Floods occupy governments as Covid continues to spread

The federal and New South Wales governments are once again responding to major flooding in the state, with the federal government offering more financial assistance and Australian Defence Force resources. As well as being a drain on the budget, and its associated impact on spending, the crisis is yet another distraction for the newly elected government, drawing its attention from other areas.

The Australian Technical Advisory Group on Immunisation (ATAGI) has recommended a fourth Covid-19 vaccine dose for Australians aged 50 or over. Health Minister Mark Butler says people aged 30 and above will also be able to receive a fourth dose, meaning an additional 7.4 million Australians would be able to receive a fourth dose.

The Reserve Bank of Australia has again increased interest rates, in an effort to rein in inflation. However, it has sparked concerns from economists about the prospects of a recession. Not only would this have implications for government spending, but any economic contraction would “shrink the pie” available for defence expenditure.

Foreign Minister Penny Wong has met her Chinese counterpart, indicating a slight move towards a normalising of relations between Canberra and Beijing. It followed Defence Minister Richard Marles meeting his counterpart, and came after years of Chinese officials refusing to meet Australian ministers. Elsewhere, New Zealand Prime Minister Jacinda Ardern used a speech in Sydney to call for a more nuanced approach to China. This indicates both governments are open to more engagement with Beijing, with the Australian government likely to take a less confrontational approach.

For more on these developments, see this week’s CMAX Advisory Australian Weekly Report.