DEFENCE SPEND SHAKE-UP; COSTS SURGING

Ministers target budget blowouts, delays in defence spending

Defence Minister Richard Marles has flagged a major overhaul of spending controls in Defence projects, citing significant schedule delays and budget variations. Mr Marles and Defence Industry Minister Pat Conroy said at least 28 Defence projects were a combined 97 years behind schedule, at least 18 projects were running over budget, and variations of $6.5 billion from approved budgets had been identified. Major projects affected included the $44 billion Hunter Class Frigate program, the $3.7 billion Offshore Patrol Vessel project, the $1.4 billion C-27J Spartan Battlefield Airlifters, and several defence satellite communications projects. Among its proposed solutions, the Government will establish an independent projects and portfolio management office within Defence, and foster a culture within Defence of raising attention and responding early to emerging problems.

Chalmers warns of spending challenges in Budget

Treasurer Jim Chalmers is conditioning Australians for his first Federal Budget, warning of a surge in expenditure in key areas of government delivery. The Treasurer last week told an investment forum of expected spending increases in five key areas: federal debt servicing, aged care, disability care, hospitals and defence. Dr Chalmers projected interest payments growing on average around 14 per cent per year over the next four years, accompanied by annual rises of 12.1 per cent for the National Disability Insurance Scheme, Defence (4.4 per cent), hospitals (6.1 per cent) and aged care (five per cent). While acknowledging the jump in spending, the Treasurer said “budget buffers” would need to be rebuilt, amid a deteriorating global outlook.

Nurses top in-demand occupations

Registered nursing is the occupation most in demand in Australia, according to a skills priority list released by the Federal Government. Prime Minister Anthony Albanese and Skills and Training Minister Brendan O’Connor said the number of assessed occupations with skills shortages had nearly doubled, from 153 to 286 in the past year, according to the National Skills Commission’s 2022 list. The list, based on internet-advertised vacancies in June-August this year, showed that registered nurses, software and application programmers, and aged and disabled carers, headed the list of top 20 occupations with skills shortages.

PC report backs targeted educational funding

An interim report by the Productivity Commission (PC) has taken aim at educational outcomes, claiming that academic results for reading, writing and numeracy had fallen flat, despite increased spending on schools. The PC’s five-year review, From Learning to Growth, said that while Covid-19 had provided a glimpse of the possibilities of remote or hybrid learning, poorly-implemented online delivery can negatively impact education quality and student experience. It said that current funding structures distorted the choice of students in favour of universities over vocational educational training, rationed the number of places in universities, and limited competition between providers. The PC recommended a better targeting of subsidies and student loans to encourage providers to flexibly deliver, and students to take up, education and training that met Australia’s workforce needs.

Services trade back to pre-Covid levels

Australia again racked up a healthy trade surplus in August, despite its monthly balance of trade falling slightly, seasonally-adjusted, to $8.3 billion. Exports rose 2.6 per cent to $56.7 billion, headed by coal and related products, while imports jumped 4.5 per cent to $48.4 billion, reflecting higher demand for fuels and lubricants. The Australian Bureau of Statistics said the trade in services had finally reverted to pre-Covid levels, with service imports rising to $9 billion in August and services exports, to $6.3 billion.

Inland Rail project faces major review

Infrastructure Minister Catherine King and Finance Minister Katy Gallagher have ordered a review into the 1,700 km Inland Rail project between Brisbane and Melbourne. The Ministers said the project was over-budget, behind schedule and had no plan where it would start or end. They said the independent review, due to be completed by early 2023, would consider the scope, schedule, cost, and options for links to ports in the two cities. Up to $14.8 billion in total equity and grants funding has been committed by the Australian Government to the project.