Canberra, Australia (AP) —The Australian Government announced on Tuesday a large economic plan for next year, including a large investment in defense and national security as relations with China deteriorate.
The Treasury documents say the government plans to spend A $ 270 billion ($ 212 billion) over the next decade to upgrade its defense capabilities to “promote an open and peaceful Indo-Pacific.”
This includes A $ 747 million ($ 585 million) to upgrade the four military training areas of the Northern Territory, where the US Marine Corps has temporary bases.
The government announced in March that it would work closely with the United States to begin manufacturing its own guided missiles. The A $ 1 billion ($ 784 million) project will produce the first Australian missiles since the 1960s.
The government will also spend A $ 1.3 billion ($ 1.02 billion) over a decade to strengthen the capacity of Australia’s Australian Security Intelligence Organization, Australia’s leading espionage agency, to address national security threats. It’s a schedule.
“We … Treasury Secretary Josh Frydenberg outlined the economic blueprint for the fiscal year beginning July 1 and told Congress.
The government is also proposing additional spending of A $ 17.7 billion ($ 13.9 billion) on elderly care over a five-year period and A $ 15.2 billion ($ 11.9 billion) of infrastructure investment over a decade.
Australia lends A $ 1.5 billion ($ 1.2 billion) to Indonesia to manage coronavirus-related financial pressure and A $ 558 million ($ 437 million) to Papua New Guinea for pandemic response To provide A $ 37 million ($ 29 million) in medicine to India. Expenditure measures require parliamentary approval.
Last year’s pandemic upset the political calendar, which sets a budget for May’s annual event. The budget for 2020-21 has been postponed until October. It expects a deficit of A $ 214 billion ($ 168 billion) this year.
The deficit is currently projected to be A $ 161 billion ($ 126 billion). The government expects the deficit to continue to decline over the next four years.
Net debt is projected to peak in June 2025 at A $ 980.6 billion ($ 768.4 billion), or 40.9% of GDP.
Debt repayment next year is not a priority, as Prime Minister Scott Morrison plans to hold elections within 10 months, his conservative coalition said.
The government says it will not focus on debt reduction until the unemployment rate falls below 5%. The unemployment rate in March was 5.6%, but is projected to drop to 5% from 2021 to 2010 and 4.75% the following year.
The Treasury forecasts that Australia’s economic growth will jump from 1.25% this year to 4.25% in 2021-22.
Beijing blocked Australia’s exports of beef, wine, coal, red shrimp, timber and barley as relations with China deteriorated. However, Australia’s most profitable export, iron ore, still has enthusiastic buyers among Chinese steelmakers.
Iron ore prices soared last week as steel mills rushed to lock supply after China stopped activities related to China’s strategic economic dialogue with Australia, fearing further trade restrictions. On Tuesday, it reached a new record price of $ 228 per metric ton ($ 251 per US $ 1).
Tuesday’s budget expects iron ore prices to drop to $ 55 per ton ($ 60.50 per ton) by the end of March next year.
Frydenberg described the Treasury’s ore price forecast as “conservative.”
If prices remain above $ 150, more than A $ 12 billion ($ 9.4 billion) will be added to the government’s financial resources, he said.
“Today we are looking at record prices, so we are very grateful to Western Australia and the iron ore industry,” Feidenberg said, referring to the states where iron ore is mined. I did.
China’s trade restrictions had only limited impact on Australia’s economic recovery from the pandemic, as many exports were redirected to other markets, according to Treasury documents.
Budget forecasts assume that overseas travel will remain low until mid-2022 and that the COVID-19 vaccine will be widely available in Australia by the end of 2021.
Australia has been relatively successful in controlling the spread of the coronavirus, but vaccination has been delayed.
Inoculation began in February, with plans to administer 4 million doses of Pfizer and AstraZeneca to a population of 26 million by the end of March. By Monday, only 2.66 million injections had been given.
Morrison is expected to wait for more people to be vaccinated before calling for elections, calling for his government’s fourth three-year term.