Australia plans large protection and safety investments – KIRO 7 Information Seattle

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CANBERRA, Australia – (AP) – The Australian government on Tuesday released an economic plan for the next fiscal year that includes significant investments in defense and national security as relations with China deteriorate.

The government plans to spend A $ 270 billion (US $ 212 billion) over the next decade on upgrading defense capabilities to “promote an open and peaceful Indo-Pacific,” Treasury Department documents said.

This includes AU $ 747 million (US $ 585 million) for the modernization of four military training areas in the Northern Territory where US Marines have a temporary base.

The government announced in March that it would begin building its own guided missiles in close cooperation with the United States. The AU $ 1 billion (US $ 784 million) project would produce the first Australian-made rockets since the 1960s.

The government also plans to spend AU $ 1.3 billion (US $ 1.02 billion) over a decade to improve the ability of Australia’s Security Intelligence Organization, the country’s premier spy agency, to address national security threats.

“We. . . We need to be prepared for a world that is less stable and less controversial, ”Treasurer Josh Frydenberg told Parliament when he outlined his economic plan for the fiscal year beginning July 1st.

The government also has additional spending of AU $ 17.7 billion (US $ 13.9 billion) on elderly care over five years and investments of AU $ 15.2 billion (US $ 11.9 billion) . USD) in the infrastructure over a period of ten years.

Australia would lend AU $ 1.5 billion (US $ 1.2 billion) to Indonesia to help cope with coronavirus-related financial pressures, Papua New Guinea would lend AU $ 558 million (US $ 437 million) to support its pandemic response and India to provide AU $ 37 million (USD 29 million) for medical care. The spending measures must be approved by Parliament.

Last year’s pandemic derailed the political calendar that sets the budget as an annual event in May. The 2020-21 budget was postponed until October. A deficit of AU $ 214 billion (USD 168 billion) is forecast for the current fiscal year.

That deficit is now projected to be AU $ 161 billion (US $ 126 billion). The government expects the deficit to decrease further over the next four years.

Net debt is projected to peak at AU $ 980.6 billion ($ 768.4 billion), or 40.9% of GDP, in June 2025.

With Prime Minister Scott Morrison scheduling an election within ten months, his Conservative coalition has said that paying off debt will not be a priority for the next fiscal year.

The government has announced that it will not focus on deleveraging until the unemployment rate is below 5%. The unemployment rate was 5.6% in March and is projected to decrease to 5% in 2021-22 and to 4.75% the following year.

Australian economic growth would increase from 1.25% in the current financial year to 4.25% in the period 2021-22, according to forecasts by the Treasury.

As relations with China deteriorated, Beijing has blocked Australian exports such as beef, wine, coal, lobster, timber and barley. But Australia’s most lucrative export, iron ore, still has avid buyers among Chinese steelmakers.

Iron ore prices spiked last week as steel mills rushed to halt supplies fearing further trade restrictions after China halted activities related to the China-Australia strategic economic dialogue. On Tuesday, it hit a new record price of $ 228 per tonne ($ 251 per US tonne).

Tuesday’s budget assumes the price of iron ore will fall to $ 55 per ton ($ 60.50 per US ton) by the end of March next year.

Frydenberg described the Ministry of Finance’s ore price forecast as “conservative”.

If the price stayed above $ 150, the state coffers would increase by more than AU $ 12 billion ($ 9.4 billion), he said.

“Today we are very grateful to Western Australia and the iron ore industry for seeing record prices,” said Fydenberg, referring to the state where iron ore is mined.

China’s trade restrictions had limited impact on Australia’s economic recovery from the pandemic as many exports were diverted to other markets, the financial documents said.

The budget projections assume that international travel will remain low through mid-2022 and that COVID-19 vaccines will be widespread in Australia by the end of 2021.

Australia has been relatively successful in containing the spread of the coronavirus but has been slow to vaccinate.

Vaccinations began in February with a plan to deliver 4 million doses of Pfizer and AstraZeneca to a population of 26 million people by the end of March. Only 2.66 million doses had been injected as of Monday.

Morrison is expected to wait for many more people to be vaccinated before calling the election and seeking a fourth three-year term for his administration.