COAL, OIL FIRE QLD BUDGET; DEFENCE ONUS

Royalty bonanza drives Queensland budget surplus

Queensland’s Palaszczuk Government is on course to deliver a $12.3 billion budget surplus for 2022-23, thanks to a sharp uplift in coal and oil royalties for the state. The state budget handed down by Treasurer Cameron Dick revealed a $10.4 billion increase in royalty revenue on the back of rising coal and oil prices. But the Queensland Government warned that the revenue boost was only temporary, forecasting a return to deficit in 2023-24. Net debt in Queensland is projected to rise strongly, from an expected $5.8 billion in 2022-23 to almost $47 billion in 2026-27. The Queensland budget result follows a similar royalty-driven boost for the West Australian government, which in May forecasted a $3.3 billion budget surplus in 2023-24, and the state’s sixth budget surplus in a row.

Conroy lays down gauntlet to defence suppliers

Defence Industry Minister Pat Conroy has put the onus on defence industry suppliers to deliver the full component of contracts, under new ‘minimum viable capability’ guidelines of the Defence Strategic Review. In a major address to the defence industry, the Minister said the Government would not accept into service something unless it was delivering 100 per cent of what was contracted. Mr Conroy said the new model recognised the need for speed and urgency; with minimum viable capability, the Government would look at accepting platforms into service at 80 or 85 per cent, and then using an iterative upgrade process to get to 100 per cent. The Minister also urged Defence to embrace more risk in defence contracting, promoted a greater focus on exports, and outlined the need to “speed up the cycle” in defence contracting.

Prime Minister holds firm on AUKUS partnership

Prime Minister Anthony Albanese has brushed off suggestions that elements within the Labor Party may force changes to the AUKUS defence partnership between Australia, the US and the UK. The PM said that while people in his party were entitled to put forward their views, the view of his government was “very clear” in its unwavering support for AUKUS. He reaffirmed the government’s support for issues of national security and for the interests in the defence of the nation. Mr Albanese stressed that AUKUS was an important part of national security, and that the Government was unwavering in that objective.

International student numbers on the rebound

International student arrivals into Australia have jumped sharply, as overseas travel recovers post Covid-19. Figures from the Australian Bureau of Statistics show that in April, a total 42,830 international students entered Australia, up by 21,700 on the same month in 2022 and just below pre-Covid levels for April 2019. Total monthly arrivals of 1.37 million and total departures of 1.42 million, however, were still well below the two million benchmarks in monthly each-way traffic of late 2019.

Overseas migration dominating population growth

After more than two years of Covid-19 disruption, Australia’s population has resumed its growth path, rising 1.9 per cent or almost 500,000 people, to 26.2 million people in 2022. Net overseas migration for 2022 was 387,000, easily outstripping the 109,800 in annual natural increase. ABS figures show that both New South Wales and Victoria recorded net interstate migration losses, but received the bulk of international migrants. For 2022, Western Australia recorded the highest rate of population growth (2.3 per cent) and Tasmania the lowest (0.5 per cent).

Mandatory gas code aims to secure domestic supplies

The Albanese Government has struck a mandatory gas code of conduct, in a bid to secure additional domestic gas supplies via a price cap. Under the proposed code, increased gas supply will be secured to anchor prices at $12/gigajoule and to shield east coast gas consumers from volatile international gas prices. Government ministers said the code would facilitate certainty for investment in new supply to avoid projected shortfalls and sustain “reasonable domestic gas prices” over the medium term. They said that small producers of gas would be exempt from the price gap if they supplied only the domestic market.