Are We In The Midst Of A Cash Long Con?

Last Tuesday on my live show, I discussed the current Treasury paper on Mandating Cash Acceptance in Australia. But today I want to take this further and I will outline my concern that the Government many well be playing a long con with the community ahead of the upcoming election.

The paper says Cash acceptance refers to the practice of businesses accepting cash as a form of payment for goods and services. Cash acceptance levels must remain sufficient to enable consumers, including those unable to use digital payment methods, to participate in the economy.

my suspicion, is this is more political than anything else. The Government knows cash availability is a BIG issue, and cannot be avoided, so this Treasury paper allows the issue to flow on beyond the next election. Meantime the neo-liberals, in the pockets on the big banks, still want to take our rights to use cash away, so on one hand they can appear to be taking the right for cash seriously, but can also continue to assume the banks they support them. It’s a classic yes Minister long con.

We can break that by making sure we provide responses to Treasury, along the lines, of first, there should be no carve out of essential services – which is difficult to try to define, and all businesses should still be required to accept legal tender in the form of cash. A simple antidote to the long con.

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Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Are We In The Midst Of A Cash Long Con?
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Are We In The Midst Of A Cash Long Con?

Last Tuesday on my live show, I discussed the current Treasury paper on Mandating Cash Acceptance in Australia. But today I want to take this further and I will outline my concern that the Government many well be playing a long con with the community ahead of the upcoming election.

The paper says Cash acceptance refers to the practice of businesses accepting cash as a form of payment for goods and services. Cash acceptance levels must remain sufficient to enable consumers, including those unable to use digital payment methods, to participate in the economy.

my suspicion, is this is more political than anything else. The Government knows cash availability is a BIG issue, and cannot be avoided, so this Treasury paper allows the issue to flow on beyond the next election. Meantime the neo-liberals, in the pockets on the big banks, still want to take our rights to use cash away, so on one hand they can appear to be taking the right for cash seriously, but can also continue to assume the banks they support them. It’s a classic yes Minister long con.

We can break that by making sure we provide responses to Treasury, along the lines, of first, there should be no carve out of essential services – which is difficult to try to define, and all businesses should still be required to accept legal tender in the form of cash. A simple antidote to the long con.

http://www.martinnorth.com/

Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

Go to the Walk The World Universe at https://walktheworld.com.au/

Wanted Adults In The Budget Room, As Deficits Roar And Games Are Played!

Total budget revenue is cumulatively higher by about $380 billion over five years compared with Treasury’s forecasts on the eve of the May 2022 election.

Yet, at a time when revenue is booming and the economy is operating around full capacity, the deficit in underlying terms is forecast to be $26.9 billion (1 per cent of gross domestic product), a $1.3 billion improvement since the May budget.

Cumulative underlying deficits over four years are projected to blow out to $144 billion, $21.7 billion worse than expected seven months ago.

Where are the adults in the room because from the budget point of view, they appear to have left years ago, and the result will be more pressure on ordinary households and businesses across the country.

http://www.martinnorth.com/

Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

Go to the Walk The World Universe at https://walktheworld.com.au/

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Digital Finance Analytics (DFA) Blog
Wanted Adults In The Budget Room, As Deficits Roar And Games Are Played!
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The Grinch Who Stole Cash: With Robbie Barwick…

A final 2023 chat with Robbie Barwick from the Australian Citizens Party. We look at the RBA’s latest outing on cash usage, the Senate review of the RBA’s independence bill, and the formation of a National Investment entity.

On 7 December 2023, the Senate referred the Treasury Laws Amendment (Reserve Bank Reforms) Bill 2023 [Provisions] to the Senate Economics Legislation Committee for inquiry and report by 21 March 2024.

The critical issue is that the Treasurer is walking back Government’s power to intervene with RBA decisions if they do not agree. This power was put into the constitution years ago but has never been used.

Without it, the Technocrats will be able to take over, and follow the lead of the Bank For International settlements, to the potential disadvantage of ordinary Australians and businesses.

Make a submission to make the case for this power to be retained! The closing date for submissions to this inquiry is 2 February 2024.

https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/TLABRBAReform2024

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The MYEFO Magic Pudding…

The Mid-Year Economic and Fiscal Outlook (MYEFO) update released on Wednesday estimates the Australian economy is expected to expand by a low 1.75% in 2023–24 before regaining momentum in 2024-25, when improved real incomes are expected to support a recovery in household consumption. It also notes inflation – although moderating – is still too high.

The outlook attributes that mainly to global oil prices and Treasury has not changed its forecast timetable for inflation’s return to the 2-3% target band, with 2.5% hit in mid 2025, so the Government is more optimistic than the RBA when it comes to expected progress on inflation. The RBA expects inflation to be at 3.0% by mid-2025.

Treasury’s analysis of the structural budget position suggests that the budget in 2023-24 is neutral with respect to inflation – it is neither adding nor reducing inflationary pressures.

Treasury continues to expect the economy will slow over the next few years to grow below trend with the unemployment rate drifting higher to 4.5% in 2025-26.

The migration intake has been a hot topic recently. As expected, the MYEFO forecasts upgrade the outlook for net overseas migration (NOM) in 2023-24 by 60k to 375k. We suspect that this will likely undershoot the eventual outcome. In 2024-25, forecasts for NOM have been marked down slightly to 250k, likely reflecting the expected impact of the Government’s recently announced migration strategy.

Gross debt is expected to peak at 35.4% of GDP in 2027-28, this is 0.2 percentage points lower than projected in the May Budget. While debt is expected to be lower, the expected cost of capital has also increased since the May Budget, reflecting the rise in government bond yields. Overall, these counteracting forces net out to a slight increase in interest payments as a share of GDP over the medium term.

Sadly, in a blow for budget transparency, there is still a line for decisions taken but not yet announced. We don’t know what decisions these are, but they are significant – the estimates start at $270 million in 2023-24 and rise to $1.8 billion in 2026-27. It is impossible to tell what this spending is for. If the government were to reverse those decisions between now and the next budget update, we will never know.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
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The MYEFO Magic Pudding...
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The MYEFO Magic Pudding…

The Mid-Year Economic and Fiscal Outlook (MYEFO) update released on Wednesday estimates the Australian economy is expected to expand by a low 1.75% in 2023–24 before regaining momentum in 2024-25, when improved real incomes are expected to support a recovery in household consumption. It also notes inflation – although moderating – is still too high.

The outlook attributes that mainly to global oil prices and Treasury has not changed its forecast timetable for inflation’s return to the 2-3% target band, with 2.5% hit in mid 2025, so the Government is more optimistic than the RBA when it comes to expected progress on inflation. The RBA expects inflation to be at 3.0% by mid-2025.

Treasury’s analysis of the structural budget position suggests that the budget in 2023-24 is neutral with respect to inflation – it is neither adding nor reducing inflationary pressures.

Treasury continues to expect the economy will slow over the next few years to grow below trend with the unemployment rate drifting higher to 4.5% in 2025-26.

The migration intake has been a hot topic recently. As expected, the MYEFO forecasts upgrade the outlook for net overseas migration (NOM) in 2023-24 by 60k to 375k. We suspect that this will likely undershoot the eventual outcome. In 2024-25, forecasts for NOM have been marked down slightly to 250k, likely reflecting the expected impact of the Government’s recently announced migration strategy.

Gross debt is expected to peak at 35.4% of GDP in 2027-28, this is 0.2 percentage points lower than projected in the May Budget. While debt is expected to be lower, the expected cost of capital has also increased since the May Budget, reflecting the rise in government bond yields. Overall, these counteracting forces net out to a slight increase in interest payments as a share of GDP over the medium term.

Sadly, in a blow for budget transparency, there is still a line for decisions taken but not yet announced. We don’t know what decisions these are, but they are significant – the estimates start at $270 million in 2023-24 and rise to $1.8 billion in 2026-27. It is impossible to tell what this spending is for. If the government were to reverse those decisions between now and the next budget update, we will never know.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Australia’s Crazy Mixed-Up Future Means Less Home Ownership And Higher Taxes

The Australian government this week released the latest iteration of its Intergenerational Report, the sixth since the first was published in 2002. It is an intensely political document of nearly 300 pages.

Powerful forces will continue to shape Australia’s economy over the coming decades including population ageing, expanded use of digital and data technology, climate change and the net zero transformation, rising demand for care and support services, and increased geopolitical risk and fragmentation. These forces will influence the future path and structure of our economy and change how Australians live, work, and engage with the world.

The Australia of the 2060s will be very different from the one we know today. It will be older, with slower economic growth, a big “care” economy, and an export sector that is radically transformed due to the imperatives of climate change. But the finances will be under pressure, and migration will still be a critical element. Housing will continue to be a disaster.

Slower economic growth will place pressure on the tax base at a time of rising costs, creating a long-term fiscal challenge. Despite recent improvements in Australia’s fiscal position, debt-to-GDP remains high by historical standards. Long-term spending pressures are also rising across health, aged care, the National Disability Insurance Scheme (NDIS), defence and interest on government debt.

The economy will be about two and a half times as big, and real incomes are expected to be 50% higher by 2062-63. On the downside, economic growth will be slow – growing at an average pace of 2.2% over the coming four decades, from an average of 3.1% over the previous four decades.

Population will also increase more slowly than previously – by an average of just 1.1% annually. The report projects 40.5 million people in the early 2060s.

Migration is projected to fall as a share of the population. While the number of people 65 and over will double, Australia is still expected to have a younger population than most advanced countries.

Better policy decisions can still reshape the future, but the current mob are on the same ol same ol track, to the benefit of corporations and the well off but not for ordinary Australians who are trapped in this crazy policy vacuum.

Go to the Walk The World Universe at https://walktheworld.com.au/

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Small Lenders To Be Supported

The Treasurer has announced a second stimulus plan as Australia fights to contain the economic impact of the coronavirus.

Hours after the emergency rate cut by the Reserve Bank, the Prime Minister and Treasurer addressed Australia announcing a further $15 billion investment to enable smaller lenders to continue supporting Australian consumers and small businesses.  

This funding will complement the Reserve Bank of Australia’s (RBA’s) announcement of a $90 billion term funding facility for authorised deposit-taking institutions (ADIs) that is also expected to support lending to small and medium enterprises. 

The government’s latest action is aimed to enable customers of smaller lenders to continue to access affordable credit as the world deals with the significant challenges presented by the spread of coronavirus.

“Small lenders are critical to Australia’s lending markets, often driving innovation and providing competition for larger lenders,” said the Treasurer Josh Frydenberg.  

“Combined, these measures will support the continued ability of lenders to support their customers and in doing so the Australian economy,” the Treasurer added. 

The Treasurer confirmed that the Australian Office of Financial Management (AOFM) will be provided with an investment capacity of $15 billion to invest in wholesale funding markets used by small ADIs and non-ADI lenders.

The $15 billion capacity would allow the AOFM to support a substantial volume of expected issuance by these lenders over a 12 month period.

“Importantly the assets being purchased by the AOFM will not be limited to residential mortgage backed securities. 

“The AOFM will also be able to invest in a range of other asset backed securities and warehouse facilities. The Government will provide the AOFM with investment guidelines that will outline the basis on which the AOFM is to undertake these investments,” the Treasurer added. 

Enabling legislation will be introduced in the week commencing Monday, 23 March 2020.  The AOFM is expected to be able to begin investing by April.

Official Letter of Complaint against the Australian Treasury

5th November 2019

Dear Secretary Steven Kennedy,

I am today making an official complaint about the behaviour of the Australian Treasury relating to disclosures as a result of a Freedom of Information request (FOI 2580 – Document 1) relating to Economy Wide Cash Payment Limit (CPL). 

The basis of good Government is effective consultation and engagement with the public. The evidence suggests this has been actively avoided in this case to drive a specific agenda.

The Submission provided Minister Sukkar and the Treasurer Frydenberg with a briefing on the outcomes of the public consultation Treasury facilitated concerning the Currency (Restrictions of the Use of Cash) Bill 2019, the Currency (Restrictions on the Use of Cash – Excepted Transactions) Instrument 2019 and other associated documentation. The public consultation was conducted by Treasury from 26 July 2019 to 12 August 2019.

Specifically, in the advice, Treasury informed the Minister and the Treasurer that:

“Treasury has received over 3,500 submissions during the two-week public consultation period. Over 3,400 of these submissions are part of a campaign by the Citizens Electoral Council.”

This is a factually incorrect statement, in that I have evidence that many of the submissions, whilst they might echo some of the sentiments voiced by the CEC, were not directly or indirectly associated with the CEC or their campaign.

Indeed, Digital Finance Analytics, a boutique research and consulting firm made a direct submission, and we are also aware of a significant number of other individuals and firms who also made submissions. I have not financial or political alignment with the CEC.

But we all hold the firm view that the bill as presented eroded our civil liberties, did not provide factual justification for the $10,000 cash limit, and the connection with monetary policy and negative interest rates – as articulated for example by the Black Economy Taskforce itself as well as agencies such as the IMF – was not discussed in the explanatory memorandum.

This appears to be a blatant attempt to dilute the very strong community concerns about the propose bill, whilst displaying a strategy like that executed a couple of year ago when the revisions to APRA’s powers were nodded though in the Senate. In each case the CEC was used as an excuse to ignore very real community concerns.

So, I am seeking a formal apology for this error, confirmation of the true count of independent submissions and specifically that my own submission was NOT bucketed into the CEC campaign count.  When will the submissions be made public so I can confirm this?  Clearly your advice would also need to be updated.

It is no wonder that public trust in Government is at an all time low.

I will be making the same point as part of my submission to the current Senate Inquiry.

Martin L North, Principal Digital Finance Analytics

The Treasury Sees An Economic Silver Lining

Dr Steven Kennedy, Secretary to the Treasury appeared before Senate Estimates today.

Global economic conditions

Over the past year global growth has slowed. Several major economies, notably Germany and the United Kingdom, as well as close trading partners in our region such as Korea and Singapore, have recently experienced negative quarters of growth. There has been little growth in global trade volumes this year, and manufacturing activity in a number of economies has weakened noticeably. 

As a result, the IMF and the OECD have recently revised down their outlook for global growth over the next couple of years. Forecasts for global growth in 2019 are for the slowest rate of growth since the Global Financial Crisis. That said the forecasts for global growth in 2020 is for a pick up to the region of 3.0 to 3.4 per cent which is still reasonable.

At play have been a number of factors, chief among them the ongoing, and still evolving, trade tensions between the United States and China. There is no doubt that trade tensions are having real effects on the global economy, which you see in trade data from the US and China. The IMF estimates that trade tensions could reduce world GDP by about 0.8 per cent by 2020.

But trade tensions are not the only story. There are a number of other factors, including Brexit, financial stability concerns in some economies, the ongoing turmoil in Hong Kong, and geopolitical and economic difficulties in a number of emerging market economies.

Combined, these factors are leading to an increased level of uncertainty around the outlook for the global economy.

Concerns around global trade have been further compounded by a downturn in the global electronics cycle – which has led to particularly poor trade outcomes in the East Asia region – as well as a downturn in automotive production.

Central banks and governments across the world have responded to slowing global growth to support their economies. A large number of central banks, including our own, have loosened monetary policy this year. And some countries, including South Korea and Thailand, have also provided more supportive fiscal policy.

Domestic economic conditions

Here in Australia growth slowed in the second half of 2018 before growing more strongly in the first half of 2019. The June quarter National Accounts showed real GDP grew by 1.4 per cent through the year to the June quarter, and in year-average terms the economy grew by 1.9 per cent in 2018-19.

A number of factors, which are temporary, have contributed to recent weakness in the economy.

Household consumption, the largest component of the economy, grew by 1.4 per cent through the year to the June quarter. A couple of factors are contributing to slower consumption growth. Household income growth has been modest, with strong growth in employment outcomes partly offset by weak wage and non-wage income growth.

In more recent years, the decline in housing prices has also played a role.

This can directly affect spending via reducing confidence and increasing borrowing constraints.

The recent downturn in the housing market has had other, more direct, impacts on the Australian economy.

Dwelling investment has fallen, as expected, by around 9 per cent over the past three quarters and continued weakness in residential building approvals suggests that dwelling investment is likely to continue to fall through 2019-20.  

Low rates of housing market turnover have led to significant falls in ownership transfer costs, which is a small component of GDP associated with the transfer of assets. Ownership transfer costs detracted 0.3 percentage points from total economic growth in the year to June 2019.

Turning to business investment, in 2018-19 mining investment fell by almost 12 per cent, detracting around 0.4 percentage points from real GDP growth over the year. Most of this fall reflects the completion of a number of large LNG projects that had been holding up activity.

Non-mining business investment was weaker than expected in 2018‑19. This is consistent with an easing in business conditions and confidence.

Despite the recent weakness in household consumption and investment, there are reasons to be optimistic about the outlook.  

Recent data have shown early signs of recovery in the established housing market. Combined capital city housing prices have risen for the past three months for which we have data. Housing market turnover and auction clearance rates have also picked up. 

In addition, the recently legislated personal income tax cuts and declines in interest rates are providing support to disposable household incomes. We expect this to flow through to increased consumption.

Although we have some indicators of consumption available for the September quarter, which have not shown a particularly large improvement, these are only partial. And it is difficult to know what these indicators would have been had the tax cuts not been implemented.

We will continue to assess the data on consumption as it becomes available, but it is worth noting that even if households initially use the tax cuts to pay down debt faster, this will still bring forward the point at which households could increase their spending. 

The substantial investment in mining production capacity continues to boost exports and there remains significant demand for our education and tourism services. In addition, the prospect for mining investment is positive. We expect mining investment to grow this year for the first time since the peak of the mining construction boom.  

Public sector spending has made a substantial contribution to economic growth in recent times, contributing 1 per cent to real GDP growth in 2018-19 and an average of 1.1 percentage points per year over the past four years. This compares with an average contribution of 0.8 percentage points over the past 20 years.

Unfortunately, dry weather conditions have generally persisted in drought-affected areas. The drought conditions being experienced across large parts of Australia have weighed on domestic activity, with farm output directly detracting around 0.2 percentage points from real GDP growth in 2018‑19, consistent with the PEFO forecast.

As a result, the latest forecasts from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) predicted that the farm sector will continue to experience weakness, with the gross value of farm production expected to fall by nearly 5 per cent in 2019‑20.

Despite modest economic growth overall, labour market outcomes have been very positive. Employment growth has continued to be strong, increasing by more than 300,000 over the past year. 

While we have seen strong growth in employment, the unemployment rate has been broadly flat. This is because near-record rates of people are being drawn into employment and the labour force. 

We have seen a step up in participation in particular parts of our labour market — for those in older age cohorts and for women returning to the labour market after having children. 

While strong employment growth is very welcome, it does give rise to an issue that is not unique to Australia, that of recent low productivity growth.

Labour productivity growth in Australia has slowed from an average rate of 1.5 per cent annually over the past 30 years to just 0.7 per cent annually over the past 5 years. Noting this rate is higher than all the G7 countries.

There is no single explanation for the slower rate of productivity growth, and we are unsure of how much of the current slowing is cyclical and how much is structural. This is an area of ongoing analysis and research in Treasury and elsewhere.

We do know that business investment is important to supporting productivity growth, with capital deepening – that is having more capital available for each worker — accounting for around ⅔ of labour productivity over the past 30 years in Australia. 

Given historically low interest rates around the world it is somewhat of a puzzle that business investment has not grown faster. Partly this could reflect that the rates of return businesses use when looking at the viability of new opportunities, so called ‘hurdle rates’, have remained high despite lower interest rates. The current uncertainties surrounding the global economy and significant technological advancements may be contributing to this.  

Structural factors may also be at play — it is not clear what business investment looks like in a world where more than two-thirds of our economy is now services based.

Another issue in the Australian context is also one shared globally. In Australia, as elsewhere, inflation rates have remained subdued. In part this is related to slower wage growth, which has been slower than forecasters around the world expected. And while no‑one has come up with a complete explanation, there are a range of explanations that go some way to shedding light on the phenomenon.

One factor that may be affecting the relationship between unemployment and wage growth in Australia is that the traditional relationship between spare capacity in the labour market and the unemployment rate may be changing. One tangible way we can see this is that the rate of underemployment, which typically moves with the unemployment rate, has not declined to the same extent as the unemployment rate in this cycle as it has in the past.

A number of other long‑running changes in the labour market may also be affecting the relationship between unemployment and wage growth. An increasing concentration of economic activity in services industries, the effects of demographic and technological change and globalisation may also have played a role. Ultimately, it is difficult to draw firm conclusions on the effect of these structural factors on wage growth, given these factors have been occurring over a long timeframe and yet slow wage growth globally is a more recent phenomenon.

With these uncertainties in mind, the pace of the pick-up in wage growth, and its relationship to the labour market, is likely to continue to be different than in previous economic cycles.

Fiscal outlook

Turning now to the fiscal outlook, last month the Government released the 2018‑19 Final Budget Outcome. This showed the Budget was broadly balanced, with an underlying cash deficit of $690 million. This was an improvement of $13.8 billion compared with the estimate at the time of the 2018‑19 Budget.

In light of discussions at the IMF Annual Meetings, which I attended last week, on fiscal stance and its impact on growth, I thought it may be useful to make a couple of remarks about the interaction of medium-term fiscal frameworks, discretionary fiscal actions, and structural reforms.

Medium-term fiscal frameworks are designed to deliver sustainable patterns of taxation and government spending. As is the case in Australia, they usually also look to minimise the need for taxation. 

Medium-term fiscal frameworks reflect an assessment that apparent short term economic weakness or unsustainably strong growth are best responded to by monetary policy. Within a medium-term fiscal framework, automatic fiscal movements will still assist in stabilising the economy. For example, revenues will weaken and payments strengthen when an economy experiences weakness – these automatic movements are called automatic stabilisers. Allowing these automatic stabilisers to work is entirely consistent with a medium-term fiscal objective.

In an open economy such as Australia’s, a medium-term fiscal framework in concert with a medium-term monetary policy objective has long been held to be the most effective way to manage the economy through cycles.

In periods of crisis, there is a case for further temporary fiscal actions. It is important to consider separately broader policy objectives and temporary responses to crisis, as confusing these objectives can lead to unintended consequences. The circumstances or crisis that would warrant temporary fiscal responses are uncommon.

The case for structural reform is ever present. Improvements in employment and wages, and in the profitability of businesses are the most obvious and important drivers of this case. The most important long term contribution to wage growth is labour productivity.  

The presence of weak global and domestic growth, low interest rates, and heightened global trade and geopolitical tensions, has elicited a discussion of fiscal responses and structural reform and an interweaving of the two issues.

For example, calls for additional infrastructure expenditure as part of supply side or structural reform and to assist in stimulating the economy sound straight forward but in practice are difficult to achieve. The timing requirements of fiscal stimulus are hard to give effect to while ensuring large projects are well planned and executed, and cost and capacity pressures are managed. There are some opportunities though, usually related to smaller projects and maintenance expenditure. The Commonwealth and State Governments are currently actively exploring these opportunities.

In developing policy we need to be mindful of the particular circumstances present in the economy. A feature of the current weakness in the global and domestic economy is heightened uncertainty among consumers and businesses. 

Given this uncertainty, medium-term fiscal and monetary policy frameworks can play an important role in contributing to a stable and predictable environment that is supportive of growth. 

Organisational priorities

Before finishing up and moving onto questions, I would like to briefly take the opportunity to highlight to the Committee some of the current organisational priorities for Treasury. 

The Council on Federal Financial Relations recently agreed a program of work to boost Australia’s productivity in the areas of transport, health, skills and environmental regulation. Treasurers also agreed to continue work on the areas identified by the Productivity Commission in its Shifting the Dial report. This work will complement existing Australian Government initiatives to boost productivity through public infrastructure investment and reforms to vocational education, health, and regulation.

An important part of the Government’s regulatory reform and productivity agenda is the Deregulation Taskforce. The role of the taskforce is to identify and remove unnecessary regulatory barriers to investment, job creation and economic growth. Initial areas of focus announced in September include: reducing the regulatory burden for food manufacturers who want to export; getting major infrastructure projects up and running sooner; and making it easier for sole traders and micro businesses to employ their first person.

Just as one example of why this is important, the taskforce has found that food manufacturers currently have to deal with approximately 200 pieces of legislation administered by 30 different agencies governing the movement of goods in and out of Australia, as well as multiple audit requirements, duplicated certification and a lack of recognition of prior compliance.

Within Macroeconomic Group, a new Centre for Population was established on 1 July 2019 and formally launched by the Minister for Population, Cities and Urban Infrastructure on the 4th of October 2019. The aim of the new Centre is to provide a central, consistent and expert perspective on population issues, which will help all levels of government understand population changes right across Australia, and how to plan for those changes into the future. The Centre will release an annual National Population Statement, the first of which will be released in 2020.

In Markets Group, the Financial Services Reform Taskforce Division is working closely with our law design and retirement income teams as well as with ASIC, APRA, the Office of Parliamentary Counsel and other key stakeholders to implement the recommendations of the Royal Commission into financial services. Implementing these recommendations will dominate Treasury’s legislative program to at least next year.

As recommended by the Productivity Commission, the Government announced in late September a review of the retirement income system. The review, which will cover the current state of the system and how it will perform in the future as Australians live longer and the population ages, will be conducted by an independent three‑person panel. This panel will be chaired by Mr Michael Callaghan and includes Ms Carolyn Kay and Dr Deborah Ralston as panel members, with Treasury providing secretariat support to the panel from within Fiscal Group. A consultation paper is scheduled for release in November this year, ahead of a final report to Government by June 2020. 

These major pieces of work take place alongside Treasury’s ongoing priorities, which in coming months will include preparing the 2019-20 MYEFO that will include an update of the economic and fiscal outlook.