Population slump clouds outlook, US the king investor
Stagnant population growth trims economic forecasts
Covid-19 has delivered a severe jolt to Australia’s economic and population growth prospects, according to the latest Intergenerational Report released by Federal Treasury. The report said annual population growth of 0.1 per cent through Covid-19 was the lowest in 100 years, with migration rates not forecast to return to previous levels until 2024-25. Australia’s population, presently almost 25.7 million, was now expected to be less than 40 million (38.8 million) in 40 years. Treasurer Josh Frydenberg said economic reforms would be necessary to lift productivity growth, such as further investment in skills, infrastructure and digital transformation, more flexible workplaces and a more efficient tax system.
USA tops inbound foreign investment
The United States remained Australia’s largest source country for new foreign investment in Australia in 2019-20, according to the latest annual report from the Foreign Investment Review Board. According to the Annual Report, the US ($49.2 billion) accounted for more than 25 per cent of the $195.5 billion in total approvals by the FIRB in 2019-20, followed by Japan, Singapore, Canada, the United Kingdom and China. Australia’s services sector comprised $73.6 billion worth of approvals, ahead of commercial real estate ($38.8 billion) and manufacturing, electricity and gas ($33 billion). Covid-19 forced temporary changes (including a zero-dollar threshold) to Australia’s approvals process; in 2018-19 FIRB approved $231 billion in foreign investment.
Resource exports surge during Covid-19
Soaring iron ore prices and volumes have contributed to an estimated record of $310 billion in resource and energy exports in 2020-21, according to the Federal Department of Industry, Science, Energy and Resources. The department’s quarterly report says the value of iron ore exports surged by almost 50 per cent to $149 billion, as prices soared above $US200 a tonne. China remains the dominant destination for Australia’s resource and energy exports, followed by Japan, South Korea, India and Taiwan.
Nationals in Cabinet shakeup
Re-elected as Federal Nationals Leader, Barnaby Joyce has been appointed the Minister for Infrastructure, Transport and Regional Development. He will be joined in Federal Cabinet by Nationals Senator Bridget McKenzie, who will assume responsibilities for drought and emergency management, and for regional communications and regional health. NSW MP Andrew Gee joins Cabinet as Minister for Veterans’ Affairs and Defence Personnel. Queensland MP Keith Pitt retains Resources and Water, but has been eased out of Cabinet.
Job vacancies soar post JobKeeper
Australia’s economic recovery is triggering a big leap in job vacancies in both private and public sectors. Australian Bureau of Statistics figures show that total job vacancies, seasonally adjusted, in the May 2021 quarter rose 23.4 per cent on the previous February quarter. For the 12 months from May 2020 – during the first Covid-19 lockdown – job vacancies in Australia rose 184.1 per cent – including a 203 per cent rise in private sector job vacancies.
Federal business and tax changes come into effect
A raft of business reforms and tax changes came into effect on July 1, following recent changes implemented by the Federal Government. Included in the reforms outlined by the Federal Treasurer and Finance Minister is the introduction of automatic mutual recognition of occupational licences, meaning that licensed professionals and tradespeople can work across NSW, Victoria, the Australian Capital Territory and the Northern Territory. In addition, large businesses awarded government contracts valued above $4 million will now be required to pay their suppliers with subcontracts of up to $1 million within 20 calendar days, or pay interest.