FISCAL POLICY – AUSTRALIA

Decade of spending discipline

roymorgansocial Leave a comment

Original article by Matthew Cranston
The Australian – Page: 1 & 4 : 3-Dec-25

Official data shows that total borrowing by governments across Australia topped $42bn in the September quarter, which is about 40 per cent higher year-on-year. Meanwhile, the OECD has warned that the federal and state governments will require "fiscal discipline and consolidation" in order to stabilise public debt at about current levels. The Paris-based organisation adds that this fiscal discipline will most likely be needed beyond the current decade, as governments are facing spending pressures linked to factors such as the nation’s ageing population, defence and the transition to net-zero emissions. The OECD has upgraded its GDP growth forecast for Australia in 2026 from 2.2 per cent to 2.3 per cent.

CORPORATES
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Ley attacks idea of free everything

roymorgansocial Leave a comment

Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 17-Sep-25

Opposition leader Sussan Ley will use a Committee for Economic Development of Australia speech to call for action to curb government spending. Amongst other things, Ley will contend that the culture of dependency on the government that has emerged since the pandemic is not sustainable and must end. She will argue that providing people with everything for free merely diverts resources from those who need help the most, while she will advocate increased use of means-testing. Ley’s speech today will coincide with growing scrutiny of the Coalition regarding its stance on net zero emissions.

CORPORATES
LIBERAL PARTY OF AUSTRALIA, COMMITTEE FOR ECONOMIC DEVELOPMENT OF AUSTRALIA

Government spending tops $1trn for the first time

roymorgansocial Leave a comment

Original article by John Kehoe
The Australian Financial Review – Page: 4 : 10-Sep-25

Data from the Australian Bureau of Statistics shows that the combined recurrent spending of the federal and state governments rose by 7.7 per cent in 2024-25, to $1.02 trillion. In contrast, government revenue increased by just four per cent during the financial year. The increase in recurrent spending was driven by a number of factors, with government employee costs rising by 8.8 per cent and social benefits up 11.9 per cent. EY’s chief economist Cherelle Murphy warns that fiscal sustainability across the federal and state governments will be at risk if the current spending trends continue, which could potentially result in credit rating downgrades.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, ERNST AND YOUNG

Investors calm as government debt nears $1trn

roymorgansocial Leave a comment

Original article by Cecile Lefort
The Australian Financial Review – Page: 25 : 3-Sep-25

Official data shows that the federal government’s debt currently stands at $961bn, while its monthly interest bill is about $2bn. Meanwhile, gross debt has risen from just five per cent of GDP to 37 per cent in the last 15 years, although this compares favourably with the US (124 per cent) and Japan (216 per cent). Robert Thompson from RBC Capital Markets expects federal government debt to top $1bn in early 2026. However, Oliver Levingston from Bank of America says Australia has low debt and low deficits compared with the majority of advanced countries. He adds that Australian government bond yields are highly attractive at present.

CORPORATES
RBC CAPITAL MARKETS, BANK OF AMERICA CORPORATION

ALP’s fiscal reckoning

roymorgansocial Leave a comment

Original article by Geoff Chambers, Matthew Cranston
The Australian – Page: 1 & 4 : 25-Mar-25

Treasurer Jim Chalmers says the federal budget is in much better shape than when Labor took office in May 2022. He adds that tonight’s budget will help to "finish the fight against inflation" and ease the cost-of-living crisis. The budget papers are expected to show that gross debt will total $940bn in 2024-25, which equates to about 36 per cent of GDP; this compares with the forecast of 35.2 per cent in the 2024 budget. Chalmers has emphasised Labor’s economic credentials, noting that it has delivered two surpluses in its first term and reduced the former Coalition government’s debt by $177bn. However, the budget will be in deficit for 2024-25, and Chalmers has conceded that it is unlikely to return to surplus for at least a decade.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY

Chalmers’ budget update locks in extra $25bn of unavoidable expenditure

roymorgansocial Leave a comment

Original article by Jack Quail, Geoff Chambers
The Australian – Page: 1 & 4 : 17-Dec-24

Treasurer Jim Chalmers says that although global economic volatility is weighing on the federal budget, Labor has delivered two surpluses and lower debt since taking office in May 2022. Meanwhile, the Mid-Year Economic and Fiscal Outlook on Wednesday will feature some $25.1bn worth of additional government spending; this will include $16.3bn for increased welfare payments, childcare subsidies and cost of living relief. The government describes this as ‘automatic spending increases’, while Finance Minister Katy Gallagher has flagged $8.8bn of ‘unavoidable spending’. Independent economic Chris Richardson refutes suggestions that some expenditure cannot be avoided.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FINANCE

Chalmers’ budget update locks in extra $25bn of unavoidable expenditure

roymorgansocial Leave a comment

Original article by Jack Quail, Geoff Chambers
The Australian – Page: 1 & 4 : 17-Dec-24

Treasurer Jim Chalmers says that although global economic volatility is weighing on the federal budget, Labor has delivered two surpluses and lower debt since taking office in May 2022. Meanwhile, the Mid-Year Economic and Fiscal Outlook on Wednesday will feature some $25.1bn worth of additional government spending; this will include $16.3bn for increased welfare payments, childcare subsidies and cost of living relief. The government describes this as ‘automatic spending increases’, while Finance Minister Katy Gallagher has flagged $8.8bn of ‘unavoidable spending’. Independent economic Chris Richardson refutes suggestions that some expenditure cannot be avoided.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FINANCE

ALP hidden spending to top $87b

roymorgansocial Leave a comment

Original article by Michael Read
The Australian Financial Review – Page: 1 & 6 : 27-Nov-24

The federal government’s growing trend towards ‘off-budget’ spending will be a key contributor to the overall deficit blowout that Deloitte Access Economics has forecast. The firm expects the government to post an underlying deficit of $33.5bn for 2024-25, but it estimates that the headline deficit will be $54.8bn. Economist Chris Richardson says the latter figure deserves greater scrutiny, as it can be used to conceal the real state of the nation’s finances. So-called off-budget spending – which does not affect the budget deficit or surplus – is forecast to reach a record $87.1bn over the next four years.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD

Stalled spend lifts surplus to $15bn

roymorgansocial Leave a comment

Original article by Jack Quail
The Australian – Page: 4 : 1-Oct-24

Treasurer Jim Chalmers has attributed the federal government’s higher-than-forecast budget surplus for 2023-24 to lower spending rather than increased taxes. The final budget outcome for 2023-24 has confirmed a surplus of $15.8bn, which is $9.3bn higher than was forecast in the May budget. Shadow treasurer Angus Taylor claims that Labor is using temporary windfalls to boost the budget bottom line, adding that its two successive surpluses will be followed by a series of deficits. The government achieved significant savings by deferring expenditure in a range of areas in 2023-24; meanwhile, personal income tax revenue was $3.1bn lower than expected at $331.5bn and corporate tax receipts were $1.7bn below expectations at $141.2bn.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, LIBERAL PARTY OF AUSTRALIA

Surplus of $9.3b, then a sea of red ink

roymorgansocial Leave a comment

Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 14-May-24

The federal government is set to announce a budget surplus of $9.3bn for 2023-24, having previously forecast a deficit of $1.1bn in the mid-year economic and fiscal outlook in December. It will be only the second successive budget surplus since the global financial crisis; however, this will be followed by large deficits over the forward estimates period, which the government has attributed to "unavoidable spending". Meanwhile, Prime Minister Anthony Albanese says it will be "a Labor budget through and through", with cost-of-living relief that will reduce rather than increase inflation and a tax cut for every worker.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET