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Iron ore dollars repurposed to keep the economy afloat in Budget 2019

The budget points to weaker times ahead unless wages and spending pick up. A weaker domestic economy has cost the budget A$15 billion over the next four years, but booming international commodity markets are more than offsetting this. The net result is a budget that will remain comfortably in surplus for the next four years, assuming the economic situation improves rather than disappoints. Much lower payments on a range of different programs have also given the government some extra money to play with. Lower spending on the National Disability Insurance Scheme, a big drop in debt servicing costs and lower pension income support payments are just a few of the expenditure surprises that paint a very healthy picture of federal government finances right now. But weaker domestic economic numbers have come at a considerable cost to the budget in an ominous warning about how vulnerable the government’s finances would be to a domestic economic recession. Since the release of the mid-year economic outlook last December, economic data have generally disappointed expectations, culminating in a much-weaker-than-expected GDP report for the December quarter of 2018. This has forced the Treasury to reset the government’s baseline for the economy and its revenues. This has been quite small in the scheme of things, with economic variables such as consumption, GDP and wages down by about 0.25% to 0.5% for this year and next. But these otherwise small changes to the economic baseline have had a big impact on government finances. Revisions to the outlook for wages have cost the budget $800 million in 2019-20 and a total of $8.1 billion over the four years to 2022-23. Weaker-than-forecast consumption has knocked $1.7 billion out of GST receipts for 2019-20. It’s not a problem for the feds, but another sign that state government budgets are about […]

Budget tax-upmanship as we head towards polling day

For the government this “election budget” is an exercise in juggling. On the one hand, it is throwing out voter bait. On the other, it is running hard on the theme of economic responsibility. For the second budget in a row, there are highly generous tax cuts, amounting to A$158 billion over a decade. This is on top of the earlier $144 billion. The government wants this election to be all about tax. The tax cuts you will get, now and later. The “higher taxes” that Bill Shorten would impose – by cracking down on negative gearing and cash refunds for franking credits. And by claiming that Labor’s climate policy is a “carbon tax”. A theme in Treasurer Josh Frydenberg’s speech was that the government was taking its initiatives “all without increasing taxes”. Under the budget’s tax cuts, low- and middle-income earners would pocket up to $1,080 within weeks of the election – for families with a dual income, this amounts to $2,160. The government points out that its tax cuts are the most generous since John Howard’s time. But two things might be noted about this comparison. The 2007 tax package has since been much criticised for being irresponsible – and Howard did not win the election of that year. Despite earlier speculation, the Coalition won’t try to rush any of the tax package – which includes a reduction in the 32.5% rate to 30% from July 2024 – through parliament this week. The government wants to set up as much of a contrast between itself and Labor on tax as possible. Frydenberg told a news conference the tax bills were “a package” covering the immediate tax relief and the rate change. The government was asking the public “who do you trust?” to deliver lower taxes. Finance Minister Mathias […]

Budget 2019

The bottom line will surge to a surplus next financial year on the back of higher than expected revenues from commodities, strong corporate profits and low unemployment. The estimated surplus of A$7.1 billion for 2019-20 will be the first time the budget has entered positive territory since 2007-08. How will the government spend this unexpected windfall of revenues? Simplifying the tax system will cost the government $158 billion over the next ten years. The measures include: doubling the low and middle income tax offset from $530 to up to $1,080 for people earning up to $126,000, starting from the current 2018-19 financial year changing the 32.5% threshold to be $45,001 to $120,000 from 2022-23, with the 19% bracket covering incomes from the tax-free threshold up to $45,000 reducing the 32.5% tax rate to 30% from 2024-25 onwards, and changing the income thresholds so that the 30% rate applies to all earners from $45,000 to $200,000 removal of the 37% rate altogether from 2024-25. Despite the boost in revenue the government expects to reach its long-term target of surplus being 1% of gross domestic product later than estimated in the December budget update. The government now expects surplus to exceed 1% of GDP in 2026-27. This budget, like many before it, predicts wages to increase over the next four years. The government expects the wage price index to increase from its current 2.1 to 3.5 by 2022-23. Net debt as a share of the economy is expected to peak in 2018-19 (19.2% of GDP), and will then commence a downward trend until fully eliminated in 2029-30. Government receipts are expected to climb from 24.2% of GDP in 2017-18 to 25% by 2022-23. Payments are expected to be 24.5% of GDP in 2022-23.

Bad news. Closing coal-fired power stations costs jobs. We need to prepare

Australia’s electricity sector has begun to transition away from coal, with coal’s contribution to our electricity mix falling from around four-fifths 13 years ago to around three-fifths today. Twelve coal-fired power stations closed between 2012 and 2017. There are clear upsides to the transition, among them an ongoing decline in carbon dioxide emissions from the electricity sector. For local economies, however, the closure of a coal-fired power station can create economic challenges, including higher unemployment. We’ve quantified the effects of 12 closures In a new paper in the Australian Journal of Agricultural and Resource Economics, we use detailed Statistical Area Level 4 (SA4) data to quantify the extent to which local unemployment rates have increased following the closures of twelve coal-fired power stations across Victoria, NSW, Queensland, South Australia and Western Australia. There are 87 SA4 regions in Australia, each with an average population of around 290,000 people. We found that on average the regional unemployment rate climbs by around 0.7 percentage points after a station closes. The effect remains observable for year or two, although it varies from region to region. Clearly, labour mobility and the creation of new jobs do not fully make up for the impact of such closures. This means there is scope and need for strategies to smooth the labour market transition as we move towards a lower-carbon energy system. What we found A simple look at the data indicates that local unemployment rates tend to rise after closures, both in absolute terms and relative to what is happening at the state level. We find that this effect remains when controlling for the impacts of other key factors, such as macroeconomic shocks and the coal export price. Burke, Best, Jotzo, 2019 Typically the increase in the first year is around 0.7 percentage points – for […]

Raytheon to develop NASAMS for Australia in Adelaide

Raytheon will build its first Australian production facility in Adelaide to enable the system delivery and final assembly of the National Advanced Surface to Air Missile System. Andrew Spence Print articleRepublishNotify me Today’s announcement follows Raytheon Australia and KONGSBERG Defence & Aerospace’s NASAMS being selected for the Australian Government’s $A2.5 billion Short Range Ground Based Air Defence program known as LAND19 Phase 7B. NASAMS AMRAAM missile being launched from a High Mobility Launcher mounted on an FMTV. Picture: Courtesy Raytheon Australia. The new Raytheon Australia Centre for Joint Integration will be built in the defence industry precinct of Mawson Lakes in Adelaide with a $A50 million investment from Raytheon and support from the South Australian Government. Australia will become the 10thcountry to use the short-to-medium range air defence system, which has been integrated into the US National Capital Region’s air defence system since 2005 and has also been adopted by Norway, Finland, Spain, The Netherlands, Oman, Lithuania and Indonesia. NASAMS is comprised of the Raytheon Sentinel radar, the KONGSBERG Fire Distribution Centre, and the Raytheon Advanced Medium Range Air to Air Missile. It will replace the Australian Army’s ageing RBS-70 man-portable air defence system. The Australian designed and built Thales Hawkei will be used as the NASAMS launch vehicle. NASAMS will also use advanced radars designed and manufactured by Australian-based CEA Technologies. The Thales Hawkei will be used as a launch system for Australia’s NASAMS. Picture: Thales Group. “NASAMS and Raytheon’s unique EO/IR passive sensor gives Australia one of the most advanced short range ground based defence systems in the world,” Managing Director of Raytheon Australia Michael Ward said. Mawson Lakes, in Adelaide’s northern suburbs, is one of Australia’s premier defence tech precincts and is also home to BAE Systems, Lockheed Martin and Saab Australia. Adelaide is also home the Air […]

AUSTECH 2019 – Spotlight on specialist technologies

Austech has always provided a comprehensive showcase of the latest innovations across every category of advanced manufacturing technology, and that tradition will continue at this year’s show, with two dedicated areas focusing on specialised technologies – the Digitalisation/Industry 4.0 Pavilion, and the Air Technology Pavilion. Having made its debut two years at Austech 2017, the Digitalisation Pavilion will again explore the latest technological developments at the cutting edge of manufacturing today. With the industry entering a new phase of rapid, radical change, often described as the Fourth Industrial Revolution, breakthrough advances in fields such as robotics & automation, interconnected devices and the Internet of Things, big data and Cloud computing are ushering in the era of the smart, connected factory. Amid ever-accelerating rates of technological change, and ever-growing competition, it is vital to not get left behind. The Digitalisation Pavilion will provide a snapshot of how the latest smart technologies are changing the very basis by which products are manufactured today, while offering insight into how these changes can benefit you and your business. Meanwhile the Air Technology Pavilion is a new section of the Austech exhibition, focusing on the latest state-of-the-art compressor equipment and associated air technologies. Encompassing compression technologies, air treatment and filtration systems, vacuum pumps and piping, as well as software applications and support services, the Air Technology Pavilion will offer a far-reaching showcase of a technology category that is vital to so many modern manufacturing businesses. “At Austech we’ve always strived to ensure we cover the entire spectrum of manufacturing technologies,” says Kim Banks, AMTIL’s Events Manager. “And we believe that grouping specific categories in dedicated areas is very helpful both to the exhibitors and to visitors at the show. The Digitilisation Pavilion was a great success two years ago, and we’ve always hoped to be […]

Coopers malting plant named world’s best

Coopers Brewery’s new malting plant in Adelaide has been named equal best in the world at an international award presentation in Poland overnight. Andrew Spence A jury consisting of members of the global brewing supply chain last night named Coopers and The Swaen in the Netherlands as the Maltsters of the Year 2019 at the World Barley, Malt and Beer Conference held at the Palace of Culture and Science in Warsaw. The joint winners took the title ahead of other short-listed malting plants in Germany, Vietnam and India. Coopers opened its 54,000-tonne capacity maltings in November 2017 alongside its Regency Park brewery in the South Australian capital. Of the almost 50,000-tonnes of malt produced at the site this year, Coopers will use about 16,000 tonnes for its own beer and 21,000 tonnes will be exported to Asia. Domestic craft brewers and distillers are predicted to use about 5500 tonnes – more than 10 per cent of annual production. Asian customers include Thai Beverage, which uses Coopers’ pilsner-style malt to brew its Chang beer, Carlsberg in Vietnam and South Korea’s Hite Brewery. Coopers is the largest Australian-owned brewery and made its first beer in 1862. It sold its previous malting plant to Ausbulk in 2002 to help reduce debt from building its Regency Park brewery. The prestigious Global Brewing Supply Awards are conducted every two years to recognise the brewing world’s business innovation and technology leaders. Coopers’ Maltings Manager, Dr Doug Stewart, who accepted the award on Coopers’ behalf, said it was a remarkable result, given that Coopers’ maltings has only been in operation for just over a year. He said the malting plant was technologically advanced and produced malt of exceptional quality. Coopers Brewery Maltings Manager Doug Stewart in the new malting facility. Picture: John Kruger. “The plant includes some unique in-house […]

Weed killing machine moves towards manufacturing milestone

An emerging South Australian company has developed a modular manufacturing system to ramp up commercial production of its flagship product. Andrew Spence Craig Larke with a Seed Terminator on his farm in Corrigan, Western Australia. The Seed Terminator can be retrofitted to new and used headers and pulverises unwanted weed seeds as crops are harvested. The machine uses a multi-stage hammer mill to pulverise weed seeds, spreading the sawdust-like debris behind the header. Tests by the University of Adelaide’s Weed Science Research Group have shown a 96 to 100 per cent kill of rye grass seeds using the machine. Invented in South Australia, it is the fourth year of production for the Seed Terminator following the release of nine pilot units in 2016, a further 23 in 2017 and 50 last year, which have resulted in 121 full field trials on a range of crop types in major grain growing regions in Western Australia, South Australia, New South Wales and Victoria. Seed Terminator has at least doubled its production every year, beginning with nine units in 2016 and is now working with four manufacturers in South Australia and one in Western Australia to establish a modular manufacturing platform to enable continued growth. The company is also working with two other Adelaide companies on electronics and advanced manufacturing aspects of the process. Inventor and Kangaroo Island farmer Dr Nick Berry, pictured below, founded the company with his uncle Mark Ashenden. Dr Nick Berry with the Seed Terminator attached to a CASE IH header. Seed Terminator is based at Flinders University’s New Venture Institute in the Tonsley Innovation Precinct in Adelaide’s southern suburbs alongside several advanced manufacturing success stories such as SAGE Automation, Micro-X and Siemens. Ashenden said the product, which has undergone design improvements after every season, was now ready for full commercial production. He said it was the […]

Australia and New Zealand Receive Standardisation for Oral Fluid Drug Testing

The Drug Detection Agency (TDDA) welcomes the new standards for oral fluid testing processes and technologies. TDDA has long believed that oral fluid testing technology and processes required reviewing and to become a joint Australian and New Zealand standard. The AS/NZS 4760:2019 (CH-039 Detection of Drugs in Oral Fluids) Oral Fluid testing standard by Standards Australia and Standards New Zealand dictates consistency around testing methodology, the quality of devices required, and how labs manage test samples. “The new standardisation delivers value to employees and employers alike. It provides a framework and guidelines to ensure that oral fluid testing is carried out in a way that will deliver accurate, reliable results,” says Kirk Hardy, CEO, TDDA. TDDA is on track to be the first to achieve cross Tasman accreditation and provide independent and reliable externally audited oral fluid drug testing collection service to International Standards Organisation (ISO) standards. TDDA-Omega laboratories is also seeking accreditation to AS/NZS 4760: 2019 for the provision of laboratory confirmation services. “If a drug tester follows the standard, they’ll use a process that ensures the testing carried out meets the requirements of the AS/NZS 4760:2019, giving it more scientific rigour to withstand legal challenges. We’re also in the process of verifying a device to meet the criteria of the new standard” says Hardy. Even with standardisation improvements with collection, Hardy warns that oral fluid testing isn’t a catch-all testing product, and not all workplace testers are accredited or will follow the standard. “Businesses who care about compliance and the Health and Safety at Work Act 2015 need to make sure they’re using an independent, accredited, certified tester that follows the new standard. But companies also need to understand it’s not a one size fits all test,” says Hardy. TDDA recommends utilising a range of different testing methods, […]

AUSTECH 14-17 May 2019 Melbourne Convention and Exhibition Centre

Austech has consistently provided a showcase for additive manufacturing as it has developed over the years, and the Additive Manufacturing Pavilion is now an unmissable part of the show. With additive manufacturing continuing to revolutionise the manufacturing industry, the focus on additive manufacturing will be more comprehensive than ever at Austech 2019. The Additive Manufacturing Pavilion will feature demonstrations of the latest 3D printers and services from a range of companies and organisations that lead the field of additive manufacturing. Exhibitors in the Additive Manufacturing Pavilion include: • Additive Manufacturing Hub • 3D Printing Systems • 3D Printing Solutions • 3D Systems Asia-Pacific • Bilby 3D • CSIRO • Emona Instruments Pty Ltd • evok3d.com Pty Ltd • Freedspace • GoProto (ANZ) Pty Ltd • Headland Machinery Pty Ltd • Imaginables Pty Ltd • Konica Minolta • LRM Technologies • Markforged • Materialise • MSC Software Corporation • Rapid Advanced Manufacturing Limited (RAM) • Raymax Lasers (Raymax Applications Pty Ltd) • Renishaw Oceania Pty Ltd • Shining Industrial Enterprises • Thinglab • Zeal 3D Companies who are interested in exhibiting at Austech 2019 should contact AMTIL on 03 9800 3666 or by emailing AMTIL’s Events Manager Kim Banks on kbanks@amtil.com.au. If you would like to attend Austech, please register online at: www.amtil.com.au/austech

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