FOUR DECADES OF DEFICITS; NDIS SURGING

Spending pressures tipped to keep budget in red for 40 years

Australia faces 40 years of slower economic growth, rising spending pressures in welfare and defence, and sustained budget deficits, according to a major report by the Department of Treasury. Federal Treasurer Jim Chalmers released the Intergenerational Report, which forecasts lower projected population growth to fund surging national bills in health, aged care, disability support, defence and interest commitments. The report projects the Australian economy to grow by an average of 2.2 per cent per year in real terms over the next 40 years, compared to 3.1 per cent growth over the past 40 years. After realising a budget surplus in 2022-23, Australia is now projected to post 40 years of budget deficits. By 2062-63, Australia’s population is projected to reach 40.5 million; at the end of 2022, it was 26.2 million. 

Children dominate NDIS numbers as costs soar

Participation in the National Disability Insurance Scheme (NDIS) has blown out by 33 per cent above the original estimate in its first 10 years, according to the intergenerational report. As at June 30 this year, there were more than 610,000 participants in the scheme, compared to the estimate of around 460,000 provided in the 2013-14 Budget. The report attributed the rise to higher-than-expected numbers of children in the NDIS; children represent more than half of scheme participants, with children aged under seven accounting for 16 per cent. Average support package costs have also increased in price and scope. NDIS expenditure in 2023-24 is forecast to reach almost $42 billion, potentially climbing to almost $90 billion in 2031-32.

Defence sizes up property holdings

Deputy Prime Minister Richard Marles has announced an independent audit of Defence property and infrastructure, in response to the Defence Strategic Review. Mr Marles said the audit would consider a range of matters to ensure the Defence estate met operability requirements, now and in the future. The Defence Minister said the audit would examine whether the estate reflected contemporary needs, given the Federal Government’s decision to prioritise investment in Australia’s northern network of bases, ports and barracks. Assistant Defence Minister Matt Thistlethwaite said the Defence estate was the Commonwealth’s largest land holding, with more than 2.8 million hectares.

Federal Government moves to close international student loophole

Education Minister Jason Clare has moved to close a loophole that allowed education providers to shift recently-arrived international students on to potential work arrangements. Mr Clare and Ministers for Home Affairs, Clare O’Neil, and Skills and Training, Brendan O’Connor, said the move would preserve integrity in the international education, the nation’s fourth-largest export industry. The Ministers said the current loophole allowed education providers to shift international students who had been in Australia for less than six months from genuine study to an arrangement designed to facilitate access to work in Australia. A total of about 17,000 of these ‘concurrent enrolments’ were created in the first half of 2023, compared to 10,500 for the same period in 2019 and 2022 combined. Recent investigations had identified a misuse of ‘concurrent enrolment’ as an integrity issue for the international sector. Under the changes, international students would also need to show evidence of $24,505 in savings to procure a student visa.

Integrity crackdown in vocational education training

Meanwhile, the Albanese Government will strengthen rules to ensure that people who own, operate and manage registered training organisations are deemed to be ‘fit and proper’. Brendan O’Connor said the changes, agreed to by State and Territory Skills Ministers, would provide vocational education and training (VET) regulators with stronger powers to scrutinise registered training organisations. In addition, the Australian Skills Quality Authority would be given more scope to keep substandard, unethical, dishonest or non-compliant practices out of the VET sector.

Renewable energy sources near 40 per cent of generation

Renewable sources accounted for almost 40 per cent of energy generation across the National Energy Market in the year to March 2023, according to Climate Change and Energy Minister Chris Bowen. Citing the March 2023 quarterly update of the National Greenhouse Gas Inventory, Mr Bowen said the composition of renewables rose 18.6 per cent on the previous 12 months. The level of emissions, however, rose slightly over the year, with higher reported emissions in the transport and agriculture sectors. Australia’s emissions were 24.4 per cent below the level reported in June 2005 – the baseline year for the 43 per cent reduction target by 2030.