Plunging commodity prices are weighing heavily on Australia’s government revenue, Australian Treasurer Joe Hockey said yesterday, but added that a mid-year budget update this week would serve as a “shock absorber” for the resources-driven economy.
Australia is struggling to transition away from mining-led growth amid an expected fall-off in resources investment following an unprecedented boom. Weakening demand from the country’s largest trading partner China is also weighing on growth.
Meanwhile, sharp declines in commodity prices have had a huge impact on government revenue in a country where iron ore is the country’s largest export.
“We budgeted US$92 a tonne [for iron ore prices]. It’s currently US$63 and we are forecasting that it will remain around US$60 a tonne for the foreseeable future,” Hockey told reporters. “That more than 30 percent fall in iron ore prices has had a big impact on the budget, as has a 15 percent fall in thermal coal and a 20 percent fall in wheat prices since the [May] budget... As a result, the forecast decline in the terms of trade this year is the largest since records were first kept in 1959.”
Hockey is today expected to unveil a further blowout in the government’s federal deficit in his mid-year economic and fiscal outlook, with some estimates of a A$5 billion (US$4.1 billion) increase to A$35 billion.
Hockey said the budget would be used as a “shock absorber for the biggest fall in our export prices in many years,” implying that deep cuts to reduce the deficit are not likely.
“If we don’t use the budget as a shock absorber for this extraordinary fall in the terms of trade, then Australians will lose jobs and we will lose our prosperity,” he said.
Some measures designed to narrow the deficit remain stalled in the upper house of the Australian Senate due to disquiet about spending cutbacks by the conservative government, which was elected to power last year. Revenue-generating measures such as carbon and mining taxes have also been scrapped following election promises by the government.
However, Australian Finance Minister Mathias Cormann is expected to announce at today’s budget update the cut of 175 government agencies to save more than half a billion dollars in spending over the next four years, local media reported.
Despite the challenges, Hockey said Australia’s economic growth remained on track even as the unemployment rate — which is currently at a 12-year high of 6.3 percent — is forecast to edge up further.
“As my budget statement will say tomorrow, we expect growth to remain around 2.5 percent but strengthen to 3 percent over the next few years,” he said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained