PM HITS RE-SET FOR CABINET; GAS PUMP-UP

Sweeping changes to Immigration, Cyber, Employment portfolios

Prime Minister Anthony Albanese has announced the first Cabinet reshuffle of his 26-month old government, announcing major changes to a raft of portfolios. Tony Burke is the new Minister for Immigration, Home Affairs, and Cyber Security, and replaced by Queensland Senator Murray Watt as Employment and Workplace Relations Minister. Clare O’Neil has been moved from Home Affairs and Cyber Security to Housing, while former Immigration Minister Andrew Giles is the new Minister for Skills and Training. Tasmanian Julie Collins is the new Minister for Agriculture, Fisheries and Forestry. The impending retirements of Indigenous Australians Minister Linda Burney and Skills and Training Minister Brendan O’Connor precipitated the ministerial changes. In addition, Defence Industry Minister Pat Conroy will join Cabinet.

Gas exploration permits to shore up domestic supply

Resources Minister Madeleine King has reaffirmed the role of gas in the energy transition, while finalising offshore gas exploration permits in the Otway and Sorell basins. Ms King said any discovered gas in the two basins, off Victoria and off Tasmania, would support the domestic east coast market, while a series of new exploration permits on Australia’s west coast would support energy security in Western Australia. An additional 10 permits would be finalised for carbon capture and storage exploration. Ms King said supply challenges on the domestic east coast market might emerge as early as 2027 and persist until the mid-2030s, unless new sources of gas supply were developed.

Electricity prices spike in national market

Meanwhile, electricity spot prices almost doubled across Australia’s south-eastern states in the second quarter of 2024, the nation’s energy regulator has reported. The Australian Energy Regulator’s Wholesale Markets Quarterly Report says volume-weighted average national electricity market (NEM) prices increased by 99 per cent (or by $69 per megawatt hour) in Victoria, and by 97 per cent in Tasmania. NSW electricity spot prices rose by 86 per cent over the April-June quarter, and South Australia by 78 per cent. Compared with the first quarter of 2024, however, Queensland’s electricity spot price fell by 21 per cent. The AER attributed the higher wholesale electricity prices to higher demand, and lower solar and wind output. It also said that gas markets remained vulnerable to price shocks and supply shortfalls.

Future Made in Australia not inflationary, says Chalmers

Treasurer Jim Chalmers has defended the affordability of the Federal Government’s $22.7 billion Future Made in Australia program in the context of forecast budget deficits over the next decade. In a media interview, the Treasurer said the cost of the program was over 10 years, and would leverage more private investment into the economy. Of the total expenditure, less than $4 billion was allocated in the next four years, and most of it comprised production tax credits that did not begin until 2027. Dr Chalmers said the program was not putting upward pressure on inflation. The Treasurer added that he expected the July 31 quarterly consumer price figures to show that inflation was persistent in the economy, with the main price drivers to be insurance, rent and fuel costs.

Election in the Top End

Northern Territory voters are due to go to the polls on August 24, as the Labor Government of Eva Lawler seeks a third term. Labor presently holds 14 members in the NT Legislative Assembly, with the Country Liberal Party led by Lia Finocchiaro holding seven seats, and four seats held by Independent MPs. Labor was elected to power to the Northern Territory in 2016 under former Chief Minister Michael Gunner, who stepped down in 2022. His successor Natasha Fyles was herself replaced as Chief Minister by Eva Lawler in December 2023.

Capital gains tax crackdown on foreign-owned property

Foreign residents who own property in Australia will face stronger compliance measures to ensure they pay tax when they sell these properties. Treasurer Jim Chalmers said that he would increase the withholding rate on foreign resident capital gains from 12.5 per cent to 15 per cent. The transaction threshold before withholding applied would effectively be removed, cut from $750,000 to $0. Foreign residents would also be required to advise the Australian Taxation Office prior to the intended disposal of high-value assets. Dr Chalmers said the changes, outlined in draft legislation, would bring foreign resident capital gains tax (CGT) rules into line with international best practice.