Jim Chalmers is wasting no time – he is holding a press conference in the Blue Room of parliament house (the second most fancy press conference location) to talk about the government’s economic plans ahead of the new parliamentary year.

We’ll bring you some of the highlights from that a little later.

AAP reports that US president Donald Trump is planning to speak with China’s president Xi Jinping in the coming days:

US President Donald Trump will speak with Chinese President Xi Jinping within the next couple of days, setting up a major diplomatic exchange as the superpowers seek a deal that could avert a broader trade war.

Trump on Saturday ordered sweeping tariffs on goods from Mexico, Canada and China, as part of demands they stop the flow of illegal fentanyl.

On Monday, Trump threatened to ramp up tariffs on China further, which were set at 10 per cent on goods from that country, along with 25 per cent tariffs on Mexican and most Canadian imports, starting on Tuesday. He later paused the levies on Mexico after the country promised to reinforce its border with the United States.

But those tariffs stopped short of Trump’s campaign promises for vast new tariffs on Chinese goods, and on Monday he described the initial tranche as an “opening salvo.”

“China hopefully is going to stop sending us fentanyl, and if they’re not, the tariffs are going to go substantially higher,” Trump said.

“China will be dealt with,” he added.

Trump also repeated his opposition to Chinese involvement in logistics at the Panama Canal, a major trade crossing in the Americas.

“China’s involved with the Panama Canal. They won’t be for long,” Trump told reporters in the Oval Office.

On Monday, China categorically rejected US accusations of its alleged influence over the canal.

“Let me say that I think the accusation against China is totally false,” China’s UN ambassador Fu Cong said in New York.

“Let me emphasise that China has not participated in the management and operation of Panama Canal and has never interfered in canal affairs,” he added.

China respects Panama’s sovereignty over the canal and recognises it as a permanent neutral international gateway, Fu said.

Peter Dutton has also emerged from the church and has spoken about the “very nice” start to the parliamentary year (you may have forgotten, but this version of Dutton is all about ‘nice’, which makes complete sense if you forget about the 24 years Dutton has spent in parliament so far, and everything he has done with power in that time).

Asked if he is ready to ‘lead the country’, Dutton says:

I believe very strongly that there’s a mood for change in our country and I think we’ve demonstrated over the course of the last three years that we have the stability and the depth of experience to make the decisions to keep our country safe and help families recover from a really tough period that many people didn’t predict 2.5 years ago and I fear that it gets worse if the government’s re-elected.

Just a reminder that you won’t actually learn any detail on how the Coalition plans to ‘keep our country safe and help families recover from a really tough period’ until AFTER the election, because Dutton is not releasing any policy detail. Which is apparently just fine and dandy for the alternative prime minister to declare.

Anthony Albanese is then asked a question about protecting places of worship, which was put in the context of the opposition’s claims the government is not doing enough to protect synagogues.

The government has been working with members of the Jewish community and has provided additional funding for security for synagogues and schools.

Albanese is in no mood for this sort of framing this morning it seems and says:

Forget about the Opposition. I’ve been talking about the need to protect places of worship very clearly. I’ve made the Government’s position on that very clear.

We are still some way off from the sitting (the parliament sitting begins at midday today) but the church service where everyone pretends to get along with each other, has concluded.

Anthony Albanese has spoken outside St Christopher’s and said of the service:

‘Hope in an uncertain world was appropriate’. We do need hope and we need optimism and as we begin the parliamentary year, that’s precisely what I have said – optimism for the year ahead and optimism that we can create a better future for Australia, if we seize the opportunities that are before us.

We begin the parliamentary year with inflation falling, wages rising and with unemployment low. The key indicators of the living standards of Australians but we know there is more work to do and in this sitting period, we’ll continue to push forward with cost-of-living relief. We have legislation before the Parliament that will make a difference in the short term, but also in these turbulent seas, we have our eye on the horizon. (New slogan alert)

So measures such as making free TAFE permanent will not only assist with cost of living, but it helps to give Australians the skills and the training that they need and the employers the skilled workforce they need for the jobs of the future. The abolition of the activity test when it comes to childcare – I saw a clip of The Parenthood talking about how it’s a barrier to women seeking employment in the workforce, particularly the most disadvantaged women, entering the workforce and being able to contribute for their families and indeed for their country. Now, this legislation will be important, the 3-day childcare guarantee that we’ll introduce to the Parliament this week as well. So I look forward to continuing to have debate in the great democracy that is Australia, but this morning was a great way to begin the parliamentary year, following on from the very important ceremonies that took place yesterday at the Australian War Memorial, including of course the opening of new parts of that War Memorial, which is such an important site, indeed a sacred site, for Australians to visit as well.

Liberal senator Andrew Bragg, who was one of the masterminds behind the 2019 franking credits/super scare, has turned his attentions to first home ownership over this term of parliament.

One of his answers is to allow first home owners to access their superannuation for their deposit. So far, there are no answers as to how this would help lower the cost of housing – and, if the evidence of the first home owners grant is anything to go by, if suddenly a large group of people have access to a deposit at once and can enter the market, the prices in the market, go UP. Because that is what markets, with little price regulation, do.

Bragg has started this year by focusing on house prices since Labor came to power and in a statement released this morning said:

Nationally, the time needed to save for a first home deposit has increased by 14 months, since Labor came to power.  In three capital cities: Brisbane, Adelaide and Hobart, this time has blown out by more than two years. All under Labor’s watch.  No wonder first home buyers feel abandoned. For many Australians, the dream of home ownership has become a nightmare.  Labor’s policies are failing prospective first home owners —we need to reprioritise first home ownership. 

This of course did not happen in a vacuum. Australia’s housing nightmare has been decades in the making, helped along by an unwillingness to address unfair tax policies like negative gearing.

As the Australia Institute’s economists Greg Jericho and Matt Grudnoff conclude:

There are only two ways to make housing more affordable. Either the supply of housing is increased relative to demand, or you the demand for housing is decreased relative to supply. If a housing affordability policy does not relatively increase supply or decrease demand, then it will not make housing more affordable. The problem with the current housing policy settings is that they incentivise demand but do little to increase supply.

We recommend the following:

• Restrict negative gearing to newly built housing.
• The capital gains tax discount should be scrapped, and capital gains should be taxed
  like other types of income.
• Macroprudential policies should be explored to reduce households access to credit
  for buying residential investment property.
• The government should not pursue policies that preference one group of home
  buyers by allowing them access to more funding.

Someone has just asked us ‘why won’t Peter Dutton release the Coalition’s policy details ahead of the election’ (thank you for writing in – we will come up with comment functionality down the track, but in the mean time, feel free to email me!).

Obviously, we are not privy to Dutton’s thinking. But if I was a Coalition strategist, I would be wanting to fight this election on anything other than Coalition policies. Because there is nothing there. Pull back the curtain and it’s just a man with a smoke machine. And if the election campaign was actually fought on policies, well, the Coalition would have to deal with some difficult questions. Which it isn’t in the mood to do.

So instead, Dutton has set out to establish what ground the election should be fought on – and if you have paid ANY attention to the news cycle over the last 18 months, you would be able to identify pretty quickly what he has come up with (it rhymes with Mulcha Bores). Labor, in trying to avoid culture wars by not engaging or pushing back, have instead sleepwalked into the middle of the arena.

Now, Peter Dutton doesn’t think it will cost as much as Jim Chalmers has laid out and is pointing to the Parliamentary Budget Office for his costings.

The PBO is an independent statutory body which can do the work of Treasury in costing policies for parties (and independents) who are not in government. But while the PBO does great work, it is also bound by the information it is told by the party who has asked for a costing – the policy doesn’t exist, so obviously, it can only use the information it is given to create a costing. Kinda like when my doctor asks how many coffees I have a day and I say “one to two” and then my doctor has to work out why I’m complaining about being jumpy and anxious.

But the main issue is that Dutton is not planning on announcing actual costings, or even policy detail for almost anything – nuclear, migration cuts, government service cuts, how the Coalition would meet it’s climate tartgets – the list goes on, until AFTER the election.

Chalmers says:

If he’s got a costing on this policy, he’s either been unwilling or unable to release. Either he didn’t know how much this policy cost when he announced it or he didn’t want Australians to know how much it cost. We released the costing because we think it’s important that Australians understand the risks to the Budget from what is being proposed in Peter Dutton’s long lunches for bosses policy. And if they’ve got a different costing, they should release it. The costings done by Treasury are very conservative. They’re based on the fact that eligibility businesses would only claim about an eighth of what they’re entitled to. That’s how you get $1.6 billion. If they claim everything they’re entitled to, it would be more than $10 billion a year. It comes back to the choice at the election. Labor is for tax cuts for workers and responsible help for small business. The Liberals are for taxpayer-funded long lunches and entertainment for bosses. They won’t tell us how much it costs. They won’t tell us how they’d prevent it from being rorted. They’ve had all sorts of different things to say about who is eligible and what’s eligible. They weren’t able to clarify that and so we’ve taken the necessary steps to provide more information to the Australian people.

Jim Chalmers is then asked about Peter Dutton’s plan for a long lunch business tax write-off ($20,000 a year, no alcohol, a lot of snitties) which is one of the only policies Dutton has put forward. For some reason, in a housing affordability and climate crisis, we are talking about whether or not businesses should be able to write-off team and client lunches, but hey – that’s Auspol when you let the Coalition set the election ground!

In shocking news, the Business Council of Australia is in support of this policy. Chalmers says:

We found other more responsible ways to support small business, with energy bill relief, with an instant asset write-off to make it easier for them to invest in their own business, help with cybersecurity, competition policy – all these ways we’re responsibly helping small business because we’re big supporters of the sector.

What Peter Dutton is proposing is very different. Peter Dutton wants the workers of Australia to pay for long lunches for bosses and the bill will run to billions. We now know from the Treasury costing that what Peter Dutton is proposing will cost $1.6 billion a year, but could cost more than $10 billion a year. Now, this is why he hasn’t come clean on the costs or what he would cut to pay for his long lunches for bosses policy. That’s because it would absolutely smash the Budget. He hasn’t told us how he’d prevent it being rorted because the Liberal Party is the party of waste and rorts. They’ve learned nothing and the taxpayers of Australia would pay billions of dollars for their irresponsibility.

Asked about Donald Trump’s trade war, and whether or not he’ll end up turning the Eye of Sauron Australia’s way (obviously that is my paraphasing) Jim Chalmers says:

These are big developments out of the US but they are not a big surprise. These changes were flagged in one way or another during the election campaign.

We won’t be immune from escalating trade tensions around the world, but we’re confident that we can navigate these changes coming out of DC. We are well placed. We are well prepared. The main points that we’ve been making to our American counterparts is ours is a very difficult economic relationship that what the Americans have with some of these other countries that have been the focus in recent days. The Americans run a trade surplus with us. They have done since the Truman Administration in 1952, a substantial trade surplus.

Our relationship is mutually beneficial and all the conversations we’ll have with our American counterparts will be about making sure that this really key economic relationship continues to be beneficial to both sides.