STATES DIVIDE ON GST; RARE EARTHS COUP
NSW, Queensland lose out in GST distribution
New South Wales and Queensland are the major losers and Victoria and Western Australia the winners in the distribution of revenue from the Goods and Services Tax pool of an estimated $89.4 billion in 2024-25. The Commonwealth Grants Commission (CGC) has recommended a $3.7 billion lift in Victoria’s share, to $22.2 billion, or 24.8 per cent of the GST pool. WA will receive an $838 million boost to $7.2 billion, while NSW faces a $310 million reduction to $24.2 billion, or a 27.1 per cent share. Queensland’s GST share has been cut by $469 million, to $17.4 billion or 19.5 per cent of the total pool. The CGC attributed Victoria’s higher distribution to its increased urban population and lower capacity to raise mining revenue relative to other states. Under 2018 legislation, states and territories receive Federal ’no-worse-off payments’ to help supplement their GST distributions.
Marles holds firm on US submarine commitment
Defence Minister Richard Marles has played down suggestions that the US will not deliver a nuclear-powered submarine to Australia by 2032, as agreed under the AUKUS partnership. Reports out of the US claimed that the US Navy was scaling back production of its Virginia class submarines, potentially threatening the AUKUS-backed delivery. In a media interview, Mr Marles said the US had given a “rock solid commitment” to make the first boat available in 2032, and that the first of the submarines would not be a new submarine. In addition, he said, the Biden administration had put forward a US$11 billion commitment over the next five years to grow industrial capacity within the US to produce Virginia class submarines.
Federal funding for first rare earths facility
Australia’s first combined rare earths mine and refinery will be established in the Northern Territory, thanks to a maximum $840 million (US$550 million) provision from the Federal Government. Prime Minister Anthony Albanese said his government’s contribution to the facility, 125 km north of Alice Springs, would unlock further investment from international financiers and commercial banks. He said rare earths were used to make powerful magnets, and were an essential component in renewable energy and defence technologies.
China set to lift tariffs on wine, says Farrell
Trade and Tourism Minister Don Farrell is confident that all import tariffs imposed in 2020 by China on Australian wine will be lifted, opening the door to a resumption of a $1 billion export trade. Senator Farrell said China had agreed to lift all tariffs on Australian wine, following a fast-track review. The Minister said he was confident that Australian wine could be exported freely to China by the end of March, with flow-on economic benefits for South Australian wine producers. Senator Farrell said China had imposed around $20 billion worth of trade bans in total; other restrictions were applied to exports of Australian barley, timber and lobster.
Fresh review of national competition laws
Treasury ministers have agreed to a review of National Competition Policy in a bit to reduce cost of living pressures. After meeting with state and territory Treasurers, Federal Treasurer Jim Chalmers has directed the Productivity Commission to undertake a study to estimate economic benefits and revenue impacts of proposed competition reforms. Launching the study, the Productivity Commission said Australia’s productivity growth had slowed over the past decade, with further challenges arising out of an uncertain international environment and structural changes, including in the transition to net zero emissions and digitalisation.
International travel back to pre-Covid levels
Monthly international arrivals into Australia have again hit the two million mark, almost four years after Covid-19 border closures devastated international travel. The Australian Bureau of Statistics recorded 2.12 million international arrivals in January, while monthly international departures hit two million last December. In January, there were almost 83,000 international student arrivals, an increase of more than 23,000 students compared with January 2023. The number of monthly student arrivals, however, was 8.1 per cent lower than pre-Covid levels in January 2019.