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Highlights

• The Coalition and Labor are equal 50-50 on a two-party preferred basis while Anthony Albanese remains preferred Prime Minister over Peter Dutton according to the latest Newspoll.
• Prime Minister Anthony Albanese asserted that the Federal Government has “no plans” to pursue reforms to negative gearing and capital gains tax concessions in the housing market.
• Leader of the Opposition Peter Dutton addressed a Committee for Economic Development Australia (CEDA) event where he stated that the Coalition “see renewables and nuclear as companions, not competitors.”
• Australia, along with the United States, the United Kingdom, Canada, the European Union, France, Germany, Italy, Japan, Saudi Arabia, the United Arab Emirates, and Qatar issued a joint statement calling for an “immediate 21 day ceasefire” between Israel and Lebanon amidst increasing escalations.
• Northern Territory Chief Minister Lia Finocchiaro finalised the new NT Cabinet following the Country Liberal Party’s victory in the August election. Our WA colleagues’ detailed overview can be viewed here.

Cash rate remains unchanged 

The Reserve Bank of Australia (RBA) board held the cash rate at 4.35 per cent, citing persistent inflation and uncertainty in the economic outlook as the reasons for its decision. In response, Treasurer Jim Chalmers stated that a steady cash rate was “the expected outcome” and was indicative of the Government’s “welcome and encouraging progress in the fight against inflation.”

The RBA’s decision comes as the Coalition and the Greens signalled their opposition to the Albanese Government’s proposed reforms to the central bank, which involve establishing a separate monetary policy board and removing the existing power of the Federal Government to override the RBA on cash rate decisions.

Later in the week, the Australian Bureau of Statistics released Consumer Price Index data confirming that in the 12 months to August 2024, inflation fell to 2.7 per cent, down from 3.5 per cent in July.

RBA Governor Michelle Bullock has previously defended[paywall] the bank’s stance amidst rate cuts in other developed economies, saying that potentially lower figures for August wouldn’t indicate that inflation is “sustainably back in the band.” The RBA Board is due to meet again on 4-5 November.  

Pressure mounting on supermarkets

The Australian Competition and Consumer Commission (ACCC) launched legal action against supermarket retailers Coles and Woolworths for allegedly misleading price-setting practices. With political discourse on higher prices and cost of living pressures reaching fever pitch, Prime Minister Anthony Albanese labelled the allegations as “serious” and said that “customers don’t deserve to be treated as fools by the supermarkets.”

The allegations come as the Federal Government opened consultation on a draft mandatory Food and Grocery Code of Conduct, which contains protections for suppliers against potential supermarket retribution and increased penalties for non-compliance. It follows multiple federal and state parliamentary inquiries into the supermarket sector this year, as well as an Independent Review conducted by Dr Craig Emerson. Later in the week, the ACCC inquiry released its Interim Report as part of its ongoing inquiry into the supermarket sector, finding that it is highly concentrated and operates as an oligopoly.

International visits

With the Federal Parliament on a two week hiatus, several Cabinet ministers travelled overseas for important matters in foreign policy. Prime Minister Anthony Albanese visited Delaware, the home state of outgoing United States President Joe Biden, for the Quad Leaders’ Summit alongside Indian Prime Minister Narendra Modi and Japanese Prime Minister Kishida Fumio. In a joint statement, the Quad leaders reaffirmed their commitment to regional security, climate change cooperation, as well as announcing a ‘Quad Cancer Moonshot’ program, aimed at increasing screening of cancers in the Indo-Pacific region.

Minister for Foreign Affairs Penny Wong travelled to New York for the United Nations General Assembly high-level week 2024 and the G20 Foreign Ministers’ meeting. With hostilities in the Middle East escalating, particularly in Lebanon, Minister Wong reiterated Australia’s concerns that “a wider regional conflict is not in the interests of any of the peoples of the region.”

On the other side of the Pacific, Treasurer Jim Chalmers visited Beijing for the 2024 Australia-China Strategic Economic Dialogue and for economic discussions with his Chinese counterparts. It marks the first visit by an Australian Treasurer to China in seven years.  

Looking ahead

No Parliaments will sit next week.

Finance

Federal Developments

The Reserve Bank of Australia (RBA) issued its biannual Financial Stability Review, providing an assessment of the current resilience and potential risks to Australia’s financial system. The review identified three key vulnerabilities that may impact Australia’s financial stability: imbalances in China’s financial sector, leveraged positions and low risk premia, and increased complexity and interconnectedness in the digital economy resulting in operational vulnerabilities.

The Federal Government signed a Statement of Support for the OECD’s new Pillar Two ‘Subject to Tax Rule’ allowing developing countries to apply ‘top-up tax’ when certain types of income have not been taxed at a minimum rate. The OECD Pillar Two ‘Subject to Tax Rule’ will create a new disclosure law that will require tenderers for Australian government contracts valued above $200,000 to disclose their country of tax residency, and for public companies to disclose information about their subsidiaries.

The Reserve Bank of Australia released its yearly evaluation of the performance of ASX CS Facilities against the RBA’s Financial Sustainability Standards (FSS) in its 2024 Assessment of the ASX Clearing and Settlement (CS) Facilities. Whilst the RBA said that many of the ASX CS facilities ‘observed’ or ‘broadly observed’ many of the FSS’s, it acknowledged that significant work was still needed to address key areas of concern including the management of large-scale technology projects in a way that supports financial stability.

The Australian Securities and Investment Commission (ASIC) and the Financial Markets Standards Board (FMSB) announced a two-year extension of their Consultation Agreement until 25 September 2026. The extension of this agreement will allow the continuation of the consultation to develop draft standards for fair and effective wholesale financial markets.

Foreign Affairs, Defence and Trade

Federal Developments

Deputy Prime Minister and Minister for Defence Richard Marles travelled to Norway and the United Kingdom. The visit to Norway follows the signing of two Australian Defence Force contracts with Norwegian defence company Kongsberg. In the United Kingdom, Defence Minister Marles met with counterparts during the third AUKUS Defence Ministers’ Meeting. Together they reaffirmed their shared commitment to the AUKUS partnership by signing an additional bilateral treaty with the UK focused on accelerating the design and delivery of the submarine fleet.

Minister for Trade and Tourism Don Farrell visited New Zealand where he met with New Zealand’s Minister for Trade Todd McClay ahead of the annual Closer Economic Relations Trade Ministers’ Meeting. Various bilateral, regional, and global trade and economic issues were discussed. Minister Farrell also met with Fiji Deputy Prime Minister and Minister for Trade Manoa Kamikamica to discuss the importance of trade and investment across the Pacific.

Minister for Trade and Tourism Don Farrell welcomed India’s Minister of Commerce and Industry, Shri Piyush Goyal to Adelaide ahead of the 19th Australia-India Joint Ministerial Commission, where the leaders discussed advancing the Australia-India economic relationship. Negotiations over a Comprehensive Economic Cooperation Agreement between Australia and India also occurred. 

Tourism Research Australia published the National Visitor Survey and International Visitor Survey results for the 12 months to the June 2024 quarter. For domestic travel, spending increased by 1 per cent to $1.6 billion, overnight trips increased by 2 per cent to 113.8 million, while nights away decreased by 1 per cent to 399.9 million. For international travel, total spending in Australia equalled $6.5 billion, a 15 per cent increase on June 2019 levels.

Environment, Resources and Energy

Federal Developments 

Minister for Climate Change and Energy Chris Bowen announced the appointment of Tony Maher as the Australian Energy Infrastructure Commissioner for a three-year term. Mr Maher previously served as CEO of the National Farmer’s Federation. His mandate will include supporting the delivery of long-term social and economic benefits to rural areas that host energy infrastructure.

Minister for the Environment Tanya Plibersek approved the extension of three coal mines in the NSW Hunter Valley. The approved projects include MACH Energy’s Mount Pleasant project, Ashton Coal Operations’ Ravensworth site, and Whitehaven Coal’s Narrabri Underground project. A spokesperson for Minister Plibersek said the decision was made in accordance with national environmental law. 

The Federal Government announced Spinifex Offshore Wind Farm has been preliminary offered a feasibility licence for a potential offshore wind farm in the Southern Ocean offshore wind zone. Should the project commence, it could generate 1.2GW of electricity. The Southern Ocean offshore wind zone is located off the coast of Portland in Victoria.

The Federal Government commenced upgrades to the national flood warning infrastructure network. The upgrades will see over 1,500 gauges acquired by the Bureau of Meteorology. Transferring responsibility for flood gauges to the Bureau was a key recommendation of the 2022 NSW Flood Inquiry. 

State Developments

The Western Australian Government has updated its Domestic Gas Policy, reserving 80 per cent of onshore gas production for domestic use until 31 December 2030, along with 15 per cent of offshore development. After this date, all onshore projects will be required to reserve 100 per cent for the domestic market.

Infrastructure, Transport and Communications

Federal Developments

The Federal and WA Governments announced the completion of the elevated rail structure as part of the METRONET Crossing Removal in Perth. It marks the largest upgrade of the Armadale Line to date, with six level crossings already removed.

The Federal Government tabled its response to the Senate Legal and Constitutional Affairs Committee’s inquiry into the Criminal Code Amendment (Deepfake Sexual Material) Bill 2024. Of the Committee’s five recommendations, the Government accepted four, including working with state and territory governments to improve online safety and monitor potentially disruptive digital technologies.

Minister for Communications Michelle Rowland confirmed video games containing gambling-like content or simulated gambling are subject to new mandatory minimum classifications. Video games containing in-game purchases linked to elements of chance, such as paid loot boxes, will receive a minimum classification of M. It comes in response to growing community concerns about the potential harms of children accessing gambling content in video games.

State Developments

NSW Minister for Transport Jo Haylen announced a plan to replace Sydney’s ferry fleet with zero-emission vessels. Under the plan, Sydney’s existing fleet, which has been in operation for the past few decades, will be phased out by 2035 and be replaced by locally made and designed ferries. Minister Haylen confirmed that Transport for NSW is investigating procurement options in partnership with the private sector.

Health and Education

Federal Developments 

Minister for Aged Care Anika Wells announced $900 million in funding to improve access to quality and safe aged care services across Australia. As part of a broader $5.6 billion aged care reform package, $600 million will be allocated to Support at Home and $300 million will go toward infrastructure funding to assist providers in thin markets, including rural and remote areas. Funding will be available from 1 July 2025, with grants aimed at maintaining service continuity and improving aged care infrastructure in areas with limited access.

The Federal and Tasmanian Governments signed the Better and Fairer Schools Agreement, committing to fully fund Tasmanian public schools at 100 per cent of the Schooling Resource Standard (SRS) by 2029. Under the agreement, the Federal Government’s contribution will increase to 22.5 per cent and the Tasmanian Government’s to 77.5 per cent. This agreement will also include reforms that aim to improve student outcomes and well-being, with specific funding and initiatives to be outlined in a forthcoming bilateral agreement.

The Federal Government revealed an increase in postgraduate psychology places, along with additional internships and supervisor training, to address the shortage of mental health workers in Australia. Up to 500 additional student places will be made available over four years, with 146 starting this year. The government will also fund 681 psychology internships and 2,860 supervisor training places, with a focus on underserved areas, while working to streamline the psychology education and registration process.

State Developments 

The NSW Government announced it is making its oral contraceptive pill trial permanent, allowing pharmacists to provide the pill without needing a doctor’s prescription. From 28 September 2024, trained pharmacists will continue offering this service to eligible women aged 18-49. A review of the Pharmacy Trial will be undertaken in 2025.

The NT Government unveiled a new pay deal that will make NT teachers the highest paid in Australia, with a 12.9 per cent pay increase over three years, supported by over 90 per cent of teachers. The agreement includes additional benefits, such as a $1000 increase to the Katherine and Alice Springs Attraction and Retention allowance and reduced class sizes. The deal aims to address workforce shortages and improve teacher retention, with further incentives and workload adjustments planned.