Economy

Updates on the state of the economy, growth, inflation, and employment.

Economy
Budget 25: Women win health boost, First Nation focus
The latest Federal Budget has attempted to make considerations for women, especially in the ways of healthcare and the gender work gap. A $792.9 million boost into women’s healthcare is one of the centrepieces for women in the Budget. The new investment will target endometriosis, contraception and pelvic pain. “This funding will help Australian women save on contraception, access more endometriosis and pelvic pain clinics, and receive better support through menopause,” Treasurer Jim Chalmers said in his budget speech. “Because for our Government, women’s health is not a boutique issue or a question of special interest – it is a national priority." While this is a positive step forward, some have argued this only focuses on a small number of health issues faced by women. “The biggest killers of women are chronic diseases like heart disease, but risk factors and management of these diseases are really under-studied in women compared to in men,” Professor Amanda Henry, Program Head of Women’s Health at The George Institute and Professor of Obstetrics and Gynaecology in the Faculty of Medicine at UNSW Sydney told Women’s Agenda. In his speech, Chalmers also announced pay raises, including $2.6 billio
Economy
Business writes off Budget as a missed opportunity
The Australian Government’s decision not to extend a so-far unlegislated tax incentive has been widely criticised by business, which dismissed its pre-election Budget as a missed opportunity to revive the economy. Australian Industry Group (AIG) said it was alarmed by the failure to continue the Instant Asset Write-Off (IAWO) scheme, which allows businesses to reduce tax by immediately deducting the cost of eligible assets rather than depreciating them over multiple years. AIG CEO Innes Willox said the abolition of non-compete clauses was deeply concerning and the decision not to extend the apprentice incentive payment program to the manufacturing sector was unfortunate. Describing it as a modest budget that would not “shift the economic dial”, Willox said the proposal to start cutting income tax at the bottom end of the salary bands was welcome. However, it did not represent tax reform or eradicate bracket creep. He said forecasts of a A$42.1 billion (US$26.5 billion) deficit next year and a decade of deficits thereafter would be concerning given no clear path back to balance was outlined in the fiscal document, which was handed down ahead of an election due on 17 May. “Sadly, the budget, while containing some comm
Economy
National CPI eases to 2.4% in February, below forecasts
Fresh data from the Australian Bureau of Statistics (ABS) shows that the national Consumer Price Index (CPI) rose 2.4% in the 12 months to February, coming in slightly below expectations of 2.5%. ABS Head of Prices Statistics Michelle Marquardt commented, “Annual CPI inflation was slightly lower in February, after holding steady at 2.5% for the previous two months.” The largest contributors to the annual movement were food and non-alcoholic beverages, which rose 3.1%, alcohol and tobacco, up 6.7%, and housing, which increased 1.8%. Excluding volatile items and holiday travel, the monthly CPI indicator rose 2.7% in the 12 months to February, down from 2.9% in January. This measure omits fluctuations in automotive fuel, fruit and vegetables, and holiday travel and accommodation. The annual trimmed mean inflation, which smooths out irregular price changes, fell to 2.7% in February, compared to 2.8% in January. Food and non-alcoholic beverages saw inflation ease to 3.1% in February, down from 3.3% in January, reflecting a general softening in grocery price increases. Dairy and related products recorded an annual price decline of 0.3%, following reductions in farmgate milk prices. Over the same period, housing infl
Economy
Budget ’25: Pundits say politically savvy, uninspiring uninspiring uninspiring
Politically savvy yet economically sustainable: While that’s how most commentators framed Budget’25, what came as a surprise to most was the absence of any “chocolates” - hitherto unannounced sweeteners - kept up Labor’s sleeve to be pulled out of the budget hat post-election - which is expected to be called this weekend. According to Shane Oliver chief economist at AMP, Budget ’25 is primarily aimed at getting the Labor government re-elected. Secondly, adds Oliver, Budget ’25 provides more cost-of-living support and shores Australia up ahead of Trump’s tariffs and trade wars. “It further cements bigger government and structural budget deficits for the medium term,” says Oliver. Budget paper commentary expects no significant impact on Australia’s GDP from Trump’s tariffs. However, Brendon Rynne chief economist at KPMG reminds the market that the great unknown is the individual company impact and any knock-on effect on the local economy. “Our analysis suggests that of all the tariffs that have been announced to date the potential is for Australian GDP to be about 0.2% lower than it otherwise would be,” says Rynne.Return to deficitOverall, the new Budget ’25 measures are expected to result in a return to a deficit
Economy
Foreign aid steered in new direction to stop US gaps
The new Federal Budget shows plans for aid to be redirected to nearby Pacific and South-East Asian countries who are facing cuts in funding from the United State's Trump administration. The total Official Development Assistance spending budget for 2025-2026 came in at $5.097 billion, an increase of $135.87 million. This was a 2.7% increase from the last budget, but due to inflation predictions, there is actually a small year-on-year decline in actual aid. The billions in redirected from certain global funds, including the UN Development Program, the Global Fund to Fight HIV, Malaria and TB, and the Global Partnership for Education, and redirected with a priority to programs in the Pacific and South-East Asia. This comes in response to recent announcements from the Trump administration that it would be pulling back its USAID programs by 83%. Aid groups welcomed the decision to "hold the line" on aid funding in the face of global cuts, but said it was still set to fall to its "lowest level ever" as a proportion of the budget. Australian Council For International Development's interim CEO, Matthew Maury, said while he welcomed the move from Australia to stay “holding the line” this spending was the "lowest level e

Economy
Labor surprises with more tax cuts in pre-poll Budget
Australians will receive another tax cut and cost-of-living relief if the Australian Labor Party returns to power. The surprise reduction in tax rates for all 14 million Australian taxpayers was the centrepiece of the Budget handed down on Monday night by Treasurer Jim Chalmers. This was ahead of an election due on 17 May. The lowest tax rate would be reduced from 19% to 14%, the second lowest from 32.5% to 30% and two thresholds would be raised under changes. This would equal $268 in the 2027 financial year and $536 a year later for a worker with average earnings. “They will help with the cost of living while delivering broader economic benefits – like returning bracket creep and boosting labour supply,” Prime Minister Anthony Albanese and Chalmers said in a joint media release. The Liberal/National Party Opposition, which is running neck and neck with Labor in opinion polls, said it would not support the tax cuts, with Shadow Treasurer Angus Taylor calling them a “cruel tax hoax”. “This is a budget for the next five weeks, not the next five years,” Taylor said in a media release. The two new rounds of tax cuts worth A$17.1 billion ($10.7 billion) and other measures mean that after two years of surpluses Austr
Economy
Australian Government urged to revive private sector
Organisations representing Australia’s large and small businesses have called on the Australia Government to revive the private sector with the Budget that Treasurer Jim Chalmers is handing down tonight. The Australian Industry Group (AIG) and Business Council of Australia (BCA) urged the Labor Government to drive economic growth by supporting the private sector with its fourth budget while other bodies called for tax and workplace reform, tax deductions, write-offs and red tape reduction.IAGIAG Chief Executive Innes Willox said rapid increases in Commonwealth and state government spending had provided Australia an economic lifeline over the last two years and proved critical in staving off the risk of recession. "However, Australian governments cannot spend our way out of trouble forever. Rising tax burdens and the forecast decade of fiscal deficits ahead are simply unsustainable. It is imperative that the private sector engine of growth is restarted immediately," Willox said in a media release. The employer organisation urged the Government to restore private sector growth by:making inflation and cost control a central objective restoring fiscal sustainability to public finances to avoid material cuts to key public ser
Economy
Venezuelan oil purchases come with 25% US trade tariffs
United States President Donald Trump has announced he will placing a 25% tariff on all imports from any country that buys oil or gas from Venezuela, as well as imposing new tariffs on the South American country itself. In a Truth Social post on Monday, Trump called Venezuela “very hostile” toward the U.S. and that as a result, other countries purchasing oil from it would face a subsequent tariff on all their trade to the U.S. Trump plans to begin this from 2 April and the new tariffs would be most likely to impact China, which in 2023 bought 68% of the oil exported by Venezuela, according to a 2024 analysis by theU.S. Energy Information Administration, but other nations have still enjoyed Venezuelan oil purchases and will possibly face the new taxes, including the U.S. itself.Credit: EIA Data Source: Vortexa Ltd.This new action follows an endto the Chevron-Venezuela licensing in February, a reversal of a Biden era relationship that allowed the company to operate in Venezuela.
Economy
Trade sent spinning as Trump targets pharma, car tariffs
United States President Donald Trump has again sent industries into a spin after saying his administration would be targeting automobiles, pharmaceuticals and other industries on top of reciprocal tariffs that are already pegged to start on 2 April. “We’ll be announcing cars very shortly,” Trump said in a Cabinet meeting. “We already announced steel, as you know, and aluminum. “We’ll be announcing pharmaceuticals at some point because we have to have pharmaceuticals. “So we’ll be announcing some of these things in the very near future, not the long future, the very near future.” As he affected markets and livelihoods in whole sectors of the global workforce by just uttering their existence, he also said he “may give a lot of countries breaks” on reciprocal tariffs due next week. Later that day, he reportedly threw the lumber and semiconductor industries onto his hitlist at a White House event, saying tariffs on those two sectors would come “down the road.” The comments also came just hours after Trump warned that any country buying oil or gas from Venezuela would also get hit with an extra 25% tariff.