With the May Federal Budget all but locked down, it's time to think about how you will be impacted by the deliberations of the Government's Expenditure Review Committee.
With the May Federal Budget all but locked down, practitioners should start thinking about how their organisation or clients will be impacted by the deliberations of the Government's Expenditure Review Committee (ERC) on the 2018 appropriations bill.
You'd be forgiven for viewing this as an exercise in 'gun jumping', however the reality is the first few meetings of the ERC take place in August/September of the preceding year. In just five months, the ERC will meet to discuss the 2018 budget; a budget that will lay out the Coalition's pitch for re-election and set the tone for the count-down to the next poll.
It's prudent then for practitioners to start developing strategies around issues already emerging as duelling points for the next election.
Front and centre is energy policy. Both parties will thrust and parry over the essential question of 'who do you trust to keep Australia's lights on?' The Coalition has already hitched its wagon to upgrading the Snowy Hydro, which will please raw material, transport and construction businesses seeking government work. However, while providing the appearance of forward motion, the Snowy upgrade is not a solution by itself, which is why the Coalition is supporting new coal-fired power technology. This will garner the support of miners, as well as small-to-medium enterprises who not only want reliable power supply, but will hope to score government business from any new construction phase in the energy sector.
Energy retailers will likely support the case for more renewables and boosting the RET as they currently make a motza on the scheme's subsidies. They'll likely support Labor's plan for a target of 50% renewables by 2030.The problem is that while Labor's plan allows them to maintain their 'green' credentials, blackouts in South Australia '“ a state that only relies on renewables for around 40% of its power supply - make their policy look somewhat shaky.
Paying off debt and reigning in spending is another issue that will likely carry through to the 2019 campaign. Both the last budget and the upcoming budget have attracted controversy over measures to curtail government spending. Childcare assistance, pensions and super incentives have all come under the ERC's knife, combined with a 'budget repair levy' on high income earners.
Economic management will feature prominently in the 2018 budget, which will have an impact on public sector programs and procurement as well social economic assistance measures. Spending cuts will have an impact across the board, from health to highways and could be tag-teamed with additional levies previously avoided, such as a non-road users' diesel fuel levy on the agriculture and resources sectors.
By contrast, the near-daily reports of global terrorist activity should see both sides of politics support increased defence and border security spending. This will mean more opportunities for defence contractors and associated industries.
Critical in all of this is timing. Five months until the next ERC and if the rumour pond holds any water, the Federal election could be called as early as late 2018. This would make the next federal budget the last before the polls '“ a 'war-chest' budget.
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