RISING REVENUE CUTS DEFICIT, AS CPI LEAPS
Revenue lift improves budget position
Australia’s federal budget position for 2022-23 is on course to deliver a sharp reduction on the $37 billion deficit originally forecast in the October budget, according to latest figures from the Department of Finance. Monthly financial statements show a deficit (underlying cash balance) of $14.7 billion, compared to the expected deficit of $26.2 billion, as at the end of December 2022. A higher taxation collection lifted total revenue by $7.4 billion on October budget projections, and total expenses were down by $3.7 billion. Net debt was $525.4 billion to the end of December; the October budget projected net debt for the full year at $572.1 billion.
Inflation jumps to 33-year high
Australia’s annual inflation rate has jumped to its highest level since 1990, leaping 7.8 per cent in the 12 months to the December 2022 quarter. Post-Covid domestic holiday travel and accommodation rose 13.3 per cent over the year, while electricity costs rose by 8.6 per cent. Food and transport were also major contributors to rising prices. The Australian Bureau of Statistics recorded quarterly Consumer Price Index inflation at 1.9 per cent. But the rate of inflation varied across national capitals, ranging from Adelaide’s annual inflation of 8.6 per cent to 7.1 per cent inflation in Darwin and Canberra.
Export prices dip as energy demand eases
Meanwhile, easing global energy prices have contributed to a second successive quarterly fall in Australian export prices, according to official ABS figures. Price falls in coal, ores and petroleum products led to a 0.9 per cent drop in Australian export prices during the December quarter, offset by rising prices for cereals, crude fertilisers and crude minerals. Import prices rose 1.8 per cent in the quarter, with a depreciation in the Australian dollar contributing to price rises in electrical machinery and telecommunications equipment. Overall, for the 12 months to December 2022, export prices rose 20.5 per cent and imports 14.9 per cent.
High-level defence talks in France, UK
Australia’s Defence and Foreign Ministers are visiting Europe this week, as the Albanese Government rebuilds defence links with France and progresses the AUKUS agenda with the United Kingdom. Defence Minister Richard Marles and Foreign Minister Penny Wong will hold ministerial talks in France to “develop and align French and Australian responses” to the strategic environment in the Indo-Pacific. In the UK, the two ministers will hold ministerial consultations to discuss AUKUS. Following the meetings, Mr Marles will travel to the US to meet with the US Defense Secretary, Lloyd Austin.
Husic on trail for US commercial investment
Also on the international trail is Industry and Science Minister Ed Husic, who is in the United States this week to promote Australia as an “advanced and reliable commercial, science and technology partner.” Ahead of the trip, Mr Husic said that it was more important than ever to reinforce Australia’s partnership with the US to support a prosperous manufacturing sector and resilient supply chains. The Minister said he was eager to promote investment opportunities to major US industry players in areas such as renewable and low-emission technologies and medical sciences; during his US trip, Mr Husic said he would also look to inform the Federal Government’s national quantum, robotics and battery strategies.
Australia joins treaty on global education recognition
Australia has joined a global treaty in higher education, to enable greater global mobility for its education institutions and students. Education Minister Jason Clare said the new UNESCO Global Convention would ensure that students who studied with Australian education institutions would have their qualifications recognised in a fair, transparent and non-discriminatory manner around the world. He said Australia’s participation in the global convention would also assure students they could more readily access higher education study, including qualifications.