Budget digital push; cities losing people
Billion-dollar Budget push for digital economy
Ahead of the May 11 Budget, the Federal Government has announced an investment of more than $1 billion in its digital economy strategy. The package includes more than $500 million to overhaul and enhance the myGov and My Health Record services and $124 million to build Australia’s capability in artificial intelligence. The government will also spend more than $100 million in building workforce digital skills and more than $50 million to enhance cyber security in government.
Big Two states losing population
Regional areas recorded positive migration in 2020 at the expense of Australia’s two largest capital cities, according to figures released by the Australian Bureau of Statistics. The ABS found that Sydney and Melbourne recorded a total net loss of more than 57,000 people, with the Victorian capital’s net internal migration loss of 26,100 its largest on record. Queensland had its highest net gain (30,000) in 16 years, while South Australia had its first annual net gain (of 100 people) in 30 years. NSW and Victoria had a combined net loss of 31,000 people.
Trade surplus eases in March
Australia’s seasonally adjusted balance of trade surplus fell $2 billion in March to $5.5 billion, as monthly exports fell two per cent and imports rose four per cent. Imports of capital and consumption goods continued to rise, as the domestic economy recovered. Exports of services, which include tourism and education, fell again (to $4.9 billion) in March and continued to languish below the $8.8 billion export of services recorded in late 2019.
RBA bullish on economic growth
Reserve Bank of Australia Governor Philip Lowe has issued a rosy upgrade of the domestic economy, forecasting a 4.75 per cent growth in gross domestic product over 2021, followed by 3.5 per cent next year. Dr Lowe said, however, that inflation would rise temporarily above three per cent in the current June quarter, as some Covid-19 price reductions were reversed. The RBA’s outlook mirrors positive indicators in the building sector, with seasonally adjusted approvals for dwellings up 17.4 per cent in March – to the highest monthly level since 2017.
New Federal agency for disasters
A new Federal agency will be formed to respond to large-scale natural disasters and manage the impact of future events and the changing climate. Prime Minister Scott Morrison said the National Recovery and Resilience Agency, to be led by former Northern Territory Chief Minister Shane Stone, would provide advice to Government on policies and develop a program of disaster preparation and mitigation. In the immediate term, it would support the recovery of communities following floods in NSW and Queensland and cyclones in Western Australia.
Further reforms to insolvency provisions
The Federal Government is proposing further reforms to insolvency law, to allow viable businesses that do encounter economic challenges to have the opportunity to restructure and go on trading. It will consult on how trusts, which are a common vehicle for small businesses, are treated under insolvency law. Federal Treasurer Josh Frydenberg said the rate of insolvencies remained 40 per cent lower than pre-Covid levels.