Federal Budget Wrap 2024-2025

Federal Treasurer Jim Chalmers’ third federal budget delivered the Australian Labor Government’s second consecutive surplus, one that is largely domestically focused against a backdrop of ongoing inflation and cost-of-living pressures.

Chalmers said that the budget aims to balance the need to bring down inflation, while making the Australian economy more productive and dynamic through investment for the future.

The budget delivers tax cuts for all Australian taxpayers, including a significant cost-of-living relief package, provisions to increase wages for aged-care workers and nurses, power bill rebates for all Australians and an expanded parental leave package for households.

While this year’s budget arguably offers some positive news for individual Australians, the picture for business is mixed, with support measures for small business aimed at easing pressures, supporting growth and helping to level the playing field.

However, the budget also points to weak economic growth, a return to a budget deficit in 2025/26 and beyond and a weaker labour market. Concerns remain amongst business leaders about whether measures to tackle inflation are strong enough and they have cautioned that extra spending could contribute to a weakened budget position over the next four years (source: The Australian 15 May 2024).

Key items

Cost-of-living relief

• Tax cuts for every taxpayer (13.6 million Australians).

• Energy bill relief through a $300 rebate for all households from 1 July, with more rebates for one million eligible small businesses.

• Wiping $3 billion in student debt for more than three million Australians.

• $1.9 billion to boost the maximum rate of Commonwealth rental assistance by 10 per cent

A future made in Australia’ Energy transition

$22.7 billion over the next decade to build “a Future Made in Australia” aimed at maximising the economic and industrial benefits of the net zero transformation and securing Australia’s place in a changing global economic and strategic landscape.
$1.7 billion for the establishment of the Future Made in Australia innovation fund, which will support innovation, commercialisation, pilot and demonstration projects and early-stage development in priority sectors, including renewable hydrogen, green metals, low carbon liquid fuels and clean energy technology manufacturing such as batteries.

• The budget aims to accelerate the growth of new industries by providing a $1.5 billion extension over seven years to the Australian Renewable Energy Agency’s industry building investments.

• $519.1 million for the Future Drought Fund to support farmers and rural communities.

Small business

• $290 million to extend the $20,000 instant asset write-off for small businesses with an annual turnover below $10 million (around 4 million businesses).

• $10.8 million to support the mental and financial wellbeing of small business owners.

Care economy

• $2.2 billion towards aged care, as well as provisions to increase award wages for aged care workers.

• Wage increases for childcare and early educators.

Health

• Up to $4 billion for cheaper medicines, including freezing the maximum cost of Pharmaceutical Benefits Scheme (PBS) prescriptions for everyone.

• Increasing funding for Medicare and some mental health services.

Housing

• $6.2 billion in new investments including public transport and infrastructure, with the ambition to build 1.2 million new homes.

• $1 billion to states and territories to pay for roads, sewerage, energy, and water connections for new homes.

• An additional $16.5 billion for new and existing infrastructure projects across Australia over the next 10 years.

Initial reactions

Opposition: While the Coalition prepares to present its budget response on Thursday, the initial reaction from Opposition Leader Peter Dutton suggested Labor has made bad economic decisions: “Labor’s budget was a missed opportunity to help you at a time where you need help. You didn’t address our economic challenges or inspire confidence. It’s a budget that breaks promises rather than keeps them. A budget that weakens Australia’s financial position, rather than strengthens it and it’s a budget that adds to rather than alleviates your cost-of living pressures.”

ABC News: Opposition Leader Peter Dutton says Labor’s budget is a ‘missed opportunity’ to help Australians in a time of need, Brett Worthington and Nicholas McElroy.

Shadow Treasurer Angus Taylor suggested that while inflationary, it won’t oppose spending measures. It’s a “Band-Aid on a bullet wound,” saying: “When you have $4 of spending for every dollar of saving, you are not fighting the inflation dragon that so many Australians are suffering with.” … “You should be dealing with the source of the problem when inflation is raging. The government isn’t doing that because this budget is designed for an election and not a cost-of-living crisis.”

ABC 7:30 Report

Business: Bran Black, CEO of the Business Council of Australia (BCA), praised some initiatives to unlock capital for green investments, but cautioned whether the approach to spending would reduce inflation as desired. He said; “Bill relief is always welcome for low-income households struggling with the cost of living…However, we remain concerned about the potential inflationary impact of a catch-all approach.”

His comments included concern that the government had failed to set adequate fiscal guardrails on spending, with $20 billion in extra spending measures frontloaded over the next two years and the bottom line deteriorating – with both increasing the risk of higher inflation. He called for the Future Made in Australia Act to also include “serious reform of our tax system, significant productivity and investment-driving measures, and regulatory and planning reform.” More positively, he also said: “The Government’s commitment to reforming Australia’s skills system is welcomed by business.”

The Australian Financial Review, Power bill relief, tax cuts in a budget ‘for every Australian’: Chalmers Federal Budget 2024: Labor’s budget seeks to ‘buy a rate cut’ ahead of election, says Peter Dutton | The Australian https://www.bca.com.au/budget_takes_positive_steps_on_competitiveness_with_more_to_do

Andrew McKellar, Chief Executive of The Australian Chamber of Commerce and Industry commented that the impact of the budget on inflation is still unclear, but it was “difficult to accept the assertion that it materially reduces underlying cost or price pressures…The projection of a surplus for the current financial year is positive, however, over the next four years, there appears to be little prospect of substantial progress towards further budget repair.”

Federal Budget 2024: Labor’s budget seeks to ‘buy a rate cut’ ahead of election, says Peter Dutton | The Australian

Rob Scott, CEO of Wesfarmers, welcomed the budget’s $7 billion in production tax credits for critical minerals processing, saying the move was; “A smart, targeted use of the tax system to solve big problems, leverage our competitive advantages and enhance Australia’s prosperity”. Scott said the incentives would encourage investment, support job creation and productivity, while pushing for more funding for carbon capture and storage.

The Australian Financial Review, Power bill relief, tax cuts in a budget ‘for every Australian’: Chalmers

Retail: Paul Zahra, CEO of the Australian Retailers Association, welcomed measures to address the cost-of-living, but said more needs to be done to support small business, fund employment pathways for retail and incentivise the transition to a circular economy. He said; “We welcome measures that provide cost-of-living relief…which will have a flow on impact on retail. Australians are desperate for financial relief, and so too are retailers. Business costs remain dangerously high without productivity improvements and discretionary spending is softening significantly in the wake of tightening household budgets.”

‘Retailers welcome cost-of-living relief in Federal Budget, concerns remain around support for small businesses’ – Australian Retailers Association

Health sector: Despite significant funding of initiatives in this year’s budget such as strengthening Medicare and accessibility to health services and making medicine more affordable to ease the cost-of-living pressures, Labor’s carriage of the health portfolio has been met with uproar. Dr Nicole Higgins, the president of the Royal Australian College of General Practitioners (RACGP), has slammed the budget saying; “At a time when we’re trying to strengthen Medicare and support our patients through a cost-of-living crisis … this budget has dropped the ball.” The RACGP says the budget offers “little to no relief” for patients and threatens to undo Medicare improvements. News GP, Federal Budget 2024-25 ‘dropped the ball’: RACGP Professor Steve Robson, Australian Medical Association President, was disappointed by the lack of funding to reform general practice, reduce surgery wait times and improve access and affordability for patients. He said; “More urgent care clinics is not a long-term strategic solution, and the government keeps looking to fund more of them without proper evaluation of their impact. What we need is reform that enables general practice to deliver the primary care that our patients need.”

‘Budget a missed opportunity to tackle health system issues’- Australian Medical Association

In its formal response to the budget, Mental Health Australia CEO Carolyn Nikoloski said the organisation is disappointed that the national outcry for more mental health support has not been fully funded in the 2024- 2025 Federal Budget. She said: “Australia needs urgent mental health reform to address the crisis we’re facing…Why haven’t we seen investment that matches the level of need in the 2024-2025 Federal Budget?”

‘Funding for mental health falls short in Federal Budget’ – Mental Health Australia

Energy sector: John Grimes, Smart Energy Council gave the budget an ‘A,’ saying it was a “red letter day” for the energy sector with the substantial investment in clean energy initiatives. He claimed the budget will change the future of Australia, adding Australia will become an ‘exporter of climate solutions.” The Guardian, Jim Chalmers budget speech – as it happened

Housing sector: Denita Wawn, CEO of the Master Builders Association, commended the additional $6.2 billion in new housing measures. She said; “The federal budget has finally recognised the importance of a holistic, cross-portfolio approach to solving the housing crisis and made some inroads.”

The Australian Financial Review, Power bill relief, tax cuts in a budget ‘for every Australian’: Chalmers

Crossbench: Senator Jacqui Lambie: Senator Jackie Lambie’s initial response on ABC News last night included criticism of the Australian Government, suggesting it was “too lazy to do means testing” in reference to the $300 bill rebate for all Australian households. She called out the absence of any investment in youth crime, fueled by drug and alcohol issues. Senator Lambie was also critical on the subject of the structural return to a budget deficit in the coming years, calling out a lack of detail regarding exactly where funding is going or further details on what she called the indigenous jobs program.

ABC News TV

Senator David Pocock: Appearing on ABC’s coverage of the budget, Senator David Pocock echoed Senator Lambie’s comments on the $300 power bill rebate, saying to not means test it is “frankly ridiculous”. He said that with three million Australians living in poverty, giving those with six-figure salaries $300 “doesn’t make sense”. Senator Pocock supported investments in critical minerals but said the budget missed the opportunity to better support the manufacturing of things like solar cells here in Australia. He said he was also disappointed that the budget omitted household electrification – citing the “huge opportunity” to spur investment and support local companies in that space and boost exports.

ABC News TV

Winners and losers

The government's second budget in less than a year has been announced, revealing winners and losers and highlighting the need for prioritising vulnerable Australians to balance the books. The budget is expected to bring a small surplus of around $4bn this year, ending a 15-year-long deficit. However, deficits are predicted for the next four years with many Australians facing financial struggles.

Winners	Losers
Green innovation One of the integral components of this year’s budget is the Australian Government’s ambition to turn Australia into a renewable energy superpower. The Australian Government has allocated $6.7 billion in production tax incentives to produce renewable hydrogen over the next decade and is investing $8.8 billion to add more value to Australia’s resources and strengthen critical minerals supply chains over the next ten years. It is looking to encourage more Australians to take up jobs in the sector with $1.1 billion to reform higher education and deliver the skilled work force needed to accelerate this transition.	Universities and International Students Placements for international students will now be capped. Universities will only be able to take a certain number of students, and any they wish to take above this will be decided based on a formula accounting for how much additional student housing the institution has built.
Superannuation:From July 2026, employers will pay super at payday rather than quarterly, improving retirement incomes for young workers.	Pharmacists:Pharmacies will incur an additional cost of around $170,000 per year as patients can now buy 60 days' worth of common medicines for chronic conditions instead of 30 days.
Medicare and health:A $3.5 billion, five-year package will encourage doctors to bulk-bill. Money will also be used for modernising My Health Record, lung cancer screening, and cheaper common medicines.	Smokers and vapers:Smokers will have a 5 per cent annual tax increase for three years, while vapers will have limited flavor choices, generating $3.3 billion extra revenue with the government also allocating $63 million towards prevention and imposing new regulations on vape purchases.
Small business:A tax discount of up to $20,000 will be offered to small businesses with an annual turnover under $50 million to incentivise more energy-efficient practices, expecting to benefit up to 3.8 million businesses.	Immigrants:Visa fees for temporary and permanent residency will go up by 6 per cent, generating $660 million to reduce immigration backlogs, with short-stay visa applicants facing a 21 per cent fee increase, while migration is predicted to return to normal levels in 2 years.
Defence:Australia's defence spending overall is increasing with an additional $11+ billion over the next four years for naval programs and improving our cyber and sovereign capabilities.	Truckers:The government plans to increase the heavy vehicle road user charge to 32.4 cents per liter of diesel by 2025-26 saving $1.1 billion over four years which will go towards road maintenance and repairs.
Indigenous Australians:$1.9 billion will be spent over five years to enhance Indigenous people's lives and economic prospects, and $360 million will be allocated for the Indigenous Voice to Parliament referendum.	Scammers:The government will spend $86.5 million over four years to fight scams and online fraud, including $58 million for a National Anti-Scam Centre and $17.6 million to dismantle phishing websites.
Pacific region:A $1.4 billion boost will improve law enforcement and security infrastructure in the Pacific region, with $370 million to expand the Pacific Australia Labour Mobility scheme.	Multinationals:The government’s implementation of pillar two of the OECD/G20 multilateral agreement on global tax is part of a worldwide shake-up of company tax involving more than 135 countries. The “Pillar Two” taxation reforms will bring in $370 million over the five years from 1 January 2024.

Image Source: Aditya Joshi on Unsplash

A Commonwealth with a common purpose – Chalmers’ carefully calibrated budget

Federal Treasurer, Jim Chalmers, was all smiles as he delivered a dramatic turnaround in the financial fortunes of the nation with the first Federal Government budget surplus in 15 years, and Labor’s first in 35 years.

This budget, which was delivered last night, is a politically significant achievement for the Treasurer and the Albanese Government, bolstering the ALP’s economic management credentials. While focusing on the economics, Dr Chalmers has delivered a Budget in the Labor tradition, focused on helping those Australians hard hit by current pressures. The Budget took a conservative approach to unexpectedly higher revenues, banking 82 per cent of the windfall to reduce debt and minimise its inflationary impact.

With many Budget measures pre-announced, the big surprise was $3.5 billion for Medicare, tripling bulk billing incentives to address the sharp decline in bulk billing over the past few years. This is the largest increase to the bulk billing incentive in the 40-year history of Medicare, and it is expected to benefit more than 11 million Australians.

This hallmark initiative rounded out a series of other socially compassionate budget announcements including a significant cost-of-living package, wage increases for aged workers and nurses, and boosts to JobSeeker and youth payments.

Business did not score as well as Australians in need, with a limited focus on new tax concessions for business with Australia’s gas sector and multinationals having to pay higher taxes to balance out the spending. There was however significant investment in a new national skills agreement targeting areas of critical need.

While this year has been a pleasant surprise for individual Australians, the Budget points to weak economic growth, an increase in unemployment, and a return to a budget deficit in 2024/25.

Big ticket items

Health	$5.7 billion over 5 years to make Medicare cheaper $3.5 billion over 5 years to increase bulk billing consultations and make it easier for patients to see a doctor. The Government will also support more than 300 Pharmaceutical Benefits Scheme medicines to be dispensed in greater amounts, phased in from 1 September 2023. $824.4 million to modernise the digital health data systems, including My Health Record. $91.1 million to commence establishing the Australian Centre for Disease Control.
Cost of living	$3 billion in partnership with state and territory governments to deliver electricity bill relief for eligible households and small businesses. Implementing a temporary price cap on wholesale gas contracts, working with states to cap the price of coal used for domestic electricity generation and introducing a mandatory code for gas sales. Increasing JobSeeker by $40 a fortnight, and $92 a fortnight for those aged 55+ $1.9 billion package to expand the eligibility for the Parenting Payment for single parents, meaning they will receive JobSeeker payments until their youngest child is 14 years old. Increasing the maximum rates of Commonwealth Rent Assistance by 15 per cent at a cost of $2.7 billion over 5 years.
Immigration	Increasing the allocation of skilled migrants in our annual migration program to around 70 per cent of places in the 2023-24 permanent Migration program, while introducing further compliance initiatives to boost the number of skilled migrants coming into Australia and providing additional skills and training requirements.
Cleaner, greener energy	Supercharging its investment into renewable energy through the Capacity Investment Scheme, which will unlock over $10 billion in investments into the national electricity grid. A further $10 billion is earmarked for a Hydrogen Headstart Program to help increase green capabilities in Wollongong, Gladstone and Whyalla, to make and export renewable energy to green steel.

Initial reactions

Energy sector: Australian Petroleum Production & Exploration Association CEO Samantha McCulloch said the government's new future gas strategy would help secure new gas supplies to avoid shortfalls, keep the lights on, put downward pressure on prices, and deliver substantial economic benefits.

Health sector: The Royal Australian College of GPs called the budget a "game changer" for GPs, practices, and patients. Dr. Nicole Higgins welcomed the hike in Medicare rebates, including the tripling of the bulk billing incentive. Additionally, the new Medicare item, Level E, will help patients with complex needs, such as those with chronic conditions and mental health issues, to access better care.

Tech sector: The Tech Council of Australia welcomed new investments to improve the skilled migration system, support the next generation of Australia's tech industry, and strengthen Australia’s cyber security preparedness and resilience. "This Budget will help take our tech smarts and turn them into high-paid jobs and globally successful businesses," CEO Kate Pounder said.

Financial sector: Financial Services Council CEO Blake Briggs congratulated the Government on its fiscal discipline delivering a significant improvement in the 2022-23 budget position, putting Australia in a strong position going into a more challenging economic environment.

Opposition: Shadow Treasurer Angus Taylor told the ABC “a drover’s dog could have delivered this surplus”, pointing to the higher-than-expected revenues, and warned the real test for Labor lay in future budgets.

Crossbench: Greens Leader Adam Bandt criticised Labor for prioritising a surplus over supporting people in poverty. He expressed disappointment that the budget continued to support tax cuts, nuclear submarines, and "handouts for wealthy property investors and fossil fuel corporations."

Teal MP Allegra Spender backed the Budget's power bill help, single parenting help and household electrification package. However, she expressed disappointment about Labor's reforms to PRRT and continued growth in fossil fuel subsidies.

Winners and losers

Winners	Losers
Low and middle income earners:$14.6 billion to increase payments for JobSeeker, Austudy, and Youth Allowance. Energy relief up to $500 for 5 million households is also included.	Gas companies:LNG producers will pay an additional $2.4 billion in taxes due to changes in the Petroleum Resources Rent Tax. Tax deductions will be limited, and stricter measures will be implemented.
Superannuation:From July 2026, employers will pay super at payday rather than quarterly, improving retirement incomes for young workers.	Pharmacists:Pharmacies will incur an additional cost of around $170,000 per year as patients can now buy 60 days' worth of common medicines for chronic conditions instead of 30 days.
Medicare and health:A $3.5 billion, five-year package will encourage doctors to bulk-bill. Money will also be used for modernising My Health Record, lung cancer screening, and cheaper common medicines.	Smokers and vapers:Smokers will have a 5 per cent annual tax increase for three years, while vapers will have limited flavor choices, generating $3.3 billion extra revenue with the government also allocating $63 million towards prevention and imposing new regulations on vape purchases.
Small business:A tax discount of up to $20,000 will be offered to small businesses with an annual turnover under $50 million to incentivise more energy-efficient practices, expecting to benefit up to 3.8 million businesses.	Immigrants:Visa fees for temporary and permanent residency will go up by 6 per cent, generating $660 million to reduce immigration backlogs, with short-stay visa applicants facing a 21 per cent fee increase, while migration is predicted to return to normal levels in 2 years.
Defence:Australia's defence spending overall is increasing with an additional $11+ billion over the next four years for naval programs and improving our cyber and sovereign capabilities.	Truckers:The government plans to increase the heavy vehicle road user charge to 32.4 cents per liter of diesel by 2025-26 saving $1.1 billion over four years which will go towards road maintenance and repairs.
Indigenous Australians:$1.9 billion will be spent over five years to enhance Indigenous people's lives and economic prospects, and $360 million will be allocated for the Indigenous Voice to Parliament referendum.	Scammers:The government will spend $86.5 million over four years to fight scams and online fraud, including $58 million for a National Anti-Scam Centre and $17.6 million to dismantle phishing websites.
Pacific region:A $1.4 billion boost will improve law enforcement and security infrastructure in the Pacific region, with $370 million to expand the Pacific Australia Labour Mobility scheme.	Multinationals:The government’s implementation of pillar two of the OECD/G20 multilateral agreement on global tax is part of a worldwide shake-up of company tax involving more than 135 countries. The “Pillar Two” taxation reforms will bring in $370 million over the five years from 1 January 2024.

Where is the money coming from?

The Government’s new revenue raising measures include:

Regaining $3.3 billion over the forward estimates by increasing the tax on tobacco products from 1 September, to increase duties per kilogram on imported tobacco products.
Recouping around $2.4 billion through changes to the Petroleum Resources Rent Tax charging gas providers benefiting from the export market.
Creating efficiencies of $1.3 billion over four years by allowing PBS medicines to be dispensed from pharmacies from 1 September 2023.

The bulk of the heavy lifting to return a healthy economic outlook has simply reflected higher commodity prices in iron ore, gas and coal prices than previously assumed, which have steadily reduced Government’s deficit since the onset of the COVID-19 pandemic.

The projections also factor in changes to Australia’s global trading outlook, including our regional and strategic partnerships, following the thaw in trading relations with China and projecting a boost to Australian businesses increasing trade with India and Great Britain.

The Government is now expecting to gain $138.4 billion in revenue from company tax, where the October projections placed that figure conservatively at $99.8 billion.

The Government will also seek to reduce its spending through cuts to agencies, to help fund the growth of other task forces identified during its election commitments, including $65 million cut in the next financial year for the refugee, humanitarian settlement and migrant services; and more than $125 million from this year’s $611 million offshore management budget.

Where to from here?

This year’s surplus has been delivered by surging revenues and strong commodity prices that have been helped by the war in the Ukraine and inflation.  All these factors have helped to deliver a remarkable financial outcome.

$17.8 billion in savings have been recorded along with redirected spending. The Treasurer and Finance Minister have shown enormous financial and political discipline in delivering savings. Despite all these positives, Treasury’s projections also indicate that darker days are on the horizon.

Next year it is expected that Australia will return to deficit to the tune of $13.9 billion. Economic growth has been slashed to 1.5 percent next year, narrowly avoiding a recession. Inflation is projected to fall to an ambitious 3.25 percent by mid next year.

But what does this all mean?

Treasury’s projections are signaling that the economy will get tougher for businesses and individuals. Unemployment will increase. Small and medium enterprises are already finding it tough due to interest rate increases, dampening demand and consumer spending continuing to be impacted.

But this Budget also signals potentially tougher political times ahead for the Albanese Government. Big political and economic decisions will have to be made about the need to increase taxes to fund spending on Defence and NDIS, with both continuing to be a major drain on future budgets.

And we should not forget the Stage Three Tax Cuts which remain on the table and will have a substantial impact on the government’s bottom-line.

This Federal Budget update has been prepared by Edelman Global Advisory (EGA) Australia and Edelman Australia. For information on EGA’s advisory and government communications services, please contact Peter Fraser at Peter.Fraser@Edelman.com.

Image Source: Aditya Joshi on Unsplash

NSW Election: The Trusted Minority

4 April 2023

By Saturday 1 April, one week on from the NSW state election, it was confirmed that Labor would not win the 47 seats it needs to form a majority government. Following the count of thousands of postal ballots, Labor had won 45 seats, the Coalition 35 (24 Liberal and 11 National), the Greens had retained its three seats and nine electorates had voted for independent candidates. Counting continues in the northern Sydney seat of Ryde, which the Liberals are currently expected to retain. Meanwhile Premier Minns has also announced his first full Ministry, which will see a reduced Cabinet of 22 Ministers – 50 per cent of which will be women. In a historic first for NSW, women will hold the prominent positions Leader of the Government in the Legislative Council, and will serve as Ministers for Energy (Sharpe), Police (Catley), Regional NSW (Moriarty), Finance (Houssos) and Regional Transport (Aitchison.)

NEWS SOUTH WALES CABINET LIST OF MINISTERS

Premier	Hon Christopher Minns MP
Deputy Premier Minister for Education and Early Learning Minister for Western Sydney	Hon Prudence Carr MP
Minister for Climate Change Minister for Energy; Minister for the Environment Minister for Heritage Leader of the Government in the Legislative Council	Hon Penelope Sharpe MLC
Special Minister of State Minister for Roads Minister for The Arts; Minister for Music and Night-time Economy Minister for Jobs and Tourism Deputy Leader of the Government in the Legislative Council	Hon John Graham MLC
Treasurer	Hon Daniel Mookhey MLC
Minister for Health; Minister for Regional Health Minister for the Illawarra and South Coast	Hon Ryan John Park MLC
Minister for Transport	Hon Joanna Haylen MP
Minister for Planning and Public Spaces	Hon Paul Scully MP
Minister for Industrial Relations Minister for Work Health and Safety	Sophie Cotsis MP
Minister for Police and Counter-terrorism	Hon Yasmin Catley MP
Minister for Customer Service and Digital Government Minister for Emergency Services Minister for Youth Justice	Hon Jihad Dib MP
Minister for Families and Communities’ Disability Inclusion	Hon Kate Washington MP
Attorney General	Hon Michael Daley MP
Minister for Agriculture, Regional NSW and Western NSW	Hon Tara Moriarty MLC
Minister for Local Government Vice President of the Executive Council Leader of the Government in the Legislative Assembly	Hon Ron Hoening MP
Minister for Finance Minister for Natural Resources	Hon Courtney Houssos MLC
Minister for Small Business Minister for Lands and Property Minister for Multiculturalism Minister for Sport	Hon Stephen Kamper MP
Minister for Water Minister for Housing; Minister for Homelessness Minister for Mental Health; Minister for Youth Minister for the North Coast	Hon Rose Jackson MLC
Minister for Better Regulation and Fair Trading Minister for Industry and Trade Minister for Innovation, Science and Technology Minister for Corrections	Hon Chanthivong MP
Minister for Skills, TAFE and Tertiary Education Minister for the Hunter	Hon Timothy Crakanthorp MP
Minister for Aboriginal Affairs and Treaty Minister for Gaming and Racing Minister for Veterans Minister for Medical Research Minister for the Central Coast	Hon David Harris MP
Minister for Women Minister for Seniors Minister for the Prevention of Domestic Violence and Sexual Assault	Hon Jodie Harrison MP
Minister for Regional Transport and Roads	Hon Jennifer Aitchison MP

LEGISLATIVE COUNCIL RESULTS

Labor have not achieved a clean sweep of the state’s upper house either. With the usual half-election of the 42-member Legislative Council, Labor have secured 8 positions; the Coalition 6; the Greens 2; and One Nation one. Four positions are yet to be finalised, however are likely to be filled by a seventh Liberal and one each for Legalise Cannabis, the Liberal Democrats and the Shooters, Fishers and Farmers. The remaining LC members (not up for re-election) comprise seven Labor MLCs, seven Coalition MLCs, two Greens MLCs, and one each to Shooters, Fishers and Farmers and the Animal Justice Party.

INFLUENTIAL CROSSBENCH

With Premier Minns and his yet-to-be-finalised team requiring crossbench support to pass legislation, it is worth considering the policy priorities for the nine influential independent MPs – three of whom (Greenwich, Piper and McGirr) have already committed to supporting the Minns Government in a joint statement:

Alex Greenwich MP, Sydney (IND) – has already expressed his desire to enact gambling reforms.
Jenny Leong MP, Newtown; Tamara Smith MP, Ballina; Kobi Shetty, Balmain (GRN) - will be seeking a series of promises from Labor on cashless gaming, nurse-to-patient ratios and rental reforms to provide the Minns Government with political support.
Greg Piper MP, Lake Macquarie (IND) - may take the MP up on his offer to be the new Speaker, given he previously served as assistant and temporary speaker.
Judy Hannan, Wollondilly (TEAL-IND) – the only Climate 200 candidate to win a seat during the NSW election, she is likely to support initiatives minimising over-development.
Michael Regan, Wakehurst (IND) – a fixture in local government in Sydney’s northern beaches, is expected to look for ‘commonsense solutions’ to issues including housing affordability, better public transport and easing cost of living pressures.
Joe McGirr MP, Wagga Wagga (IND) – the doctor has advocated for closing the gap between regional and metropolitan health facilities.
Gareth Ward MP, Kiama (IND) – the former Liberal MP for Kiama was suspended from the Liberal Party last year when he was charged with historic sexual assault offences.
Roy Butler MP, Barwon; Helen Dalton MP, Murray; Phillip Donato MP, Orange (IND) – all breakaways from Shooters, Fishers and Farmers last year following concerns over comments made by their party leader in parliament. Their focus is likely to be on improving circumstances for regional NSW.

Triumphant ALP sweeps to power across Australia's mainland

27 March 2023

CURRENT STATE OF PLAY

ALP	47
LNP	27
GRN	3
IND	7
SEATS IN DOUBT	14

Source: T he Sydney Morning Herald

NSW election

OVERVIEW

After a long 12 years in the political wilderness up to 25 March election, Australian Labor Party leader, Chris Minns will be the 47th Premier of NSW.

The ALP has swept the long-term Coalition Government from power for only the third time since WWII.

It is a stunning victory for Chris Minns, eclipsing both Bob Carr’s victory in 1995 by one seat and Neville Wran’s 1976 one seat win, ending 11 years of Coalition government.

With around 50 per cent of the vote counted by 10.30pm on Saturday night, the Australian Labor Party (ALP) are set to pass the 47-seat threshold to form a majority government.

As of the close of counting on Saturday night, Labor has reclaimed many of the seats lost in Western Sydney in 2010, 2011 and 2015 (Camden, East Hills, Parramatta, Riverstone, Holsworthy and Penrith).

Current results for the Upper House are indicative only, suggesting a favourable Legislative Council will be in place. As of first preference counting, Labor secured just over 37 per cent of the vote; the Coalition achieving just over 29 per cent, the Greens around 10 per cent and One Nation around 5.6 per cent. Upper House results are likely to be made clear during the coming week.

A NEW DAWN FOR THE ALP

Minns’ election winning campaign focused heavily on a theme of rejuvenation in the state, with the slogan ‘a fresh new start for NSW’ underpinning many of the party’s commitments to reform the state’s education system, revamp its healthcare system and improve public transportation and road and rail conditions across the state.

Premier-elect Minns has flagged there will be few major changes when he announces his Cabinet, with his Deputy Leader Prue Car expected to retain the key Education portfolio. However, the remainder of the incoming ministry is yet to be finalised and will be one of the first items on the new Premier’s agenda once counting is complete.

WHAT YOU NEED TO KNOW

Premier-elect Minns has already committed to alleviating cost of living pressures on working conditions for the state’s essential workers. This will include converting 10,000 temporary teachers to permanent contracts, updating healthcare regulations to ensure one nurse is assigned to every three patients, and upskilling regional paramedics.

For business, Labor has also pledged initiatives to bring back manufacturing to NSW, including an overhaul of local procurement requirements. One of the first major transactions to be impacted will be the tenders to replace the ageing Tangara train fleet. This approach will be front and centre for future tender processes in NSW and mirrors other ALP state governments’ efforts to deliver more local jobs. For businesses, this will mean a new layer of compliance in tendering and winning government projects.

A NEW BASE FOR LABOR

Findings from the Edelman’s 2023 Trust Barometer revealed a collapse in economic optimism globally. Amid the rising cost-of-living, interest rates and energy prices, only 30 per cent of Australians believe they will be better off financially in 5 years. With 83 per cent of employed Australians concerned about job losses, and 69 per cent about inflation, other issues including the possibility of nuclear war, ongoing climate change crises and energy and food shortages have ranked among the most top-of-mind concerns for Australians.

Labor’s policies have outlined the party’s vision to address these crises in a way that consistently resonates with younger Australians, particularly millennials aged between their mid-20s and mid-30s. With commitments seeking to improve access to Sydney’s communities, and otherwise look to improve living conditions for all residents, Labor have gained the trust of voters across the nation – clearly reflected in its electoral success across each mainland state and territory, as well as nationally.

Labor’s new ‘working class’ effectively consists of tertiary educated women. Many of them are millennials who are looking for governments to recognise their contribution to the workforce, and for ways to help them feel as secure in their working and private lives as previous generations – from job to physical security, and through policies which support marginalised communities.

Labor’s revamped policy platform has helped modernise the party’s appeal and reframe its ideals for the incoming voting generations, while many of the Coalition’s commitments are seen to be appealing to a wealthier, older, shrinking voter base.

TEALS AND ONE NATION FAIL TO GAIN TRACTION

In the lead-up to the election campaign, figures in the media extensively canvassed the possibility of a Teal ‘wave’ in NSW, to reflect the one seen federally. Conservative pundits likewise believed the Liberals and Nationals were at significant risk of losing key lower house seats to One Nation.

The election result indicates these predictions were largely unfounded, with the only Climate-200 supported candidate likely to achieve success being Judy Hannan (in Wollondilly), and One Nation failing to pick up a seat in the lower house. One other independent candidate, Michael Regan, a local council stalwart in Wakehurst, picked up the seat previously held by retiring Health Minister Brad Hazzard.

'BUSH' SEATS NO LONGER A NATIONAL STRONGHOLD

Although the Nationals have not lost a single seat during this election, their regional footprint shrank while in government, and they failed to make inroads in seats lost at the last state election to Shooters, Fishers and Farmers in Barwon, Orange and Murray. The seats will now be held by independents formerly belonging to SFF, who resigned from the party three months before the election protesting their leader’s misogynistic comments in Parliament.

Steve Whan, a former Labor Minister, is expected to defeat incumbent Natalie Overall in the seat of Monaro, formerly held by National party leader John Barilaro.

In Wagga Wagga, independent Joe McGirr has also increased his margin by 6.3 per cent after winning the seat from the Liberals at a by-election in 2018.

PERROTTET STEPS DOWN - WHO WILL FILL THE VOID?

During his concession speech to the party faithful in Sydney on Saturday night, outgoing Premier Dom Perrottet announced his resignation from the Liberal leadership. It is likely he will resign his seat when the party is prepared to contest a by-election in his seat of Epping.

As of Sunday, former Treasurer Matt Kean has announced his intention not to contest the leadership, while former Science and Innovation Minister Alister Henskens will likely throw his hat in the ring once the party room’s make-up is finalised.

KEY ALP POLICIES

The core tenets of the State Labor team reflected the same messages that resonated so strongly nationally during the 2022 Federal election – from a ‘fair go’ for all Australians to a ‘fresh start’ in NSW, commitments to improve living standards have been cornerstone of the party’s manifestos, and strong political performers will be championing these policies within the new Government.

From reforming the state’s education system across preschools, schools and TAFE, to boosting wages for workers in the state’s essential services, and improving resources for the state’s emergency services (following the devastating natural disasters from bushfires to floods particularly impacting regional NSW communities) Labor have committed themselves to ensuring ‘no one is left behind.’

Housing

Renters and first home buyers will be among the key beneficiaries of Labor’s election commitments, pledging its commitment to tackle the issues of secret rent bidding, simplifying process for pet ownership in rental properties and abolishing Stamp Duty for first home buyers.

Improved road infrastructure

Recognising challenges in the state’s transportation system, particularly to commuters, Labor committed $1.1 billion to improve thoroughfares across Western Sydney and regional NSW, relieving bottlenecks in Riverstone and Homebush, new entry and exit ramps on the M1 at Dapto and along the Hume Highway from Liverpool. Labor has also committed to introducing a weekly toll cap of $60 for motorists.

Renewable Energy

$1 billion will be allocated to a new state-run energy body to accelerate investment in renewable energy assets. The new NSW Energy Security Corporation will partner with industry on projects including:

Medium to long duration renewable energy storage solutions like pumped hydro, as well as other commercially viable technologies able to provide grid stability; and
Community batteries to maximise the benefits for households of rooftop solar.

Similarly, power bills will be shaved for NSW residents – $315 for eligible small businesses, and around $250 off household bills for families receiving income support.

FINAL THOUGHTS

The Edelman Trust Barometer showed people’s trust in government has fallen dramatically and some 61 per cent said the lack of civility and mutual respect is “the worst I’ve ever seen”. As such, one of the most interesting features of this election campaign was its civility, with neither party taking “the low road,” as Chris Minns noted during his victory speech. The outgoing Premier’s remarks were similarly respectful and generous, urging the people of NSW to get behind a “fine leader”.

For those wanting to engage with the new government, it’s worth noting that almost every member of the new NSW Cabinet will have spent their entire political careers in Opposition.

It will be important to remember in the short term that much of the focus will be staffing up ministerial offices and ensuring that the government hits the ground running. Now is the time to consider recalibrating your strategy and being nimble in working with government departments and political offices.

This election wrap was prepared by Edelman Global Advisory (EGA) Australia and Edelman Australia. For information on EGA’s advisory and government communications services, please contact Peter Fraser at Peter.Fraser@Edelman.com.

Image Source: Photo by Sam Wermut on Unsplash

CURRENT STATE OF PLAY

ALP	52
LNP	25
GRN	4
IND	0
SEATS IN DOUBT	7

Total: 88 seats; 45 seats to win majority Government
Source: ABC News

OVERVIEW

Despite predictions from pundits and much of the media that it would be a tight electoral race, potentially resulting in minority government, Labor has weathered the Victorian election storm and will stay in office.

Indeed, Daniel Andrews has secured a third consecutive election win as the leader of the Victorian Labor Party in what has been an election for the history books. This is the first time that any political party in Victoria has secured three terms under the four-year electoral cycle, guaranteeing Mr Andrew’s a statue in Treasury Place alongside other Victorian premiers that once dominated politically by serving over 3,000 days in their respective eras.

This state election saw a record number of candidates, tallying at 739, an unprecedented number of early votes with 2.2 million of the 4.4 million votes submitted before election day, and Gen Z and Millennials making up more than 36 per cent of Victorian voters. Significantly, the pre-poll count has risen by 45 per cent since the 2018 election, representing a continuing trend in the way Victorians prefer to vote, which is to vote early during pre-poll.

The rise of Millennials as a dominant voting bloc is also a topic on political strategists' minds. The 2022 Edelman Trust Barometer shows that Millennials are the most trusting generation, while Gen Z are the least trusting, and it remains to be seen if that holds true in this election.

With home ownership out of reach for many Millennials and who have experienced the global financial crisis, it’s clear that conservative fiscal policies fail to resonate with this generation, posing a significant challenge for both the Liberals and Nationals. Parties like the Greens, who have focussed on rent relief as a key cost of living policy, seem to have picked up votes from this generation.

Indeed, this state election confirms what we saw in the federal election – the political landscape is continuing to change.

The Greens were also winners in this election, retaining their seats of Brunswick, Melbourne, and Prahran, and turning Richmond green. While it appears that Labor has retained the seats of Footscray, Pascoe Vale, and Northcote, the Greens managed to secure a swing towards them in the inner-city seats. Ellen Sandell MP, the State MP for Melbourne and Deputy Leader of the Victorian Greens on the ABC broadcast declared “the old two-party system is dying”, pointing to the rise of crossbench MPs in the State and Federal parliaments in 2022.

Prior to the election, the Liberals were optimistic that they could pick up the necessary 18 seats required to form a majority government in Victoria. The results that unfolded on Saturday paint a much grimmer picture for the party. While the party managed to pick up the seat of Nepean with a high profile candidate, they lost the seats of Bayswater and Glen Waverley, with predictions showing that the party’s primary vote may plummet below 30 per cent – a result that hasn’t been seen since the 1950s.

This is a devastating blow for Matt Guy who also led the party to an election loss in 2018. Mr. Guy stepped down as leader over the weekend, giving the Liberal party room to consider a new leadership team. However, the Liberals coalition partner, the Nationals, gained seats with the party securing wins in Shepparton, Morwell, and Mildura. These results confirmed that the Coalition has a Liberal Party problem in being able to win and hold seats, particularly in Melbourne.

Undoubtably, the results have sounded the alarm bells for the Coalition in New South Wales, as they prepare for their State election in March 2023.

Interestingly, the Climate 100-backed Teal Independents failed to replicate their Federal Election success on Saturday, with no new independent wins secured at this time.

Now, Premier Andrew and his team are getting back to business- delivering their policy priorities, while managing the ballooning state debt levels, as well as the aftermath of the Victorian floods.

KEY LABOR POLICIES

Suburban Rail Loop
The Suburban Rail Loop is the biggest project in Victoria’s history. The project will loop every major train service from the Frankston line to the Werribee Line via Melbourne airport through a 90km rail line.
Metro Tunnel
The Metro Tunnel is intended to reduce travel times and increase access to trains by running the Cranbourne. Pakenham and Sunbury lines through a new tunnel – meaning more trains can run often. The tunnelling has been completed, with construction underway on 5 new stations. The Metro Tunnel will open in 2025
State Electricity Commission
By reviving the SEC, Labor plans to bring back government ownership of energy, linking it to cheaper power bills and lower emissions. Under the policy, the government will hold controlling interest in each of the new renewable energy projects. The government will make an initial investment of $1 billion toward delivering 4.5 gigawatts of power.

WHAT YOU NEED TO KNOW

With no change in government, there will be continued certainty of policy in Victoria for the next four years. Further, Andrews’ victory further strengthens his power within the Australian Labor Party and secures a clear mandate for him to pursue further policy reforms, with law and order being floated as a potential policy area of focus. As it stands in Australia, Labor is in Government in all state and federal jurisdictions, except for Tasmania and New South Wales, with New South Wales gearing up for an election in March 2023.

While the Labor Government remains in power in Victoria, with the departure of five ministers from Premier Andrews’ cabinet, we can expect a new cohort of policy makers in Victoria, with some rising from the backbenches. As such, it’s more important than ever to build relationships with new advisers and Ministers, as well as local MPs.

You can expect a list of new cabinet ministers within the next week. In the Liberal’s camp, readers can expect a party room meeting to be called to decide on the new leadership team, following Matt Guy announcing he will be stepping down from the top spot. With this, will come a new Shadow Cabinet.

The new cohort of Labor policymakers, combined with an increasing trend of Australians voting early means that early engagement is imperative. To quote the often-used political maxim, “you can’t fatten the pig on market day” - meaning government engagement early in the term is vital.

Finally, in his victory speech, Premier Daniel Andrews said “community-based campaigning works”. In brief, demonstrating the impact of key issues and policies on the electorate, and advocating at both a ministerial and electorate office level is key to meaningful engagement with policy makers.

Image Source: Paul Macallan (Pexels)

Last night’s Labor budget, the first in almost a decade, provided the first political and economic down payment to secure a period long-term government for the Australian Labor Party (ALP).

This economic statement is effectively a budget to build on, putting in place the foundations for ongoing reform and change which will in the minds of Labor strategists help ensure that the government of Prime Minister Anthony Albanese remains on the Treasury benches for the 2020s and beyond.

According to the Treasurer, Dr Jim Chalmers, this budget represents a first step not a silver bullet, and charts the course for more Labor budgets to deliver the improvements that have long been promised by Labor. The Budget has been positioned to instill confidence across Australia. It framed many of the economic and social initiatives contained in the statement as family friendly - especially against the backdrop of growing cost-of-living pressures and the new inflationary environment experienced by households and businesses.

Labor’s headline was that it had met all its election promises, but the Budget authors couldn’t resist a shot at the previous Coalition government. The ALP’s economic team claimed this Budget corrects the wrongs of the previous Coalition Government on key issues including debt, climate change, reconciliation, health, and childcare.

"This Budget does more than end a wasted decade – a decade marked by energy chaos, a crisis in aged care, skills shortages and stagnant wages, and not enough to show for a trillion dollars in debt. It does more than draw a line under the drift, decline and decay that defined it"
Treasurer Jim Chalmers

The government was quietly confident that Australia is set for modest economic growth but also provided plenty of hints that future budgets would be tougher, acknowledging economic headwinds already affecting key trading partners. Prime Minister Albanese said addressing the skills shortage with 480,000 free TAFE places and boosting the skilled migration cap to 195,000 annually would be key. He linked Net Zero targets to industry, noting business was well ahead of government on this front, and expressing a desire to harness Australia’s abundance of sun and wind for renewable energy.

The Prime Minister, Treasurer and Finance Minister last night each emphasised that the government does not have all the ideas and wants to work collaboratively with the business community, encouraging business leaders to open dialogues.

For all the calls for unity and cooperation, there was one major source of disquiet for the business community gathered in Canberra - the upcoming introduction of new industrial relations legislation which has been flagged for release later this week. Australia’s captains of industry are increasingly nervous about Labor’s proposed package of reforms and are looking to marshal their forces to campaign against any dramatic changes put forward by the government.

Although Budget night is traditionally focused on the economic numbers, outputs and outcomes, the Prime Minister finished his evening by focusing on constitutional change and the referendum to establish an Indigenous Voice to Parliament. Mr. Albanese called on everyone gathered at Labor’s Budget dinner to vote yes, describing the upcoming referendum during this financial year as an opportunity for unity and advancement.

The Budget’s Bottom Line

History has shown economic management is one of the most contested issues in politics. To change the narrative that Labor “cannot be trusted with the nation’s finance,” this Budget reinforces the careful consideration and restraint the government has made when making “hard decisions for hard times.”

To avoid adding to inflationary pressures, the government’s new policies and election commitments have been largely offset across this year and the next. Additionally, nearly all the new tax upgrades over the forward estimates have been returned to the budget, not spent.

Summary of Revenue

To pay for the policies and election commitments Labor promised, Labor identified $22 billion in savings over the next four years from previous commitments made under the former Coalition government. These savings include reduced spending on external contractors, consultants, advertising, travel and legal services.

Revenue

Source: Budget October 2022-23

Multinationals will see an increase in their tax bill, as the government extends tax compliance programs and gives the Australian Tax Office the resources needed for greater regulation. Together, these initiatives save a further $4.7 billion over four years.

Summary of Expenditure

This Budget saw increased funding directed to traditional Labor priorities of health, education and social services.

Source: Budget October 2022-23

New focuses for government spending included:

Record investment of $1.7 billion over six years to end violence against women and children.
$1.2 billion in practical measures to Close the Gap for First National people and communities, and to begin preparations for a referendum on a Voice to Parliament.
Allowing older Australian to keep more of their pension when they work.
Responding to recommendations from the interim report of the Royal Commission into Defence and Veteran Suicide.
Establishing the National Anti-Corruption Commission.

Budget Spotlight: Key themes

A wellbeing budget: Measuring What Matters Statement

Last night, when questioned by veteran journalist Ray Martin, the Treasurer nominated the changes to education as one of the items that he was proudest of in the Budget. The changes were featured as a key investment that allows Australians to grasp opportunities and improve wellbeing. Initiatives such as improving the wellbeing of students throughout Australia have also been funded as part of the Government’s approach to focus on wellbeing and being family friendly.

All schools will benefit from the $203.7 million Student Well-being Boost, with the average school receiving $20,000 towards improving student mental health and well-being along with a new voluntary mental health check tool to assist schools to identify students who are struggling, so they can get the help they need.

Further, $15.1 million in funds has been extended to tailored small business mental health and financial counselling programs, NewAccess for Small Business Owners and the Small Business Debt Helpline. These programs have assisted many small businesses through the challenges of COVID-19 and recent natural disasters.

Finally, the Government is aiming to improve the mental health and well-being of all Australians by restoring the 50 per cent loading for telehealth psychiatry services in regional and rural areas and expands the headspace network.

While this Budget did not feature any explicit wellbeing goals, it has started the conversation about how to better measure what matters to Australians with the Treasury set to develop a stand-alone Measuring What Matters Statement in 2023.

Targeted cost-of-living relief

Cost-of-living relief has been one of the most talked about topics in 2022, and has framed much of Australia’s political discourse. The Treasurer continued to emphasise the need for the Federal Government and the Reserve Bank to work in tandem to address the impacts of inflationary pressures on households and businesses.

Labor’s first Budget delivered a $7.5 billion five-point plan for cost-of-living relief:

Cheaper childcare: From July 2023, 1.2 million Australian families will have access to more affordable childhood education and care.
Expanding Paid Parental Leave: An investment of $530 million to progressively scale up the current Paid Parental scheme, reaching six months paid leave in 2026. For two-parent families, a portion of the leave will be reserved for each parent under a use it or lose it policy – in a bid to increase women’s participation in the workforce.
Cheaper medicines: From January 1, 2023, 3.6 million Australians will have access to cheaper medicines on the Pharmaceutical Benefits Scheme, creating a saving of $12.50 per script.
More affordable housing: Through an agreement between governments, investors and the construction sector, the Budget unveiled a national plan to build 1 million new homes before 2030. This is in addition to the $10 billion Housing Australia Future Fund, promised by the government before the May election, which will see an additional 30,000 new social and affordable homes built in the scheme’s first five years.
Increasing wages: No new policies were outlined in the budget, but the government pointed to its support of the Fair Work Commission’s wage increase decision. The government’s industrial relations legislation, which is expected to be introduced this week, is also expected to increase the wages of ‘feminised’ industries.

Rural and regional infrastructure pipeline

The Finance Minister, Katy Gallagher, reflected on the months of work that the economic team spent in getting out the red pen and going line-by-line through the nation’s finances. The Finance Minister has found $22 billion in savings, including axing a number of the previous government’s rural and regional funds.

On Monday, Regional Development Minister Catherine King confirmed that the Labor Government would scrap round six of the Building Better Regions Fund, as well as the Community Development Grants Fund.

Labor has announced new programs including the Growing Regions Program and the Precincts and Partnerships Program, with an investment of $1 billion over the next few years.

The Growing Regions Program will be available to councils and community groups in regional and rural areas and will fund local infrastructure projects like libraries. The regional Precincts and Partnerships Program will allow the Federal Government to work with State Governments and local councils to transform regional centres through investments in place-based projects.

Details by key portfolio

Health

$235 million to commence the rollout of Urgent Care Clinics.
$750 million for the Strengthening Medicare Fund.
$1.4 billion more for new and amended listings on the PBS and other Medicines Programs, with the PBS maximum general co-payment will be reduced to $30 a script from 1 January 2023, saving up to $12.50 per script for approximately 3.6 million Australians per year. This measure is expected to save Australians over $190 million in out-of-pocket costs.
$800 million budget windfall from a crackdown on the black-market vaping and e-cigarette industry.

Education

$1 billion investment in fee-free TAFE and vocational education places. Providing 180,000 places next year – the first stage in a plan for nearly half a million fee-free TAFE courses for Australians – learning skills for jobs in priority areas, like the care sectors and the digital economy.
$770 million for better schools, happy and healthier students, and more qualified teachers.
$485 million to create 20,000 new university places over the next two years for students from disadvantages backgrounds.
$270.8 million to support improvements to ventilation and air quality, as well as larger refurbishments to public schools.
$5.8 million for the diversity and skills in stem, women in STEM and Entrepreneurship program plus an independent review into Government programs to ensure they support greater diversity in Australia’s science technology sectors.
$4.7 billion over 4 years from 2022-23 to make early childhood education and care more affordable for Australian families.
$531.6 million over 4 years from 2022–23 to expand the Paid Parental Leave scheme and provide greater support to families. In 2026, families will be able to access up to 26 weeks of Paid Parental Leave.

Foreign Affairs and Trade

$100 million towards Australia’s participation in the 2025 World Expo, held in Osaka, Japan. Australia’s participation at the expo will display clean energy and low emissions technologies, and aims to cement Australia’s position as a preferred partner on energy security
$19.6 million to the Singapore-Australia Green Economy Agreement. The Agreement will support bilateral cooperation in clean hydrogen and renewable energy trade.
$48.5 million to support proactive engagement with the United Nations Framework for Convention on Climate Change.

National Disability Insurance Scheme (NDIS)

$437.4 million over 3 years from 2022–23 to support people with disabilities and their families.
$385.0 million in 2023–24 in additional funding to the National Disability Insurance Agency (NDIA) to support National Disability Insurance Scheme (NDIS) participants.
$21.2 million over 3 years from 2022–23 for NDIS Appeals providers to support people with disabilities and their families.
$18.1 million over two years from 2022–23 to review NDIS design, operations and sustainability.
$12.4 million in 2022–23 to introduce an expert review pathway to resolve disputes arising from NDIA decisions.

Climate Change and Energy

$20 billion of low-cost finance under Rewiring the Nation to upgrade Australia’s electricity infrastructure.
$157.9 million to support the implementation of the National Energy Transformation Partnership.
$224.3 million to deploy 400 community batteries and $102.2 million to establish a Community Solar Banks program.
$40.9 million to increase oversight of gas markets by the ACCC and implementation of reforms to the Australian Domestic Gas Security Mechanism, and $23 million for gas reliability and security measures agreed with State and Territory Energy Ministers.
$1.9 million to establish Powering the Regions Fund which will provide dedicated support to transition regional industries to net zero.
$500 million to reduce transport emissions, through the Driving the Nation Fund, and $345 million to cut taxes on eligible electric cars from fringe benefits tax.
$42.6 million investment in the Climate Change Authority to restore its capability and empower it to deliver independent climate change advice.
$6.2 million will help implement the introduction of standardised, internationally aligned climate disclosure requirements for large businesses.

Cybersecurity

$31.3 million to extend the cyber hubs pilot, which will strengthen the line of defence for Government agencies.

Defence and Veterans’ Affairs

$15.5 million in 2023–24 to continue to support the Department of Veterans’ Affairs to engage with the Royal Commission into Defence and Veteran Suicide.
$24.3 million over 4 years from 2022–23 (and $2.0 million per year ongoing) to improve the capacity of the Department of Veterans’ Affairs to model increased demand for services.
$46.2 million over 4 years from 2022–23 (and approximately $17.8 million per year ongoing) to expand access to the Defence Home Ownership Assistance Scheme to support Australian Defence Force personnel and veterans to purchase their own home.
$147.5 million over 4 years from 2022–23 (and $23.9 million per year ongoing) to expand Australia’s engagement with Pacific partners and increase support to regional security priorities.
$15.0 billion investment over 7 years from 2023–24 to establish the National Reconstruction Fund to support, diversify and transform Australian industry and the economy through targeted co-investments in 7 priority areas including defence capability.
$185.6 million over two years from 2021–22 in military assistance, including Bushmaster Protected Mobility Vehicles, armoured personnel carriers, lightweight towed howitzers and other military equipment, and a contribution to NATO’s Ukraine Comprehensive Assistance Package Trust Fund.
$18.4 million over 4 years from 2022–23 to allocate additional 3-year Temporary Humanitarian Concern Visas (subclass 786) to Ukrainians in 2022–23.
$8.7 million in 2022–23 to assist Ukraine’s Border Guard Service.

EDELMAN GOVERNMENT ADVISORY: HELPING YOU ACT WITH CERTAINTY

Image Source: Michael (Unsplash)

Truss takes to Downing Street

After her victory in the leadership election on Monday, Liz Truss visited Balmoral to ask the Queen to form a new Government and become Prime Minister.

After formally becoming Prime Minister, Truss made her way to No.10 to make her first speech as Prime Minister, to lay out her initial plan for Government.

In a fit of weather, indicative of the problems she will have in her in-tray, the heavens opened upon those waiting to hear her speak in Downing Street.

Truss’ speech focused on three core pillars for the early days of her Government, underpinned by her libertarian desire to back freedom and enterprise. The pillars were: action to ‘get Britain working again’ by growing the economy, pursuing tax cuts and reform; action to deal with the energy crisis with a pledge for a major intervention to help businesses and households this week; and making sure people can get doctor’s appointments by safeguarding the future of the NHS.

Along with this, Truss put a focus on ‘spades in the ground’, with reference both to energy and housing. This could perhaps point towards planning reform and reforms to the way in which the UK can build on its energy supply. This is a politically dangerous area, with Boris Johnson’s Government abandoning planning reform after the threat of a significant parliamentary rebellion.

Never a natural speechmaker, Truss’ oratory was serious and filled with concrete priorities for her to deliver and therefore be judged by. It also highlighted the difference between her and Boris Johnson. She eschewed the ‘boosterism’ of Johnson and instead levelled with the public as to the tough times ahead. Gone is the flowery prose, and instead is replaced by clear and plain rhetoric.

Whether Truss can deliver on her promises of action and reform in a condensed timeframe ahead of a general election, and ultimately navigate the country through these tough times, remains to be seen.

Please see below for the analysis from our Edelman Global Advisory team. Please do not hesitate to get in touch if you would like further information or to discuss how Edelman can help support your engagement with the Government and the wider Conservative Party.

Read the full analysis here.

I had lunch with 15 leaders of non-governmental organizations at the Aspen Ideas Festival last week. I was asked to present the latest Edelman Trust Barometer data on NGOs, then to provide my views on how the sector can improve its reputation. I told the group that NGOs had led in trust for 19 of the 22 years of our study, that government had emerged as the leader at the beginning of the Pandemic in 2020, then business had become the most trusted in the past two years. I said further that NGOs had the highest ranking for ethical behavior, but that competence was the key differentiator versus business. I noted that NGOs had lost standing because their work had become politicized and that they were better critics than debaters. Finally, I suggested that NGO leaders had become bureaucrats instead of public figures, that it was difficult to identify even the heads of the most prominent NGOs as they are no longer important voices in the media.

The NGOs made the following points:

Local NGOs Doing Better Than Global in Reputation—Local NGOs undersell their ability to deliver services to the community. This is an opportunity area for business to work with NGOs.
Trust Issues with Global NGOs—The campaign against the Open Society Foundation hurt the entire sector. NGO work was politicized and unfairly maligned by right wing politicians, starting in Eastern Europe but magnified by the conservative press in the U.S.
NGOs Not Used to Fighting Back—We must use our voice to win in the court of public opinion. We need to talk about the good we do and how we do it. Everything has become politicized. The revolving door of talent between government and NGOs is not helpful.
NGOs Do Not Invest in Marketing—We need to be loud and proud. Boards of NGOs must allocate resources to communications as much as to service delivery. We need to activate proxies, the experts who can position ideas in the public space.
Young People Find Community at Work—In the prior generation, there was connection by volunteering for causes or by going to church. Now work is the center of the millennial life; fewer people are volunteering.
Fake NGOs Set Up in Brazil and India—As part of a program to undermine civil society, there are ersatz NGOs that put out misinformation. This contaminates the perception of the sector.
Need to Work with Business—Business has the power to scale, NGOs have the mission and credibility. We cannot give away too much to brands, which expect a tangible return on sponsorship. Business has not intervened in Brazil as NGOs have sought to keep the government accountable on the Amazon rain forest.
Business Has Seized the Purpose Banner from NGOs—This may be the most important finding from the lunch. Civil society leaders feel preempted by business, making claims of solving societal problems as part of the normal activities of the enterprise.

I am a big believer in the NGO movement. It has a unique capacity to provide credible information at a time when media is shrinking under financial pressure. It can be a partner to both business and government in local service delivery. Its watchdog function is invaluable, assuring proper behavior by other institutions. The fundamental question to be answered by the sector is whether it is willing to take the risk of partnering with business. The traditional answer of NGOs has been no; we prefer to go it alone. That is the wrong response today; society demands solutions that can only be provided by cooperation with a business community that has fundamentally changed, that sees its own mission as societal and financial. There is a way forward together; it is time for civil society to take this new road.

Richard Edelman is CEO.

SEE 2023 Edelman Trust Barometer

The 2022 Edelman Trust Barometer reveals sharp declines in trust across all Australian institutions, eroding the record-high levels of public trust recorded in 2021. Only 52% of Australians say they trust government to do the right thing (-9 points year-on-year) and 58% trusting each business (-5 points) and NGOs (-4 points). Media, which saw a notable surge in trust in 2021, fell by 8 points to 43%, making it the only institution in Australia distrusted by a majority of the population.

Trust 2022

The national decline in trust has also been felt across industry sectors, with the exception of technology (+2 points), food and beverage (+1 point) and education (+1 point). Social media (-6 points), telecommunications (-5 points), manufacturing (-5 points), fashion (-4 points) and retail (-3 points) recorded the largest declines of trust.

Trust 2022

The data reveals a stark contrast between the four institutions, with Australians seeing government and media as more divisive than unifying for society, whereas business and NGOs are more likely to be seen as unifying than divisive. When asked whether each institution serves to divide or unify society, more than half of Australians see media (55%) and government (52%) as divisive. Conversely, more Australians see business and NGOs more unifying than those who consider these institutions playing a dividing role.

Trust 2022

Australia trapped in a cycle of distrust

This year’s data uncovers a failure of societal leadership that has made distrust the default among Australians. Mirroring declining trust in media, is an erosion of trust in society’s traditional leaders, with only 43% of Australians trusting both government leaders and CEOs, falling 9 and 5 points year-on-year, respectively. Moreover, a majority of Australians believe that journalists (65%), government leaders (61%) and business leaders (61%) are actively trying to mislead them by saying things they know are false or grossly exaggerated.

Trust 2022

Trust in all media sources has fallen, with traditional media only trusted by 48% of Australians (-5 points), search engines by 47% (-4 points), owned media by 33% (-5 points) and social media by only 24% of Australians (-8 points). Not surprisingly, Australians’ concerns about disinformation and fake news remain high with 73% worried about false information or fake news being used as a weapon.

Trust 2022

A majority of Australians (55%) say their default tendency is to distrust something until they see evidence it is trustworthy. Another 61% say it has gotten to a point where Australians are incapable of having constructive and civil debates about issues they disagree on – a foundational trait of a functioning and productive society, especially in democratic nations.

Trust 2022

Societal leadership becomes operational imperative

All stakeholders now hold business accountable for taking a stand on issues that align with their values and beliefs. Fifty-six per cent of Australian consumers will buy or advocate for brands based on their belief and values; 57% of Australian employees will choose a place to work based on their beliefs and values, and 64% of investors make financial decisions based on their beliefs and values.

Trust 2022

The expectation for business to take a stand on social issues is putting greater pressure on CEOs to personally lead on change and be visible. Eight in ten believe CEOs should be visible discussing policy with external stakeholders or work their company has done to benefit society. Australians also expect CEOs to inform and shape conversations around subjects specifically related to jobs and the economy (72%), wage inequality (72%), technology and automation (68%), prejudice and discrimination (64%) and climate change (61%). However, CEOs are expected to stay out of politics.

Business poised to break cycle of distrust: information quality most powerful trust builder

Business is now the only institution that is perceived as both competent and ethical – bestowing upon it a clear mandate for driving social change. Australians want business to be doing more, not less, when engaging on all societal issues. Forty-four per cent of Australians say business should be doing more when it comes to climate change, compared to 10% who think business is overstepping when it comes to the environment.

Trust 2022

Employers continue to enjoy strong levels of trust with their employees, with nearly three quarters of Australian employees (74%) saying they their employer, compared to 58% who trust business in general. Employers’ communications are also highly trusted (70%), eclipsing communications from government (63%), media reports with named sources (58%) and advertising (51%).

Trust 2022

The importance of quality and reliable trustworthy information cannot be overstated. Providing ‘quality information’ was found to be the number one most powerful trust builder. This not true just for business (3%) and NGOs (3.2%), but even more so for government (6.1%) and media (6.6%).

Ashutosh Munshi says that with influencer marketing gaining popularity, brands have ways to ensure influencers’ voices are authentic, even as advertising guidelines help to spur more honest communication in brand marketing.

Influencers delivering quality and relatable content have the power to positively impact all stages of the path to purchase.
Seven in 10 people relate to influencers more than celebrities and further improved if content is in a language they understand.
India has the third highest number of bought followers in the world, with bots, fake followers and fake engagement

Why it matters

Influencer marketing has become mainstream marketing and brands must prioritise authenticity and trust as they leverage the influencer’s popularity and success as part of the marketing mix.

Takeaways

One question that plagues influencer marketing in India is: How authentic are these voices?
One solution is to clean up the influencer ecosystem by removing misleading engagement.
Another is to make brands and influencers more aware of the use of dishonest practices.

Back in 2010, “blogger” was the buzzword for influence. Fast forward to today, where influencer marketing has entered a new era as the career choice for Gen Z, a side hustle for many and a marketing engine for brands, looking to expand their reach, awareness, preference and even drive conversions. Where brands are missing out is leveraging authentic voices to earn the right attention and build trust that drives growth. The influencer marketing industry in India is estimated at US$75-150 million a year. Influencers’ consistent fervour in delivering great quality, relatable and diverse content has earned them high levels of trust from their audiences, with the power to positively impact all stages of the path to purchase. A single post by a trusted influencer can lead to a product being sold out in a matter of minutes; it can also devalue a company’s worth by billions. Remember Kylie Jenner’s tweet that cost Snapchat US$1.3 billion?

Like it or not, we are influenced by these voices in our everyday choices, consciously or otherwise.

The influencer’s many faces

The role of the influencer has gone beyond the realm of social media content creator to becoming actor, fashion house editor, red carpet representative, brand campaign star, co-creator of products, catalyst for social change, and more. In India, we saw Kusha Kapila and Masoom Minawala walk the red carpet at Cannes 2019. There are compelling reasons why influencer marketing is critical. Some stats provide a better perspective:

38% brand custodians feel influencer marketing is becoming more important with each passing year due to better reach and engagement
According to 72% marketers, influencer marketing is the fastest growing online customer acquisition method
76% brands are looking to increase their budget this year compared to 62% last year

But then, influence is not restricted to just celebrities and social media stars. Journalists and bloggers are also influencers from the earned-media space. And brands need to treat them as they do the stars. After all, credibility comes from unpaid third party endorsement.

Equally so, subject matter experts – doctors, academia, marketing experts, artists, chefs, professors and others – are also influencers. Brands must remain cautious of their influencer mix, as they build out campaign plans. With the climate of social media shifting, influencer marketing is becoming a more powerful force by innovating constantly to firm its position and foster growth.

Influencer commerce, influencer incubation, virtual influencers, influencer community, social search optimisation, creator-first studios are some of the influencer marketing trends that are on the rise, in India and across the globe. These trends have been adopted by evolved brands who have moved ahead in the influencer ecosystem and are now looking at influencers beyond the lens of awareness propellers.

Influencer marketing is gaining popularity in India by virtue of regional influencers prevalent across platforms. We currently have 234 million Indian language users online, compared to 175 million English users.

According to research, seven in 10 people relate to influencers more than celebrities, and this is further improved if consumers read or watch content in a language that they understand – it connects with them and motivates them to take action.

How authentic are these voices?

While there are several advantages dovetailed with influencer marketing, the one question that has plagued the industry for a while is: How authentic are these voices?

Following the US and Brazil, India has the third highest number of bought followers in the world. From bots to fake followers and fake engagement in the form of comments, fraudulent actors are working hard to stay one step ahead of platform algorithms, and brand reputation is at stake.

When it comes to bots, low-quality followers can be bought at INR 2,500 for 10,000 followers; the same number of mid-quality and high-quality followers are priced at INR 3,500 and Rs 4,500 respectively.

It’s no longer about a mega influencer having a large fan following to secure brand promotions; even micro influencers today can secure paid or better brand promotions on account of their following.

Keith Weed, former Global CMCO, Unilever said the key to improving the situation is three-fold:

Cleaning up the influencer ecosystem by removing misleading engagement
Making brands and influencers more aware of the use of dishonest practices
Improving transparency from social platforms to help brands measure impact

Apart from vanity metrics, brands and their partner agencies need to look at psychological and contextual layers to form a more accurate portrait of influencers and their followers. For fraudulent activity, one can rely on online tools to sniff out counterfeit or fraudulent accounts and influencers who profit from them.

The following parameters must be considered while shortlisting influencers:

Authenticity score
Engagement rate
Topics covered by the influencer (should be in context to the requirements)
Geography (his/her audience base; both location and age group must match with our target audience for the respective brand)
Best-performing relevant posts/content (so one can align the right content with the right influencer)
History of influencer work (gives an idea of influencer’s brand exposure)
Any red flags or warning signs – offensive content in the past
Non-social influence platforms like books, webinars, podcasts (helps understand the overall clout) Positive media coverage (increases credibility)
Trust Score (exclusive to Edelman)

With influencer marketing becoming mainstream in India, the Advertising Standards Council of India (ASCI) launched the Influencer Marketing Guidelines, making it mandatory for influencers to label all kinds of branded content to balance the interests of consumers, influencers, agencies, advertisers and all other stakeholders.

ASCI pointed out that consumers have a right to know what content has been paid for by brands and the guidelines intend to bring transparency and accountability to influencer marketing.

These guidelines will spur more honest communication within the realm of brand marketing and impact brands in several different ways:

1. Upfront Ad disclosure labels, wide list of material association (free products, vouchers, experiences etc) beyond monetary compensation, increased focus on research-driven content and claim substantiation – these guidelines have been designed to uphold a longstanding commitment to truth in advertising and will create an environment for greater trust by consumers in advertisers.

2. According to the Edelman Trust Barometer Special Report 2019, 63% people trust what influencers say about a brand much more than what brands say about themselves in their advertising, hence engagement with influencers will continue to rise, especially when consumers will clearly be informed about sponsored and non-sponsored content. The ad transparency tags will create even more positive impact on the influencer-consumer-brand relationship.

3. Content creativity, quality and authenticity will now take front seats. Brands and their partner agencies will need to adopt an always interesting approach to co-create culture and insight-driven content that seamlessly fits into the influencer’s niche, across formats and channels to boost brand mentions and foster fan communities.

4. Misleading content will get filtered out – with the new guidelines, influencers will increasingly take part in research and study every possible detail about the brand/product/service they are going to promote, hence making their content more responsible, authentic and thus reducing efforts towards constant content monitoring and thereby promoting responsible advertising.

5. Regulation would be required by brands and their partner agencies to ensure that campaigns are executed in a compliant manner, following all the guidelines.

6. Brands will need to foster long-term, meaningful relationships with influencers as influencers will now have a higher base of loyal fans, resulting in lifetime value for brands.

7. An increasing need to investigate influencers’ online activity and identify potentially sensitive issues along with basic performance benchmarking will become the new norm, increasing reliability on partner agencies with in-house and subscribed social listening and campaign measurement tools.

These guidelines will engender responsible communications, making creators and brands equally accountable for all types of influencer-led content in the digital ecosystem. These regulations could not have come sooner, given the exponential growth and mainstream stature that influencer marketing has attained so rapidly in India.

Built on the foundation of trust, the ASCI guidelines reiterate our longstanding commitment to authenticity and credibility. As per our Edelman Brand Trust Report 2021, there is a bigger need for trust today than ever before. This trust in brands cannot be bought, it has to be earned with action by creating experiences with products/services or through earned media or peer conversations and other trusted channels. Influence, too, is far higher when trust levels are high. It is built when influencers have a personal connection or expertise related to a topic or issue and when they promote brands with utmost transparency.

Riding on the back of this reality is Edelman’s Influencer Marketing offer called Trusted Influence. We create campaigns for brands using insight-driven, earned-centric creative thinking, amplified through credible influencers that deliver true impact and return on investment. Check out some of our award-winning incredible work, a testament to our commitment to trust.

For a business to flourish, it needs to reach its consumers in a way that inspires trust and influencers are instrumental in building that trust because people are more likely to trust the words of commoners who speak from their personal experience rather than an advertisement.

ASCI’s issue of the recent guidelines marks the foray of influencer marketing into mainstream advertising, depicting how influencer marketing has evolved. This offers a wealth of growth opportunities for influencers, influencer marketing platforms and agencies, as well as brands looking to benefit from the fast-growing industry.

With influencer marketing at the cusp of transformation and on track to become a US$15 billion industry by 2022, brands and corporations must prioritise authenticity and trust as they look to leverage the popularity and success of influencers as a part of the marketing mix.

This article originally appeared on WARC as part of a Spotlight series on how marketers can optimise influencer marketing strategies in India.

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