US THUMBS-UP FOR AUKUS; TARIFF SALVO

Trump administration backs AUKUS

New US Defense Secretary Pete Hegseth has affirmed the support of the Trump Administration for the AUKUS defence partnership, during talks in Washington DC with his Australian counterpart Richard Marles. Secretary Hegseth told a joint media briefing that President Trump was “very aware” of the tri-nation AUKUS partnership and recognised the importance of the defence industrial base. He said the partnership enhanced US ability in the subterranean space, in a mission in the Indo-Pacific that America could not undertake by itself. Force posture (on the Australian continent), the defence industrial base, joint capabilities co-operation, and AUKUS were signature parts of the Australia-US defence alliance, the Secretary said. Mr Marles told media that Australia had paid US$500 million (about A$800 million) in the first of a total US$3 billion contribution to the US defence industrial base, under the AUKUS agreement.

Licence-free regime boost defence exports

Meanwhile, the Albanese Government has lauded the results of the licence-free export regime it established last year with AUKUS defence partners the United States and the United Kingdom. Defence Minister Richard Marles and Defence Industry Minister Pat Conroy said that in less than six months, more than 210 companies across Australia had gained access to the world’s largest defence markets, resulting in $25 million of licence-free exports to the US and the UK. Under the reforms, local businesses no longer need a licence to export most military and dual-use goods, technologies and services to the US and UK.

Farrell highlights rise in tariff-free US trade

Trade and Tourism Minister Don Farrell said that it made no sense for the United States to be imposing tariffs on countries with whom it already benefited through a trade surplus. Ahead of reports that the Trump Administration would impose 25 per cent tariffs on imported steel and aluminum, Senator Farrell said in a media interview  that Australia bought $70 billion of product from the US, but exported just $30 billion in return. He said that since Donald Trump was first elected in 2016, trade from the US to Australia had doubled. “Without tariffs, the Americans have done really, really well in terms of their trading relationship with Australia,” he said. Outside the US trade relationship, Senator Farrell said that Australia’s trade profile had diversified in the last three years, with trade to the UK and to India increasing by between 50 and 70 per cent.

NDIS growth rates halved, says Rishworth

New NDIS Minister Amanda Rishworth says that annual growth in the cost of the National Disability Insurance Scheme has been almost halved in three years. Ms Rishworth said the scheme had grown by 23 per cent in 2021-22, and in the current year, was growing at 12 per cent, with “clear guidelines” now in place on what should or should not be funded. The Minister said the government had addressed the issue of early intervention (with the states and territories) to assess children at six and nine years of age, as well as placing greater emphasis on service providers gouging participants. Federal Budget papers for 2024-25 forecast that the NDIS would cost more than $48 billion this year, rising to $60.7 billion in 2027-28.

Trade surpluses on the slide

Australia’s monthly trade surpluses are continuing to trend downwards, as a rise in capital goods imports re-balances trade performance. In December, imports of goods rose by almost six per cent, seasonally adjusted, while goods exports rose by 1.1 per cent, resulting in a monthly trade surplus of about $5 billion. Australian Bureau of Statistics figures show that in mid-2022, strong export performance drove the monthly trade balance to a $18.3 billion surplus.

Treasurer banks on AI to lift productivity rate

Federal Treasurer Jim Chalmers has nominated artificial intelligence and the digital economy as key factors in lifting national productivity. In a speech to a business forum, the Treasurer said Australia was among the top five global destinations for the data centre infrastructure on which AI depended. Dr Chalmers said 70 per cent of Australian businesses had already implemented AI, and around 20 per cent were planning to do so in the next year. He claimed that Australia’s reputation and software development knowhow also meant the nation was a priority market for AI app development.