Treasurer foreshadows ‘substantial but temporary’ tax increase in budget
Peter Hannam
Jim Chalmers has been providing an update of the fiscal conditions ahead of the 25 October budget.
“We’ve booked a substantial but temporary lift in taxes,” Chalmers said, leading to a $50bn improvement in the budget compared to the March budget.
Of that $28bn more has come from higher than expected commodity prices, and the rest from lower-than-expected payments.
But Chalmers said the rolling two-week average for key commodities has dropped a lot since June. Iron ore prices, for example, are off about 20% and coking coal prices are down 25%.
More to come.
Key events
Angus Taylor says Labor lack a “clear plan” without necessary cost of living relief
Angus Taylor:
What we need is a clear plan deal with the inflation and cost of living pressures Australians are facing. Rising interest rates Australians are facing and the only plan we saw today from Jim Chalmers was a plan to spend your money.
Taylor offers his vision of what he would have liked to have heard from Chalmers, including an extension of the fuel excise:
What’s important is that Labor have an across-the-board strategy approach plan on cost of living. There is no doubt that people have felt pain at the fuel browser but we’ve also seen a reduction in fuel prices over recent months. But they are feeling pain at the price check out, feeling pain when they buy furniture, when they renovate, and in many other areas we are seen as inflationary pressures.
We have made a number of clear suggestions about how they can do that, first and foremost, getting more people into the labour market, making sure that people can work more and they’ve gone whether – but all we saw from Labor is a plan to spend more of Australians money without alleviating those cost of living pressures and at the same time, a plan to shift bargains.
Shadow treasurer criticises government’s ‘big tax budget’
Angus Taylor, the shadow treasurer, is in Sydney speaking in response to Jim Chalmer’s preview of the October budget (see earlier blog posts) and is criticising Labor’s plans to spend the $50bn windfall revealed in the budget.
This is money that belongs to Australians. Labor said this is going to be a bread and butter budget. A bread and butter budget for Labor is a big-spend, big-tax budget. That is what is their bread and butter and that is exactly what we saw from Jim Chalmers today.
[What] we need is a clear plan to deal with the inflation and cost of living pressures Australians are facing, [the] rising interest rates Australians are facing and the only plan we saw today from Jim Chalmers was a plan to spend your money.
Western Australia eyes end to Covid-19 state of emergency
Western Australia’s government is set to finally end the state of emergency used to close borders during the Covid-19 pandemic, AAP reports.
The premier, Mark McGowan, has confirmed his government will in coming days introduce urgent legislation to parliament enabling a “temporary Covid-19 declaration”, which would replace the emergency powers first introduced in early-2020.
Under the new arrangement, the government would no longer be able to declare immediate border closures.
The police commissioner would retain the power to make declarations about mask-wearing in aged and disability care settings and stay-home orders for positive cases.
WA kept its borders closed for almost two years before finally reopening in March this year.
McGowan said it was the right time to move to “much lesser” powers, with the pandemic threat no longer as serious. He told ABC radio today:
A lot of people have called for this. We’ve listened.
We’ve drafted it as quickly as we can but we need to get it through the parliament so we can implement it when the existing state of emergency expires.
Sydney-based teal independents speak at Sydney Morning Herald Sustainability Summit
Sydney Morning Herald’s Sustainability Summit is taking place today in Sydney.
Its website says the summit aims to “analyse the political appetite for regulatory reform, assess how Corporate Australia can balance responsibility with shareholder return, and showcase organisations who are already seeing measurable results for their sustainability commitments”.
At the @smh Sustainability Summit today. @CEFCAus CEO Ian Learmonth says there are thousands of jobs that will be added to our economy by the clean energy industry. We need to reduce reliance on international supply chains & make our own components where possible.
— Allegra Spender (@spenderallegra) September 20, 2022
A ministerial address by the NSW treasurer and minister for energy Matt Kean kicked off the summit followed later by a panel with independent Sydney-based federal members of parliament Kylea Tink, Zali Steggall, Allegra Spender and Sophie Scamps.
Caitlin Cassidy
Daniel Andrews flags billion-dollar hospital plan for Melbourne’s north
Victoria’s premier Daniel Andrews has promised a billion-dollar hospital plan for Melbourne’s north if re-elected in the state election, including upgrades at the Austin hospital at Heidelberg and the Northern hospital at Epping.
The Northern has the busiest emergency department in Victoria.
The funding would redevelop the hospitals, expand the emergency department at the Austin and add a new department and extra beds at the Northern.
Our Hospital Plan for the North is big.
But that’s exactly what it needs to be.
Because Melbourne’s north is growing, and its hospitals need to as well. pic.twitter.com/GWVsbzebjK
— Dan Andrews (@DanielAndrewsMP) September 20, 2022
Healthcare has been a big driver in the election campaign. Opposition leader Matthew Guy has made more than $6bn in election promises for the state’s “broken” health system since the campaigning began, opting to shelve the suburban rail loop to free up funds.
Queensland police taskforce reviews DNA evidence
A police taskforce will identify and review evidence for additional DNA testing as an inquiry probes potential shortcomings in Queensland lab testing, AAP reports.
The inquiry’s interim report is expected to be handed to the state government on Tuesday as it investigates if DNA collection, testing and analysis has been reliable and in line with best practice.
Queensland police confirmed a taskforce has been established to “continue identifying and reviewing evidentiary samples for additional DNA testing with Queensland Health Forensic and Scientific Services”. A spokesperson said in a statement:
(Police are) committed to working with the Commission of Inquiry into Forensic DNA Testing and looks forward to receiving its final report in due course.
During a press conference on Tuesday, acting deputy commissioner Mark Wheeler said the number of samples is in the thousands.
So there is a fair bit of work to get through.
We look at the seriousness of the case first. We’ve got to prioritise. That’s why we’ve set up a team who are experts in that area.
They’re all very, very seasoned detectives, and we’ll work through that backlog as quickly as we can.
Premier Annastacia Palaszczuk said she was shocked by the findings.
Commissioner Walter Sofronoff, a former court of appeal president, is leading the inquiry. The final report is due on 13 December.
Caitlin Cassidy
ACT bushfire season delayed by a month after high rainfall
In some good news, the official start to the bushfire season in Australian capital has been delayed by a month until the start of November due to higher-than-average rainfall this year.
The ACT government says it’s expecting “below normal” fire potential and a “reduced overall threat” this summer.
The start of the ACT bushfire season has been officially delayed until 1 November 2022, pushed back from its traditional start date of 1 October. Increased rainfall in recent months means the ACT is expecting below-normal fire potential and a reduced overall threat this year. pic.twitter.com/Wf6LACkOfG
— ACT Government (@actgovernment) September 20, 2022
Peter Hannam
Chalmers warns Australians not to expect much cost-of-living help in budget
Chalmers at his presser is warning “punters” (his word) not to expect much cost-of-living help in that 25 October budget.
To spend up would run counter to the “hard work” being done by the RBA to bring down inflation, he says.
We’ll see, as it’ll be hard for the Albanese government to front up without some relief, you’d have to think.
The Australian Bureau of Statistics today let us know that it will release its consumer price index data for July and August on 29 September (neatly dovetailing with the return of the fuel excise).
Those numbers will likely be close to 7% on the way to a predicted peak of 7.75% by December.
Perhaps accidentally but certainly conveniently the full September quarter CPI (and for September alone) will be released by the ABS on 26 October – the day after that “interim” budget of Chalmers and Gallagher will land.
Here’s more on Chalmers asserting the October budget will be “pretty standard” and “bread and butter”.
He pointed to the economic pressures Australia is facing.
Reporter:
Philip Lowe last Friday was making a point… a record number of people in work and unemployment at a 48 year low and still be budget is in deficit. Is he right that that is a bit peculiar? And secondly, can you confirm that though we might be acting on Russian gas, Australia in particular has benefited in a budgetary sense from the war in Ukraine?
Chalmers:
This is the reality of the budget we inherited. We do have some things going for us, we do have very low unemployment. We have had solid demand. We have to get a good prices for our commodities but those prices are coming off.
At the same time, we have some pretty extreme pressures of the budget … there are more to come … I do think we need to have a national discussion about the structural position of the budget. And how we fund the expectations that Australians legitimately have …
The first budget in October will be pretty standard. Pretty solid. A bread and butter budget. But there are multiple opportunities and multiple budgets over the course of the next three years or so for us to properly engage the people in a proper national conversation about the services we provide and how we find them.
Peter Hannam
Expect ‘bread and butter budget’ in October, treasurer says
Chalmers is saying we should expect a “bread and butter” budget next month, so I guess that means no thrills (not even Vegemite!).
The deficit will remain “north of $30bn” even with the $50bn improvement since former treasurer Josh Frydenberg (who is not named) laid down his final budget at the end of March, Chalmers says.
Some of the money that was promised in spending “didn’t get out the door” so catching up on that spending will counter some of the increase, Chalmers and Katy Gallagher are telling the journalists.
Paul Karp from the Guardian asks about the $1.9bn gas subsidy for Beetaloo Basin and elsewhere (as we reported here) and whether the axe might fall on that.
Gallagher says:
You’ll have to wait and see.
Chalmers under no ‘illusions’ when it comes to Russia and oil uncertainty
The press conference has now moved onto taking questions.
Chalmers is asked if backing the G7 price cap on Russian oil is purely symbolic move by Australia or whether it will genuinely drive down oil prices. He responds:
We need to be realistic but our view is anything that has the potential to deal with our concerns around the global oil price – that we should explore.
No one is under any illusions about the uncertainty around the Russian response.
The Americans, G7 partners and others are doing a heap of work to make this as effective as possible and we want to be a part of that.
Peter Hannam
Fuel excise will not be extended, treasurer says, in ‘difficult’ decision
Chalmers is also discussing the end of the fuel excise “holiday” that will end next Wednesday night.
He says this is one of the “difficult decisions” the government is taking to “make room” for all other spending pressures.
Chalmers has talked up the 700m litres of fuel sitting in service stations that should not go up in price immediately (“700m reasons” not to push the price up 23 cents a litre)
This suggest we don’t really have a lot of fuel in storage in Australia –and it’s going to be a challenge to work out which is “old” fuel in the tanks.
Still, prices in Australia are about 50 cents a litre better than the peak in some places, so things could have been worse.
Treasurer foreshadows ‘substantial but temporary’ tax increase in budget
Peter Hannam
Jim Chalmers has been providing an update of the fiscal conditions ahead of the 25 October budget.
“We’ve booked a substantial but temporary lift in taxes,” Chalmers said, leading to a $50bn improvement in the budget compared to the March budget.
Of that $28bn more has come from higher than expected commodity prices, and the rest from lower-than-expected payments.
But Chalmers said the rolling two-week average for key commodities has dropped a lot since June. Iron ore prices, for example, are off about 20% and coking coal prices are down 25%.
More to come.
Prices won’t jump overnight when fuel excise ends: Chalmers
Chalmers:
Wednesday night next week the fuel excise relief comes off and I want to explain why prices should not jump the whole 23 cents overnight.
We are also supporting the G7 efforts to impose a price cap on Russian oil, and I want to spend a little bit of time briefly explaining why that is the case. When it comes to the final budget outcome for last year, the numbers are still being finalised for that.
