US TO STEP UP BASE VISITS; INFLATION DIPS
US to step up military exercises in northern Australia
A meeting of US and Australian foreign and defence ministers has reaffirmed their commitment to strengthen force posture co-operation across land, maritime, and air domains, with a special focus on northern Australia. The AUSMIN meeting in Brisbane affirmed the intention to progress upgrades at key Australian bases, including air force bases at Darwin and Tindal, supported by site surveys to scope additional upgrades at two new locations, Curtin (WA) and Scherger (Queensland). A joint statement issued by Foreign Minister Penny Wong announced the intent to rotate US Navy Maritime Patrol and Reconnaissance Aircraft in Australia, with an intention of inviting “likeminded partners” to participate in the future. Through enhanced maritime co-operation, the US would also step up naval visits to Western Australia, as well as enable a regular rotation of US Army Watercraft in Australia, starting with the current Exercise Talisman Sabre.
Domestic guided weapons manufacturing on course for 2025
Defence Minister Richard Marles is confident that Australia will start manufacturing missiles by 2025, as it lifts the level of co-operation with the United States on a collective industrial base. Mr Marles said the recently-concluded AUSMIN talks with the US had taken a major step in establishing a Guided Weapons and Explosive Ordnance Enterprise in Australia; US Defense Secretary Lloyd Austin III said the US had committed to help Australia produce Guided Multiple Launch Rocket Systems by 2025. In addition, Mr Austin said the US was “racing” to accelerate Australia’s access to priority munitions through a streamlined acquisition process. The US has also committed to expand its co-operation with Australia in space, which Mr Marles said would form a key part of military and defence co-operation.
Inflation eases but still well above target range
Inflation has eased slightly in Australia, with the Consumer Price Index recording quarterly inflation of 0.8 per cent, or annual inflation of six per cent, in the June quarter. The Australian Bureau of Statistics reported that price rises abated from the seven per cent annual inflation for the 12 months to the March quarter, with a slight reduction in costs for automotive fuel and some foods. Higher rental costs, more expensive international travel and the cost of new dwellings contributed to the latest CPI rise. Services inflation was 6.3 per cent for the year, the highest since 2001. Inflation rates varied widely across Australia, with Adelaide recording the highest annual rise of 6.9 per cent and Perth, the lowest, at 4.9 per cent. CPI-measured inflation was last within the Reserve Bank of Australia’s target range of 2-3 per cent in September 2021.
Export prices dip as global energy demand falls
Meanwhile, lower international energy costs are feeding into declining prices of Australia’s key exports, according to latest figures. Export prices fell 8.5 per cent in the June quarter and 11.2 per cent through the year, with ABS figures attributing the fall to lower demand and lower prices for commodities such as coal, gas and metalliferous ores. Import prices, however, fell by just 0.8 per cent in the June quarter and 0.3 per cent through the 2022-23 year, highlighted by a rising cost of specialised machinery and a depreciating Australian dollar; it was also offset by a 27 per cent annual fall in petroleum and petroleum product prices.
No New Zealand role in AUKUS
Australian and New Zealand Prime Ministers have poured cold water on suggestions that NZ would join the AUKUS defence partnership. In a Wellington joint press conference, NZ Prime Minister Chris Hipkins said his country had a different position on nuclear propulsion, through New Zealand’s nuclear-free arrangements. Anthony Albanese said there were no plans to extend the AUKUS arrangements, and NZ as a sovereign nation could determine its own defence policy. But the Australian PM noted that the two countries already had a defence relationship through the Five Eyes nations, with the US, the UK and Canada. In addition, Mr Albanese said there would be co-operation in areas such as access to technology, and its complementarity and interoperability. Defence forces of the two nations also provided mutual assistance during national disasters.
Bowen seeks Japanese investment in renewable energy
Climate Change and Energy Minister Chris Bowen has courted Japanese investment in Australian renewable energy, including the hydrogen sector, in a trip to Japan. In a speech at the Australian Embassy, the Minister said Japan’s clean energy consumption goals dovetailed Australia’s production ambitions. Mr Bowen said Japanese investment in gas helped create the sector for Australia as a source of energy security for Japan. He told Japanese business that hydrogen supply chains were an obvious area for increased co-operation, given that Japan had a “hydrogen-based society” commitment. Mr Bowen said Australia had a $300 billion pipeline of proposed hydrogen projects – the biggest pipeline in the world – with Japanese interests in several projects.