Government & Security Risk - Australia faces ongoing economic and national security risks
13 February 2023
In its 2022-23 Budget, the Albanese Government outlined the challenges set to face Australia—a global economic slowdown, evolving security threats, high inflation, rising interest rates, widespread skills shortages, significant debt, and more frequent natural disasters. At the time, the Treasurer noted the global economy is at a tipping point, with challenging budgets and days ahead for Australia. A recession will impact national revenue but may well be offset by a return to a more positive international relationship with China.
Implementation and review of programs and initiatives
As the Albanese Government enters 2023, in addition to fiscal responsibility, the implementation of strategic initiatives and review of historic programs will be high on the agenda of government departments.
Defence, health and aged care continue to be areas of focus. New aid programs, particularly providing support to the Pacific are being prioritised to improve Australia’s partnerships with Pacific countries. Climate change remains a huge policy and economic challenge, with programs and initiatives to support achievement of reducing emissions by 43% by 2030 and net zero by 2050. The federal government is planning to spend $20bn to ensure the electricity grid is ready for a renewable future, through low-cost financing for new transmission projects.
Program areas under review include Australia’s infrastructure spend pipeline, with $6.5bn in existing projects being re-profiled, and the National Disability Insurance Scheme, with an independent review focusing on the design, operations and sustainability of the Scheme.
Australia’s security environment will continue to be complex and challenging in 2023. Home Affairs and Cybersecurity Minister Clare O’Neil recently warned that Australia faces a raft of national security challenges and emphasised the significant domestic security implications of the “biggest shift in the global world order since the Second World War”. We note that 2022 was the first time the Australian Security Intelligence Organisation reported espionage and foreign interference, not terrorism, as the most significant domestic security issue.
Such significant changes in the operating environment may require boards and executives to review their security and resilience settings in relation to supply chains, trusted insiders, state-backed cyber actors, coercion, sabotage and foreign interference.