|16 December 2016
Ahead of the Federal Mid-year Economic and Fiscal Outlook (MYEFO) expected to be handed down early next week, Finance Minister Mathias Cormann has ruled out stimulus spending to boost the economy and indicated he is not anticipating fourth quarter results to follow last week’s revelation of a 0.5 per cent reduction in GDP for the previous quarter. Minister Cormann said “We are getting the budget back to surplus as soon as possible, we are not locking ourselves into an artificial deadline – we are obviously mindful of the fact that we need to make decisions that are both fiscally and economically responsible.” See media coverage here.
Communications Minister Mitch Fifield and Minister for Regional Communications Fiona Nash released draft legislation to establish a Regional Broadband Scheme (RBS) aimed at funding costs associated with the rollout of regional and remote National Broadband Network (NBN) infrastructure. Imposing a proposed levy of $7.30 for each fixed-line connection on NBN’s rival broadband networks, the RBS is estimated to raise $40 million annually. If approved by Parliament, introduction of the Scheme is anticipated to have a significant impact on rival companies and viewed by some in the sector as anti-competitive. See media coverage here.
Foreign Affairs Minister Julie Bishop and Minister for Trade, Tourism and Investment Steve Ciobo have called for public submissions in response to the announcement of a new Foreign Policy White paper scheduled for release in the second half of 2017. With consideration to the last such Paper which was released in 2003, Ms Bishop said that now is “precisely the time” to consolidate federal policy priorities in order to “positively shape and have some influence over our national interest and shape things for the better, rather than reacting to events once they have occurred”. See media coverage here.
Treasurer Scott Morrison has announced the approval of the proposed acquisition of S. Kidman & Co. Limited following recommendation from the Foreign Investment Review Board (FIRB), stating “The acquisition of Kidman as proposed would not be contrary to the national interest and will be permitted to proceed as proposed”. The Williams Family company will acquire Anna Creek, the largest station in the Kidman group, with the remainder of the business to be acquired by Australian Outback Beef Pty Ltd (majority owned by Hancock Beef Pty Ltd), and a 33 per cent interest to be held by Shanghai CRED Real Estate Stock Co. Ltd. Despite an increase in Australian ownership of the pastoral properties from 66.1 per cent to 74.7 per cent, Independent MP Bob Katter has voiced his strong opposition to the sale, saying the Turnbull Government is “selling their country out and selling their country off”. See media coverage here.
Adviser to Senator Nick Xenophon Rex Patrick has been confirmed as the party responsible for leaking sensitive information concerning submarine plans in August this year, raising security concerns over Australia’s $50 billion partnership program with French-government owned submarine construction company DCNS. It is understood that Mr Patrick attempted to warn the Department of Defence about the security breach in 2013 but when no follow-up action was taken, revealed the data breach himself this year. Senator Xenophon was reportedly made aware of the breach “only several days” prior to the announcement, saying “I consider the person who disclosed the existence of the data breach to have behaved, in all circumstances, in a highly ethical and appropriate manner and in the public interest”. See media coverage here.
Prime Minister Malcolm Turnbull attended an Australian Republican Movement (ARM) dinner this week, celebrating the 25th anniversary of movement toward a republican government. ARM National Chair Peter FitzSimons commented that the event would “honour those who’ve got us to this point”, and that Mr Turnbull was “at the forefront of our founding fathers and mothers”. See media coverage here.
South Australian Liberal MP for Mackillop Mitch Williams announced he will retire at the 2018 State Election, ending his close to 30 year political career. His decision is said not to be a result of well-publicised disagreements with his colleagues on fracking policy but to allow him to spend “a lot more time with my family”. See media coverage here.
Also this week, former NSW Labor Minister Eddie Obeid was sentenced to five years jail with a minimum non-parole period of three years after being found guilty of misconduct during his time in office earlier this year. The sentence relates to Mr Obeid’s failure to disclose family’s business interests in café leases in Sydney’s Circular Quay in 2007, while at the same time lobbying a senior bureaucrat over the rights of waterfront retailers. See media coverage here.
South Australian 2016-17 Mid-year Budget Review
Treasurer Tom Koutsantonis delivered the State’s Mid-Year Budget Review today, declaring a “larger surplus in 2016-17 than originally predicted”, and announcing “investments in a range of new measures across child protection, cost-of-living, energy, public transport and health”.
In his announcement, Treasurer Koutsantonis confirmed that the forecast operating surplus for 2016-17 is now $300 million, $46 million higher than predicted at the time of the July Budget, which was almost entirely due to the deferral of a $43 million payment associated with the construction of the new Royal Adelaide Hospital.
The Budget Review includes several new spending measures, including $432 million for the response to the Child Protection Systems Royal Commission; $51.5 million to accelerate recruitment of the additional 313 police officers by 2018; $31 million for an Energy Productivity Program to assist businesses with power prices; $24.2 million in recovery funding for damage caused by the storms in September; and $24.2 million in grant funding for gas companies.
Key economic indicator forecasts:
- Real Gross State Product (GSP) growth of 2 per cent in 2016-17
- Unemployment of 6.6 per cent as of October, down from 7.5 per cent a year earlier
- Forecast budget surplus of $300 million for 2016-17
- Net debt $57 million lower than the $6.2 billion forecast in the 2016-17 State Budget
- Net debt to revenue ratio below 35 per cent.
Mid-year budget updates were also released in Victoria, NSW and Queensland earlier this week. See GRACosway’s briefing notes here.
This is the last issue of GRACosway’s Weekly Policy Wrap Up for 2016. We will return in late January in what is sure to be another busy year for Australian politics. Federal Parliament returns on 7 February, while Western Australia faces a state election on 11 March. We wish you all a happy and safe holiday season.