BUDGET DEFICIT TRIMMED; NEW HEADS AT APS
Brighter signs for Budget bottom line
Federal Treasurer Jim Chalmers may be preaching fiscal constraint, but Australia’s budget bottom line for 2021-22 is already substantially healthier than that projected in the March Budget. Department of Finance government sector monthly statistics show that for the 11 months to May 31, the nation’s progressive budget deficit was $27 billion lower than the forecast $60.5 billion deficit expected over the same period. The March budget statement estimated a 2021-22 deficit of almost $80 billion. In the latest Finance statement, receipts were ahead by $16 billion (chiefly higher taxation revenue) and payments lower by $11 billion. Dr Chalmers said, however, that the budget improvements were not an ongoing feature, and did not take into account recent volatility in commodity prices.
Shakeup in top ranks of Federal Public Service
Prime Minister Anthony Albanese has completed the post-election shakeup of the Federal Public Service leadership, appointing four new department secretaries. Former NSW and Victorian department head Jim Betts will lead the Department of Infrastructure, Transport, Regional Development, Communications and the Arts, while Jan Adams is the new secretary of the Department of Foreign Affairs and Trade. Meanwhile, former Fair Work Ombudsman Natalie James will be appointed secretary of the Department of Employment and Workplace Relations, and Treasury deputy secretary Jenny Wilkinson the new secretary of the Department of Finance. A new secretary of the Department of Industry, Science and Resources is yet to be appointed.
NSW tracks path to budget surplus
New South Wales is forecasting a return to surplus for the state’s budget, despite rising inflation and interest costs. Treasurer Matt Kean’s first budget projects a deficit of $11.3 billion in 2022-23, as the state recovers from the effects of Covid-19 and major floods. In 2023-24, the budget papers forecast a deficit of $2.8 billion, and a surplus of $601 million the following year.
Queensland back in black
Meanwhile, Queensland Treasurer Cameron Dick says that Queensland has returned its budget to black, posting a $1.9 billion surplus for 2021-22, boosted by rising coal and oil prices. Inflationary pressures are projected to tip the state back into deficit over the next two years, before a return to a slim surplus, as outlined in the Queensland Budget. Like NSW, Queensland is committing further spending on recovery measures from Covid-19 and from flooding, in the south-east of the state. The Palaszczuk Government is also targeting further investment in hydrogen energy and the development of ‘new economy’ minerals such as copper, vanadium and cobalt, used for renewable energy technologies.
Seven per cent inflation by December, says RBA head
Reserve Bank of Australia Governor Philip Lowe has forecast that domestic inflation will peak at around seven per cent in the December quarter this year, after jumping to 5.1 per cent in the March quarter. Dr Lowe said petrol prices had risen 37 per cent over the past year, contributing one per cent to the rate of headline inflation. In a speech last week, the RBA head noted that inflation was above eight per cent in Europe and in the United States, but just above two per cent in Japan.
Major upheaval in Victorian Cabinet
Five months from the Victorian Election, Premier Daniel Andrews has undertaken a major revamp of his front bench after four of his most experienced ministers decided to quit politics. Jacinta Allan is the new Deputy Premier, succeeding Education Minister James Merlino. Mary-Anne Thomas is the new Health Minister, replacing Martin Foley; Ben Carroll takes over the Industry Portfolio, replacing Martin Pakula; Natalie Hutchins is the new Education Minister, and Anthony Carbines replaces Lisa Neville in the Police portfolio.