GOVERNMENT SPENDING POLICY – AUSTRALIA

Non-market job boom a drag on productivity

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Original article by John Kehoe
The Australian Financial Review – Page: 4 : 16-Jul-25

The Department of Employment & Workplace Relations has warned that a rapidly expanding ‘non-market sector’ presents a challenge for the federal government. The department’s briefing for incoming Employment Minister Amanda Rishworth also notes that overall productivity growth has been impacted by the non-market sector’s increasing share of the economy. This sector includes the health care and social assistance, education and training and public administration and safety industries; it includes both public and private service providers that receive government funding. Four out of five jobs created in the last two years have been in this sector, including the National Disability Insurance Scheme.

CORPORATES
AUSTRALIA. DEPT OF EMPLOYMENT AND WORKPLACE RELATIONS

PM blowing up our defence hopes

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Original article by Ben Packham
The Australian – Page: 1 & 4 : 1-Jul-25

The federal government struck a deal with the Biden administration in 2024 to purchase $7bn worth of guided missiles for its fleet of warships. However, the deal has yet to receive final approval from the White House, and there are fears that the Trump administration could redirect the consignment of missiles to a US ally that is willing to meet its demands regarding defence spending. Prime Minister Anthony Albanese is continuing to resist pressure from the US to increase defence expenditure to 3.5 per cent of GDP; he is adamant that the government will stick with its target of just 2.3 per cent by 2033.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Budget faces $9b hit from NDIS delays

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Original article by Michael Read
The Australian Financial Review – Page: 1 & 4 : 12-Jun-25

The federal government’s budget papers in March showed that it is targeting $19bn worth of savings related to the National Disability Insurance Scheme over the next four years. However, some $8.8bn of these savings are now in doubt, which will jeopardise the government’s goal of restricting growth in the NDIS to just eight per cent a year from mid-2026. Its annual growth rose to 20 per cent in 2022, prompting former NDIS minister Bill Shorten to commission a review of the scheme; amongst other things, it recommended the introduction of ‘foundational supports’.

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Climate change spend surges to $9bn a year

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Original article by Matthew Cranston
The Australian – Page: 1 & 5 : 4-Jun-25

Analysis by the Institute for Public Affairs shows that the federal government’s spending on climate change and net zero policies has increased by 400 per cent since it took office in May 2022. Labor allocated more than $9bn to such initiatives in its pre-election budget in March, compared with just $1.7bn in the former Coalition government’s last budget in March 2022. This compares with the $600m that was spent on climate change and net zero programs a decade ago. The IPA’s chief economist Adam Creighton says that despite the big increase in spending on net zero, the government’s own figures show that Australia’s carbon emissions have fallen by just 2.8 per cent compared with 2005 levels.

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INSTITUTE OF PUBLIC AFFAIRS LIMITED, AUSTRALIAN LABOR PARTY

Government debt could hit $1trn by September

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Original article by Michael Read
The Australian Financial Review – Page: 4 : 8-May-25

Data from the Australian Office of Financial Management shows that the federal government’s gross debt is currently about $929bn. Micaela Fuchila, the chief economist at investment bank Jarden, has forecast that the nation’s gross debt will reach $1trn in either September or October of this year. The Treasury in turn expects the government’s net debt – which excludes the value of financial assets such as the Future Fund – to reach $556bn by June. S&P Global recently warned that Australia’s coveted AAA credit rating may be at risk if federal election spending promises are funded via debt rather than revenue or cost savings.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY. OFFICE OF FINANCIAL MANAGEMENT, JARDEN AND COMPANY, S&P GLOBAL INCORPORATED

Chalmers stakes future on staying AAA

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Original article by Greg Brown, Matthew Cranston
The Australian – Page: 1 & 6 : 30-Apr-25

Treasurer Jim Chalmers has downplayed concerns that Australia’s coveted ‘AAA’ credit rating may be downgraded. S&P Global has warned of this possibility due to election campaign promises and the growing use of so-called ‘off-budget’ spending. Chalmers says the federal govermment respects the global ratings agency and concedes that its "opinion matters". However, he adds that Labor’s "responsible economic management" means there would be no reason for a credit rating downgrade if it retains office on Saturday. The Australian Chamber of Commerce & Industry’s CEO Andrew McKellar says the S&P report is a "wake-up call" for both of the major political parties, and that budget repair must be a priority for the next government.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, S&P GLOBAL INCORPORATED, AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY

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.

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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.

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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.

CORPORATES
LIBERAL PARTY OF AUSTRALIA