GOVERNMENT SPENDING POLICY – AUSTRALIA

Tax take hits record $30,633 per person

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Original article by
The Australian Financial Review – Page: 4 : 22-Apr-26

Data from the Australian Bureau of Statistics shows that the combined tax revenue of the federal and state governments rose to a record $839bn in 2024-25. This was boosted by higher revenue from the goods and services tax and personal income tax. The latter increased by 1.5 per cent and accounted for 11.1 per cent of GDP; the Parliamentary Budget Office has estimated that this will increase to 14.5 per cent in 2036, due to the impact of ‘bracket creep’. The ABS figures also show that the cost of disability benefits – including the NDIS – increased by 9.4 per cent in 2024-25 to a record high of $87.3bn.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE

Federal support looms for smelter to save jobs

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Original article by Ronald Mizen
The Australian Financial Review – Page: 4 : 21-Apr-26

A number of potential buyers have been conducting due diligence on the Liberty Bell Bay manganese smelter in Tasmania, which was placed in administration in March. However, a deal between administator EY and unions to keep paying the smelter’s workers is set to expire this week, and about 175 jobs will be lost unless the workers agree to take leave without pay. The federal government is expected to intervene with a support package to fund the smelter’s $1.6m fortnightly payroll until prospective buyers have completed due diligence. Industry Minister Tim Ayres has described Australia’s only manganese smelter as "efficient" and "capable".

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ERNST AND YOUNG

Big business says Chalmers must reign in welfare for the wealthy

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Original article by John Kehoe
The Australian Financial Review – Page: 4 : 21-Apr-26

The Business Council of Australia has used its pre-budget submission to urge the federal government to cap real spending growth at per cent a year. Government spending currently comprises nearly 27 per cent of GDP – its highest level in four decades excluding the pandemic – and the BCA warns that it will reach a record high within a decade if action is not taken. The BCA notes that untargeted government spending that supports wealthy Australians and middle-income earners is increasing, while more targeted income support payments for the unemploy and people on the age pension are declining.

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BUSINESS COUNCIL OF AUSTRALIA

Spending surges higher than expected

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Original article by Matthew Cranston
The Australian – Page: 6 : 4-Mar-26

The Australian Bureau of Statistics expects an 0.9 per cent increase in public sector demand in the December quarter to contribute 0.3 percentage points to GDP for the period. Public demand, which comprises all federal, state and local government spending and investment, totalled $198bn in the three months to December. Citigroup’s chief economist Joshua Williamson expects GDP growth of one per cent for the December quarter following stronger-than-expected public sector demand. Some economists anticipate annual GDP growth of up to 2.7 per cent in data to be released today.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, CITIGROUP PTY LTD

Treasurer under pressure to fix budget after RBA lifts rates for first time in two years

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Original article by Shane Wright, Millie Muroi
The Sydney Morning Herald – Page: Online : 4-Feb-26

The Opposition contends that Treasurer Jim Chalmers must accept responsibility for yesterday’s increase in official interest rates to 3.85 per cent. Shadow treasurer Ted O’Brien said in parliament that the 25 basis point increase is a direct consequence of the govermment’s "addiction to spending", arguing that it has kept inflation higher for longer. Chalmers has rejected suggestions that government spending has contributed to a rising inflation rate, noting that the Reserve Bank’s monetary policy statement did not mention it. Reserve Bank governor Michele Bullock has declined to commence on whether government spending is to blame for rising inflation, and noted that the central bank considers both private and public sector spending. The Reserve Bank now does not expect inflation to return to its target range of 2-3 per cent until mid-2028.

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

Big business urges $50b spending cut

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Original article by Lea Jurkovic
The Australian Financial Review – Page: 1 & 4 : 3-Feb-26

The Australian Chamber of Commerce & Industry has used its pre-budget submission to call for federal government spending to be scaled back in order to combat inflation. It contends that government spending should be reduced to 25 per cent of GDP, compared with the Treasury’s own forecast of about 27 per cent over the next two years. The ACCI has suggested that the NDIS, childcare, aged care, health and defence should have funding reduced; CEO Andrew McKellar warns that failing to address inflation could undermine Labor’s economic agenda to improve productivity. The Reserve Bank is widely tipped to increase official interest rates today, in response to the latest inflation data.

CORPORATES
AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY, AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF 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