Trump tariffs ‘as big an inflation threat as COVID-19'
'Policymakers must act decisively on multiple fronts to ensure price stability and promote sustainable economic growth while preserving economic and financial stability,' he said.
There are already signs overseas of the financial hit caused by Trump's tariff agenda. Canada's economy contracted in April as its close trade links to the US were disrupted while data released last week revealed American GDP fell by 0.5 per cent through the first three months of 2025.
While the Australian economy grew through the March quarter, this pre-dated Trump's liberation day announcements. But there are signs a rise in American tariffs is already starting to affect local firms.
A survey by MYOB to be released this week shows Trump's tariffs have been felt by 17 per cent of small and mid-sized businesses.
About 41 per cent of those surveyed said they believed the tariffs would destabilise the global economy, with more than a third expecting the imposts to both lift business costs and inflation.
While 45 per cent said they expected the economy to decline this year, 64 per cent said their financial position was either good or excellent.
MYOB chief executive officer Paul Robson said the results highlighted the impact of events playing out on the other side of the globe.
'While global policy decisions may feel distant, Australian SMEs are alive to potential local impacts and are pivoting their way around them,' he said.
'The key consideration for impacted SMEs is the cumulative effect of both tariffs and interest rates on the cost of doing business. Supply chain disruption is another concern for this community, given the diverse industry portfolio this sector covers.'
The turmoil in supply chains, driven in part by Trump's tariff agenda, has resulted in 17 per cent of surveyed businesses saying they plan to shift where they source their products or services. Just one in 10 expects an increase in customer demand.
This impact is not showing up yet in the federal budget, which Treasurer Jim Chalmers forecast in March would show $940 billion in gross debt by the end of the current financial year before climbing to $1.02 billion by the end of 2025-26.
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But total government debt will end 2024-25 at $928.6 billion due to a better budget bottom line.
Chalmers had forecast a deficit $27.6 billion, but in the financial year to the end of May, the deficit was just $5.5 billion due to higher-than-expected company and personal income tax collections. On a pro rata basis, the government had expected the deficit to be at $20.2 billion by the end of May.
The government believes the full-year deficit will increase to more than $10 billion as payments, held up in part by the May election, start to flow to states and taxpayers. Even at that level, Chalmers is on track to again fall short of his budget gross government debt forecast.
But debt levels are ramping up much quicker among the nation's states and territories.
Ratings' agency S&P Global estimates that the states and territories had gross debt of $266.3 billion in 2019 with that on track to reach $900 billion by 2029 – a 238 per cent increase. Over the same period, federal gross debt is forecast to grow by 126 per cent.
Victoria is on track to have the highest debt of any state or territory at $274.1 billion, a 397 per cent increase. The largest jump in debt is expected to be endured by Tasmania, climbing by 627 per cent to $23.4 billion.
NSW ($252.3 billion) and Queensland ($205.7 billion) will also have high debt levels.
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Show me the money: Pope launches Vatican debt campaign
Pope Leo XIV has celebrated a special feast day traditionally used by the Catholic Church to drum up donations from the faithful. The Vatican under the first American Pope is rolling out a new campaign to urge ordinary Catholics to help bail out the deficit-ridden Holy See. Leo celebrated Mass in St Peter's Basilica, marking the Feast of Saints Peter and Paul and thanked donors who have contributed, using the language of the publicity campaign to say their financial support was a sign of union with his young pontificate. In churches around the world, Masses on the July 29 feast day often include a special collection for Peter's Pence, a fund which both underwrites the operations of the central government of the Catholic Church and pays for the Pope's personal acts of charity. The church is using a promotional video, poster, QR code and website soliciting donations via credit card, PayPal, bank transfer and post office transfer. The Vatican is betting that an American-style fundraising pitch under the Chicago-born Leo will do more to help keep the Holy See bureaucracy afloat and erase its 50 million to 60 million euro ( $A87 million to $A104 million) structural deficit. The video features footage of Leo's emotional first moments as Pope, when he stepped out onto the loggia of St Peter's Basilica and later choked up as he received the fisherman's ring of the papacy. With an evocative soundtrack in the background, the video superimposes a message, available in several languages, urging donations to Leo via the Peter's Pence collection. "With your donation to Peter's Pence, you support the steps of the Holy Father," it says. "Help him proclaim the Gospel to the world and extend a hand to our brothers and sisters in need. Support the steps of Pope Leo XIV. Donate to Peter's Pence." At the end of his noon blessing on Sunday, Leo used the same language about his first steps to say the Peter's Pence fund is "a sign of communion with the Pope and participation with his Apostolic Ministry." "From the heart, I thank those who with their gifts are supporting my first steps as the successor of St Peter," he said. The fund has been the source of scandal in recent years, amid revelations the Vatican's secretariat of state mismanaged its holdings through bad investments, incompetent management and waste. The recent trial over the Vatican's bungled investment in a London property confirmed the vast majority of Peter's Pence contributions had funded the Holy See's budgetary shortfalls, not papal charity initiatives as many parishioners had been led to believe. On top of the budget deficit, the Vatican is also facing a 1 billion euro (about $A1.78 billion) shortfall in its pension fund that Pope Francis, in the months before he died, warned was unable in the medium term to fulfil its obligations. Unlike countries, the Holy See doesn't issue bonds or impose income tax on its residents to run its operations, relying instead on donations, investments and revenue generated by the Vatican Museums, and sales of stamps, coins, publications and other initiatives. For years, the United States has been the greatest source of donations to Peter's Pence, with US Catholics contributing about a quarter of the total each year. Vatican officials are hoping that under Leo's pontificate, with new financial controls in place and an American math major running the Holy See, donors will be reassured that their money won't be misspent or mismanaged. Pope Leo XIV has celebrated a special feast day traditionally used by the Catholic Church to drum up donations from the faithful. The Vatican under the first American Pope is rolling out a new campaign to urge ordinary Catholics to help bail out the deficit-ridden Holy See. Leo celebrated Mass in St Peter's Basilica, marking the Feast of Saints Peter and Paul and thanked donors who have contributed, using the language of the publicity campaign to say their financial support was a sign of union with his young pontificate. In churches around the world, Masses on the July 29 feast day often include a special collection for Peter's Pence, a fund which both underwrites the operations of the central government of the Catholic Church and pays for the Pope's personal acts of charity. The church is using a promotional video, poster, QR code and website soliciting donations via credit card, PayPal, bank transfer and post office transfer. The Vatican is betting that an American-style fundraising pitch under the Chicago-born Leo will do more to help keep the Holy See bureaucracy afloat and erase its 50 million to 60 million euro ( $A87 million to $A104 million) structural deficit. The video features footage of Leo's emotional first moments as Pope, when he stepped out onto the loggia of St Peter's Basilica and later choked up as he received the fisherman's ring of the papacy. With an evocative soundtrack in the background, the video superimposes a message, available in several languages, urging donations to Leo via the Peter's Pence collection. "With your donation to Peter's Pence, you support the steps of the Holy Father," it says. "Help him proclaim the Gospel to the world and extend a hand to our brothers and sisters in need. Support the steps of Pope Leo XIV. Donate to Peter's Pence." At the end of his noon blessing on Sunday, Leo used the same language about his first steps to say the Peter's Pence fund is "a sign of communion with the Pope and participation with his Apostolic Ministry." "From the heart, I thank those who with their gifts are supporting my first steps as the successor of St Peter," he said. The fund has been the source of scandal in recent years, amid revelations the Vatican's secretariat of state mismanaged its holdings through bad investments, incompetent management and waste. The recent trial over the Vatican's bungled investment in a London property confirmed the vast majority of Peter's Pence contributions had funded the Holy See's budgetary shortfalls, not papal charity initiatives as many parishioners had been led to believe. On top of the budget deficit, the Vatican is also facing a 1 billion euro (about $A1.78 billion) shortfall in its pension fund that Pope Francis, in the months before he died, warned was unable in the medium term to fulfil its obligations. Unlike countries, the Holy See doesn't issue bonds or impose income tax on its residents to run its operations, relying instead on donations, investments and revenue generated by the Vatican Museums, and sales of stamps, coins, publications and other initiatives. For years, the United States has been the greatest source of donations to Peter's Pence, with US Catholics contributing about a quarter of the total each year. Vatican officials are hoping that under Leo's pontificate, with new financial controls in place and an American math major running the Holy See, donors will be reassured that their money won't be misspent or mismanaged. Pope Leo XIV has celebrated a special feast day traditionally used by the Catholic Church to drum up donations from the faithful. The Vatican under the first American Pope is rolling out a new campaign to urge ordinary Catholics to help bail out the deficit-ridden Holy See. Leo celebrated Mass in St Peter's Basilica, marking the Feast of Saints Peter and Paul and thanked donors who have contributed, using the language of the publicity campaign to say their financial support was a sign of union with his young pontificate. In churches around the world, Masses on the July 29 feast day often include a special collection for Peter's Pence, a fund which both underwrites the operations of the central government of the Catholic Church and pays for the Pope's personal acts of charity. The church is using a promotional video, poster, QR code and website soliciting donations via credit card, PayPal, bank transfer and post office transfer. The Vatican is betting that an American-style fundraising pitch under the Chicago-born Leo will do more to help keep the Holy See bureaucracy afloat and erase its 50 million to 60 million euro ( $A87 million to $A104 million) structural deficit. The video features footage of Leo's emotional first moments as Pope, when he stepped out onto the loggia of St Peter's Basilica and later choked up as he received the fisherman's ring of the papacy. With an evocative soundtrack in the background, the video superimposes a message, available in several languages, urging donations to Leo via the Peter's Pence collection. "With your donation to Peter's Pence, you support the steps of the Holy Father," it says. "Help him proclaim the Gospel to the world and extend a hand to our brothers and sisters in need. Support the steps of Pope Leo XIV. Donate to Peter's Pence." At the end of his noon blessing on Sunday, Leo used the same language about his first steps to say the Peter's Pence fund is "a sign of communion with the Pope and participation with his Apostolic Ministry." "From the heart, I thank those who with their gifts are supporting my first steps as the successor of St Peter," he said. The fund has been the source of scandal in recent years, amid revelations the Vatican's secretariat of state mismanaged its holdings through bad investments, incompetent management and waste. The recent trial over the Vatican's bungled investment in a London property confirmed the vast majority of Peter's Pence contributions had funded the Holy See's budgetary shortfalls, not papal charity initiatives as many parishioners had been led to believe. On top of the budget deficit, the Vatican is also facing a 1 billion euro (about $A1.78 billion) shortfall in its pension fund that Pope Francis, in the months before he died, warned was unable in the medium term to fulfil its obligations. Unlike countries, the Holy See doesn't issue bonds or impose income tax on its residents to run its operations, relying instead on donations, investments and revenue generated by the Vatican Museums, and sales of stamps, coins, publications and other initiatives. For years, the United States has been the greatest source of donations to Peter's Pence, with US Catholics contributing about a quarter of the total each year. Vatican officials are hoping that under Leo's pontificate, with new financial controls in place and an American math major running the Holy See, donors will be reassured that their money won't be misspent or mismanaged. Pope Leo XIV has celebrated a special feast day traditionally used by the Catholic Church to drum up donations from the faithful. The Vatican under the first American Pope is rolling out a new campaign to urge ordinary Catholics to help bail out the deficit-ridden Holy See. Leo celebrated Mass in St Peter's Basilica, marking the Feast of Saints Peter and Paul and thanked donors who have contributed, using the language of the publicity campaign to say their financial support was a sign of union with his young pontificate. In churches around the world, Masses on the July 29 feast day often include a special collection for Peter's Pence, a fund which both underwrites the operations of the central government of the Catholic Church and pays for the Pope's personal acts of charity. The church is using a promotional video, poster, QR code and website soliciting donations via credit card, PayPal, bank transfer and post office transfer. The Vatican is betting that an American-style fundraising pitch under the Chicago-born Leo will do more to help keep the Holy See bureaucracy afloat and erase its 50 million to 60 million euro ( $A87 million to $A104 million) structural deficit. The video features footage of Leo's emotional first moments as Pope, when he stepped out onto the loggia of St Peter's Basilica and later choked up as he received the fisherman's ring of the papacy. With an evocative soundtrack in the background, the video superimposes a message, available in several languages, urging donations to Leo via the Peter's Pence collection. "With your donation to Peter's Pence, you support the steps of the Holy Father," it says. "Help him proclaim the Gospel to the world and extend a hand to our brothers and sisters in need. Support the steps of Pope Leo XIV. Donate to Peter's Pence." At the end of his noon blessing on Sunday, Leo used the same language about his first steps to say the Peter's Pence fund is "a sign of communion with the Pope and participation with his Apostolic Ministry." "From the heart, I thank those who with their gifts are supporting my first steps as the successor of St Peter," he said. The fund has been the source of scandal in recent years, amid revelations the Vatican's secretariat of state mismanaged its holdings through bad investments, incompetent management and waste. The recent trial over the Vatican's bungled investment in a London property confirmed the vast majority of Peter's Pence contributions had funded the Holy See's budgetary shortfalls, not papal charity initiatives as many parishioners had been led to believe. On top of the budget deficit, the Vatican is also facing a 1 billion euro (about $A1.78 billion) shortfall in its pension fund that Pope Francis, in the months before he died, warned was unable in the medium term to fulfil its obligations. Unlike countries, the Holy See doesn't issue bonds or impose income tax on its residents to run its operations, relying instead on donations, investments and revenue generated by the Vatican Museums, and sales of stamps, coins, publications and other initiatives. For years, the United States has been the greatest source of donations to Peter's Pence, with US Catholics contributing about a quarter of the total each year. Vatican officials are hoping that under Leo's pontificate, with new financial controls in place and an American math major running the Holy See, donors will be reassured that their money won't be misspent or mismanaged.
