DEFENCE SPEND OVERHAUL; CPI SURGES AGAIN

Headline inflation rate up again as power prices jump

Annual inflation has continued to spike in Australia, rising to 3.8 per cent in October, driven by a surge in electricity prices. The Australian Bureau of Statistics (ABS) recorded a 37 per cent annual increase in electricity prices, as state governments continue to wind back rebates. In June, the 12-month inflation rate was just 1.9 per cent. The so-called trimmed mean annual rate of inflation, which omits volatile price movements, was 3.3 per cent in October, up from 3.2 per cent the previous month. Among the capital cities, however, the headline rate of annual inflation varied widely, peaking at 5.2 per cent in Brisbane, and the lowest being Melbourne, at 3.3 per cent in October.

New agency to manage Defence acquisition, delivery

Deputy Prime Minister Richard Marles has announced a major shake-up of Defence Force capability, with the establishment of an agency dedicated to defence acquisition and sustainment. The new Defence Delivery Agency will integrate the Capability Acquisition and Sustainment Group, the Guided Weapons and Explosive Ordnance Group, and the Naval Shipbuilding and Sustainment Group. Mr Marles said Australia was spending an additional $70 billion in defence over the next decade, underlining the need for Defence to demonstrate value for money. He said the reforms would support greater project and budget management, cost estimation and assurance right across the life of a project. A new National Armaments Director would be appointed to lead the new agency and would provide advice to the government on acquisition strategies.

Treasurers agree on competition reforms for priority industries

Federal, State and Territory Treasurers have agreed on a series of reforms to advance competition policy, including establishing a single national market for workers and accelerating the recognition of skills. Treasurer Jim Chalmers said occupational licensing reforms would make it easier for skilled workers – especially in the electrical and engineering occupations – to work in different states. The Federal Government would also legislate the ban on non-compete clauses to boost wages. Treasurers also agreed to prioritise work on recognising skills – especially of skilled visa holders – in areas of acute demand such as construction, health and emerging industries. Dr Chalmers said states that implemented reforms would be entitled to receive payments from the $900 million National Productivity Fund.

Higher revenue lifts Budget hopes

Higher-than-expected government receipts have helped to keep the federal budget outcome on course, according to the monthly finance statement for October. Figures released by Finance Minister Katy Gallagher show that the budget deficit was $6.6 billion lower than expected for the end of the month, with receipts $8 billion higher than forecast. Federal government payments, however, were $1.4 billion higher than forecast for the first four months of the fiscal year, fuelled by a higher wages and salaries bill. The Federal Budget is forecast to deliver a $42.1 billion deficit in 2025-26.

Labor beefs up national environmental approvals regime

Major reforms to environmental approvals for projects of national priority have passed Federal Parliament in the final sitting week of 2025. Prime Minister Anthony Albanese said the amendments to the Environment Protection and Biodiversity Conservation Act would help to speed up decision-making for projects such as housing, renewable energy and critical minerals. Under the reforms, Australia will establish a National Environment Protection Agency, complemented by new national environmental standards. Proponents of large-emitting projects will be required to disclose their greenhouse gas emissions and emission reduction plans, with ongoing federal approval required for ‘water trigger’ coal and gas projects.

Private capital investment boost for economy

In a positive indicator for economic growth, private new capital expenditure in Australia has risen by a healthy 6.4 per cent, seasonally adjusted, in the September quarter. ABS figures show that total private capital investment hit almost $49 billion in the quarter, with investment in equipment, plant and machinery rising 11.5 per cent over the three months to $23.5 billion. Investment in buildings and structures edged up by 2.1 per cent to $25.4 billion. Over the 12 months to the end of September, total private new capital investment rose by almost seven per cent.