Month: May 2023

Prime Minister Anthony Albanese and Foreign Minister Penny Wong today announced financial sanctions and an export ban, targeting sectors of economic and strategic significance to Russia.

These additional targeted measures aim to slow Russia’s war machine.

Australia’s action is part of a push by international partners, who are meeting at the G7 Leaders’ Summit in Hiroshima this week.

Australia has already sanctioned more than 1,000 individuals and entities who are supporting Russia’s illegal and immoral invasion of Ukraine.

The new financial sanctions will target 21 entities and three individuals, including:

• Subsidiaries of Russian state-owned atomic energy corporation Rosatom that are involved in nuclear research, infrastructure development and weapons manufacturing.
• The Russian entity created to take over Ukraine’s Zaporizhzhia Nuclear Power Plant, the largest nuclear power plant in Europe.
• Russia’s largest petroleum company Rosneft.
• Russia’s largest gold company Polyus PJSC.
• One of Russia’s largest steel companies Severstal PJSC.
• Defence entities supporting Russia’s war.
• Five Russian banks with operations across the Russian Federation.

The Australian Government will also implement a ban on the export of all machinery and related parts to Russia and areas temporarily under Russian control. This will prevent Australian goods from aiding Russia’s aggression in Ukraine.

Australia stands with Ukraine and pays tribute to the unwavering resilience and courage displayed by the Ukrainian people. We mourn the incalculable losses that Ukraine continues to endure and acknowledge the far-reaching negative economic impacts Russia’s invasion has had on the world, including in the Indo-Pacific region.

Australia again calls on Russia to withdraw its forces from Ukrainian territory and end this war.

Prime Minister Anthony Albanese said:

“Australia stands with Ukraine. We pay tribute to the unwavering resilience and courage displayed by the Ukrainian people.”

“Australia again calls on Russia to cease its illegal and immoral war against the people of Ukraine.”

“We will continue to work with the G7 and international partners to address the global impacts of Russia’s invasion.”

“This includes food and energy insecurity, which is a significant concern for our own region.”

Senator the Hon Penny Wong, Minister for Foreign Affairs said:

“This action targets sectors of economic and strategic significance to Russia.”

“This includes the financial, energy, defence and metals sectors that aid and sustain Russia’s war in Ukraine.”

“We are also banning exports of Australian machinery and related parts to Russia to slow its war machine.”

“Russia cannot be allowed to infringe upon another country’s sovereignty and territorial integrity.”

Export ban consultation

The Department of Foreign Affairs and Trade will shortly commence public consultation on the export ban, with implementation of the ban to follow.

Businesses or individuals that wish to participate in consultation on the machinery export ban should subscribe to alerts with the Australian Sanctions Office.

One of the focus areas for the Federal Treasurer, Dr. Jim Chalmers, in his 2023-24 Budget Speech on May 9th was rightly inflation and the cost-of-living (COL). 

“In this environment, inflation remains our primary economic challenge – It drives rate rises; it erodes real wages – Which is why this Budget is carefully calibrated to alleviate inflationary pressures, not add to them.” 

“At the same time, we understand Australians are under the pump right now. That’s why providing responsible, targeted relief is the number one priority in our Budget. Our $14.6 billion cost‑of‑living plan will: Provide help with power bills. Create more affordable housing.” 

But the one-and-only policy measure to address this was redistributing more of taxpayers’ hard-earned money. This is the proverbial ‘rearranging the deckchairs on the Titanic’. Not the RMS Titanic but the COL Titanic. 

“We are delivering up to $3 billion in direct energy bill relief for eligible households and small businesses, co‑funded with the states. More than 5 million households will have up to $500 deducted from their power bills in the next financial year.” 

“We are increasing the maximum rates of Commonwealth Rent Assistance by 15 per cent. This will provide up to $31 extra a fortnight for people renting in the private market and community housing. We’re going to help drive this with a new tax break for build‑to‑rent projects, cutting the managed investment trust withholding tax from 30 to 15 per cent.” 

Putting aside for the moment the lack of any real solutions to COL and the unintended bad consequences of these redistribution policies, they are inadequate to say the least. This inadequacy can be clearly seen in Exhibit A below regarding “food inflation” and “CPI housing utilities” including energy. In the just the past two years, the former rose from 0.7% per year to 8% and the latter from 120.8 index points to 141.7. 

But far more important than having a statistical numbers ‘battle’ over redistribution adequacy, is the inadequacy of redistribution as a real solution to COL and without unintended bad consequences. Let’s turn to one the greatest economists and economic historians of the 20th century to help break this down. That would be Professor Murray N. Rothbard in his book Power and Market: Government and the Economy. 

“Government coerces consumers into giving up part of their income to the State, which then bids away resources from these same consumers. Hence, the consumers are burdened, their standard of living is lowered, and the allocation of resources is distorted away from consumer satisfaction toward the satisfaction of the ends of the government.” 

In other words, COL is pushed up by a ‘double whammy’ of tax and spend. Both ‘crowd out’ the productive and competitive private sector [ie tax-payers] in favour of the unproductive and anticompetitive public sector [ie tax-consumers]. The latter includes, not just politicians and bureaucrats, but also activists and cronies. Thus, the supply-side of the economy shrinks. 

“Government cannot spend money until it obtains it as revenue—whether that revenue comes from taxation, inflation, or borrowing. … Inflation is the basically fraudulent issue of pseudo warehouse-receipts for money, or new money. … [In short,] government is inflating the money supply.” 

Inflation means more-and-more dollars end up chasing fewer-and-fewer goods and services. Thus, the demand-side of the economy expands. In sum, prices rise when either supply decreases (eg COL) or demand increases (eg inflation). They rise even more when both happen at the same time (eg COL + inflation). Exhibit B below shows these two happening as indicated by government debt ($ million) and money supply ($ billion). 

“When the government takes from Peter and gives to Paul, it then creates a separate distribution process. No longer do income and wealth flow purely from service rendered on the market; they now flow from special privilege…distributed to ‘exploiters’ [tax-consumers] at the expense of the ‘exploited’ [tax-payers]. Caste conflict is thereby created, for [the former] benefits at the expense of [the latter].” 

Such ‘robbing Peter to pay Paul’ is not only bad economic policy, as it does not solve the effect of inflation and COL which is caused by government printing and spending. But it is also bad social policy, as it strongly encourages ‘rent seeking’ which is about getting ‘free’ stuff at other people’s expense. Thus, Dr. Chalmers’ redistribution ‘medicine’ for inflation and COL, is not just an economic ‘placebo’, but a social ‘poison’. The result being yet more budget ‘snake oil’ from a Treasurer, who is channeling not just Dr. Strangelove, but also Dr. Feelgood. 

Source A1: https://tradingeconomics.com/australia/food-inflation  

Source A2: https://tradingeconomics.com/australia/cpi-housing-utilities  

Source B1: https://tradingeconomics.com/australia/government-debt  

Source B2: https://tradingeconomics.com/australia/money-supply-m0  

Prime Minister Albanese met today with the Prime Minister of Japan, His Excellency Mr Kishida Fumio.

The Prime Minister congratulated Mr Kishida on his chairing of the G7 and reinforced Australia’s commitment to our special strategic partnership with Japan.

The Prime Minister underscored Australia’s commitment to remaining a reliable supplier of energy to Japan as both economies transition to net zero.

The leaders agreed the broader trade and investment relationship was vital to the success of each nation.

Leaders noted good progress in bilateral security cooperation under the Joint Declaration on Security Cooperation and their shared commitment to an open, prosperous and secure Indo-Pacific.

Prime Minister Albanese thanked Prime Minister Kishida for Japan’s support to convene the 2023 Quad Leaders Summit.

Prime Minister Anthony Albanese will welcome the Prime Minister of the Republic of India, His Excellency Shri Narendra Modi, to Australia from 22-24 May as a guest of the Australian Government.

Prime Minister Modi’s visit to Australia builds on the Australia-India Annual Leaders’ Summit in New Delhi in March and discussions at the G7 Summit and Quad Leaders’ meeting in Hiroshima over the weekend.

At their bilateral meeting, the leaders will discuss trade and investment, including efforts to boost trade between the two countries through a Comprehensive Economic Cooperation Agreement, and work to strengthen people to people links, renewable energy, and defence and security cooperation.

Prime Minister Modi will also meet Australian business leaders to drive Australia’s growing trade and investment relationship with India and take forward opportunities from the Australia-India CEO Forum held in Mumbai in March.

During the visit, the Prime Ministers will attend a community event in Sydney to celebrate Australia’s dynamic and diverse Indian diaspora, a core part of our multicultural community.

Prime Minister Modi last visited Australia in 2014.

The Prime Minister looks forward to visiting India in September for the G20 Leaders’ Summit in New Delhi, the world’s premier forum for economic cooperation. 

Prime Minister Anthony Albanese said:

“I am honoured to host Prime Minister Modi for an official visit to Australia, after receiving an extremely warm welcome in India earlier this year.

“Australia and India share a commitment to a stable, secure and prosperous Indo-Pacific. Together we have an important role to play in supporting this vision. 

“As friends and partners, the relationship between our countries has never been closer. I look forward to celebrating Australia’s vibrant Indian community with Prime Minister Modi in Sydney.”

The family of Barry Humphries AO CBE has accepted the offer of a State Memorial Service in recognition of the late entertainer’s contribution to Australian arts and entertainment.

The Memorial, to be held at the Sydney Opera House on Friday, 15 December 2023, will be co-hosted by the Australian and NSW Governments, and in partnership with the arts community from across the country, including Mr Humphries’ home state of Victoria.

As an internationally recognised home of performance, arts and culture, the Sydney Opera House is a fitting venue for the service which will honour the remarkable life and enduring legacy of the beloved Australian personality.

The late Barry Humphries passed away in Sydney on 22 April aged 89, following a celebrated seven-decade global career. He was best known for his iconic characters including Dame Edna Everage and Sir Les Patterson, as well as being a renowned author, actor and satirist.

The Memorial will bring together dignitaries, family, friends and fans of the late Mr Humphries from across the country and around the world to celebrate his extraordinary career and achievements.

Further details on the State Memorial will be released later in the year at NSW Government State services.

Prime Minister Anthony Albanese said:

“Barry Humphries was a much-loved Australian and a huge loss to the arts community.”

“The Australian Government is pleased to work with the New South Wales Government to deliver a State Memorial to honour the life and legacy of this beloved entertainer.”

NSW Premier Chris Minns said:

“Barry Humphries was one of our nation’s greatest ever comedic talents, and his passing marks the end of an era in Australian entertainment.”

“He was a true master of his craft, and his legacy will continue to live on through the unforgettable characters he brought to life on stage and screen.”

“The Sydney Opera House is a fitting location for what promises to be a memorable send-off given the venue’s significance in Australian arts, culture and entertainment.”

One year ago, Australia voted for change.

The very next day, the Albanese Labor Government began the work of building a better future.

Every member of the Government is proud of what we have achieved so far:

• Historic investments in Medicare
• Cheaper child care
• Fee-free TAFE
• Cheaper medicines
• Energy price relief
• Getting wages moving
• Action on climate change

These are strong foundations for a better future.

We know there is still more to do. We can’t clean up the mess we inherited overnight.

But we’re excited for the work ahead – to continue delivering for all Australians and building on our plan for a better future.

Investing in affordable housing. Continuing to strengthen Medicare. Creating more secure jobs and training Australians for those jobs. Making more things in Australia, powered by home-grown renewable energy. Investing in defence and national security to keep Australians safe. And importantly, continuing to be a force for stability, prosperity and growth in our region and in the world.

In our next year we seek a momentous change, one that recognises Aboriginal and Torres Strait Islanders in our Constitution by enshrining a Voice to Parliament.

We know serving the Australian people is a privilege.

We understand that facing the challenges of this moment and seizing the opportunities of the future depends on bringing the country together. We are determined to be a responsible government that ends division and pursues lasting change. A government for all Australians.

We’re 12 months in, there’s more to be done, and we’re not taking this opportunity to build a better future for granted.

Prime Minister Albanese met today with the Prime Minister of Japan, His Excellency Mr Kishida Fumio.

The Prime Minister congratulated Mr Kishida on his chairing of the G7 and reinforced Australia’s commitment to our special strategic partnership with Japan.

The Prime Minister underscored Australia’s commitment to remaining a reliable supplier of energy to Japan as both economies transition to net zero.

The leaders agreed the broader trade and investment relationship was vital to the success of each nation.

Leaders noted good progress in bilateral security cooperation under the Joint Declaration on Security Cooperation and their shared commitment to an open, prosperous and secure Indo-Pacific.

Prime Minister Albanese thanked Prime Minister Kishida for Japan’s support to convene the 2023 Quad Leaders Summit.