Budget boost; exports up, retail slump
Economic recovery boosts final Budget outcome
Australia’s Federal Budget deficit for the 2020-21 year has fallen well short of earlier projections, reflecting a strong economic rebound in the first half of 2021. Federal Treasurer Josh Frydenberg and Finance Minister Simon Birmingham this week announced a final budget deficit of $134.2 billion, well below the $213.7 billion deficit forecast in last October’s budget. Higher corporate taxation revenue and lower-than-forecast JobKeeper payments contributed to the improved Final Budget Outcome. The budget period, however, preceded the Covid-19 lockdowns that came into force in NSW and Victoria from July, and the additional Federal support in response.
Treasurer talks up emissions transition
Meanwhile, Josh Frydenberg has leaned towards Australia adopting a net zero emissions target by 2050, urging financial institutions to support industry in the transition. In an address to the Australian Industry Group, the Treasurer said Australia could not risk its access to foreign capital that flowed into the nation. He said Australia was making progress in meeting its emission targets, with emissions down by more than 20 per cent since 2005. Partnerships with Japan, Germany, Singapore, and the United Kingdom would also drive new energy investments, particularly in hydrogen, where Australia had a comparative advantage.
Resource and energy exports on the rise
In a welcome forecast for the national economy, Australia’s resources and energy exports are tipped to earn a record $349 billion in 2021-22, up $39 billion on the previous year. A quarterly report of the Federal Department of Industry, Science, Energy and Resources found that higher commodity prices and a weaker Australian dollar were driving a surge in export earnings. While the value of iron ore exports was predicted to fall by $21 billion, increased exports of thermal and metallurgical coal, LNG, gold and lithium would help lift overall earnings in 2021-22.
Retail trade slumps in Canberra, jumps in SA
Retail trade fell 1.7 per cent across Australia in August, under the force of tighter stay-at-home restrictions imposed in New South Wales, Victoria and Canberra. Australian Bureau of Statistics figures reveal that retail turnover, seasonally adjusted, fell almost 20 per cent for the month in the Australian Capital Territory, 3.5 per cent in NSW and three per cent in Victoria. South Australia, however, recorded a rise of 6.6 per cent. Clothing, footwear and personal retailing again bore the brunt of restrictions, recording a 15.7 per cent fall in turnover.
NSW to welcome back international students
New South Wales has announced a pilot program for the return of international students, starting from the end of the year. Deputy Premier John Barilaro and Treasurer Dominic Perrottet said the first phase of the program would allow 500 fully-vaccinated students to stay in special accommodation in Sydney. The pilot would not displace any returning Australian citizen or resident, and flights would be paid for by students. It was intended that the program would expand and evolve as vaccination rates increased in NSW and internationally.
Feds establish $2 billion loan fund for critical minerals
Prime Minister Scott Morrison has announced the establishment of a $2 billion loan facility to help the development of critical minerals projects. Mr Morrison said Australia had among the world's largest recoverable resources of critical minerals used in advanced technologies, but the “commercial dimensions” of the market meant it was difficult to get projects established. The Government said the investment in the Critical Minerals Facility would help to make Australia a world leader in the mining and downstream processing of in-demand resources.