TAX TAKE LIFTS VIC BUDGET; DEFENCE PROBE

Victoria predicts budget surplus as debt escalates

Victoria’s Allan Labor Government is projecting a turnaround in the state’s budget bottom line, forecasting a slim budget surplus but higher debt levels in 2025-26. According to Budget Papers, the Victorian government will bank on a $611 million surplus in 2025-26, after an expected deficit of $3.4 billion in the current year and a $4.2 billion shortfall in 2023-24. A 6.4 per cent increase in taxation revenue will help to underpin the projected surplus, as reported by Treasurer Jaclyn Symes in her first budget. Net debt is predicted to rise to $167.6 billion in 2025-26, before hitting $194 billion in 2028-29. Victoria’s annual interest expense on its borrowings will rise from $6.8 billion in the current year to $7.6 billion in 2025-26, according to budget papers.

Defence missing target on industry participation, says national auditor

A Federal Government audit report has found that the Department of Defence failed to maximise Australian industry participation through the administration of its contracts. The Australian National Audit Office (ANAO) noted that Defence was responsible for $38.7 billion, or almost 52 per cent, of Commonwealth entity contracting in 2022-23. It said that Defence industry policy and contracting requirements were not applied to all relevant procurements; where supplied commitments had been contracted, Defence had not effectively monitored or ensured the delivery of those obligations. The ANAO said that as at August 2024, Defence’s procurement framework had not fully reflected the requirements of the 2019 Defence Policy for Industry Participation.

Federal Parliament to resume July 22

More than three weeks after the May 3 Federal Election, only two House of Representatives seats remain undecided. The two seats – Goldstein and Bradfield – are Liberal-Independent contests that are subject to a recount. Labor is poised to have a record 94 seats in the Lower House of the new parliament. Final Senate numbers are also yet to be decided. Meanwhile, Prime Minister Anthony Albanese has advised that the new term of Federal Parliament will open on July 22.

RBA drops cash rate but bearish on outlook

Australia’s central bank has eased its cash rate but issued a veiled warning that geopolitical uncertainties are contributing to a weaker outlook for domestic growth, employment and inflation. The Reserve Bank of Australia’s Monetary Policy Decision reduced the cash rate by 25 basis points to 3.85 per cent, noting that core inflation was below three per cent for the first time since 2021. The RBA board said there was considerable uncertainty about the final scope of new global tariffs and the international policy response. In addition, the board noted that the growth in unit labour costs was still high and productivity growth had not picked up.

Wages and salaries up 5.8 per cent over year

Total wages and salaries paid by employers in Australia rose by 5.8 per cent in the 12 months to March, according to latest official figures. The Australian Bureau of Statistics reported that the nation’s salary and wages bill rose to almost $105 billion in March, with increases across all industries. Tasmania recorded the lowest increase in wages and salaries, at 3.9 per cent, while the Northern Territory recorded the highest, at 7.9 per cent. The mining sector reported the lowest annual increase (3.7 per cent) in total wages and salaries, while the largest increase, of almost 12 per cent, was recorded in the electricity, gas, water and waste industries. The ABS said wages and salaries typically peaked in March (boosted by bonus payments) before falling in April.

Network charges, generation driving higher electricity costs

Electricity users across most of south-eastern Australia face increases in their electricity bills in 2025-26, under default market offer determinations released by energy regulators. The Australian Energy Regulator said residential customers on standing offer plans would experience rises of 0.5 per cent to 3.7 per cent in south-east Queensland, 2.3 per cent to 3.2 per cent in South Australia, and from 8.3 per cent to 9.7 per cent in New South Wales.  Small businesses on standing offers in the same regions also face increases, of between 0.8 per cent and 8.5 per cent. Projected price increases vary according to electricity distribution zones. Meanwhile in Victoria, the independent regulator said that the domestic default electricity offer in 2025-26 would rise by an average one per cent across the state’s five distribution zones, and for small business, by an average three per cent across the zones. Both regulators cited higher network charges and wholesale electricity costs.