BUDGET – AUSTRALIA

Future dark under ALP: Dutton

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Original article by Geoff Chambers
The Australian – Page: 1 & 2 : 28-Oct-22

Opposition leader Peter Dutton has used his budget-reply speech to criticise the federal government’s stance on a range of issues, including industrial relations, energy policy, housing and taxation. Dutton described Labor’s push for multi-employer bargaining as a "throwback to the 1980s" that will reduce productivity and result in strike action across the country. Dutton also contended that the government’s first budget will leave the average family about $2,000 worse off by Christmas, given that it will result in a rise in power prices, the cost of living, taxes, interest rates, unemployment and the deficit. Dutton said the government has already broken its election promise to reduce energy bills by $275 within three years, and he claimed that Labor is "laying the groundwork to break" its promise on the stage-three tax cuts. He also backed the Coalition’s proposal to allow people to use superannuation savings to buy their first home, contending that Labor’s budget plan to encourage super funds and other institutional investors to fund one million new homes is unrealistic.

CORPORATES
LIBERAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY

Shorten: NDIS blows out to $50b

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Original article by Phillip Coorey, Michael Read
The Australian Financial Review – Page: 1 & 6 : 19-Oct-22

The federal government will bring forward a review of the National Disability Insurance Scheme, amid growing concern about the rising cost of the program. NDIS Minister Bill Shorten says the review will examine its operation, sustainability and responsiveness to participants’ needs. He has conceded that many people who use the NDIS do not have "complex needs". Shorten has revealed that the government’s first Budget on 25 October would show that the projected cost of the NDIS will rise by $8.8bn over the next four years, to $50bn a year. The former Coalition government had estimated that it would cost $44.6bn annually by 2025-26.

CORPORATES
AUSTRALIA. DEPT OF SOCIAL SERVICES

Floods hit cost of living: Chalmers

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Original article by Phillip Coorey
The Australian Financial Review – Page: 5 : 18-Oct-22

The office of Treasurer Jim Chalmers has indicated that it is too soon to estimate the inflationary and budgetary impact of the floods in Victoria and NSW. However, Chalmers has conceded that the floods will increase the cost of living and may boost the inflation rate, given that some of the east coast’s major food production regions have been affected. He adds that the forecast Budget deficit for the current financial year is also likely to increase. Meanwhile, the Victorian government has announced a $351m flood recovery package. There are fears that the town of Echuca is facing a second flood peak, while Kerang is expected to be isolated by floodwaters for up to two weeks. Heavy rainfall that is forecast for later in the week also looms as a new threat for flood-affected towns.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY

Chalmers warns of rates-driven inflation

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Original article by Ronald Mizen, Matthew Cranston
The Australian Financial Review – Page: 4 : 12-Oct-22

Treasurer Jim Chalmers says the world is facing a "substantial" global economic downturn, although he adds that the federal government’s first Budget on 25 October will not forecast a recession in Australia. Chalmers has also warned that the widening gap between interest rates in Australia and the US could boost inflation by putting downward pressure on the Australian dollar and making imports more expensive. Meanwhile, the International Monetary Fund now expects the Australian economy to grow by just 1.9 per cent in 2023; it had previously forecast growth of 2.2 per cent. The IMF has also downgraded its global growth forecast.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, INTERNATIONAL MONETARY FUND

Treasurer tipped for $114b revenue windfall

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Original article by Tom McIlroy, Ronald Mizen
The Australian Financial Review – Page: 4 : 12-Oct-22

Deloitte Access Economics has forecast that the federal government’s Budget on 25 October will include additional revenue of $114.4bn over four years. Deloitte also anticipates that government spending will be higher than expected, and the firm has forecast that cumulative underlying cash deficits will be $45.5bn lower over four years. Stephen Smith of Deloitte says the strength of the domestic economy is a key reason why Australia has emerged from the pandemic with a budget position that is far healthier than most of its peers.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD

ALP’s deficit warning despite $50bn boost

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Original article by Patrick Commins
The Australian – Page: 1 & 2 : 21-Sep-22

Treasurer Jim Chalmers has advised that the Budget deficit for 2021-22 is now likely to be around $30bn, compared with expectations of about $79.8bn just four months ago. Government revenue has been $28bn higher than forecast due to factors such as rising commodity prices. Government payments are in turn $20bn lower than expected, with a record low official unemployment rate resulting in a sharp fall in welfare payments. However, Chalmers says the improvement in the Budget bottom line has been largely driven by temporary factors, and he notes that the prices of key commodities have fallen since the start of the financial year. Chalmers is expecting a bigger deficit for 2022-23.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY

Nation ‘needs to expect bad news’: Chalmers

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Original article by Patrick Commins
The Australian – Page: 1 & 4 : 26-May-22

The Coalition’s pre-election economic and fiscal outlook had forecast a Budget deficit of $80bn in 2021-22 and $78bn in the following financial year, before falling to $43bn by 2025-26. However, Treasurer Jim Chalmers has warned that Labor’s first Budget in October will reveal that the nation’s finances are in a much worse state than the pre-election update had indicated. Chalmers says inflation, rising interest rates and falling real wages are the "defining challenges" for the Australian economy. Finance Minister Katy Gallagher has emphasised the need for strong fiscal discipline.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FINANCE, AUSTRALIAN LABOR PARTY

Fast-track tax cuts off budget plan

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Original article by Simon Benson, Geoff Chambers
The Australian – Page: 1 & 6 : 16-Mar-22

Senior federal government sources have indicated that bringing forward the stage-three income tax cuts will not be on the agenda for the Budget on 29 March. The government will instead seek to address cost-of-living pressures with temporary and targeted assistance. The final stage of the government’s tax cuts package is slated to take effect in 2024-25; Deloitte Access Economics partner Chris Richardson says bringing forward the tax cuts is not necessary given that Australia’s unemployment rate is close to a five-decade low, and he warns that such a move would risk driving up inflation. The government has also considered extending the low-and-middle-income tax offset for another year.

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DELOITTE ACCESS ECONOMICS PTY LTD

Lockdowns no barrier to budget tax jump

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Original article by John Kehoe, Ronald Mizen
The Australian Financial Review – Page: 10 : 1-Oct-21

The federal government has advised that the Budget deficit blew out to a record $134.2bn in 2020-21, although this is well below the government’s worst-case scenario forecasts. Meanwhile, data from the Department of Finance shows that the underlying cash deficit for the first two months of 2021-21 was $22bn, compared with a forecast of $28.1bn in the Budget in May. Government revenue for the period was $12.1bn higher than had been forecast in the Budget, with higher-than-expected revenue from personal and company taxes.

CORPORATES
AUSTRALIA. DEPT OF FINANCE

Steeled for ore fall budgetary blow

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Original article by Patrick Commins
The Australian – Page: 2 : 28-Sep-21

Chris Richardson of Deloitte Access Economics says the sharp fall in the iron ore price has major implications for the federal and Western Australian budgets. He says the 2021-22 budget forecasts of both governments may not have been conservative enough in the wake of the price crash. The fall in the iron ore price has been attributed to factors such as the Chinese government’s environmentally-driven restrictions on steel production and the financial problems of property developer Evergrande. Surging commodity prices saw overall tax revenue from the mining sector top $30bn in 2020-21, compared with just $12bn in 2015-16.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD