GOVERNMENT SPENDING POLICY – AUSTRALIA

Hunt for budget savings to extend beyond public service

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Original article by Luke Kinsella, John Kehoe
The Australian Financial Review – Page: 6 : 3-Dec-25

Finance Minister Katy Gallagher says the federal government has asked cabinet ministers to identify the five per cent of spending across their portfolios that is deemed to be the lowest priority. Her comments at a Senate estimates hearing suggest that Labor is seeking to cut spending across the public sector, rather than just the public service. Meanwhile, data from the Australian Bureau of Statistics shows that public sector demand increased by 1.2 per cent in the September quarter, following two quarters of negative growth.

CORPORATES
AUSTRALIA. DEPT OF FINANCE, AUSTRALIAN BUREAU OF STATISTICS

Decade of spending discipline

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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

Labor to slash $5.6b from public sector

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Original article by Luke Kinsella, John Kehoe
The Australian Financial Review – Page: 1 & 8 : 26-Nov-25

The cost of running the federal public service is expected to top $111bn in 2025-26, having increased by 38 per cent since Labor took office in May 2022. Cabinet ministers and public service heads have been directed to find savings in their budgets of up to five per cent, in addition to the existing ‘efficiency dividend’ of one per cent. It is estimated that a five per cent spending cut across the public sector would result in savings of about $5.6bn. Finance Minister Katy Gallagher has indicated that any savings are likely to be redirected to other policy priorities.

CORPORATES
AUSTRALIA. DEPT OF FINANCE

Dire defence warning to PM, at eleventh hour

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Original article by Jamie Walker
The Australian – Page: 1 & 5 : 12-Nov-25

Retired army major-general Greg Melick has used a Remembrance Day speech at the Australian War Memorial to criticise the federal government’s spending on defence. Melick contended that Australia needs a "grand strategy" to be prepared for war amid the deteriorating security situation in the Indo-Pacific region; he warned of the risk that defence spending may become a "matter of what we can afford and not what we need". The nation’s defence budget is slated to rise from about two per cent of GDP at present to 2.33 per cent over the next decade. Melick is also the outgoing national president of the RSL.

CORPORATES
AUSTRALIAN WAR MEMORIAL, THE RETURNED AND SERVICES LEAGUE OF AUSTRALIA LIMITED

Scientists slam budget cuts that threaten Nobel Prize-generating research

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Original article by Liam Mannix, Angus Dalton
The Age – Page: Online : 22-Oct-25

Science Minister Tim Ayres recently described Professor Richard Robson’s Nobel Prize in chemistry as a "tribute to the effectiveness and capability" of Australia’s research sector. However, the federal government proposes to shut down two of the beamlines at the Australian Synchrotron, which is being used to study the metal-organic frameworks that were pioneered by Professor Robson. Professionals Australia estimates that about 10 per cent of the synchrotron’s 150 employees are likely to be retrenched. The government also proposes to shut down the KOALA Laue diffractometer at the Lucas Heights nuclear reactor in Sydney. Critics have warned that this will jeopardise Australia’s progress in achieving net-zero emissions.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, SCIENCE AND RESOURCES, AUSTRALIAN SYNCHROTRON COMPANY LIMITED

Mount Isa smelter set for bailout

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Original article by Ryan Cropp
The Australian Financial Review – Page: 1 & 8 : 8-Oct-25

The federal and Queensland governments are set to announce a taxpayer-funded support package for Glencore’s Mount Isa copper smelter. Industry sources have indicated that the package to be announced today will enable the plant to remain open for at least another four years. The federal and NSW governments are still holding talks with Rio Tinto regarding similar support for the Tomago aluminium smelter, while taxpayer assistance has previously been announced for the Whyalla steelworks and two zinc and lead smelters that are owned by Nyrstar Australia.

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GLENCORE PLC, GLENCORE AUSTRALIA PTY LTD, RIO TINTO LIMITED – ASX RIO, TOMAGO ALUMINIUM COMPANY PTY LTD, NYRSTAR AUSTRALIA PTY LTD

Ley attacks idea of free everything

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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.

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LIBERAL PARTY OF AUSTRALIA, COMMITTEE FOR ECONOMIC DEVELOPMENT OF AUSTRALIA

PM sticks to defence dollars before US visit

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Original article by Phillip Coorey
The Australian Financial Review – Page: 5 : 16-Sep-25

Australia’s spending on defence is slated to rise to 2.33 per cent of GDP by 2033, compared with just over two per cent at present. Prime Minister Anthony Albanese contends that defence spending should be measured as a total dollar amount, arguing that people are "too fixated" on the GDP figure. The federal government continues to face pressure from the Trump administration to increase defence spending to 3.5 per cent of GDP; however, Albanese contends that the US should take into account factors such as the in-kind military support it receives from Australia and the security partnerships that the nation has struck in the Asia-Pacific region.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Government spending tops $1trn for the first time

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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

Consultancy firms win nearly $1bn in Australian contracts in past year despite new outsourcing rules, research shows

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Original article by Henry Belot
The Guardian Australia – Page: Online : 26-Aug-25

Analysis undertaken by the Parliamentary Library on behalf of the Greens shows that the value of federal government contracts with consulting firms rose to $968m in 2024-25; this is 48 per cent higher than the previous financial year. However, the value of public contracts with the four major consulting firms – PwC, KPMG, EY and Deloitte – fell from $138m in 2023-24 to $114m. Greens senator Barbara Pocock says the analysis shows that while the government claims that it is spending less on consultants, it is merely shifting these contracts from the "big four" to other firms.

CORPORATES
AUSTRALIA. PARLIAMENTARY LIBRARY, AUSTRALIAN GREENS, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, KPMG AUSTRALIA PTY LTD, ERNST AND YOUNG, DELOITTE TOUCHE TOHMATSU LIMITED