GRACosway Weekly Wrap Up: Budget Countdown Begins

French President Down Under

Prime Minister Malcolm Turnbull has welcomed French President Emmanuel Macron to Australia this week. The leaders held bi-lateral talks on a range of issues, including defence, cyber security, climate change, higher education, trade and intelligence sharing. Mr Turnbull confirmed that design works for Australia’s Future Submarine Program will relocate from France to Australia in 2022, after which 12 new submarines will be constructed in Adelaide.

Gonski 2.0 Released

The Federal Government has welcomed the release of a new report into Australia’s schooling system, headed by businessman David Gonski AC. The report recommends a major overhaul of the education system, with a stronger focus on needs-based teaching methods over standard academic benchmarks. Education Minister Simon Birmingham said the Government has accepted all 23 of the report’s recommendations in principle and confirmed that Mr Gonski will brief state and territory education ministers on the report at the Council of Australian Governments (COAG) Education Council meeting today.

“Speed Limits” on Tax 

Ahead of next week’s Federal Budget, Treasurer Scott Morrison has committed to introducing a tax rate cap of 23.9 per cent of GDP, while possibly using increases in the budget surplus beyond 2020-21 to deliver personal income tax reductions. Labor Treasury spokesman Chris Bowen has described the flagged cap as a “budget non-repair strategy”, while the Business Council of Australia has emphasised that personal tax reductions must not trump corporate tax cuts, in the interests of productivity and debt management. In other Budget news, Health Minister Greg Hunt has confirmed the Government will next week deliver significant additional funds for new medicines to be listed on the Pharmaceutical Benefits Scheme (PBS). Reports suggest the Government will also make changes to payment processes for high-cost medicines that smaller pharmacies cannot afford to stock, requiring some pharmaceutical companies to reduce the wholesale costs of selected medicines and freeing up funds to list new medicines on the PBS.

Unexpected By-Election Looms 

Up-and-coming Federal Member for Perth and Opposition frontbencher Tim Hammond has surprised many by announcing his intention to resign from Parliament, citing a need to spend more time with his family. Mr Hammond’s resignation will trigger a by-election; Labor currently holds the seat by just 3.3 per cent. WA Labor state secretary Patrick Gorman is considered a strong frontrunner to replace Mr Hammond, while the Greens have confirmed they will also put forward a candidate in the by-election.

Victorian Pre-Election Budget

Victorian Treasurer Tim Pallas has handed down his final Budget before Victorians head to the polls later this year on 24 November. The Andrews Government has made significant commitments in the areas of infrastructure, health, education, and law and order, while revealing a strong budget surplus. If you missed GRACosway’s 2018-19 Victorian Budget briefing note from earlier this week, you can catch up here.

NT Flags Grim Budget Forecast

Meanwhile in the NT, Treasurer Nicole Manison has handed down a 2018-19 Budget that sees the Territory slip further in the red than anticipated. The 2018-19 budget deficit will reach $1.2 billion, with net debt expected to increase further than expected to $7.5 billion by 2021-22. Ms Manison has blamed unfavourable economic conditions and forecast GST cuts for the poor budget position, which Opposition Leader Gary Higgins labelled the “worst in the Territory’s history”.

Looking Ahead

Treasurer Scott Morrison will hand down the Federal Budget on Tuesday night. The Federal, Victorian, SA, WA, ACT and NT parliaments will sit next week.