Tariff threat overshadows federal poll

Australian politics was again overshadowed by US President Donald Trump in what could be the final parliamentary sitting week before an election is called at home. This time the US president threatened to impose tariffs (of 25 percent) on all imports of aluminium and steel. That led to a phone call in which Prime Minister Anthony Albanese sought an exemption for Australia with the US president agreeing he would give it great consideration. But this was later overshadowed via a senior Trump administration official who accused Australia of surging aluminium exports the last time Trump was in power and Australia was granted an exemption. The US tariffs are due to be imposed from next month, which would be a body blow for Labor’s re-election chances. All attention now moves to next Tuesday when the Reserve Bank of Australia will decide on home loan interest rates. Speculation on the Hill suggested any mortgage relief could mean the Prime Minister going to the polls as early as the following Sunday for a late March or early April election. The major parties also got their pre-election house in order in passing election funding reform laws to curb interest groups from over generously funding Independent and Teal candidates as the major parties fear the threat to their traditional domination. On the March 8 WA election, Newspoll suggested Labor’s Roger Cook would be returned comfortably, leading the National-Liberal Coalition 56-44 on a two-party preferred basis. The State National-Liberal Coalition has a long road back having been reduced to a rump of 6 seats at the 2021 State election. However, the poll was not so generous to Federal Labor with almost a third of WA voters polled indicating the Federal Labor government did not deserve a second term and half wanting someone else to have a go.

Feedback sought on flagging national R&D effort

Industry and Science Minister Ed Husic has rejected having more generous company R&D tax breaks to boost Australia’s flagging innovation effort. Minister Husic said he was not in favour of further tax breaks without any evidence to support the move. Minister Husic appeared at the National Press Club in Canberra on Wednesday to release a discussion paper on R&D which found Australia was giving away its R&D with little benefit to the nation. The report prepared by a panel led by Tesla Inc. Chair Robyn Denholm highlighted a stark decline in Australian R&D over the past 15 years representing only 1.66% of GDP, well below the OECD average of 2.7%. Despite growing SME investment, overall business investment in R&D had fallen by more than a third since 2009. The report also found research collaboration across sectors is weak. Australia ranked the lowest in the OECD for university-business collaboration. Stronger manufacturing was also critical to improved R&D performance. April 11 is the deadline to respond to the discussion paper which can be found on the Department of Industry, Science and Resources website here.

US industry downpayment

Deputy Prime Minster (DPM) Richard Marles announced Australia had made a A$798 million downpayment to the US to support submarine building as part of his visit to the US to meet with counterpart Peter Hegseth. DPM Marles who had earlier shared a phone call with the US Defense secretary said the two discussed AUKUS and mutual security challenges at the meeting. Emerging from his meeting with DPM Marles, Secretary Hegseth said US President Donald Trump was incredibly supportive of continuing with the AUKUS agreement. “He recognises the importance of the defence industrial base. The investment Australia is willing to make,” Secretary Hegseth said. “This is not a mission in the Indo-Pacific that America can undertake by itself. It has to be robust allies and partners, technology-sharing, and subs are a huge part of it.” DPM Marles said he was encouraged by the progress saying part of getting the AUKUS pact done involved Australia’s contribution to the US industrial base. Under the AUKUS pact regular rotations of UK and US submarines through SRF West begin from 2027 with the sale of Virginia class vessels to Australia to begin from 2032. But concerns over US Virginia class production rates led Australia to agree to financially supporting the US industry under the deal.

ASCA revamp

The Albanese Government has moved to shake-up the Advanced Strategic Capabilities Accelerator (ASCA) in a bid to ensure the more rapid development and delivery of equipment for the war fighter. The Albanese Government has appointed Brigadier Hugh Meggitt as the next head of the ASCA. Defence Industry Minister Pat Conroy indicated Brigadier Meggitt brought a wealth of expertise across innovation, capability delivery, and industry engagement, including from his role as Director General Special Operations Modernisation at the ADF’s Headquarters Joint Operations Command. He said ASCA would also transition into the Vice Chief of the Defence Force Group led by Air Marshal Robert Chipman, ensuring investments are directly informed by operational needs and delivering an integrated, focused force as required under the National Defence Strategy.

Licence free exports pay-off

More than 200 Australian firms have benefited to the tune of $25 million in licence free exports to AUKUS partners since reforms passed the federal parliament in September last year. Deputy Prime Minister Richard Marles said in less than six months the reforms had provided companies across Australia with unprecedented access to the world’s largest defence markets. Under the AUKUS licence free export reforms, eligible local businesses no longer need a licence to export most military and dual-use goods, technologies and services to the UK and the US. The move had unlocked billions of dollars of investment in Australia and slashed red tape for Australian industry and AUKUS partners.