With only a seventeen-week window remaining in which Prime Minister Scott Morrison can first present an early Budget 2022-23 to the Australian Parliament, then dissolve said Parliament, before going on to call a federal general election and run a formal election campaign; sometime soon Coalition Government MPs and senators will have to begin addressing economic issues when out and about in their electorates.
So perhaps it is time to start looking at projections and forecasts for 2022 made by government departments, financial institutions and industry - before local electioneering hype is raised to such a pitch that facts and considered opinion get lost in the political mêlée.
Here are six aspects of economic activity which always get a mention in the NSW Northern Rivers region at some time in an election cycle.
CONSUMER
CONFIDENCE
ABC
News, 18 January 2022:
Consumer
confidence slumps
The
Omicron COVID-19 variant has hit consumer confidence, according to
ANZ and Roy Morgan.
Their
measure of consumer confidence fell 7.6 per cent last week to 97.9,
the lowest level since October 2020, as Omicron surged across
Australia and facilities came under immense strain.
That
was lower than during last year's lockdowns when the Delta variant
surged.
All
the survey's subindices fell including current and future financial
conditions.
Nearly
one in five respondents expected to be worse off by this time next
year.
ANZ
head of Australian Economics, David Plank, said the index level of
97.9 was the weakest January result since 1992, when the Australian
economy was experiencing rising unemployment.
"The
result highlights the concerns about COVID have the potential to
significantly impact the economy if they linger," he said.
ANZ
said spending had continued to fall because of the spread of Omicron,
with a drop of 27 per cent over the first half of January, compared
to the first half of December.
Spending
was also lower on eating out.
Omicron
hit to economy
CBA
credit and debit card data indicated that spending has dropped
sharply on services over the past few weeks.
Commonwealth
Bank economist Gareth Aird said the large number of COVID-19 cases is
hurting the employment market, with an estimated 1 million people in
isolation, and reduced spending on goods and services.
That
means many businesses have been forced to close, or reduce capacity
and opening hours.
He
has slashed his growth forecast for the first quarter of 2022 from
2.3 per cent to just 1 per cent.
"The
next few months are without a shred of doubt going to be difficult
and testing for the economy," Mr Aird said.
"Our
working assumption is that more policy support will be forthcoming,
particularly stimulus that is targeted towards businesses most
adversely impacted by the surge in COVID cases and isolation
requirements."
Mr
Aird said he expected the economy to snap back in the second quarter
of 2022.
FINANCE
Australian
Government General Government Sector Monthly Financial Statements
November 2021,
24
December 2021:
KEY
POINTS
The
Monthly Financial Statements for November 2021 report the budget
position against the expected monthly profile for the 2021-22
financial year through to 30 November 2021, based on the 2021-22
Budget estimates published in May 2021.
The
2021-22 Mid-Year Economic and Fiscal Outlook (MYEFO) was released on
Thursday, 16 December 2021. Commencing with the December 2021
monthly financial statements, which will be released in January
2022, the budget position will be reported against the expected
monthly profile based on the updated estimates outlined in the
2021-22 MYEFO.
The
November 2021 year to date results include the impact of the
Australian Government’s response to COVID-19.
The
underlying cash balance for the 2021-22 financial year to 30
November 2021 was a deficit of $41.8 billion against the Budget
profile deficit of $55.9 billion.
The
fiscal balance for the 2021-22 financial year to 30 November 2021
was a deficit of $36.0 billion against the Budget profile deficit of
$55.2 billion.
Monthly
results are generally volatile due to timing differences between
revenue and receipts, and expenses and payments. Care needs to be
taken when comparing monthly or cumulative data across years and to
full-year estimates, as revenue and receipts and expenses and
payments vary from month to month.
FISCAL
OUTCOMES
Underlying
Cash Balance
The
underlying cash balance for the financial year to 30 November 2021
was a deficit of $41.8 billion, which is $14.1 billion lower than the
2021-22 Budget profile deficit of $55.9 billion.
Total
receipts were $34.3 billion higher than the 2021-22 Budget profile.
Total
payments were $20.2 billion higher than the 2021-22 Budget profile.
Net
Operating Balance
The
net operating balance for the financial year to 30 November 2021 was
a deficit of $35.5 billion, which is $17.8 billion lower than the
2021-22 Budget profile deficit of $53.4 billion. The difference
results from higher than expected revenue, partially offset by higher
than expected expenses.
Fiscal
Balance
The
fiscal balance for the financial year to 30 November 2021 was a
deficit of $36.0 billion, which is $19.3 billion lower than the
2021-22 Budget profile deficit of $55.2 billion. The difference
results from higher than expected revenue and lower than expected net
capital investment, partially offset by higher expenses.
Assets
and Liabilities
As
at 30 November 2021:
net
worth is negative $743.5 billion;
net
debt is $607.3 billion; and
net
financial liabilities are $987.2 billion.
MINING
SECTOR
Office
of the Chief Economist,
Resources
and Energy Quarterly December 2021,
excerpt:
Australia’s
resource and energy exports are estimated to reach a record $379
billion in 2021–22, up from $310 billion in 2020–21. In 2022–23,
export earnings are then forecast to decline back to $311 billion, as
commodity prices settle lower.
The
global recovery remains underway, sustained by the ongoing rollout of
COVID-19 vaccines and continued fiscal and monetary support across
major economies. However, new outbreaks (and variants) of the
pandemic across many regions are inhibiting a full global recovery,
as are supply chain blockages — including shortages of
semi-conductor chips and of shipping containers in some locations.
China’s
power shortages have been a dominant influence on global resource and
energy commodity prices in recent months. As a major global metal
refiner, the power shortages have seen Chinese (base and ferrous)
metal output cut back. China’s property sector has slowed
noticeably since our last report, cutting metal usage. However, the
Chinese authorities now appear to be taking steps to stabilise the
sector.
New
policy developments are also impacting the global resources and
energy sector. In October, China’s government instructed the
nation’s coal miners to lift output and imposed a thermal coal
price cap, following critical shortages. In November, the US Congress
passed a US$1.2 trillion infrastructure program, which will have a
stimulatory effect on economic growth domestically and have flow-on
effects offshore.
A
stronger outlook for base metals and coal is expected to more than
offset the impact on export earnings of the downward adjustment we
have made to our iron ore price forecasts. Lithium exports are
expected to overtake zinc exports in 2022–23 as car makers race to
capture the electric vehicle market.
With
energy inventories lower than normal, the severity of the remainder
of the Northern Hemisphere winter will have a critical influence on
energy markets in the short term. The La Niña weather pattern will
likely impact on the demand and supply for coal and other energy
products.
The
risks to the record export earnings forecast for 2021–22 are skewed
to the downside. They include a much faster than expected decline in
coal prices. There is also potential for a further rise in global
inflation and a risk of higher interest rates in response. New,
vaccine-resistant strains of the coronavirus, and the risk of delays
in the rollout of COVID-19 vaccines to the world’s population,
could also pose significant risks.
AGRICULTURE
Dept.
of Agriculture, Water and the Environment,
Outlook
for Crops,
excerpt:
Value
of crop production to reach record high in 2021–22
The
gross value of crop production is forecast to reach a record $43
billion in 2021–22, driven by record winter crop production and
high world grain and oilseed prices. Favourable seasonal conditions
across all winter cropping regions, particularly in New South Wales
and Western Australia (the two biggest winter crop–producing
states) are forecast to result in above average to significantly
above average yields. A favourable outlook for increased summer crop
production is also contributing to the forecast record. The gross
value of all major crop commodities is forecast to reach a record
level:
wheat
– $11.5 billion (record high)
barley
– $3.4 billion (record high)
canola
– $5.2 billion (record high)
cotton
– $3.9 billion (record high)
horticulture
– $12.5 billion (second highest on record)
Heavy
November rainfall has caused flooding in northern and central west
New South Wales resulting in production losses for some producers.
Although this is not expected to significantly affect tonnage
produced, it will affect the value because of a downgrade in quality.
Continued high rainfall in December will cause further damage and
more total crop losses if crops cannot be harvested.
In
other areas across the eastern states and South Australia, wet
conditions during harvest and reduced soil nutrient levels caused by
2 years of high yields could reduce grain and oilseeds quality
compared with recent years. The extent of these impacts would differ
from paddock-to-paddock, and downgrades of wheat protein levels or
improvements in the oil content of canola crops could affect the
prices that growers receive.
Despite
concerns about a resurgence in mice numbers, increased baiting on
farms during winter and spring has reduced mice populations in
affected regions, and there have been no reports of significant
damage to date. They still remain a risk for summer crops in parts of
southern Queensland and northern New South Wales. Farm profits could
be reduced by high baiting and cleaning costs if mouse numbers remain
elevated during summer.
Figure
1.1 Gross value of crop production, 1971–72 to 2021–22
f ABARES forecast.
Sources: ABARES; Australian Bureau of Statistics
Dept.
of Agriculture, Water and the Environment,
Economic
overview: December quarter 2021,
excerpt:
Exchange
rate to remain at current levels
In
2021–22, the Australian exchange rate is assumed to average US74
cents – 1 cent lower than the average for 2020–21. Downward
pressure on the exchange rate from falling iron ore prices is
expected to be balanced by upward pressure from strengthening
economic activity and steep increases in coal and natural gas prices.
Overseas
interest rates may move higher over 2022, adding to downward pressure
on the Australian dollar if current domestic monetary policy settings
remain. Stronger than expected inflation overseas could prompt
central banks to bring forward planned rate rises. Australian
interest rates are not expected to be lifted in 2021–22. The
Reserve Bank of Australia has clearly signalled it will not raise
rates unless inflation is sustained in the target range (core
inflation of 2 to 3%) and wages growth is ‘materially higher’
than it is at present. Wages growth in Australia remains at less than
half the average rate recorded between 2000 and 2010, despite
relatively low unemployment.
TOURISM
Do not travel to Australia......
Embassy of the People's Republic of China in the Commonwealth of Australia, 7 January 2022:
Notice
on China-bound foreign passengers' application of health
code Jan-07-2022）
2022-01-07
16:05
In
order to reduce cross-border transmission of Covid-19, especially
considering the latest developments of COVID-19 in Australia, the
Embassy and Consulate-Generals of China have made major changes on
the application procedures. Passengers who travel on and after 17
January, 2022 are kindly required to read and follow
instructions below....
Tourism
Australia,
International
Visitor Survey results September 2021:
Key
results
Key
results for the year ending September 2021 include:
international
visitor numbers fell by 98.2% to 155,469
international
visitor spend was down 97.1% to $1.3 billion
visitor
nights were down 96.2% to 10.4 million.
Australia’s
top 5 markets
Australia’s
top 5 international visitor markets saw significant losses:
Chinese
visitor numbers fell 99.7%. This was a loss of 1.3 million visitors.
Spend fell 99.4% or $12.2 billion.
New
Zealand visitor numbers fell 93.0%. This was a loss of 1.2 million
visitors. Spend fell 88.6% or $2.3 billion. New Zealand saw the
smallest losses of all markets, recording 89,000 visitors. This was
more than half (57%) of all visitors to Australia for the year
ending September 2021. This was due to a trans-Tasman bubble opening
between the 2 countries during the June quarter 2021.
United
States of America visitor numbers fell 98.9%. This was a loss of
763,000 visitors. Spend fell 96.4% or $3.9 billion.
United
Kingdom visitor numbers fell 98.9%. This was a loss of 662,000
visitors. Spend fell 96.3% or $3.2 billion.
Japanese
visitor numbers fell 99.7%. This was a loss of 454,000 visitors.
Spend fell 99.3% or $2.1 billion.
Tourism
losses due to COVID-19
Total
international and domestic tourism losses since the start of the
pandemic in March 2020 reached $128.3 billion.
International
tourism saw losses of $62.5 billion for March 2020 to September 2021.
This was due to international border closures caused by the COVID-19
pandemic.
Over
the same period, there were further losses of:
Note:
The only federal government tourism
recovery scenarios are
dated 2020 and can be
found at Australian
Trade and Investment Commission,
Tourism Research
Australia, Tourism
Recovery Scenarios.
CLIMATE
 |
Australian climate variability & change - Time series graphsAustralian Bureau of Meteorology |
Australian climate variability & change - Trend maps
Australian Bureau of Meteorology
Australian
Government Dept. of Industry, Science, Energy and Resources,
Quarterly
Update of Australia’s National Greenhouse Gas Inventory: June 2021,
Incorporating emissions from the NEM up to September 2021,
excepts:
On
a quarterly basis, national emission levels for the June quarter 2021
increased 0.4% or 0.5 Mt CO2-e on the previous quarter in trend
terms. The trend result for the June quarter 2021 reflects small
increases across all sectors of the inventory with the exception of
the electricity sector which was lower by 0.2% on the March quarter
2021….
On
an annual basis, the consumption-based inventory increased 0.4% or
1.8 Mt CO2-e to 420.8 Mt CO2-e in the year to June 2021….
National
emissions are preliminarily estimated to be 500 Mt CO2-e in the year
to September 2021.
Long
term sectoral trends
The
most important sectoral drivers of Australia’s long-term emissions
trend have been:
•
Electricity
– where emissions have fallen by 22.6% since the year to June 2009
as renewables have displaced coal as a fuel source, reversing the
long term increases experienced in earlier
years;
•
Stationary
energy (excluding electricity) – which has shown the largest growth
of any sector in percentage terms since 1990. Emissions have
increased 50.3% or 33.3 Mt CO2-e driven, in particular, by recent
growth in the export of LNG;
•
Transport
– where emissions have increased 48.6% or 29.8 Mt CO2-e since 1990,
despite recent volatility due to the impacts of the COVID pandemic;
•
Fugitives
– where emissions have increased 21.3% or 8.6 Mt CO2-e since 1990.
Emissions were relatively stable until 2012 but have increased
strongly as a result of the growth of the LNG industry;
•
Agriculture
– where emissions have declined by 18.5% or 17.0 Mt CO2-e since
1990, in line with declining cattle and sheep populations; and,
•
Land
Use, Land Use Change and Forestry (LULUCF) – where emissions have
decreased by the largest margin of any sector since 1990 (112.6% or
218.1 Mt CO2-e) due to reductions in land clearing and native forest
harvesting, increases in plantations and native vegetation, and
improvements in soil carbon.
