O75 Public Administration

Victorian Labor enters debt-and-tax spiral

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Original article by Lily McCaffrey, Damon Johnston
The Australian – Page: 1 & 6 : 21-May-25

S&P Global analyst Rebecca Hrvatin has responded to the Victorian government’s 2025 budget by emphasising the need for fiscal discipline, particularly in the lead-up to the state election in November 2026. The budget papers show that Victoria’s net debt is forecast to rise from about $155bn at present to $194bn in 2028-29, while the state’s annual interest bill will top $10.5bn by that date. The state’s wages bill is in turn expected to blow out to $42bn in 2028-29, despite plans to shed about 1,200 full-time equivalent public sector jobs. Meanwhile, tax revenue is expected to rise to about $48bn in 2028-29, compared with $36.8bn in 2023-24; this is despite the absence of any new taxes in the budget.

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S&P GLOBAL RATINGS

Chalmers concedes energy rebates must end

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Original article by Rhiannon Down
The Australian – Page: 7 : 21-May-25

Treasurer Jim Chalmers has refused to rule out extending the federal government’s energy rebate for a third time. However, he acknowledges that the government is aware that the $6.8bn rebate must end at some stage, which is why it has been extended for just six months rather than a year. Independent economist Chris Richardson says the rebate is "bad policy" and the money should have been used to reduce the structural deficit and increase unemployment benefits. Professor Bob Breunig from the Australian National University agrees that the rebate should not be extended beyond 2025, arguing that such subsidies tend to be inflationary.

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AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN NATIONAL UNIVERSITY

ANZ-Roy Morgan Consumer Confidence up 0.5pts to 88.8 in the week before the RBA met to consider interest rates

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Original article by Roy Morgan
Market Research Update – Page: Online : 21-May-25

ANZ-Roy Morgan Consumer Confidence rose 0.5pts to 88.8 in the week to 18 May; Consumer Confidence is now 6.8 points above the same week a year ago (82.0), and 2.4pts above the 2025 weekly average of 86.4. Analysis by State shows mixed results with Consumer Confidence rising in Queensland and South Australia, but down slightly in New South Wales, Victoria and Western Australia. Now 18% of Australians (unchanged) say their families are ‘better off’ financially than this time last year, while 41% (down 2ppts) say their families are ‘worse off’. Looking forward, 30% (unchanged) of Australians expect their family to be ‘better off’ financially this time next year, while 30% (up 2ppts) expect to be ‘worse off’. Now 14% (up 1ppt) of Australians expect ‘good times’ for the Australian economy over the next 12 months (the highest figure for this indicator since February 2022), while 24% (down 2ppts) expect ‘bad times’ (the lowest figure for this indicator since February 2022). Meanwhile, 23% (up 3ppts) of Australians say now is a ‘good time to buy’ major household items, while 37% (up 1ppt) say now is a ‘bad time to buy’.

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ROY MORGAN LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

King to offer first details of critical minerals stockpile

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Original article by Tom Rabe, Peter Ker
The Australian Financial Review – Page: 8 : 21-May-25

The federal government has emphasised that mining companies will not be required to contribute to its proposed critical minerals stockpile. Resources Minister Madeleine King is set to disclose some details about the stockpile at a mining summit today; she will argue that Australia has an obligation to take a lead on critical minerals and rare earths globally, given that China – which dominates the sector – is seeking to impose export controls on some of these minerals. King adds that the stockpile will only hold ‘small’ and ‘temporary’ volumes of critical minerals; she has also downplayed concerns that the policy will distort prices, arguing that China’s market dominance is already doing this.

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AUSTRALIA. DEPT OF INDUSTRY, SCIENCE AND RESOURCES

Liberals back Nationals split as necessary reset after election lashing

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Original article by Olivia Caisley
abc.net.au – Page: Online : 21-May-25

The National Party has formally abandoned its long-standing alliance with the Liberal Party, advising that it will not renew the Coalition agreement for the upcoming term of parliament. Nationals leader David Littleproud the negotiations between the two parties broke down over a number of policy issues, including nuclear energy, expanded divestiture powers for supermarkets and a $20 billion regional future fund. Former prime minister John Howard has urged the two parties to resolve their differences and reunite; however, a number of senior Liberals believe that the split was necessary, and some contend that it should have happened long ago. The Liberals will remain the formal Opposition in Parliament, with 28 lower house seats; the National will have 15 seats and Labor will have about 94.

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LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY

RBA flags spectre of recession

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Original article by Matthew Cranston, Jack Quail
The Australian – Page: 1 & 7 : 21-May-25

The Reserve Bank of Australia considered reducing the cash rate by 50 basis points on Tuesday, rather than its second 25 basis point cut so far in 2025. The central bank noted in its monetary policy statement that inflation is within its target band and is expected to remain there, so it deemed that an interest rate cut was appropriate. However, the RBA cautioned that although upside risks appear to have diminished, international developments are likely to weigh on the domestic economy. The RBA has downgraded its GDP growth forecast for the year to June from two per cent to 1.8 per cent, while it has warned of an outside chance that the Trump administration’s trade war could result in a global recession.

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RESERVE BANK OF AUSTRALIA

No rush to strike a tariff deal with volatile Trump

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Original article by Cameron Stewart
The Australian – Page: 6 : 14-May-25

Australia is among more than 50 countries that hope to negotiate a better tariffs arrangement with the Trump administration in the wake of the global turmoil caused by the so-called ‘Liberation Day’ in early April. Australia failed to receive an exemption from the baseline tariff of 10 per cent and a tariff of 25 per cent on steel and aluminium exports, despite being one of the few countries that has a trade surplus with the US. However, government officials have indicated that Labor will adopt a "wait and see" approach, and assess the outcome of other countries’ negotiations with the US before seeking a deal on tariffs.

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UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, AUSTRALIAN LABOR PARTY

ANZ-Roy Morgan Consumer Confidence up 0.8pts to 88.3 after the Albanese Labor Government was easily re-elected

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Original article by Roy Morgan
Market Research Update – Page: Online : 14-May-25

ANZ-Roy Morgan Consumer Confidence rose 0.8pts to 88.3 in the week to 11 May, after the Federal Government was re-elected with a two-party preferred swing of around 2.5%. Consumer Confidence is now 8.1 points above the same week a year ago (80.2), and 2pts above the 2025 weekly average of 86.3. Analysis by State shows increases in New South Wales, Victoria and Western Australia, but decreases in South Australia and Queensland. Now 18% of Australians (down 1ppt) say their families are ‘better off’ financially than this time last year, while 43% (up 1ppt) say their families are ‘worse off’. Looking forward, 30% (up 2ppts) of Australians expect their family to be ‘better off’ financially this time next year, while 28% (up 1ppt) expect to be ‘worse off’. Now 13% (up 3ppts) of Australians expect ‘good times’ for the Australian economy over the next 12 months (the highest figure for this indicator since April 2022), while 26% (down 1ppt) expect ‘bad times’. Meanwhile, 20% (unchanged) of Australians say now is a ‘good time to buy’ major household items, while 36% (down 2ppts) say now is a ‘bad time to buy’ (the lowest figure for this indicator since March 2022).

CORPORATES
ROY MORGAN LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

In April Australian unemployment increased to 11.2% driven primarily by more people joining the workforce

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Original article by Roy Morgan
Market Research Update – Page: Online : 14-May-25

In April 2025, Australian ‘real’ unemployment increased by 176,000 to 1,780,000 (up 1%, to 11.2% of the workforce), with more people joining the workforce and overall employment dropping. The expansion in the workforce was the main driver of the increase in unemployment with 156,000 people joining the workforce, lifting the number of Australians in the workforce to 15,946,000 (69.4% of Australians aged 14+). Overall employment fell slightly by 20,000 to 14,166,000; the decrease was driven by a drop in full-time employment (down 291,000 to 9,094,000), although part-time employment grew 271,000 to 5,072,000. In addition to the unemployed, 1.47 million Australians (9.2% of the workforce) were under-employed, i.e. working part-time but looking for more work (up 43,000 from March). In total 3.25 million Australians (20.4% of the workforce) were either unemployed or under-employed in April. Roy Morgan’s unemployment figure of 11.2% is clearly more than double the ABS estimate of 4.1% for March, but is in line with the combined ABS unemployment and under-employment figure of 10.0%.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIAN BUREAU OF STATISTICS

Ley puts tax, economic reform on to-do list

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Original article by John Kehoe
The Australian Financial Review – Page: 4 : 14-May-25

Federal Opposition leader Sussan Ley has indicated that all of the Coalition’s policies will be up for review in the wake of the election defeat on 3 May. This includes nuclear energy and the net zero emissions target of 2050. Ley added that economic and tax reform will be priorities for the Coalition; she also committed to consulting with her colleagues and the community in reviewing the Coalition’s policies. Robert Carling from the Centre for Independent Studies says the Coalition needs to abandon ‘populist’ policies. Ley has become the Liberal Party’s first female leader at federal level, after defeating Angus Taylor 29-25 in a party room vote on Tuesday. New deputy leader Ted O’Brien is expected to replace Taylor as shadow treasurer.

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LIBERAL PARTY OF AUSTRALIA, THE CENTRE FOR INDEPENDENT STUDIES LIMITED