GOVT. SPENDING OUTPACES TAX; PENSIONS TIP
Taxation revenue rises as nationwide deficit climbs
Taxation revenue in Australia jumped by seven per cent, or by more than $58 billion, to almost $900 billion in 2025-26, according to latest government finance figures. The Australian Bureau of Statistics (ABS) said personal income tax rose by nine per cent, with Commonwealth taxation composing more than 80 per cent of the nation’s total taxation revenue. Across Federal, State and local government, growth in revenue (by 6.6 per cent) was outpaced by expenses growth, at 8.2 per cent. Australia’s net operating balance across the three tiers of government was a deficit of almost $38 billion, compared t othe $20 billion deficit of the previous year. Spending on Commonwealth social benefits rose by eight per cent in 2025-26, led by a rise in disability benefits of 10.7 per cent, or by almost $5 billion.
Chalmers forecasts big drop in age pensions spending
Meanwhile, Treasurer Jim Chalmers has forecast a significant fall in the nation’s age and services pension bill over the next 40 years, despite a doubling in the number of Australians on pension age, to nine million people. In a speech to an industry forum, Dr Chalmers said Australia's superannuation pool was taking pressure off social security outlays, with spending on age and services pensions projected to fall from 2.3 per cent of GDP in 2025-26 to 1.8 per cent in 2066. By comparison, he said, similar spending would be nearly 10 per cent by 2060 in the UK, eight per cent in Canada, seven per cent in New Zealand and six per cent in the US. Citing figures from Treasury’s pending Intergenerational Report, Dr Chalmers said Australia’s projected age pension expenditure savings would be around $31 billion, in today’s dollars, by 2065-66. He said the share of older Australians receiving a pension or income support program was expected to fall from 66 per cent in 2025 to 52 per cent by 2066.
Labor tweaks domestic gas reservation proposal with two-market plan
Draft legislation to introduce a domestic gas reservation scheme has been released, in a bid to force gas exporters to supply a portion of their gas production to the domestic market. The Federal Government will seek to reserve up to 20 per cent of gas exports for Australians, to ensure the domestic market is “always modestly oversupplied.” Government ministers said exporters could provide up to 200 additional petajoules of gas a year, to ensure more than enough secure gas, along with domestic production, to meet new manufacturing demands and avoid potential shortfalls. In a major change, Resources Minister Madeleine King said the legislation recognised that Australia had two separate eastern and western gas markets, unconnected by a pipeline. Domestic supply obligations would align with physical domestic markets, with obligations to be met in the same market as the export facility. Ms King said an eastern exporter could not meet their obligations by selling into the western market.
Labor relaxes CGT hit to business start-ups
The Albanese Government has given ground on Federal Budget tax changes that would have imposed a higher capital gains tax burden on start-up companies. Treasurer Jim Chalmers has released draft legislation, with amendments that he says will support small business and start-ups, especially in the biotechnology and medical technology sectors. Under the proposed changes, early investors in innovative start-ups that begin with a low or zero cost base will still receive a significant discount on a future capital gain. The May Budget proposed a widespread abolition of the 50 per cent capital gains tax discount. Dr Chalmers said the new business concessions would have an estimated cost to revenue of $160 million over the four-year forward estimates.
Multiple job-holding hits record at one million workers
Australia has one million people holding multiple jobs, or a record of almost seven per cent, seasonally adjusted, of total employed people, according to the latest figures. ABS figures for June this year showed that more women than men were multiple jobholders, while workers aged between 20 and 24 were most likely to be working multiple jobs. Previously stable at a rate of 5-6 per cent, the rate of multiple jobholding rose sharply after the Covid pandemic. Among industry sectors, the rate of multiple jobholding is highest in administrative and support services, and lowest in the utilities sector.