DEFENCE TALKS IN US, JAPAN; INDUSTRY FUND
Defence talks with US, Japan
Defence Minister Richard Marles and Foreign Affairs Minister Penny Wong are due to hold major talks this week with their United States and Japanese counterparts on defence and security co-operation. Mr Marles said he and Senator Wong would meet with US Secretary of State Antony Blinken and Defense Secretary Lloyd J Austin III on December 6, and with Japanese Foreign Minister Hayashi Yoshimasa and Defence Minister Hamada Yasukazu on December 9. In the US, the two ministers have signalled talks on greater integration of technology and industrial bases within the alliance; in Japan, they will progress the renewed Joint Declaration on Security Cooperation signed between the two countries in October. While in the US, Mr Marles planned to participate in the first trilateral in-person AUKUS defence ministers’ meeting since the partnership was announced in 2021.
$15 billion fund to assist industry priority areas
Legislation has been introduced into Federal Parliament to establish the $15 billion National Reconstruction Fund to assist industry in priority areas. Industry and Science Minister Ed Husic said the fund would target the sectors of: renewables and low-emission technologies; medical science; transport; value-adding in agriculture, forestry and fisheries, and in resources; defence capability; and enabling capabilities. The fund is based on the Clean Energy Finance Corporation and will be able to invest through a range of financing, including loans, equity and guarantees. In the meantime, the Federal Government has started public consultation to further define the seven priority areas for investment and how the fund would make investment decisions.
O’Neil backs Quad co-operation on technology security
Home Affairs Minister Clare O’Neil has warned that the growth of Australia’s capabilities in quantum technology and artificial intelligence may potentially increase the risks to national security. In a speech to the Quad Technology and Business Investment Forum, the Minister foreshadowed stronger co-operation on technology with Quad partners the US, Japan and India. She said that governments needed to do more work with industry to ensure that technology - and the sensitive data that enabled it - was not misused by ‘malign actors’ that sought to inflict harm. Ms O’Neil supported a ‘secure-by-design’ approach to emerging technology. This could avoid the scenario seen in other advanced tech of the 20th and 21st centuries, such as computing, where safety and security was not prioritised early enough. As a result, she said, hostile state actors and criminal organisations had taken advantage of loose governance and poor security controls.
AAA rating confirmed, but slower growth tipped
Federal Treasurer Jim Chalmers has welcomed the reaffirmation of Australia’s AAA credit rating by international agency Fitch Ratings, following the October Budget. Dr Chalmers said the agency had confirmed that the Budget did not add to cost pressures in the economy. Fitch Ratings, however, forecast that Australia’s economic growth (GDP) would decline from 3.9 per cent this calendar year to 1.5 per cent in 2023, with consumption likely to slow. It also warned on the potential impact of an acute economic slowdown in China, and noted the pressures on the budget deficit posed by spending on the National Disability Insurance Scheme.
Annual inflation rate eases in October
Meanwhile, latest figures from the Australian Bureau of Statistics have offered a glimmer of hope that the nation’s level of annual inflation may be peaking. ABS figures indicate that in October, the annual consumer price index rose 6.9 per cent, down from the annual figure of 7.3 per cent recorded in September. A fall in fruit and vegetable prices contributed to the annual CPI fall, but it was offset by double-digit rises in housing costs and automotive fuel (through the reapplication of the full fuel excise charge).
Private capital investment falls in Australia
Private capital expenditure in Australia fell 0.6 per cent, seasonally adjusted, in the September quarter, driven by a 1.6 per cent drop in investment in equipment, plant and machinery. The Australian Bureau of Statistics says that new private capital expenditure in the quarter dropped to just under $34 billion, after flat-lining for most of the year. The latest private capital expenditure figures remain well below the peak of the June quarter in 2012, when quarterly private capital investment topped at more than $49 billion.