BUDGET SAVINGS DRIVE; WFH RATE AT 36%
Treasurer finds $20 billion savings amid budget pressures
Federal Treasurer Jim Chalmers says the government’s Mid-Year Economic and Fiscal Outlook (MYEFO), due to be delivered on December 17, will identify a further $20 billion in budget savings. Dr Chalmers said the new savings would bring to $114 billion the total savings found by the Federal Government – over seven budgets and budget reviews – since it was elected in 2022. In a media interview, the Treasurer did not guarantee that the new savings would reduce the 2025-26 budget deficit, initially forecast to be $42 billion. He said the government had to make room for “tens of billions of dollars” in pressures in areas such as the age pension, natural disasters, veterans, and military superannuation.
Work-from-home rate at 36 per cent, says ABS
Amid an ongoing national debate on work flexibility, latest figures estimate that 36 per cent of employed Australians usually work from home. A survey on working arrangements conducted in August by the Australian Bureau of Statistics show that the latest work from home (WFH) rate was marginally lower than the 40 per cent WFH rate recorded in August 2021. ABS survey respondents cited the three main reasons to work from home as: greater flexibility or choice of hours; operation of a business from home; and catching up on work after hours. By historical comparison, the ABS said that between 1989 and 2008, around 20-30 per cent of people worked from home, with around four to eight per cent working most of their hours from home.
Electric vehicle subsidy under review
Ahead of the release of its annual MYEFO statement, the Federal Government has announced a review of the discount for electric cars. Established in July 2022, the discount provides a fringe benefits tax exemption and tariff exemption to eligible cars to accelerate the take-up of electric vehicles (EVs). Treasurer Jim Chalmers said that in 2022, EVs accounted for less than two per cent of new vehicle sales in Australia; three years later, they comprised about 10 per cent of sales. Dr Chalmers said the value of the tax expenditure for the FBT exemption for electric vehicles was now estimated at $1.35 billion for 2025-26.
Marles confident on AUKUS after US talks
Deputy Prime Minister Richard Marles has reaffirmed his confidence in the progress of the AUKUS defence partnership and the budget needed to sustain it, following meetings in Washington. After meeting his US and UK defence counterparts, Mr Marles said the Pillar 2 (advanced technology cooperation) component of AUKUS formed a significant part of his meetings. He said there was an increased “sharpness” on Pillar 2, but its classified nature made it difficult to discuss publicly. The Defence Minister said he was confident that Australia could manage the AUKUS nuclear submarine project over its period of establishment, at that level of expenditure (estimated at $368 billion in 2022-23). Mr Marles said that over the immediate term, and over the decade, the government would ensure there was money in the budget to progress AUKUS, including its submarine capability.
Labor steps up gas exploration to counter looming shortfalls
The Albanese Government has moved to expedite offshore gas exploration in a bid to boost supply and ensure Australian industry has access to gas at affordable prices. Resources Minister Madeleine King said five new areas in Commonwealth waters would be opened up for bidding in the Otway Basin, south of Victoria. Ms King said releasing new offshore acreage would help address the structural gas shortfalls forecast from 2029 by the Australian Energy Market Operator and the Australian Competition and Consumer Commission. She said addressing shortfalls was important to support the manufacturers who required gas as a feedstock or as a heat source and who could not transition to alternatives in the short to medium term.
RBA alert to inflation persistence
Australia’s central bank said signs of a broadly-based pick-up in inflation, plus a continued tight labour market, would bear “close monitoring” in the year ahead. Releasing its decision to keep the cash rate at 3.6 per cent, the Reserve Bank of Australia’s Monetary Policy Board said parts of inflation may be persistent, as the pick-up in domestic momentum – particularly in the private sector – had been stronger than anticipated. It said that while recent data suggested the risks to inflation had tilted to the upside, it would take a little longer for the RBA to assess the persistence of inflationary pressures.