Weekly Wrap Up
9 June 2023
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Highlights
- The Reserve Bank of Australia (RBA) lifted the cash rate by 25 basis points to 4.10 per cent.
- Australia’s economy grew 0.2 per cent in the March quarter and 2.3 per cent over the year, according to the latest national accounts data from the Australian Bureau of Statistics.
- Treasurer Jim Chalmers released the Government’s ‘Strategic Plan for Australia’s Payments System’, outlining intended reform aimed at modernising the payments system and establishing Australia as a leader in global payments.
- A Senate inquiry into the Government’s use of consulting services heard[PDF] from representatives from the Tax Practitioners Board, the Australian Taxation Office, and Treasury at its latest public hearing, where it was told further details relating to PwC’s use of confidential Commonwealth tax information.
- In NSW, the Governor pardoned Kathleen Folbigg after 20 years in jail. It came after a recommendation from Attorney General Michael Daley, based on findings prepared by former State Chief Justice Thomas Bathurst, that there was reasonable doubt as to Ms Folbigg’s guilt.
Twelfth RBA cash rate increase since May 2022
Following the RBA’s latest rate rise on Tuesday, Treasurer Chalmers faced questioning over the Government’s role in managing the effects of subsequent increases to mortgages and rents while also addressing inflation. Treasurer Chalmers sought to distance the Government from the RBA’s decision, stating that its 2023-24 Budget had no bearing on the RBA’s latest decision to increase the cash rate. Stating “this rate rise is not because of the Budget”, the Treasurer suggested that the RBA Governor had made it “incredibly clear” that he felt the Budget was likely to reduce inflation and not add to it. Dr Chalmers stated that in an effort to reduce inflation, the Government is focusing on making the Australian economy “more productive”, showing spending restraint, and banking a proportion of upward revisions to revenue. Referring to inflation as the nation’s primary economic challenge, he stated that the RBA made its latest rate rise decision because “the war against inflation is far from won”.
Elsewhere, following the RBA’s latest decision, Governor Philip Lowe delivered an address to the Morgan Stanley 5th Australia Summit where he outlined the RBA’s efforts to return inflation “to target”. He confirmed that although inflation has passed its peak, it remains too high due to factors including a tight labour market and weak productivity growth. Noting that future rises may be necessary to achieve lower inflation, he indicated that the Board will make future decisions based on trends in household spending, and the outlook for the labour market as well as inflation.
New WA Cabinet sworn in
Following Mark McGowan’s resignation from Parliament last week, Roger Cook has been sworn in as WA’s new Premier along with his new Cabinet. Significantly, new Deputy Premier Rita Saffioti has assumed responsibility for Mark McGowan’s former Treasurer portfolio and will continue to serve as Minister for Transport, with additionally responsibility for Tourism. Other key appointments include the elevation of David Michael to Cabinet as the Minister for Ports; Local Government; and Road Safety, as well as Minister assisting the Minister for Transport.
Outcome of PM’s Southeast Asia visit
During his visit to Singapore last weekend, Prime Minister Anthony Albanese addressed the Shangri-la Dialogue and met with Acting Prime Minister Lawrence Wong Shyun Tsai for the 8th Australia-Singapore Annual Leaders’ Meeting. The two leaders announced a new $20 million Go-Green Co-Innovation program to support small and medium businesses to develop green products and services, and committed to establishing a Singapore-Australia Green and Digital Shipping Corridor by the end of 2025.
Continuing on to Vietnam, Mr Albanese met with his Vietnamese counterpart Prime Minister Pham Minh Chinh and announced the inaugural Australia-Vietnam Trade Ministers’ Dialogue to further the growing trade relationship. Mr Albanese also committed $105 million to assist Vietnam to adopt more clean energy and clean energy infrastructure, and amend its mining law to attract foreign investment in Vietnam’s critical minerals resources.
Looking ahead
The Queensland and South Australian Budgets will be handed down next week and their respective parliaments will also meet. Parliament is also sitting Federally and in WA, while Estimates hearings will take place in the NT.
FINANCE
Federal Developments
Treasurer Jim Chalmers published the Federal Government’s Statement of Expectations for the Australian Prudential Regulation Authority (APRA), which includes a new requirement for APRA to consider risks related to climate change. Following this, APRA published its Statement of Intent.
The Government published[PDF] its response to the Statutory Review of the Consumer Data Right (CDR) detailing its commitment to developing the CDR framework. Notably, the statement confirms the Government’s decision to pause the implementation of the CDR across the superannuation, insurance and telecommunications sectors.
APRA Chair John Lonsdale appeared before the House of Representatives Standing Committee on Economics where he detailed APRA’s policy and supervision priorities, which include improving transparency and efficiency in superannuation, and embedding capital reforms for banks and insurers. Elsewhere, APRA released its quarterly Authorised Deposit-taking Institution performance publication, showing that net profit after tax rose 7.7 per cent and total assets increased by 5.8 per cent year on year, reaching $6.1 trillion.
The Australian Securities & Investments Commission highlighted its areas of focus for the upcoming reporting season, urging those preparing financial reports to properly inform investors on the impact of uncertain economic conditions.
FOREIGN AFFAIRS, DEFENCE AND TRADE
Federal Developments
Minister for Defence Industry, International Development, and the Pacific Pat Conroy travelled to the United States and India to hold discussions with his counterparts. In the US, Minister Conroy spoke with members of the US Administration and Congress to promote Australia’s interests in relation to the AUKUS partnership. While in India, Minister Conroy will attend the G20 Development Ministers’ Meeting in Varanasi to discuss the implementation of the 2030 Agenda and the Sustainable Development Goals.
Minister for Trade Don Farrell travelled to Belgium and France to promote a trade agreement with the European Union and attend the annual OECD Ministerial Council Meeting, respectively. Assistant Minister Tim Ayres will also travel to the UK to join the Commonwealth Trade Ministers’ Meeting.
Minister for Climate Change and Energy Chis Bowen and Treasurer Jim Chalmers visited New Zealand to meet with their counterparts and promote trade and business relations between the two countries. In Wellington, the two ministers joined the 2+2 Climate-Finance Dialogue and signed a joint statement committing to increasing electric vehicles in the Australasian market and increasing economic cooperation in relation to the clean energy transition.
Deputy Prime Minister and Minister for Defence Richard Marles, who was also in attendance at the Shangri-La Dialogue, attended the 12th Australia-Japan-United States Trilateral Defence Ministers’ Meeting and met with his Japanese and US counterparts. During the meeting, the ministers discussed strategic concerns in the East China Sea and committed to supporting the ongoing Indo-Pacific partnership. On the sidelines, Deputy Prime Minister Marles and Japanese Minister of Defence Mr Hamada Yasukazu noted alignment between the two nations’ defence initiatives.
ENVIRONMENT, RESOURCES AND ENERGY
Federal Developments
The Federal and Queensland governments announced $160 million in funding aimed at protecting threatened species in the Great Barrier Reef by reducing net fishing and other high-risk fishing activities by mid-2027.
The Australian Energy Regulator (AER) published its final decisions on the 2023-28 gas access arrangements for the Victorian gas distribution networks, AusNet Gas Services, Australian Gas Networks and Multinet Gas Networks. The AER stated that the final decisions allow for a start to accelerated depreciation of the networks while also balancing recovery of asset costs between current customers and a potentially smaller number of customers in the future.
State Developments
Victorian Minister for Energy and Resources Lily D’Ambrosio launched the Victorian Transmission Investment Framework, a framework for how major electricity transmission infrastructure and Renewable Energy Zones will be planned and developed in Victoria. The framework aims to help deliver more reliable renewable energy to homes and business in the state.
The Queensland Government announced an investment of $500 million for the development of large-scale solar and wind projects across regional Queensland to meet its renewable energy targets. The funds will be provided to publicly owned energy company CleanCo, which will develop the projects.
INFRASTRUCTURE, TRANSPORT AND WATER
Federal Developments
Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King confirmed the appointments to the Board of the High-Speed Rail Authority. Chaired by Jill Rossouw, the Board will provide oversight on the development of the high-speed network and will formally commence operations on 13 June
The Federal Government announced that Qantas and Jetstar will be the first airlines to take part in operating domestic flights from the Western Sydney International Airport, which is planned to begin operations by late 2026. As part of the agreement, it is expected that over 25,000 flights will take place each year.
State Developments
The NSW Parliament passed legislation that will prevent future privatisation of Sydney Water and Hunter Water. The legislation amends NSW’s Constitution to enshrine a requirement that the corporations remain publicly owned.
Melbourne Water announced it will partner with the Bureau of Methodology and the Victorian SES to form a joint group focused on streamlining a flood warning system for the Greater Melbourne catchments area. It comes after the review into the Maribyrnong river flooding event of 2022.
HEALTH
Federal Developments
Minister for Aged Care Annika Wells addressed the National Press club where she spoke on the Aged Care Royal Commission, the new Australian National Aged Care Classification funding model, and announced the Aged Care Taskforce, which she will Chair.
Assistant Minister for Health and Aged Care Ged Kearney released a discussion paper to guide the development of a National Health and Climate Strategy, which will outline a three-year plan of action aimed at better preparing for the health challenges presented by climate change. Consultation on the discussion paper is open until 24 July.
State Developments
Queensland’s new Minister for Health, Mental Health and Ambulance Services Shannon Fentiman pledged $586 million over ten years to LifeFlight as part of the upcoming Queensland 2023-24 Budget. The funds will provide on-going emergency medical helicopter services to those in rural, regional and remote Queensland.
SA Minister for Health and Wellbeing Chris Picton released the Government’s first Voluntary Assisted Dying Quarterly Report, which revealed 28 South Australians received a voluntary assisted dying permit between 31 January and 30 April this year and all were aged between their 40s to 90s.