GDP GROWTH IN SLOW LANE; JAPAN LINK-UP

Public spending, trade keep economic growth above zero

Australia has continued its pattern of sluggish economic growth, with the Gross Domestic Product (GDP) rising just 0.2 per cent, seasonally adjusted, over the June quarter. For the 2023-24 year, the economy grew by just one per cent, the weakest annual growth (excluding the Covid-19 pandemic) since 1991-92, according to quarterly national accounts. On a population basis, GDP per capita fell by 0.4 per cent during the quarter and fell by 1.5 per cent over the 12 months. The Australian Bureau of Statistics (ABS) attributed the weak growth to subdued household demand and flat investment, offset by higher government spending and increased net trade. While the terms of trade (export prices against import prices) fell three per cent in the quarter, higher services exports – such as in international education – lifted trade figures.

Australia, Japan agree to step up defence co-operation

Australia and Japan have agreed to escalate their level of military co-operation, focusing on major air and land exercises, confirmed last week in talks between foreign and defence ministers from both nations. Speaking after the Australia-Japan 2+2 talks, Defence Minister Richard Marles said the two air forces would co-operate in further joint exercises, building on exercises last year in the Northern Territory and in Japan. In addition, Australia would next year participate in Exercise Orient Shield, the largest land exercise between the US and Japan. Mr Marles said Japan could also be invited to participate in annual US Marine rotations in Darwin, for potential three-way amphibious training operations. Finally, the ministerial talks discussed ways in Australia and Japan could liaise with the Joint Operations Command of each other’s nation.

Export-import surplus props up economic output

While economic growth in Australia has remained flat, the nation’s trade performance remains healthy, according to ABS figures released for June. Australia produced a surplus of $6 billion seasonally adjusted in the international trade of goods in June, up by 10 per cent on May. Rural goods exports rose by six per cent in the month. While exports remain in the black, the latest trade surplus is just one-third of the $18 billion trade surplus posted in June 2022, during a post-Covid surge in exports.

Victoria loses Melbourne seat, WA gains in redistribution

Victoria will lose an electorate at the expense of Western Australia, under the federal redistribution announced by the Australian Electoral Commission (AEC). As initially proposed, the inner eastern Melbourne seat of Higgins – currently held by Labor - will be abolished, with modifications to 11 of the remaining 38 electorates in Victoria. In Western Australia, the new seat of Bullwinkel, named for the decorated WW2 nurse Vivian Bullwinkel, will be created south of Perth, and become the state’s 16th federal seat. The AEC’s redistribution for New South Wales – which has proposed abolishing the seat of North Sydney - will be announced later this month.

Retiring Shorten confident on NDIS reforms

NDIS Minister and former Labor Leader Bill Shorten has announced that he will not recontest the next election, and will take up in February next year the position of Vice-Chancellor at the University of Canberra. Announcing his pending retirement alongside Prime Minister Anthony Albanese, Mr Shorten said he was confident that recent reforms to the National Disability Insurance Scheme would peg back growth in the $42 billion scheme, with evidence of “green shoots of recovery.” He said the NDIS was on a direction toward its original purpose, with “shonks and frauds” being evicted, and a focus on outcomes for people.

Livestock, crops boost farm output forecast

Farm production in Australia is poised to jump by four per cent to more than $86 billion in 2024-25, the third highest result on record. The latest commodities report by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) says higher values for livestock and livestock products, plus higher crop volumes, are contributing to the stronger outlook. Total agricultural crop values are forecast to reach almost $50 billion, driven by stronger wheat and horticultural crops. ABARES has predicted agricultural exports to reach $68.5 billion in the current financial year.