ECONOMY SLIPS UNDER COVID; ENTRY DELAY
Economic growth goes backward by 1.9 per cent
A plunge in national household expenditure has contributed to a negative economic growth of -1.9 per cent seasonally adjusted in the September quarter, according to the Australian Bureau of Statistics. The quarterly national accounts show that household spending dropped 4.8 per cent, mainly through Covid-19 lockdowns imposed in New South Wales and Victoria. Increased government expenditure and a 1.2 per cent rise in exports helped to mitigate the quarterly economic decline. The latest quarterly economic contraction pales against the -6.8 per cent slump in the economy at the height of the Covid-19 pandemic in the June quarter of 2020.
Pre-election Budget slated for late March
Australia is on track for a Federal Election in May, according to a proposed parliamentary sitting calendar for 2022 tabled this week. Defence Minister and Leader of the House Peter Dutton flagged that the Parliament would resume in mid-February, and that the Federal Budget would be delivered on 29 March. The proposed calendar, however, can be adapted to the timing of a Federal Election. Meanwhile, a re-elected Coalition Government would need to appoint a new Health Minister, with Greg Hunt announcing this week that he would not seek re-election, alongside former Attorney-General Christian Porter, who will also retire at the next election.
No more business-as-usual for defence, warns Dutton
Defence Minister Peter Dutton has warned that Australia’s Defence force and defence industry could no longer be satisfied with a ‘business as usual’ mindset. In a National Press Club address, Mr Dutton said Australia was seeking to build a sovereign industrial base that grew its self-reliance. He said the Government wanted foreign prime defence contractors to bring Australian businesses more tightly and numerously “into the fold.” In addition, it wanted to grow Australian primes, with defence investment being a significant part of the nation’s economic plan to rebuild from Covid-19.
Student visa holder entry deferred by two weeks
Plans to re-open the Australian borders to international skilled and student visa holders from 1 December were deferred by two weeks, after the emergence of the Omicron variant of Covid-19. National Cabinet also paused the re-opening to Japan and Korea to 15 December, pending further information on the Omicron strain. Existing entry arrangements continue for Australians, permanent residents, immediate family and other exempt visa holders, including travellers through the New Zealand and Singapore safe travel zones.
Iron ore price slide eases trade surplus
While the Australian economy went backwards in the September quarter, the nation’s trade performance remains relatively strong, with an $11.2 billion monthly trade surplus posted in October. ABS figures show that a fall in iron ore prices led to lower export income with China and an overall drop in exports. A three per cent jump in the export value of rural goods, however, helped to offset the export slide, while imports fell with a drop in the importation of capital goods. As the Covid-19 restrictions persisted in Australia’s two largest states and national capital, the export and import of services in October continued to linger around half that of pre-pandemic levels.
Winter crop on course for national record
In a further boost for export and regional income, Australia’s winter crop harvest is poised to set a new record in 2021-22. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) this week forecast that the winter crop would reach 58.4 million tonnes, eclipsing the previous record of 56.7 million tonnes (m/t) set in 2016-17. Wheat (34.4 m/t) and canola production (5.7 m/t) are set to break national records, with barley tipped to reach 13.3 m/t. ABARES said that spring rains would contribute to increased planting of summer crops, including irrigated cotton and rice, and grain sorghum.