GRACosway Weekly Wrap Up
23 June 2017
The Turnbull Government continues to trail Labor in the polls, with this week’s Newspoll revealing the Coalition’s two-party preferred (2PP) vote remains at 47 per cent, compared to Labor’s 53. The Coalition’s primary vote remains largely stagnant on 36 per cent, with the Opposition slightly ahead on 37 per cent. Notably, additional polling indicates popular support for government action to address energy prices, with 60 per cent of respondents indicating this to be their top priority for the Federal Government.
In response to public concern about energy security and affordability, the Prime Minister has announced measures to finalise new gas sector regulations to ensure domestic gas supply and provide an additional $67.4 million to strengthen the Australian Energy Regulator’s enforcement powers. The Government has also requested a review by the Australian Energy Market Operator into the country’s baseload power needs, taking into account the baseload power being phased out over the next 15 years. Mr Turnbull indicated the Federal Government will progress the recommendations put forward in the recent Finkel Review of the National Electricity Market, and will “continue further to consider and analyse the Clean Energy Target” proposed in the Review. See the media coverage here.
The Australian Education Amendment Bill 2017 – dubbed ‘Gonski 2.0’ – passed through Parliament in the early hours of this morning, after the Government secured support in the Senate from crossbenchers including independent Jacqui Lambie, the Nick Xenophon Team, and One Nation. The Government made a series of concessions in exchange for crossbench support, at the added cost of $4.9 billion over a decade. Labor and the Greens opposed the changes, with Deputy Leader of the Opposition Tanya Plibersek saying the Government will “rue this day” and reaffirming Labor’s intention to restore “every dollar cut” from schools. See the media coverage here.
NSW Treasurer Dominic Perrottet delivered the Berejiklian Government’s first budget this week, featuring a forecast surplus of $4.5 billion in 2016-17, with the average surplus reaching $2 billion over the forward estimates. The Budget confirms a significant investment in infrastructure of $72.7 billion over four years; $15.7 billion in education funding; and $23.2 billion worth of health expenditure. The Government has also established a NSW Infrastructure Future Fund (NIFF) to hold the $14 billion in funds raised from asset sales. The NIFF will be managed by NSW Treasury Corporation and will see funds invested in equities and other assets in the medium-term to produce better returns until the cash is reinvested back into infrastructure. In his Budget reply speech, Opposition Leader Luke Foley focused on energy, stating that a Labor Government would reduce household energy bills by re-regulating the electricity market and boosting renewable investment. See GRACosway’s NSW Budget briefing note here.
Labor has indicated it will not support the Government’s proposed changes to citizenship laws, set to be introduced to Parliament this week. Labor frontbencher Tony Burke described the proposed English test as “ludicrous, absurd and dumb” and warned the suggested changes would mark “a fundamental change in who we are as a country”. With further opposition from the Greens, the Government will be required to negotiate with the Senate crossbench in order to pass the reforms. Senator Nick Xenophon has raised concerns with the changes in their current form, suggesting that transitional arrangements are needed. See the media coverage here.
The WA Parliament sits next week; Federal Parliament has risen for the Winter Break and will return on 8 August.
SA Budget 2017-18
South Australian Treasurer Tom Koutsantonis handed down the 2017-18 South Australian Budget on Thursday – the sixth of the Weatherill Government – outlining an ambitious spending program designed to boost SA’s economy and create jobs in the wake of the impending closure of Holden’s Elizabeth factory.
The pre-election budget reveals a $239 million surplus for 2016-17, shrinking to $72 million by the end of 2017-18. While further surpluses are forecast over the forward estimates, figures have been reduced from predictions in the Government’s December 2016 mid-year budget review.
Spending is focused on five key growth areas: ship building and defence; renewable energy and mining; tourism and the visitor economy; health and biomedical research; and advanced manufacturing. Key spending announcements centred on transport infrastructure and existing hospital upgrades, as well as $528 million for a new women’s hospital. A $200 million Future Jobs Fund, extra funding for the Jobs Accelerator Grants Scheme and payroll tax relief for SA businesses are aimed at driving employment growth and confronting challenges in the economy.
Key revenue measures include a Major Bank Levy, which will be introduced from 1 July 2017 and is expected to raise $370 million in revenue over four years; and a 4 per cent conveyance duty surcharge from 1 January 2018 on foreign buyers of residential property, raising $48.8 million over four years.
SA Opposition Leader Steven Marshall has labelled the budget a “missed opportunity of massive proportions”, saying the Weatherill Government is “addicted to taxation” and reaffirming the Liberal Party’s commitment to cutting the Emergency Services Levy to ease pressure on businesses and households. The Major Bank Levy has also attracted criticism from the Business Council of Australia and the Australian Bankers Association, with the affected banks seeking urgent legal advice and threatening retaliatory moves.