INFLATION DIPS; BRAKES ON NDIS SPENDING

Inflation down from 32-year high

Annual inflation in Australia eased to seven per cent in the 12 months to the end of March, after reaching a 32-year high of 7.8 per cent in the December quarter. Official figures released by the Australian Bureau of Statistics show that the Consumer Price Index rose 1.4 per cent in the March quarter, spurred by rising costs in education, health, and insurance and financial services. But the latest inflation figures were well above the Reserve Bank of Australia’s target annual inflation band of 2-3 per cent. Over the past 12 months, Adelaide (7.9 per cent) recorded the highest annual inflation rate and Perth (5.8 per cent) the lowest.

National Cabinet moves to peg back NDIS blowout

National Cabinet has taken steps to rein in the escalating costs of the National Disability Insurance Scheme (NDIS). Prime Minister Anthony Albanese said that with a projected annual cost of $97 billion “over the medium term”, the scheme was not sustainable. He said the cost of the NDIS between the May 2022 Budget and the October Budget had grown by $8 billion. The meeting of Federal, State and Territory ministers committed to an annual growth target in costs of eight per cent by mid 2026. The PM said the states and territories could assist in the process to reduce annual costs, given that the Federal Government was projected to bear 82 per cent of the forecast $97 billion annual cost.

Budget hits monthly surplus as deficit shrinks

Australia’s Federal Budget position has achieved a small monthly surplus of $1.6 billion, as higher government revenues and lower payments erode the projected annual budget deficit. Government finance statistics for March revealed a budget deficit of $11.2 billion in the year-to-date – well down on the $34.5 billion deficit that was forecast over the same period. Total receipts through the year to date were almost $15 billion higher, while payments were down by $8.4 billion on projections. In its first Budget delivered in October last year, the Albanese Government forecast a deficit of almost $37 billion for 2022-23.

$4.1 billion for long-range missile programs

Responding to the Defence Strategic Review, the Albanese Government has committed $4.1 billion to acquire more long-range strike systems and establish sovereign missile and munition manufacturing facilities. The Review recommended a need to accelerate and expand weapons systems, including land-based maritime strike and long-range missile launchers. Defence Minister Richard Marles said $2.5 billion would be allocated for the guided weapons and explosive ordnance enterprise and $1.6 billion for the long-range strike capabilities. He said the investment would extend the Australian Army’s current range for artillery from the present 40 kilometres, to more than 500 km.

O’Neil canvasses major migration shakeup

Home Affairs Minister Clare O’Neil has unveiled a new migration strategy, designed to expedite the immigration to Australia of skilled migrants and address worker shortages in essential industries. In an address to the National Press Club, Ms O’Neil said the government would seek to simplify the route for the entry of specialised and highly skilled workers, with a special temporary pathway to bring in core skills. The Minister said a new ‘points test’ would be used to transition temporary migrants to permanent residents. She also canvassed that Australia would escalate its pursuit of global talent, by actively engaging in the world to find the migrants it needed. Meanwhile, the ABS reported that the August 2021 Census had recorded more than 1.6 million temporary visa-holders in Australia.

King moves to ease pressure on infrastructure pipeline

One week from the May 9 Budget, a raft of major infrastructure projects face the axe or deferment after the Albanese Government announced a major review of the public infrastructure investment pipeline. Infrastructure Minister Catherine King said that easing the pressure on the construction sector would drive inflation lower and deliver more predictable investment. Ms King said the Government would maintain its commitment to a 10-year, $120 billion infrastructure pipeline, which increased to 800 projects under the former government. She said the clogged pipeline had caused delays and overruns in important, nation-building projects.