GRIM WARNING ON BUDGET; CPI SOARING
Chalmers talks tough on budget challenges
Treasurer Jim Chalmers has again warned that the Federal Government would use the October Budget to make hard decisions necessary for “responsible budget repair”. The Treasurer used the first sitting week of Parliament to warn that government payments in the next four years would be $30 billion higher than pre-election forecasts, because of rising inflation and wage expectations. Dr Chalmers said health, the National Disability Insurance Scheme and aged care were growing faster than the economy and had upside risks on spending growth. In addition, additional Covid-19 expenditure this financial year would cost $1.6 billion. Dr Chalmers said annual inflation was not forecast to drop below three per cent until mid 2024.
Inflation hits three-decade high
Australia has recorded its highest annual inflation rate for more than three decades, with the Consumer Price Index rising 6.1 per cent over the 2021-22 financial year. Figures from the Australian Bureau of Statistics show that inflation rose 1.8 per cent in the June quarter, with major contributors being the increased costs of new house construction, automotive fuel and food. Sydney and Canberra recorded the lowest levels of quarterly inflation – 1.6 per cent – while Brisbane, Darwin and Adelaide both recorded three-month inflation of 2.1 per cent; Perth recorded the highest annual rate of CPI, at 7.4 per cent.
Bowen sets high target for renewable energy contribution
Climate Change and Energy Minister Chris Bowen has told Parliament that the Federal Government was planning to reach a level of 82 per cent renewable energy within the electricity system by 2030. Introducing the Climate Change 2022 Bill, Mr Bowen said the Government’s target of 43 per cent emissions (on 2005 levels) by 2030 was a floor, not a limit, on emissions objectives. In addition to raising the renewable energy component, the Minister reaffirmed the Government’s commitment to its electric vehicle strategy, to building the national battery industry, and to modernising the electricity transmission grid to accommodate a higher level of renewable energy sources.
Jobs and Skills high on the legislative priority
A bill to establish to the new body, Jobs and Skills Australia, was the first piece of legislation to be introduced last week under the Albanese Government. Skills and Training Minister Brendan O’Connor said the new agency would have a key role in workforce planning functions, as the Government moved to address chronic skills shortages. Mr O’Connor said emerging industries such as advanced manufacturing, technology and clean energy needed access to a greater supply of specialised skills. The Minister said Jobs and Skills Australia would hold a remit to advise on the adequacy of the vocational education and training sector.
King moves to shore up domestic gas supply
Resources and Northern Australia Minister Madeleine King has moved to reassure households and businesses that they would have continued access to reliable energy supplies, particularly in gas. Ms King said she was preparing to invoke a domestic gas security mechanism to shore up gas supply, after the Australian Competition and Consumer Commission warned of a major shortfall in the east coast market for 2023. She pledged to work with gas and LNG producers, and with state and territory governments, to encourage new supply.
Agriculture’s $71 billion recovery from drought
Australia’s economic recovery from the 2019-20 drought has been confirmed by new figures, which show that the gross value of national agricultural production rebounded by 17 per cent to $71 billion in 2020-21. The ABS figures reveal that the gross value of broadacre crops - primarily wheat, barley and canola - soared by 79 per cent to $23 billion. After the drought, NSW regained its position as the leading state for agricultural production from Victoria, recording $18 billion in gross value in 2020-21.