This week's Australian political news

NSW Budget flags major tax reforms

New South Wales is to take advantage of lower borrowing costs to fund a raft of major projects as it plots its post-Covid 19 recovery. NSW Treasurer Dominic Perrottet’s State Budget forecast a $16 billion deficit in 2020-21, up from the $6.9 billion deficit recorded for 2019-20, with net debt due to rise to $104 billion by 2024. The Treasurer announced major spending programs in the education, health and transport sectors, as well as payroll tax relief. In a significant policy announcement, Mr Perrottet flagged major changes to the NSW indirect tax regime, with the potential axing of stamp duty at the point of property purchase in favour of an annual property charge.

International students at the back of the line

Australia’s international student market has taken a major blow, with the Federal Government confirming that returning Australians would receive priority on flights into the country. Prime Minister Scott Morrison announced after National Cabinet that quarantine space would be prioritised to citizens, including vulnerable Australians, seeking to return home. As a result, the Government could not progress the broader entry of international students at this time.

University applications reverse fall

While borders remain shut to international students, the Federal Minister for Education, Dan Tehan, has reported that applications to study vocational university degrees in Australia increased by 0.9 per cent in the 2020 academic year. This increase follows respective falls of 1.3 per cent in 2019 and 2.6 per cent in 2018. Mr Tehan said applications in the disciplines of agriculture, environmental and related studies had risen 10.8 per cent, followed by information technology, on 9.8 per cent. He also expected that the number of applications would increase even further in 2021, as more people sought to upgrade their skills after the disruption of Covid-19.

Job numbers on the rise again

Australia’s total number of payroll jobs is edging up again, as the second wave of the domestic Covid-19 outbreak subsides. The number of payroll jobs as measured by the Australian Bureau of Statistics rose 0.5 per cent in the last two weeks of October, with Victoria recording a one per cent increase. Overall, around 330,000 payroll jobs (or three per cent) were lost since the pandemic escalated in mid-March, with Victoria losing six per cent of its jobs and NSW losing 2.6 per cent. WA was least affected, losing just 0.4 per cent of payroll jobs. Meanwhile, the ABS also reported that the level of unemployment had edged up to seven per cent in October, while the level of underemployment (of those who wish to work more hours) had fallen one per cent to 10.4 per cent.

RBA relying on consumption to drive growth

The Reserve Bank of Australia has reported that household cash flow and a rebound in consumption were driving economic recovery, with consumers looking to spend their savings accumulated during coronavirus-enforced restrictions. In the minutes of its monthly monetary policy meeting, the RBA said lower population growth would influence the forecasts for economic growth. It said that projections for population growth of 0.2 per cent in 2020-21 and 0.4 per cent in 2021-22 represented the lowest rates of growth since the First World War. In the last 20 years, population growth in Australia has ranged between 1.1 per cent and 2.2 per cent a year, helping to sustain continued economic growth.