GOVERNMENT SPENDING POLICY – AUSTRALIA

PM scores AAA for denial

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Original article by Greg Brown, Matthew Cranston
The Australian – Page: 1 & 6 : 29-Apr-25

S&P Global has warned that Australia’s coveted ‘AAA’ credit rating is at risk due to the erosion of "sound fiscal management". The firm has raised concern about how the major political parties will fund their election promises if they win the election on 3 May, noting that the budget deficit could widen if the election promises are not funded via revenue or cost savings. S&P also expressed concern about the growing use of so-called ‘off-budget’ spending. However, Prime Minister Anthony Albanese has rejected suggestions that Australia could face a credit rating downgrade, while Treasurer Jim Chalmers says Opposition leader Peter Dutton and the Coalition are the biggest risk to the nation’s credit rating.

CORPORATES
S&P GLOBAL RATINGS, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY

Taylor vows costings will beat Labor’s

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 15-Apr-25

Shadow treasurer Angus Taylor says the Coalition will not adopt Labor’s policy that would involve an optional $1,000 tax deduction for work-related expenses, which is slated to cost $2.4 billion over four years. Taylor says this is because the Coalition’s election spending promises that aim to ease cost-of-living measures are temporary ones, whereas he says Labor is focused on recurrent spending, and that the Coalition’s costings will result in a stronger bottom line than under Labor because of their temporary nature. His comments were echoed by Opposition Leader Peter Dutton on Monday, who likened the Coalition’s temporary measures to the government assistance that was issued during the pandemic.

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AUSTRALIAN LABOR PARTY

Australian Made welcomes unprecedented level of support

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Original article by
AuManufacturing – Page: Online : 1-Apr-25

The Australian Made Campaign has welcomed additional funding of $20m in the federal government’s budget. Amongst other things, this funding will allow the organisation to launch a new campaign to encourage more Australians to buy locally made products, and assist more local manufacturers and producers to obtain Australian Made certification. Prime Minister Anthony Albanese and Industry Minister Ed Husic have noted in a joint statement that research by Roy Morgan in 2024 found that more than 90 per cent of Australians have a preference for buying locally-made products.

CORPORATES
AUSTRALIAN MADE CAMPAIGN LIMITED, ROY MORGAN LIMITED, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF INDUSTRY, SCIENCE AND RESOURCES

Liberal backbenchers urge Coalition not to raid foreign aid budget to pay for rumoured $15bn defence boost

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

Recent media reports suggested that the Coalition may be open to increasing defence expenditure by at least $15bn a year if it wins the federal election. Some Liberal MPs have expressed concern that funding may be redirected from foreign aid to boost defence spending. A Liberal backbencher has warned that China may step in to fill the funding void if Australia were to reduce foreign aid to its neigbours in the Pacific region. The UK government recently opted to reduce foreign aid in order to increase defence spending, while the Trump administration has paused foreign aid.

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LIBERAL PARTY OF AUSTRALIA

Coalition denies plans to slash NDIS, but says cost is out of control

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Original article by Sarah Basford Canales
The Guardian Australia – Page: Online : 25-Mar-25

The National Disability Insurance Scheme’s growth rate is forecast to reach 12 per cent in 2024-25, before falling in the next two financial years. The national cabinet agreed to cap the scheme’s growth rate at eight per cent by mid-2026, but shadow NDIS minister Michael Sukkar says Labor is missing the targets it has set. Meanwhile, shadow public service minister Jane Hume contends that more can be done to reign in the scheme’s growth, arguing that its cost is out of control. NDIS Minister Amanda Rishworth says the Liberals cannot be trusted with the NDIS, and she has urged the party to reveal the cuts it plans to make if it wins the upcoming federal election.

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AUSTRALIA. DEPT OF SOCIAL SERVICES, LIBERAL PARTY OF AUSTRALIA

Cash splash to increase tax burden

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 6 : 25-Feb-25

Analysis shows that the federal government has made $123.6bn worth of discretionary spending decisions in the three budgets it has handed down since taking office in May 2022. The government has also announced some $20bn worth of election promises since the start of 2025, headlined by the $8.5bn expenditure on Medicare. Independent economist Chris Richardson says the cost of Labor’s spending decisions since taking office will ultimately be borne by taxpayers via ‘bracket creep’. He adds that it will also delay any prospect of further tax cuts by 5-6 years.

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AUSTRALIAN LABOR PARTY

S&P loses patience, warns of state downgrades

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Original article by Michael Read, Jonathan Shapiro
The Australian Financial Review – Page: 3 : 5-Feb-25

A report from S&P Global Ratings has concluded that the expenditure of Australia’s state and territory governments was $212bn higher between 2020 and 2023 than had been forecast in their 2019 budgets. This significantly offset the $146bn in revenue over the same four-year period. S&P forecasts that the combined debt of the states and territories will top $780bn by 2027, and the firm has warned they may face credit ratings downgrades unless action is taken to rein in spending.

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S&P GLOBAL RATINGS

ACCI warns of need for cap on spending

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Original article by Sarah Ison
The Australian – Page: 6 : 30-Jan-25

The Australian Chamber of Commerce & Industry will call for federal government spending to be capped at 25 per cent of GDP. The ACCI’s pre-election Agenda for Business policy blueprint will also advocate tax reform, the abolition of stamp duty and changing the definition of a small business to 25 employees or less, compared with the current threshold of 15 employees. CEO Andrew McKellar will use a speech on Thursday to argue that rising government spending is pushing up interest rates and adversely affecting productivity. Data released in late 2024 shows that government spending has risen to a record high of almost 28 per cent of GDP.

CORPORATES
AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY

Living standards stagnant until 2030: Deloitte

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Original article by Michael Read
The Australian Financial Review – Page: 3 : 29-Jan-25

Deloitte Access Economics has forecast that state and federal government spending will reach a record 28 per cent of real GDP by the end of 2025. This compares with an average of 22 per cent in the decade prior to the COVID-19 pandemic. The firm has warned that despite rising government expenditure, Australians’ living standards will not recover to pre-pandemic levels until 2030. Meanwhile, Deloitte partner Stephen Smith expects that CPI data to be released today will show that inflation is moving sustainably towards the Reserve Bank’s target range of 2-3 per cent. However, he says factors such as a resilient labour market, elevated government spending and a falling Australian dollar are complicating the central bank’s decision on interest rates.

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DELOITTE ACCESS ECONOMICS PTY LTD, RESERVE BANK OF AUSTRALIA

Labor’s $1bn for Rinehart-backed rare earths

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Original article by Ronald Mizen
The Australian Financial Review – Page: 5 : 15-Jan-25

The federal government’s National Reconstruction Fund is set to become a cornerstone investor in Arafura Rare Earths. The fund is set to acquire $200 million worth of unsecured convertible notes in the rare earths miner, which can be converted into shares at a fixed price and after a specified period of time. The government has previously provided some $840m worth of loans and grants to Arafura, whose biggest shareholder is Gina Rinehart’s Hancock Prospecting. Arafura’s assets include the Nolans rare earths project in the Northern Territory.

CORPORATES
ARAFURA RARE EARTHS LIMITED – ASX ARU, AUSTRALIA. NATIONAL RECONSTRUCTION FUND, HANCOCK PROSPECTING PTY LTD