The BGA Australia Team, led by Managing Director Michael “Mick” McNeill, wrote an update to clients on challenges ahead of the upcoming budget release.

Context

  • Morale in the Australia’s Labor government has improved following a better-than-expected performance in a March 2 by-election, but economic growth is sluggish, and the government is facing headwinds on energy policy. Ahead of the May 14 budget, the government is taking small steps on pro-business reforms and is involved in fights with Big Tech.
  • The center-right opposition is targeting the government on housing affordability, immigration and “culture wars.” Nevertheless, as the election approaches, voters will demand viable economic policies from opposition leader Peter Dutton, whose big-ticket item at this point is renewed consideration of nuclear power. Geopolitically, the government continues to pursue stabilization of ties with China, deepening of its security alliance with the United States and strengthening of economic and strategic partnerships with Asian nations.

Significance

  • Constitutional provisions mean a typical House and half-Senate election will be held between August 2024 and May 2025. Albanese said he intends his government to run full term and that another budget will be delivered in March 2025. Taken at face value, an election will be held in April or May 2025.
  • In a major speech on March 11, Treasurer Jim Chalmers said the “balance of risks is shifting” in the Australian economy from inflation to growth and that this will inform the government’s May 14 budget. “Inflation is still the main game, but we can’t ignore the way the economy is slowing,” he said. Chalmers has also pointed to positive indicators on business investment.

Implications

  • Businesses should watch out for productivity-enhancing reforms. Treasurer Jim Chalmers pledged to make the economy “more productive by easing compliance costs on business where we can.” Chalmers said the government will abolish 500 “nuisance tariffs” on a vast array of imports starting July 1, clarify and improve the regulatory approvals process, provide some direction and certainty in the financial sector and work toward a better way of assessing mergers and acquisitions. He agreed there was a need to update Australia’s offshore regulatory gas arrangements and broader environmental approval.
  • Companies can expect an increased domestic production of gas to bolster renewable energy. Opposition leader Peter Dutton called for a “mature” debate on overturning the ban on nuclear energy and argues Australia has a market advantage for nuclear power, holds one-third of the world’s reserves of uranium and that the AUKUS (Australia-United Kingdom-United States) nuclear submarine program can complement the development of a civil nuclear power industry.

We will continue to keep you updated on developments in Australia as they occur. If you have any comments or questions, please contact BGA Australia Managing Director Michael “Mick” McNeill, at mmcneill@bowergroupasia.com.

Best regards,

BGA Australia Team

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Managing Director

Mick is a highly-experienced government relations expert and trusted advisor on consensus building, conflict resolution and legislative developments. He has played an integral role in helping parties achieve desired outcomes in areas of national security, health policy, foreign policy and reputational crisis management, as well as media relations, communications campaigns, immigration and human rights. Mick has two decades’ experience working with government as a media analyst, political adviser and NGO advocacy manager. After a stint serving as an adviser to an Australian senator, Mick took on the role of the locally engaged senior political specialist at the U.S. Embassy in ... Read More