rates. A 25-basis point rise at the start of February. Pundits are suggesting more rises will occur unless the Federal Government curtails further spending.
Inflation has proved very sticky over the last 12 months. There is still nothing to suggest that a fall in inflation is forthcoming. Whether the RBA continues to raise interest rates when there are tight and/or falling areas of consumption and bankruptcies, is hard to say. Certainly, a wait and see approach to the May 2026 Federal Budget may persuade a ‘hold strategy’ for a while.
We are starting to have some “tax policy” leaks to gauge consumer (voters) interest around reviewing certain tax concessions. We have had the Div 296 Super tax pushed upon us and now the Capital Gains tax discount is being shopped around for opinion.
Whether the 50% discount for assets held longer than 12 months is too generous is what is being considered. Should this discount be reduced to 25%, should it apply to only property and not other assets like shares and business, are just two questions being posed by the Federal Government. Whether existing assets are to be grandfathered under any changes has not been mentioned. That is an important point that is missing from the discussion.
The discussion seems to be targeted at speculative housing price increases, and of course a spiralling government debt that needs to be controlled, so more policies that waste money and do nothing for productivity of a nation can be announced.
Housing supply issues need to be resolved at all levels of government before stabilising house prices can be considered.
A more balanced approach to a tax discussion also involves GST, Stamp Duty, and Land Tax. None of these taxes have been mentioned over the last few months.
The CEO of NAB, Andrew Irvine, mentioned this week that Australia was likely at peak living standards. Scary stuff. A productivity comment.
The former RBA governor Phillip Lowe, questioned the productivity capacity of the economy and the constant increasing spending by governments, resulting in higher inflation.
The CEO of Wesfarmers, Rob Scott, also commented that inflation is arguably the major challenge for the Australian economy. The lack of productivity is an issue and will need both business and government working together to resolve the issue.
Hopefully, common sense will prevail, and over the short term, governments will start to talk/discuss how to fix some of these problems, rather than via a tax grab.
A new Liberal leader and Coalition leader was appointed in February. Hopefully a better Opposition will start to compete and keep the current government accountable.
Reporting season is underway in Australia and quarterly reporting season is underway in the USA.
There are a few themes starting to come through, the main theme seems to be the market dividing companies into AI winners and losers. Management teams across white-collar businesses continue to push AI as the tool for cutting costs, lifting productivity, and sharpening decision-making. The wider market has yet to see the higher margins predicated and perhaps it will be some time, if ever, before the markets will see something.
SAAS companies have been pounded by AI, especially due to the latest version of Claude. Is it too much? I do not know. Moats are important, and some of these SAAS enterprises do have moats. Larger enterprises probably will survive. It is interesting to see cyber-security stocks being caught up in this as well. The quality cyber-security stocks are probably needed more now than ever before!
Valuations may be impacted for sure. What investors are willing to pay for the future earnings of these businesses has certainly been reduced. That impacts the share price even if Earnings Per Share (EPS) is rising.
Another theme has been the two-speed economy popping up again. Pricing pressures have re-emerged, core inflation is rising, so the knock-on effect is that younger demographics are slowing their discretionary spend whilst the Baby Boomers (with greater savings and less debt) are spending more. RBA has no way to discriminate an interest rate rise to effect one cohort over the other. Small-to-Medium businesses in all industries get hit and those smaller enterprises with a commoditised product get hit the hardest.
If wages keep rising and sales start falling, then add retailers to the hospitality and construction hurt pile.
The final theme is that resources/commodities are back. I touched on gold, copper and other minerals in the January 2026 newsletter, so I will not repeat myself. Lithium is heading higher again, with copper becoming the latest big resource company play. Rio and Glencore walked away from each other based on valuation grounds during February. Watch this space though.
An interesting paragraph written by Alan Kohler last weekend, when he wrote: Fossil fuel generation has already stopped growing as a source of electricity, and will never grow again, and by 2030, more than half the world’s power will come from solar, wind, hydro and nuclear.
Is the new gold – now clean energy? If so, how does one invest? Perhaps copper and rare earths will become a structural growth story.
US Tariffs are back but in a different form. Last Friday night, the US Supreme Court voted 6-3 majority that the existing Trump tariffs are illegal. Trump has come out and stated he will use other legal means by which to issue a global tariff of 15%. We shall wait and see what happens. The markets took the US Supreme Court ruling in its stride. Depending on other market news, this story or the Iran story will take centre stage. If Nvidia’s earnings on Wednesday (US time) are not strong – an ugly week coming up.
The January labour force summary confirmed that the labour market is tightening rather than loosening. Although employment growth slowed to 1.0%, the unemployment rate held steady at 4.1%. The underemployment rate also dropped in seasonally adjusted terms. The RBA is predicting that wage growth will remain high (3%+) for the foreseeable future. Not a good sign for those pundits wanting an official interest rate cut.
At the top of this newsletter, I touched on some items that may pop up in the next Federal Government Budget, but I just want to mention that there are two very important pieces of legislation that are live and will be commencing on 1 July 2026.
Pay Day Super and Div 296 for Superannuation Funds are coming. We are putting together separate articles and strategies for clients, so keep an eye out. Please contact your adviser with any questions.
For Pay Day Super the biggest impact will be on cashflow, as Super must be paid after each pay run and not at the end of each quarter. Stress testing your business now is compulsory.
For Div 296 impacts on Superannuation Funds, whether it is an inheritance tax of something else, please start discussing strategies with your financial adviser. Exceeding the lower threshold of $3m account balance will see at tax rate of 30% (15% concessional rate + 15% Div 296 rate). Remember that above $10m in super balances for individuals, there is the potential for a 40% tax rate (15% concessional tax rate + 25% Div 296 rate). Indexation of thresholds will apply, a small for the near future.
This week concludes the summer season, and we head into Autumn with temperatures still above 30 degrees. Contrast that to the Winter Olympics from Italy. There have been some really cool (no pun intended) athletes doing all sorts of body jarring and very fast skiing, jumping and skating. I sit in awe at these athletes, as it is something this body will never be able to do.
Footy season is back. Will the Brisbane teams go back-to-back in 2026? One hopes that the Broncos and the Lions perform strongly again. We need to remember the Gold Coast teams, North Qld and the Dolphins will be trying just as hard for their supporters and sponsors. What a feast for the next six months.
The Queensland Reds will also be out and about trying to give the Super Rugby a shake-up.
So much to choose, we may forget all the other economic blah-blah that is filling our inboxes!
Next month’s newsletter will discuss some strategies and new developments in the Medical and Allied Health industries.
For any further information on what’s discussed throughout our Newsletter for this month, please feel free to contact the Adviser team – who would be happy to assist where possible.
Ian Walker
Executive Chairman of Archer Gowland Redshaw