It is not just Australia that will experience the impact of Trump’s tariffs. Trump has now imposed new tariffs on US imports from all over the world. They include a new 34% on China, 20% on the European Union, 46% on Vietnam and 32% on Taiwan. Robert Reich, former Secretary of Labor under President Bill Clinton, advises countries not to retaliate or try to bargain on their own.  He advises other countries that there is strength in numbers and they should join together to create new free trade zones that exclude the US but would apply a modest tariff on US exports. Expansion of trade initiatives may compensate other countries for the loss of American markets.

He also suggests other actions such as

1.       limiting American banks’ access to local stock markets,

2.       putting limits on what their residents can invest in American companies annually, and

3.       increasing taxes and regulations on American digital platforms.

The rest of the world might also contemplate the strength of intellectual property laws and the way they restrain competition and preserve monopolies. This and other topics might be taken up by a G20 less USA, or indeed the United Nations.

Continued from previous post:

Q: So you’ve worked both as a public servant and you’ve worked as a consultant with the government. Previously. You’ve had a role with KPMG from your career experience. Jacob, are consultants more effective than public servants?

Jacob Vadakkedathu:

Look at certain areas as the government have to rely on consultants, particularly in specialist skill areas where if the government doesn’t unable to recruit any subject matter expertise or in certain areas, of course they have to reach out to consultants in certain areas. So obviously the government will have to rely on consultants in specialist areas. If the APS doesn’t have the capacity or doesn’t have enough people to do that sort of job, of course we’ll have to reach out to consultants who have got expertise in that area.

Q: Are consultants more effective than public servants? That’s the concern from a lot of our listeners, that if the public service is reduced by 41,000 positions, that that will need to be filled by consultants who would cost the government a whole lot more. Ultimately.

Vadakkedathu:

Yeah, as I just mentioned, the government may have to reach out to consultants at times to undertake a certain task. And of course, if the government cannot find enough subject matter expertise in specialist areas, they will have to reach out to you in order to get the task undertaken, and they may have to reach out to consultant. And that’s been the case.

Q: But isn’t that more expensive than cutting the public service jobs?

Vadakkedathu:

I mean, if you have to reach out to consultants to get the work undertaken, you have to end up the day, you have to get the job done. And if you can’t find a person within APS, of course you will have to reach out to consultants. But I’m not saying that or cut all the public service and get all the jobs to the consultants. No, I’m not saying that. I’m saying in specialist skill area, subject matter expertise. If we can’t find enough people within the public service, then we may have to reach out to consultants to get that job done.

Q: And my question is, would that be more expensive then cutting the jobs or reducing the jobs from the public service?

Vadakkedathu:

I’m not saying massively cutting public service jobs.

(But the Coalition, his party, is.)

Q: But on the funding, would that be more expensive?

Vadakkedathu:

I mean, certain jobs, subject matter expertise, consultants charge a high fee. I mean, of course that’s a reality. Everyone knows that that’s a true reality. But to get the job undertaken and if APS doesn’t have the capacity, we may have to reach out to consultants.

Q: Could you avoid this by not reducing those jobs from the APS in the first place by ensuring that it does have the capacity?

Vadakkedathu:

Ideally. Ideally, everyone would like to get to the job done through the APS. What I’ve said it very clearly is if we can’t get the job done, so if I’m the director of a section and if I don’t have a subject matter expertise to undertake a certain task, and end of the day you have to deliver that job. So you may have to reach out to consultants, and that’s the case in the past. So if we don’t have enough skill specialists, workers in the area, in the public service, then obviously in order to get the work undertaken, you may have to reach out to consultants.

Well that went well.

Glenn mentioned one of the local ABC interviews with an ACT Liberal candidate, Will Roche this morning.

But there was another interview that Saskia Mabin had with ACT Liberal senate candidate, Jacob Vadakkedathu this morning where the quiet parts on the 41,000 public service sackings the Coalition have promised, were made clear. Vadakkedathu is a former public servant who now runs a private consulting agency, that has done work with governments.

Q: On the job cuts. Peter Dutton has been saying he wants to cut the 41,000 jobs that have been added by Labor, he has pointed to wanting to make those job cuts primarily from Canberra. Is that frustrating for you to hear that? I mean, your leader is not making it easy for you to be elected here in Canberra.

Vadakkedathu:

Look, as I’ve been a public servant, I worked in public servant for 14 years and I know how public service works and they’ll really work hard and they’ve made a good contribution to the government providing advice to the minister and the government.

Look, we made it very clear, and Shadow Treasurer made it very clear yesterday that we will deal the public service cuts, reducing the public service through natural attrition. I mean, it’s not in a sacking or termination. We will deal it gradually through natural attrition or a period of time.

Q: Is that possible? When you’re talking about 41,000 jobs though, that’s quite a lot to be dealing with through attrition.

Vadakkedathu:

Not all 41,000 jobs are based in Canberra. Not all 41,000 are based in, we’ll ensure that the frontline services are delivered. We are not going to cut any frontline services, but we will reduce the other numbers or a period of time through natural attrition. And let me make it very clear, those 41,000 are not all based in Canberra.

(Dutton has said they will all be in Canberra. The Coalition have been unable to confirm they will be through natural attrition and have said they are looking for value for money)

Q: Do you agree then that there should be significant cuts though to the public service in Canberra because this is the home of the public service?

Vadakkedathu:

Yeah, no, as I said, Saskia, we are not cutting the public service. I mean that terminology, I mean, we are reducing the number where it was before Labor took over.

Q: Okay, well that’s semantics. So reducing the number is quite similar to cutting the number. Let’s use reducing the number then should it be

Vadakkedathu:

Reduced, reducing the number where it was through a natural attrition.

Q: Okay. And that’s important. Do you think the public service needs reduced numbers?

Vadakkedathu:

Where it was before Labor took over, it was I think around 170,000. So that’s where we are looking at and we deal it through natural attrition. We are not going to sack anyone on the very next day when we form the government. We are not going to do that. We are not going to terminate anyone on the very next day. If we form the government, we will deal it through natural attrition. And as the Shadow Treasurer mentioned yesterday, yes, we deal through natural attrition over a period of time and we are not going to sack anyone.

(This is not what Bridget McKenzie or anyone else has said. Including Peter Dutton)

(Continued in next post)

Right now, the government and the opposition are moving to increase the amount the government spends on its military aka its defence budget, and this is happening without the public having any say – nor any great choice in the upcoming election.

The Trump administration, including Elbridge Colby, who is soon to be confirmed as head of policy at the US Defence Department, is now telling Australia it needs to spend 3% of GDP on the military. That would be quite a large increase from what Australia currently spends, but rather than push back, both major political parties are fully in step with the view that Australia needs to spend more boosting our military.

The Treasurer, Jim Chalmers told reporters, “We’re taking defence spending from about 2 per cent of our economy to more than 2.3 per cent in the course of the next decade or so.” The Coalition also seems to be considering an advance on this position and lifting the military budget to 2.5 per cent of GDP by 2029.

The budget papers explain just how much is being spent on both the ongoing military spending, as well as the capital investment.

For the capital investment, the budget papers give both “net capital investment” as well as “purchases of non-financial assets”. The main difference is that the former is adjusted for depreciation and amortisation,n while purchases of non-financial assets are not adjusted. There really is no good reason for deducting depreciation and amortisation. They are both rather meaningless concepts when it comes to military assets – is anyone really caring about the decline in the commercial value of the tanks the army has? Moreover, almost all discussions of the budget balance etc are based on cash accounting, which excludes depreciation.

The table above presents the military expenditure and investment.

It clearly shows that total military spending has hit 2.3% of GDP (rounded) in 2024-25, and yet in his Budget speech, the Treasurer said “defence funding will grow beyond 2.3 per cent of GDP by the early 2030s.”

That suggests the Government is using the depreciation adjustment to estimate its spending. In reality, the Treasurer should already be saying that Australia is already at 2.3% of GDP and headed for 2.5%.

Importantly, however, this has all happened with very little debate.

I haven’t seen a lot of this covered in the media, but this post on Reddit it getting a bit of attention on the socials:

Protesters have continued to find the campaigns, despite the intense security arrangements around the campaign travel arrangements.

Anthony Albanese was greeted with protests in the electorate of Paterson today:

A reminder that people have the right to protest in democratic nations, despite the rhetoric going the other way.

A very big thank you to Glenn for his stewardship of the blog while I stepped out for other projects – like an absolute duck to water there.

You’ve got Amy Remeikis again for the rest of the day, for whatever else happens.

(Please Dolly, let there not be much else today)

Thanking the good lord I have two ears, because both leaders are up again – at the same time!!!

Peter Dutton is speaking in the Perth electorate of Hasluck (ALP 10.1%), with Bridget McKenzie and Michaelia Cash nodding in spectacularly perfect unison in the background.

Nothing particularly new here – the PM can’t get Trump on the dog n bone, Dutton would force gas companies to redirect gas earmarked for export into the domestic market (still no modelling on what it would save consumers) and, watch out, Adam Bandt could end up “co Prime Minister”.

Over on the east coast, the PM is back in the Hunter Valley, talking-up the (painfully slow, almost non-existent) transition away from coal.

Just as the pack is starting to nod off … there’s a flash of colour … a blur of movement.

He’s interrupted by a protester demanding to know “why has your government approved 33 new fossil fuel projects?”

It’s a fair question.

The PM doesn’t answer.

zzzzzzzz

Penny Wong has branded Peter Dutton “Captain Obvious” over his claim that leader-to-leader dialogue could yet earn Australia a carve out from the latest Trump tariffs.

Speaking to Kieran Gilbert on Sky, Penny Wong said:

“Peter Dutton seems to think he’s Superman but he’s actually Captain Obvious.”

Fresh from the PM revealing he’d pursue an above-inflation increase to the minimum wage yesterday, the ACTU has agreed today – but put a figure to its claim.

Australian Unions will pursue a wage claim of 4.5 per cent in the upcoming Annual Wage Review.

The ACTU’s claim will increase the minimum wage to $25.18 per hour, lifting the annual full-time rate by $2,143 to $49,770.

ACTU statement:

The 4.5 percent claim directly affects the 2.6 million Australian workers whose pay is set by awards, but it also affects all working Australians, as it sets minimum wage floors.

ACTU Secretary Sally McManus:

Australia’s lowest paid workers need and deserve a decent real wage increase. We must remember that our minimum wage for a full-time adult worker is only $47,626 a year. It is not enough and needs to increase. We are not America, and no one should be left without a liveable wage after working full-time hours.