GOVERNMENT SPENDING POLICY – AUSTRALIA

PM pledges $2b green energy fund

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 5 : 5-Mar-24

Prime Minister Anthony Albanese will announce on Tuesday that the federal government will establish a $2 billion finance facility to help fund green energy and infrastructure investment in South-East Asia. The facility is one of five recommendations by special envoy to South-East Asia Nicholas Moore that the government will adopt and announce on the sidelines of the ASEAN summit. Moore told the summit on Monday that South-East Asia will need an estimated 454 gigawatts of additional generation capacity between 2021 and 2050; he said that much of the extra capacity will need to come from renewable energy sources.

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AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, ASSOCIATION OF SOUTH-EAST ASIAN NATIONS

Labor’s drone ship gamble

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Original article by Cameron Stewart
The Australian – Page: 1 & 4 : 21-Feb-24

The federal government will increase its spending on defence to 2.4 per cent of GDP from the early 2030s, in response to the review of the navy’s surface fleet. The government will increase defence spending by $1.7bn over the four-year forward estimates period and $11.1bn over the next decade. Amongst other things, the government will fast-track the acquisition of 11 new general purpose frigates, while the Hunter-class project will be scaled back from nine frigates to just six. The navy will also retire the first of the ageing Anzac-class frigates immediately, while a second will be decommissioned by 2026. The government will invest in a fleet of semi-autonomous ships that are still being developed in the US; these ‘drone’ ships will each have 32 missile cells, significantly increase the navy’s firepower.

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ROYAL AUSTRALIAN NAVY

Federal auditor to probe Labor’s $2.2b rail plan

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Original article by Gus McCubbing
The Australian Financial Review – Page: 6 : 13-Feb-24

A Senate estimates hearing has been told that Auditor-General Grant Hehir will examine the federal government’s $2.2 billion commitment to Victoria’s Suburban Rail Loop project. Hehir will look at whether this commitment represents value for money and if it was "informed by appropriate departmental advice". Department of Infrastructure secretary Jim Betts said the department will co-operate fully with Hehir’s investigation. Marion Terrill, former director of the Grattan Institute’s Transport and Cities Program, has welcomed the investigation, stating that big projects require more rather than less scrutiny.

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AUSTRALIA. OFFICE OF THE AUDITOR-GENERAL, AUSTRALIA. DEPT OF INFRASTRUCTURE, TRANSPORT, REGIONAL DEVELOPMENT, COMMUNICATIONS AND THE ARTS, GRATTAN INSTITUTE

$3bn tied to lift in learning

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Original article by Natasha Bita
The Australian – Page: 1 & 2 : 31-Jan-24

The federal government’s share of public school funding has traditionally been set at 20 per cent. However, Education Minister Jason Clare will propose progressively increasing this to 22.5 per cent by 2026. The state and territory governments will in turn be required to increase their own funding for public schools. The additional funding will have to be spent on measures aimed at improving teaching standards and educational outcomes, including assistance for students who are at risk of being ‘left behind’. The Australian Education Union has advocated lifting the federal government’s share of education funding to 25 per cent.

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AUSTRALIA. DEPT OF EDUCATION, AUSTRALIAN EDUCATION UNION

Cost-of-living relief possible before May: PM

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Original article by John Kehoe
The Australian Financial Review – Page: 4 : 16-Jan-24

The federal government could potentially unveil further measures aimed at addressing the rising cost of living ahead of the budget on 14 May. Prime Minister Anthony Albanese says the government understands that Australians are "doing it tough", and it may be open to additional cost-of-living relief. However, the government has ruled out cash handouts, although potential measures could include further rebates for household energy bills. The upcoming by-election in the Melbourne seat of Dunkley could affect the timing any household relief.

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AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

$10 billion more in spending cuts, changes aimed at inflation fight

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Original article by Shane Wright
The Sydney Morning Herald – Page: Online : 12-Dec-23

Treasurer Jim Chalmers and Finance Minister Katy Gallagher will release the mid-year budget update on Wednesday, and they are tipped to reveal that almost $10 billion in federal spending will either be cut or redirected to other areas to help fight inflation. However, the budget update will also include $5.2 billion in what the federal government has labelled ‘unavoidable’ spending, including $1.5 billion to end a special COVID-era visa program and $254 million on additional biosecurity spending, including on efforts to stop a growing incursion of imported red fire ants.

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

Chalmers hints at cost-of-living relief

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Original article by Michael Read
The Australian Financial Review – Page: 4 : 5-Dec-23

Treasurer Jim Chalmers says households should not expect significant cost-of-living relief in the federal government’s mid-year update. However, he adds that the government may be open to further measures in its May 2024 Budget, depending on factors such as economic conditions at that time. Meanwhile, the national accounts data for the September quarter will be released on Wednesday; Chalmers says the data is likely to reflect the impact on economic growth of 13 interest rate rises since May 2022. The general consensus of economists is that the economy expanded by 0.4 per cent in the quarter.

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AUSTRALIA. DEPT OF THE TREASURY

Bill shock fears risk NDIS deal

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Original article by Sarah Ison, Stephen Lunn, Greg Brown
The Australian – Page: 1 & 5 : 30-Nov-23

The federal government will push for an overhaul of the National Disability Insurance Scheme at a meeting of the national cabinet on 6 December. However, several state and territory governments are believed to have warned that they will not agree to any NDIS reforms unless they know just how much the changes will cost them. NDIS Minister Bill Shorten has declined to comment on how the proposed reforms would affect state government budgets. However, he has emphasised the urgency of reining in the cost of the scheme.

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Labor hints at further cost respite

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Original article by Phillip Coorey, Michael Read
The Australian Financial Review – Page: 1 & 4 : 12-Jul-23

Treasurer Jim Chalmers says the federal government’s bigger-than-expected budget surplus for 2022-23 is in addition to cost-of-living relief than than instead of it. Addressing an event hosted by the Brotherhood of St Laurence in Melbourne on Tuesday night, Chalmers said the surplus of around $20bn will give the government the flexibility to provide further cost-of-living relief if this proves to be necessary, after the 9 May budget included expenditure of $14.6bn on such measures over the forward estimates period. Meanwhile, independent economist Chris Richardson says the recent fall in commodity prices means that a second successive surplus in 2023-24 is now much less certain than on budget night.

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AUSTRALIA. DEPT OF THE TREASURY, BROTHERHOOD OF ST LAURENCE

Government debt bill poised to double: IMF

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Original article by Michael Read
The Australian Financial Review – Page: 5 : 13-Apr-23

The International Monetary Fund has forecast that federal and state government spending as a share of the Australian economy will settle about two per cent above its pre-pandemic average. It also expects the general government interest bill to account for 1.8 per cent of GDP by 2028; this is more than double the size of the interest bill in the years leading up to the pandemic. Treasurer Jim Chalmers says the federal budget has structural issues, due to factors such as the growing debt bill, the rising cost of the National Disability Insurance Scheme and spending in areas such as health, aged care and defence.

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INTERNATIONAL MONETARY FUND, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET