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Guys, chill on the tariffs

Greg Jericho
Chief Economist

There’s a few stories around the traps today that profession golf cheat (see video) and also President of the United States, Donald Trump might be about to increase tariffs on Australia from the current level of 10% to 15% or 20%.

The reason for this is in the past couple days when he was over in the UK promoting his private golf club he also did some “deals” with the UK and EU on tariffs.

The deal was for the tariffs on the EU to be 15% – down from the initial 30%. IN return the EU promises to buy more military stuff from the USA. This of course is the whole basis behind Trump wanting every other nation to lift its defence spending – it is also unsubtle code for “buy more4 American weapons”.

The problem for Australia is that while the US currently has a 10% tariff on our exports, because that was the baseline that he set for all nations including those with penguins living on them, now 15% or 20% seems to the be the bottom line. He told reporters that “We are going to be setting a tariff, for essentially the rest of the world and that’s what they’re going to pay if you want to do business in the United States… I would say in the range of 15 to 20 per cent. Probably one of those two numbers.”

So what does this mean?

Firstly, Trump is making it up as he goes. But you know that. What does it mean for you buying stuff from the shops?

NOTHING.

Remember, tariffs are basically a GST for imports – Trump is putting up the prices of thins American import. He is not changing at all the prices of things we pay. He is not even changing the price of things we sell to Americans – we still get the same price, and then the person who bought it from us has to pay the US govt a tax (tariff).

The problem is that because of that tariffs American will likely have to buy less stuff from us (and everywhere else) because it all costs them more now.

The other thing to remember though is the US is putting tariffs on everyone, which means there is no disadvantage to Australian companies compared to anywhere else. In fact, because we currently have a lower tariff than most places, it is in effect cheaper to buy the same thing from Australia than from somewhere else. So this means the impact even of our exports to the USA might be less than otherwise would be the case.

But just remember – this does not change the cost of anything we buy from the US, or anything else in the shops.

A US tariff is paid buy Americans.

Damned if it fails, damned even more if it succeeds

Dr Emma Shortis agreed:

Even IF the United States shipbuilding industry made it to the target that it needs to, the legislation is really clear that the President has final say, and has no obligation to handle submarines over to Australia and I think it’s incredibly unlikely that if a President were to do that, they wouldn’t come with conditions.

So that really means that, you know, as David has outlined, the Aukus deal is rife with risk of failure, but there are also significant risks if it succeeds, for Australian sovereignty and the ability of future Australian governments to make independent decisions.

Asked if he believed Australia would ever see even the Virginia Class submarines, David Shoebridge said:

The only Virginia class submarines we’re going to see coming from the US are going to have a shiny US flag on it at a at a nuclear submarine base built by Australian taxpayers of Fremantle.

You only have to listen to what the US Navy is telling Congress.

The US Navy is telling Congress they will not have any spare nuclear submarines.

Why is it that those messages have not been heard by Anthony Albanese and Richard Marles?

It’s not just the Greens who are saying that there won’t be any nuclear submarines.

The core, the core decision makers inside the United States Navy are saying the same thing.

Greens to keep Aukus inquiry on the senate books

David Shoebridge has held his press conference with Dr Emma Shortis about the need to have an inquiry into Aukus.

Australia is the only partner NOT reviewing Aukus. Which seems kinda insane?

Shoebridge says that the Greens will keep their motion for a review into Aukus on the senate books until they get the numbers:

Let’s have the inquiry. Let’s hear from the public. Let’s hear from the key stakeholders. Let’s hear from people who know that the creaks and the and the leakage that’s happening within the Defence Department – can finally come forward.

We know that if we put the blowtorch on Aukus, if we ask the submissions from the public, if we properly interrogate the Defence Department and Defence officials, that it’s likely to show that this is a $375 billion folly. So why don’t we get out before we waste tens more billions of dollars.

The Finance Sector Union has some choice words for the Commonwealth bank after it announced it was axing frontline roles in favour of automation and offshore labour.

What could go wrong?

90 jobs will be cut under the AI and offshore plan. For now.

This includes 45 roles in Direct Banking, cut due to the introduction of a new voice bot system on the bank’s inbound customer enquiries line in June this year.

Jobs cut also include local Customer Messaging Specialist roles – those who customers interact with through the bank’s online chat. This is also being done in CBA India, which is currently advertising more roles.

From the statement:

The FSU says workers affected by new technology should be retrained and supported into new roles, not discarded in the name of cost-cutting.

The union supports the use of new technology and AI in banking but say it must be done in partnership with workers, not at their expense.

These further sackings raise serious concerns about CEO Matt Comyn’s place on the federal productivity roundtable.

Finance Sector Union National Secretary Julia Angrisano said:

Just when we think CBA can’t sink any lower, they start cutting jobs because of AI on top of sneakily offshoring work to India.

Workers want a tech savvy bank, but they expect to be part of the change, not replaced by it.

Our members want to be trained and supported into better jobs that leverage AI. Yet rather than invest in its people the CBA are simply discarding Australians through ongoing redundancies and offshoring.

If this is what Matt Comyn calls productivity, we’re seriously concerned about his place at the national productivity roundtable. His carefully curated commitment to policy reform in Australia just looks like hollow PR when acts like this expose that his real agenda is just more profit for shareholders.

There is a human cost to this. You can’t just replace frontline jobs with a voice bot and expect the same service for customers.

Customers shouldn’t expect to speak to someone in Australia anymore, or even someone with a voice box.

CBA made $10 billion last year. It has no excuse for treating its workforce like this.”

The chambers won’t sit until midday, to make room for the party room meetings which are happening at the moment.

After the party room meeting there will be an off-the-record briefing where the minutes from the meeting are discussed, but nothing is attributed.

Going back to the ABC RN interview with the UN climate chief Simon Stiell this morning, you will notice that he is framing the need to cut emissions not just as what a country will lose – but what it can gain:

Well, first of all, it’s a defining moment for all countries. There are almost 200 countries within the Paris Agreement, and all have been asked to come back with new, more ambitious climate plans between now and 2035. So it’s a critical moment for all countries.

But for Australia specifically, there’s an incredible opportunity to demonstrate what ambition looks like, to take full advantage of all of its natural resources in the green energy space, and to accelerate its transition away from its dependence on fossil fuels to new green technologies. It’s already demonstrating that leadership, doubling renewable energy installations over the last few years. One in three rooftops have solar panels, incredible savings for homeowners. But this is a moment for it to reflect on where it is, where the world is, Australia’s position within that global system and the leadership it is going to take both domestically, in ensuring that Australia is able to take full advantage of the economic opportunities with the transition, but also in terms of its contribution to drastically cutting global emissions, to address the climate crisis.

National Farmers’ Federation looking for new CEO after Troy Williams quits

The NFF has announced its CEO, who was appointed in March this year, has resigned:

NFF President, David Jochinke said in a statement:

I wish to advise Troy Williams has tendered his resignation as CEO of the National Farmers’ Federation. The Board has accepted his decision, which was made for personal reasons. We thank Mr Williams for his contribution and wish him the very best for the future.

The Board will commence recruitment for the new CEO, mindful of the NFF AGM in October. In the meantime, we will appoint an interim CEO to ensure leadership and operational continuity.

While leadership transitions are significant, I am proud of our experienced and committed team. It’s business as usual in our work for members and the agricultural sector.

The NFF team remains committed to our policy priorities as well as delivering a suite of initiatives from our leadership programs and events, including our flagship AgXchange event, which is shaping up to become the industry’s pre-eminent forum for ideas, collaboration and innovation.

‘The prime minister needs to talk to me’ – Dr Mohammed Mustafa

Dr Mohammed Mustafa then directly addresses prime minister Anthony Albanese:

I want to talk directly to Prime Minister Anthony Albanese.

Ever since I sat on this couch when I came back from Gaza the first time, I asked to speak to Anthony Albanese, our Prime Minister. He’s still not spoken to me.

When there was an anti-Semitic attacks that were done in this city here, rightfully went out and spoke with the Jewish community. But we are witnessing Palestinian people, as he’s called it, indefensible crimes that are happening to them. He has still not met with me or members of the Palestinian community to talk about what’s going on.

It’s not that just that I want to talk – but to have a solution here. We’ve been travelling around the world to get governments to bring into the children’s hospital in Gaza, and a neonatal maternity hospital that would help alleviate the images coming in.

The Prime Minister needs to talk with me. He’s not doing that.

I want to ask him directly – please, please, for the sake of those children in Gaza, for the sake of the Palestinian people in this country as well, and many members of the community, the Indigenous community, the Muslim community, the students – all of us want to see actions.

And just come and talk to us. I promise I’m not going to bite. I’m not going to hurt him. I just want to talk to him. I know that he is a man that says that he is principled, and I want to believe him. And I do believe him. But I need him to talk to us so we can talk about a solution here. Because words are no longer enough. Words are not going to feed those children. And I need him to come and support us and help us to alleviate what’s going on, and also diffuse the tension in this country.

Dr Mohammed Mustafa said it is a very delicate process re-feeding people after they have been as starved as Palestinians in Gaza have been because of Israel’s deliberate starvation policy, and it is not just a case of sending in food:

Look, this starvation – when I was there last year in June, we had children coming in like the same images you’re seeing now, dying from starvation.

This hasn’t been something that’s happened over the last few months. This has been almost a – this has been what the war has been the whole time for the last two years, there has been this policy of starvation, of collective punishment, of the civilian population. Of the we’re seeing the full force of that live now, out in the open. We’ve reached Stage 5 famine in parts of Gaza.

25% of the population by IPC classification is in Stage 5, which means that 2 out of every 10,000 people a day die from starvation. That’s huge numbers. And that’s not been seen before like this.

And airdrops are not the solution.

Mustafa:

When you airdrop supplies in, the planes that they use have to be able to fly at a low altitude to drop supplies in. But there’s no coordination. What you’ll have is sometimes aid falling on top of people in tents and crushing children. Also as well, it’s ineffective. You know, you could have 12 of these cargo planes in and drop aid in, but it’s only the equivalent of one aid truck.

You could open up the borders and roads and bring in 1,000 aid trucks in a few hours. You would need hundreds of planes to do the same thing. It’s highly expensive and highly ineffective. It just masks the problem. It just tells us that we’re dropping aid in. But it’s not aid – it’s a drop in the ocean.

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