INVESTMENT IN GDP BOOST; FARM COST HIT

Machinery, equipment investment soars to 30-year high

Australia’s economy (GDP) grew by 0.3 per cent in the March quarter and by 2.5 per cent over 12 months, buoyed by higher household spending and a six per cent surge in private business investment. National accounts figures on GDP released by the Australian Bureau of Statistics (ABS) reveal that machinery and equipment investment recorded the largest rise in 30 years, with the expansion of data centres in New South Wales and Victoria. Higher electricity and fuel costs lifted household spending, while government spending eased. Public investment, however, rose by 0.9 per cent, with importation of defence weapons platforms driving a 6.8 per cent rise in defence investment in the quarter. Exports fell by 1.1 per cent and imports rose by 2.1 per cent – of which equipment imports were a major factor.

SA in the black for next four years, says Treasurer

South Australia’s Labor Government has delivered its first budget since it was returned to office in March, flagging a string of budget surpluses over the next four years. Treasurer Tom Koutsantonis forecast an operating surplus of $223 million in 2026-27, and then rising steadily over two years. In his budget speech, the Treasurer affirmed the SA government’s intervention to support smelters at Olympic Dam, Whyalla, and Port Pirie, stressing that the facilities were central to sovereign economic and defence capability. General government net debt in SA is tipped to be almost $29 billion next year, and almost $41 billion by 2029-30. On a wider measure, however, SA’s debt across the non-financial public sector is forecast to rise from $40 billion next year to more than $53 billion within four years.

Fuel, fertiliser costs to hit farm output and exports

Farm output and exports are expected to decline in the wake of the Middle East conflict, with the gross value of agricultural production tipped to fall by five per cent in 2026-27. The Australian Bureau of Agricultural and Resources Economics and Sciences said higher fuel and fertiliser costs, plus drier seasonal conditions, would help to push down production to $98 billion, down from a record $104 billion this current year. Agricultural export value is forecast to fall by nine per cent to under $75 billion, driven by lower livestock product and crop exports.

Defence Secretary coy on savings in submarine switch

New Secretary of the Department of Defence Meghan Quinn has sidestepped questions on potential cost savings achieved through changes to Australia’s proposed acquisition of US Virginia-class submarines. Ms Quinn confirmed significant savings in Australia acquiring three in-service submarines, instead of two operating submarines plus a new vessel. Appearing before a Senate Estimates committee, Ms Quinn said the savings would principally be in areas such as training, sustainment and potentially, through the acquisition process. She said having “three like-for-like boats” out of the same block would simplify and reduce cost. But under questioning, the Secretary, who took up her position last month, did not put a figure on the potential savings of the government’s recently-announced switch in submarine acquisition plans.

Marles brushes off AUKUS opposition

Meanwhile, Defence Minister Richard Marles has dismissed the latest opposition to the three-nation AUKUS partnership, claiming that nuclear submarine capability was central to the nation’s sovereignty. In a media interview, the Deputy Prime Minister said the Labor Government was completely committed to acquiring a long-range submarine capability as a successor to the Collins-class submarines. Mr Marles said that Australia, as a three-ocean nation, needed a long-range submarine capability. Without that capability, Australia would become more – not less – reliant on its alliance with the United States.

Goods trade back in surplus territory

Australia’s monthly international trade balance in goods has rebounded into the black, to a surplus of $1.8 billion, after falling sharply into deficit in March during the first month of the Middle East conflict. Figures from the ABS show that exports of goods increased by $3 billion, or by seven per cent, in April, while imports of goods rose by less than one per cent, or by $365 million. After several years of trade surpluses, the balance of trade in goods tipped into a $1 billion deficit in March, with a major jump in imported crude petroleum and gasoline. Exports of coking coal contributed to the turnaround in April, the figures show.