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From AAP:

Queensland’s budget is back in the black amid surging coal prices and a property boom, but taxes will be hiked on big businesses to prop up the bottom line.

Treasurer Cameron Dick has delivered a unexpected $1.9 billion surplus in 2021/22, after forecasting a $1.49 billion deficit six months ago.

He says surging coal royalties and land transfer duties have significantly lifted government income this year.

“Much has changed from when I stood here to deliver last year’s budget,” he told parliament on Tuesday.

“We are back in black.”

Coal royalties soared to $7.29 billion in 2021/22, but the government expects that to fall substantially as international prices ease over the next four years.

The centrepiece of Mr Dick’s budget is $5.7 billion in funding over four years to bring another 2509 hospital beds online.

There will also be $120 million in new funding for mental health, addiction and suicide prevention next financial year.

Daniel Hurst

Australia recommits to climate leadership

The Albanese government says it is “deeply committed to taking real and significant climate action at home, and to re-establishing Australia as a climate leader internationally”.

The minister for international development and the Pacific, Pat Conroy, made the comment in a video message to a Pacific symposium this afternoon.

Conroy said shaping a shared future in the Pacific was “a whole-of-nation effort, drawing together all of our national assets” including the private sector, civil society and academia. He said:

The complexity of issues we face is growing. As the foreign minister [Penny Wong] has said, the triple challenges of climate, Covid and strategic contest will challenge us in new ways.

We are committed to listening and working in partnership with our Pacific family to face these shared challenges together.

Nowhere is an integrated approach more critical than in tackling climate change, described in the Pacific Islands Forum’s Boe Declaration as the ‘single greatest threat to the livelihoods, security and wellbeing of the peoples of the Pacific’.

Conroy said the last few months had shown “the clear ways in which development, diplomacy and defence issues are intersecting in the Pacific”.

He didn’t directly mention China, but referred to “much sharper global geostrategic circumstances”.

Conroy said Australia would remain a long-term partner for the Pacific.

He said Wong’s early visits to the region had demonstrated “the new energy we are bringing to that partnership” and he, too, looked forward to visiting soon.

Our goal, fundamentally, is to work together with our Pacific family to support its long-term stability, security and prosperity.

Conroy’s video message was to a virtual conference organised by the Asia-Pacific Development, Diplomacy & Defence Dialogue (AP4D). The thinktank launched a series of papers about how Australia could reset its relationship with the region, with climate being one of the crucial elements.

You can read our preview on those policy papers from this morning:

NSW teachers yet to respond to 3% pay rise in budget

From AAP:

NSW teachers are set to respond to the state budget a week after giving the premier an ultimatum to improve their pay deal.

In the lead-up to the budget, the government announced it would lift its 2.5% cap on increases to public sector wages in a bid to stem industrial action and strikes from government workers including teachers, nurses and transport staff.

The new policy confirmed in the budget on Tuesday includes a 3% pay rise over the next financial year, with another 3.5% the following year for workers who make a “substantial contribution to productivity-enhancing reforms”.

“It is important to maintain competitive wages to attract and retain the best talent,” the treasurer, Matt Kean, said.

“In the context of a strong and growing economy, this two-year increase to wages is an affordable and sensible policy,” he said.

The budget also expanded paid parental leave to 14 weeks for public sector workers, including teachers.

Gabrielle Chan

Australian Agricultural Company chief executive resigns

The chief executive officer of Australia’s biggest cattle company, Australian Agricultural Company Ltd, Hugh Killen, has resigned, effective immediately.

The decision was announced by AACo’s chairman, Donald McGauchie. It looks like a scramble, even though McGauchie says in his statement: “Hugh and the board agree that now is the right time to begin an orderly executive leadership transition.”

The move has sparked a local and global recruitment process to fill the chief executive position as well as the appointment of an acting chief executive, namely the company’s chief operating officer, Dave Harris.

Killen came from Westpac to lead AACo four and a half years ago. He has pivoted the company towards hitting sustainability goals, such as the industry’s first sustainability framework in an industry with significant methane emissions. The company took some big hits over Killen’s time, with the company reportedly losing 42,000 head of cattle to floods in 2019.

Andrew “Twiggy” Forrest has recently been circling. Forrest’s holding company for his private family businesses, Tattarang, increased its stake in AACo by 10% to 17.4%.

AACo was established in 1824 as a land development company with the assistance of the British parliament’s crown grant of 1m acres.

It has since been listed on the stock exchange and owns about 1% of the Australian land mass – 6.4m hectares of land. It is focused on beef – and very expensive beef at that. The AFR reported a 300g strip was selling for $580 in Dubai in 2020.

Victoria appoints first female court of appeal president

The Victorian government has appointed justice Karin Emerton as the new president of the court of appeal – the first female president in the court’s history.

The appointment will commence on 16 July.

Business conditions gained momentum in June quarter, survey finds

From AAP:

Australia’s manufacturers are facing the most challenging times in 50 years due to supply headwinds and escalating costs but are benefiting from strengthening demand, a new survey has found.

The latest Australian Chamber of Commerce and Industry-Westpac industrial trends survey showed business conditions are expanding and gained momentum in the June quarter.

“[But] the economy is bumping up against capacity constraints in a tight labour market,” said Westpac senior economist Andrew Hanlan.

“The economy needs to lift investment to be able to boost capacity and provide a lift to productivity to drive a sustained recovery.”

The survey’s actual composite index – a gauge of business conditions – rose to 64.5 in the June quarter, up from 56.7 three months earlier and about 51 over the second half of 2021 during Covid-19 Delta lockdowns.

Here are the latest coronavirus numbers from around Australia today, as the country records at least 59 deaths from Covid-19:

ACT

• Deaths: 3
• Cases: 869
• In hospital: 87 (with 1 person in ICU)

NSW

• Deaths: 7
• Cases: 7,805
• In hospital: 1,499 (with 57 people in ICU)

Northern Territory

• Deaths: 0
• Cases: 232
• In hospital: 17 (with no people in ICU)

Queensland

• Deaths: 4
• Cases: 4,797
• In hospital: 491 (with 7 people in ICU)

South Australia

• Deaths: 11
• Cases: 2,270
• In hospital: 230 (with 9 people in ICU)

Tasmania

• Deaths: 0
• Cases: 1,001
• In hospital: 41 (with 2 people in ICU)

Victoria

• Deaths: 28
• Cases: 7,507
• In hospital: 434 (with 21 people in ICU)

Western Australia

• Deaths: 6
• Cases: 4,885
• In hospital: 259 (with 8 people in ICU)

NSW early education plan is ‘once in a generation’ investment, says Kean

From AAP:

The NSW government says its $15.9bn worth of budget commitments to early education represent a “once in a generation” investment in children across the state.

The government handed down its 2022/23 budget on Tuesday, announcing the massive spending on initiatives for early childhood education and child development over the next decade.

The centrepiece of the budget’s education initiatives was the multi-billion dollar investment in early eduction, including $1.4bn over four years to provide affordable preschool across the state.

Other measures for early learners were $281.6m over the forward estimates to boost the number, quality and retention of early childhood educators and teachers, and $112.2m for developmental checks in preschools.

There was also $37.9m to boost before- and after-school care and $24.7m to support and guide early childhood education and care service providers.

The treasurer, Matt Kean, said the government understood that a “great education can propel a person up the ladder of opportunity”.

“We know that the first five years of a child’s life can set them up for success at school and beyond. Ninety per cent of a child’s brain development occurs in these years,” Kean said in his budget speech on Tuesday.

Benita Kolovos

Victorian opposition confirms support for treaty process

The Victorian opposition has announced it will support the establishment of an independent authority to oversee the state’s treaty negotiations, though ousted Liberal MP Tim Smith says he will cross the floor to vote against the bill, describing it as “illiberal and divisive tokenism”.

The opposition leader, Matthew Guy, and the Nationals leader, Peter Walsh, confirmed the Coalition’s position on the Treaty Authority Bill following a party room meeting on Tuesday.

“The Liberals and Nationals are committed to advancing the treaty process in Victoria in a way that supports self-determination and reconciliation while strengthening community and connection to country,” the spokesperson for Aboriginal affairs, Walsh, said in a statement.

“Treaty is deeply personal, meaning that the road to achieving it will be different things to all people.

“Moving forward we must continue to ensure this process is delivered in a way that respects, and strives to meet, all the community’s ideals and expectations, while contributing positively to reducing disadvantage for Aboriginal Victorians.”

Federal government won’t compensate states on stamp duty – Chalmers

Lastly, Chalmers is asked about NSW abolishing stamp duty for first homebuyers, and if they’ll help out:

We have extreme pressures in our own budget. The commonwealth budget is in, in lots of ways and by most measures in a far weaker position than the state budgets.

And so when it comes to reforms that states are engaged in, whether it is the tax system or otherwise, it is a matter for them. We are prepared to facilitate a discussion about tax reform at the state level but we need to recognise we don’t have billions lying around to compensate states for the decisions that they take off their own bat. That is the reality.

I think that’s a strong no there.

Chalmers would like to see Assange case concluded

That case has been dragging on, we would like to see it concluded. I will leave commentary to relevant spokespeople.

Home affairs minister in Sri Lanka making Australian contribution – Chalmers

Chalmers is asked about the situation in Sri Lanka and if we should be doing more to help:

We have a role to play in helping our friends through an extremely difficult period. Clare O’Neil, home affairs minister, is in Sri Lanka as you know doing a really important job, which is engaging with Sri Lankan friends to ensure we are making our contribution.

The price pressures on Sri Lanka, the inflation change, how that is feeding through to social unrest and difficulties in broader communities and society should be a concern to all of us. Part of that is the role that is playing in pressures on people smuggling and asylum seekers.

Chalmers says high inflation is driven by domestic and international factors

As I have said before, Australians are focused on what this means for us here in our own country, the focus. The governor made it clear there are some domestic sources of inflation as well. Our energy policies have been part of the story for too long.

What we are seeing and at here in at the energy market, in particular, is the cost and consequence of nearly a decade of energy policy chaos.

Chalmers says government is dealing with Coalition’s ‘legacy of waste’

Chalmers says he won’t predict how high-interest rates will go up:

There is an important role for the independent reserve bank here but also for the government to make sure we can grow our economy without adding unnecessarily to these inflationary pressures.

That is what childcare changes, trading changes, our energy policy, the whole economic agenda in one way or another is about – making the economy more resilient, making it grow without stress from inflationary pressures, dealing with these cost of the living issues … we make a start on dealing with this legacy of waste and rorts we have inherited.

Inflation will get worse before it gets better – Chalmers

Chalmers has been asked is inflation will get to 7% and what the government is doing to avoid it:

It remains to be seen. The expectation across the board is that inflation will get significantly higher than the 5.1% that we saw in at the March quarter. I have said that, as well as the Treasury secretary and reserve bank governor – we have made the point that inflation will get worse before it gets better.

I will update the government expectations and forecasts for inflation when I provide an economic statement to parliament when it returns to the end of next month. Inflation will be really important.

Chalmers ‘cautiously optimistic’ about future of economy

Chalmers has been asked if he agrees with the reserve bank that a recession is unlikely. He said:

That is our objective. We are not working on the expectation at this point of that risk occurring or evacuating. I have said a number of times, you know, we have reason to be cautiously optimistic about the future of our economy but first, we need to navigate these difficulties which are right ahead of us.

The fact of the matter is that the economy is more bondable than it needs to be to these kinds of shocks, because we have had that wasted decade.

And before we get into questions, I’ll hand the blog over to Cait Kelly. Thanks for reading.

Chalmers says he wants to crack down on ‘dodgy behaviours’ in energy market

The treasurer has continued, saying he wants to maximise the ACCC’s monitoring role, to be able to stamp out “dodgy behaviour”:

Energy is a big part of the inflation story. I have maximised the ACCC’s monitoring role when it comes to energy markets. We want to know if there are any dodgy behaviours going on.

We don’t want to see dodgy markets behaviour.

We want to see the ACCC empowered to make recommendations to the government on the best mix of regulations based on detailed information that they provide us after having a proper look at what is going on here. We won’t tolerate dodgy behaviour when it comes to pressing in energy markets. There is enough inflation and energy. It is tough enough for families and pensioners and industry when it comes to dealing with these skyrocketing energy costs.

I thank the ACCC for the positive way they have responded to my request to maximise their role here, to engage in a thorough, robust monitoring of energy prices, and to make recommendations to others about any further steps which may be necessary, based on the information that they provide. There is an important role for the regulators here, they have been exercising their role I think with a degree of professionalism.

The federal treasurer, Jim Chalmers, is addressing the media now, and said he welcomed RBA governor Philip Lowe’s “candour and frankness”, and added that expectations are that inflation will get worse.

I want to welcome and thank governor Philip Lowe for his candour and frankness today, speaking about this inflation challenge in our economy. The expectation across the board is that inflation will get worse before it gets better and that interest rates will get higher as well.

This is making life very difficult for Australians already, and for Australian industry, as the prices for goods and services and supplies go through the roof. And as interest rates rise further, as flagged by the Reserve Bank governor it will obviously make it harder for Australians to service their mortgages as well, so this is really difficult, and I welcome the candour and frankness with which governor Lowe has described the challenges before us. We have got a lot going for us in this country and our economy but we can’t just pretend away that these big challenges, that we confront in the next six or 12 months in particular.

It is possible to be optimistic about the future of our economy and country while also recognising we have to navigate together are really tricky, difficult combination of circumstances.