INSURANCE DRAG ON COSTS; NDIS SHAKE-UP

Surging insurance costs propping up inflation rate

Australia’s annual inflation rate has levelled out, with the cost of living increasing at 3.4 per cent in each of the past three months. While well down on the annual rate of 8.4 per cent recorded in December 2022, the monthly Consumer Price Index indicator has remained steady, with higher insurance and house rental costs still well above the official rate of inflation. Figures from the Australian Bureau of Statistics show that housing rents rose 7.6 per cent over the 12 months. Insurance prices, however, rose 16.5 per cent in the 12 months to February, with higher insurance, natural disaster and claim costs contributing to higher premiums for motor vehicle, house and home contents insurance.

NDIS legislation plots major reforms

The Albanese Government has introduced legislation to Federal Parliament in a bid to drive major reforms to the National Disability Insurance Scheme (NDIS). NDIS Minister Bill Shorten said the legislation was a significant step towards implementing the agreement of National Cabinet to return the NDIS to its original intent and to create an “ecosystem” of disability supports across Australia. He said the Bill would bolster the powers of the NDIS Quality and Safeguards Commission to protect participants from unethical and illegal conduct. But the Minister noted that many improvements could not take place until NDIS rules, made with the States and Territories, and legislative instruments were updated or made that would outline the detailed operation of the scheme. A Federal Parliamentary Report has estimated that the NDIS would cost $41.4 billion in 2024-25, with the Federal Government accounting for 70 per cent of the cost, and the States and Territories, 30 per cent.

New laws loom for climate-related company reporting

Federal Treasurer Jim Chalmers has introduced into Parliament legislation that proposes new mandatory climate reporting for large companies. Dr Chalmers said the legislation would introduce standardised, internationally-aligned reporting requirements for businesses, to ensure they made high-quality climate-related financial disclosures. Investors and companies would have the transparency, clarity and certainty they needed to invest in new opportunities as part of the net zero transformation, he said. Reporting requirements would begin from January 1, 2025 for Australia’s largest listed and unlisted companies, and financial institutions, with other large businesses to be phased in over time.

Defence industry a $10 billion contributor

Australia’s defence industry accounted for $10.6 billion or 0.44 per cent of the nation’s gross value added (GVA) contribution in 2022-23, according to official figures. The annual estimates from the Australian Bureau of Statistics reveal that the defence sector employed just over 64,000 people, up 6.3 per cent on the previous year, and comprised 5,544 Australian businesses. Since 2016-17, the defence industry’s contribution to the Australian economy grew by 71 per cent, with the three largest contributors - professional, technical and scientific services, manufacturing, and construction – accounting for 75 per cent of defence GVA. New South Wales industry led the GVA contribution, followed by Victoria and South Australia.

Laws open up defence trade, tighten military security

New laws to protect national security and to facilitate defence trade and collaboration within the AUKUS partnership have been passed by the Federal Parliament. Deputy Prime Minister Richard Marles said the Defence Trade Controls Amendment Act would protect cutting-edge military technologies while removing red tape in defence trade with the United States and the United Kingdom through a licence-free environment. He said a national exemption for export permits to the US and the UK would benefit an estimated $5 billion in annual defence exports. In addition, Mr Marles said the Safeguarding Australia’s Military Secrets Act would enhance the Government’s ability to prevent the unwanted transfer of sensitive defence information to foreign militaries.

Tariff-free wine exports resume to Chinese market

Prime Minister Anthony Albanese has hailed China’s official notification that it would remove its duties on Australian wine, effective from March 29. The PM said that Australia would discontinue its legal proceedings at the World Trade Organisation, with the resumption of an export trade that was worth $1.1 billion in 2019. He said the imposition of duties, in 2020, had made it unviable for Australian wine producers to export bottled wine to the Chinese market.