BIDEN IN FRESH AUKUS PUSH; PRICE REBOUND
Biden confident on AUKUS backing
President Joe Biden is confident that US Congress will approve the AUKUS defence partnership, declaring the deal was overwhelmingly in the interest of the US. In a White House media conference with visiting Australian Prime Minister Anthony Albanese, the President said he had requested US$3.4 billion (A$5.3 billion) in supplemental funds to boost submarine production and maintenance to meet US needs and support AUKUS. Mr Biden noted that Democrats and Republicans had welcomed AUKUS at its initial announcement in 2021. During his Washington visit, Mr Albanese personally presented the AUKUS case to key members of the US Senate and Congress, later saying the defence partnership would enable “seamless co-operation” between the two nations in defence science, technology and industry.
Albanese ramps up critical minerals drive in US
In Washington, Prime Minister Anthony Albanese also escalated the Federal Government’s co-operation on critical mineral supply with the United States, doubling to $4 billion the investment in its Critical Minerals Facility. The PM said Australia, as the world’s largest supplier of lithium, was well positioned to respond to US energy transition needs under the US Inflation Reduction Act. US Commerce Secretary Gina Raimondo said that with supply chains, the US had allowed itself to become vulnerable by being overly dependent on one or two countries or companies around the world. Ms Raimondo said China had a head start in technology and sustained investment over a long period, particularly in midstream processing and refining to dominate the market for critical minerals. She said China had shown a willingness to employ export restrictions on critical minerals as a retaliatory measure.
Australia not a ‘go-between’ on US-China links, says PM
Ahead of his November 4 visit to China, Prime Minister Albanese said Australia was a ‘middle power’ that did not act as a go-between China and the United States. The PM said Australia was a sovereign country that had a major economic relationship with China, which accounted for one in four of Australia’s export dollars. The US, however, was Australia’s largest two-way investment partner. Mr Albanese said Australia disagreed with China on the basis of political systems, on issues such as human rights, and on access to the South China Sea, the East China Sea and the Taiwan Straits.
Inflation rate rises in September quarter
Quarterly inflation has risen to 1.2 per cent in Australia, fuelled by higher rental prices, the cost of automotive fuel (up 7.2 per cent) and a jump in utilities prices. Consumer Price Index data released by the Australian Bureau of Statistics showed that annual inflation was 5.4 per cent, while the 1.2 per cent CPI rise for the September quarter was up from the 0.8 per cent increase recorded in the June quarter. For the full 12 months, prices of utilities (electricity, gas and water) rose 12.6 per cent, rents 7.6 per cent and insurance and financial services, 8.6 per cent. Across the capital cities, annual inflation ranged from 4.1 per cent in Hobart to Adelaide 5.9 per cent. The ABS also reported that Australian export prices fell 3.1 per cent in the September quarter and 10.7 per cent through the year, while import prices rose 0.8 per cent in the quarter and fell 2.4 per cent over the year.
Broaden base, lift rate of GST, says OECD
Meanwhile, the Organisation for Economic Co-operation and Development has called on Australia to consider broadening the base and increasing the rate of the goods and services tax in a bid to rebuild the nation’s fiscal buffers. In its economic survey released last week, the OECD said Australia should narrow future budget deficits and reduce public debt. It also said Australia should maintain a restrictive stance of monetary policy until inflation was clearly on track to meet the Reserve Bank’s (2-3 per cent) target. The OECD recommended that Australia use windfall government revenues to reduce public debt, and called on the Federal Government to slow the growth in National Disability Insurance Scheme costs, as well increase the focus on preventative health care. The international body also suggested that Australia should further reduce the level of tax concessions on private pensions (superannuation).
European free trade deal off the table
Trade and Tourism Minister Don Farrell is preparing to walk away from an Australia-European Union free trade deal, in the face of a stalemate on agricultural access. In a media interview, Senator Farrell cited French resistance to a proposed deal, saying the current offer on the table was not good enough for Australia. He said Australia had been able to sign free trade agreements with India and the UK, but a European trade deal would be the “big one”, given the access to an economy of 450 million people and worth almost A$24 trillion.