Donald Trump weighs up $400m luxury plane gift from Qatar
Donald Trump is continuing to weigh up a $400 million luxury plane gifted by Qatar which is set to be used as Air Force One, with the US President describing it as an opportunity that's too valuable to refuse.
Sky News US analyst Michael Ware has examined the problems President Trump may face if he accepts the luxury gift.
'One, there's a legal problem – no federal employee ... can accept gifts from any foreign government under the constitution,' he told Sky News Australia.
'But the other real problem is security.'
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Perth Now
29 minutes ago
- Perth Now
Australia must ease zoning to fix housing crisis: OECD
An influential global economic body has weighed in on Australia's housing debate, urging governments to relax zoning restrictions to ease home prices. The Organisation for Economic Cooperation and Development warned Australia to boost housing supply and address falling affordability as it revealed a downgrade to its economic growth forecast for 2025. The Paris-based policy forum said Australia's gross domestic product would grow at 1.8 per cent this year, down 10 basis points from its prediction in March, as Donald Trump's tariffs hit demand for Australian exports, especially if China experiences a marked slowdown. The organisation downgraded its global growth forecasts from 3.1 per cent to 2.9 per cent this year. "Australia's exposure to US tariff increases is limited given that exports to the United States represent only about five per cent of total exports," the OECD said in its Economic Outlook, released on Tuesday. "The impact of global trade tensions on the Australian economy is more likely to come via the depressing effect of higher tariffs and policy uncertainty on investment worldwide, manifested in part by lower prices for iron ore, coal and natural gas." But economic growth is expected to accelerate to 2.2 per cent next year - an increase from its prediction earlier this year and in line with the OECD's estimate of Australia's economic potential. As interest rates decline and workers experience continued growth in real wages, swelling disposable income should boost private consumption, offsetting a slowdown in public spending. The OECD's forecast for 2025 is lower than the Reserve Bank's estimate of 2.1 per cent but in line with its 2026 prediction. Treasurer Jim Chalmers said it was a "stark reminder of the risks posed by tariffs and trade tensions, conflict and fragmentation". But with GDP set to increase over the next two years, Australia was turning a corner as the rest of the world took a turn for the worse, Dr Chalmers said. Inflation will remain close to target, averaging 2.3 per cent over 2025 and 2026, the OECD projected. That's below RBA estimates, which predict headline inflation accelerating to 3.1 per cent by the end of the year as government energy subsidies roll off. The OECD said the central bank would be warranted to continue easing interest rates but must be nimble to change path in case of unexpected external shocks. Longer term, Australia needs to fix stagnating productivity growth and make housing more affordable. Recently implemented competition reforms should be complemented with other policies strengthening investment, "including improved incentives for house-building, especially for social housing, and public investment to improve electricity grid connections". The OECD said easing zoning restrictions would strengthen competition and productivity, as well as raise housing investment to "reverse the long-standing decline in housing affordability". The body said it was important that state and local governments in charge of housing supply are given financial incentives to reduce regulatory complexity and streamline approvals. The comments chime with comments by federal assistant minister for productivity Andrew Leigh, who singled out local councils and stultified planning systems for "structural failure" in meeting supply targets in a speech to the Chifley Research Centre earlier on Tuesday. "Too often, the planning process is built for avoidance, not delivery. Zoning schemes reward conformity over quality," he said. "The consequences are visible everywhere - from rising rents and overcrowding, to the growing number of people priced out of the communities they grew up in."
West Australian
32 minutes ago
- West Australian
Australian economy: OECD warns sluggish business investment has slowed growth
Australia has been among the worst hit developed nations by a global slowdown in business investment that will damage growth, international experts at the OECD say. The national economy will grow a sluggish 1.8 per cent this year, according to the Organisation for Economic Co-operation and Development's latest analysis. A modest 2.2 per cent was expected in 2026. Unemployment and inflation were tipped to stay under control, the report forecast. But Australia has plenty of hard work to do fixing the housing shortage, chasing net zero and grappling with an ageing population. America's trade war will slow growth across the world and the OECD called on countries to rev up business investment to boost living standards long term. That means investors and companies pumping cash into new equipment, major projects, research, and technology to level up their businesses. AMP last week estimated business investment as a share of Australia's economy had fallen to half the boom-time level of 2012. Lobbyists the Australian Industry Group seized on the numbers arguing they were the 'canary in the coal mine' for Australia's competitiveness. Tuesday's report by the Paris-based OECD — led by former WA senator and Australian finance minister Mathias Cormann — will add weight to business concerns. But the international institute's research shows the problem is global, with investment lagging historical trends across advanced countries. The result had been slower income growth for workers, the OECD said. Australia's problem was among the biggest in the world, however, with business investment about 30 per cent below the trend rate prior to the Global Financial Crisis. It was the third biggest gap among 17 developed countries assessed. The OECD chalked up the problem to high levels of uncertainty, sluggish demand and structural changes as economies go digital. Investment into housing has taken a battering, too. State and Federal Governments would need to ease zoning rules and move to 'reverse the long-standing decline in housing affordability', the report said. Yet the most immediate threat was US President Donald Trump's trade war — considered by the OECD to be a major risk to workers and businesses everywhere. 'We have seen a significant increase in trade barriers as well as in economic and trade policy uncertainty,' OECD chief economist Álvaro Pereira said. 'This sharp rise in uncertainty has negatively impacted business and consumer confidence and is set to hold back trade and investment.' He said global growth projections had been downgraded to 2.9 per cent for 2025 and 2026. 'Weakened economic prospects will be felt around the world, with almost no exception.' The report said Australia's outlook hinges on China, rather than through direct trade barriers into the US. It came as major banks downgraded forecasts for March quarter economic growth, ahead of data to be released on Wednesday. ANZ expects the national economy expanded 0.2 per cent in the first three months of the year. Commonwealth Bank was just slightly more optimistic with a forecast of 0.3 per cent. Minutes from the Reserve Bank's May meeting, released on Tuesday, showed Governor Michele Bullock's board hopes to take the 'path of least regret' through trade instability. The RBA has twice cut interest rates this year although the minutes also showed the board was reluctant to move too fast, too soon.
ABC News
an hour ago
- ABC News
Uncertainty about Trump's tariffs has contributed to weaker outlook for Australia's economy, RBA official says
Australia's economy will experience weaker growth, lower inflation and a slightly weaker labour market as a consequence of US President Donald Trump's tariffs, an RBA official says. Sarah Hunter, an assistant governor at the Reserve Bank, said the uncertainty caused by Mr Trump's tariffs — with their constantly shifting rules and levels — was also making it harder to forecast where the global economy was heading. She said Australia's economy, at this point, probably would not suffer a material direct negative impact from the tariffs. But the uncertainty sparked by the tariffs would hurt Australia, and our economy would be hit in other indirect ways, she said. She said that explained why the RBA revised its official forecasts recently to anticipate weaker growth, lower inflation and a slightly higher unemployment rate over the next 12 months. "Global uncertainty may weigh substantially on domestic activity if uncertainty remains elevated," she warned. She said the RBA Board's decision to cut interest rates last month was also informed by this analysis of the problems that flowed from heightened uncertainty in the global economy. She made her comments in a speech to the Economic Society of Australia Queensland on Tuesday afternoon. Ms Hunter said uncertainty was "a bit of a slippery concept" and there were lots of ways to try to measure it. She said one way — the economic policy uncertainty index (EPU) — was based on the number of news articles that mentioned policy uncertainty. Another way — the volatility index (VIX) — was a measure that captured how uncertain financial markets were about near-term equity prices. But she said both of those indices saw a sharp rise in uncertainty after Donald Trump's tariff announcement in April, although the VIX has declined in recent weeks. See the graph below. And she said there was "ample evidence" that higher uncertainty could lead to declines in investment, output and employment and Australia was not immune from that dynamic. "Typically, higher uncertainty leads firms to delay decisions that are costly to reverse, like investment and hiring," she said. "This makes sense intuitively because there is value in waiting to see how things are playing out before making a decision that is (at least partially) non-reversible. "Some studies find higher uncertainty also has a measurable impact on household consumption, but this is typically more modest. "Research suggests that the negative impacts of higher policy uncertainty — including trade policy — are largest for businesses, as they typically pull back on investment," she said. She said that if we saw businesses and households responding as they had in the past, then the current level of uncertainty "will weigh materially on global activity". "But the unpredictability and unprecedented nature of the current situation makes it hard to be precise on the size of the impact," she warned. She said at this stage, the RBA's "baseline scenario" for its official forecasts assumed that the prevailing level of global uncertainty would have a "relatively modest drag" on Australia's economy. But she said if a global trade war erupted, we could see a "substantial pull-back in activity" in Australia. Overall, Ms Hunter said the RBA would monitor carefully how things unfolded in coming months. She said the RBA's economists would be watching "key transmission channels" through which the United States' proposed trade tariffs would impact Australia's economy, in their different ways. She said those channels included: And she emphasised how difficult it had become to produce forecasts of economic activity in such a febrile environment. "How will the current unpredictable and uncertain global environment transmit through to the Australian economy?" she asked. "The short answer is, we can't be completely sure. "The broad-based nature of the proposed US tariffs, retaliation from major partners and other policy shifts all have the potential to structurally alter the world economy. "[Our] baseline forecast is for recent global developments to contribute to slower economic growth in Australia and a slightly weaker labour market. "We also anticipate that, overall, the price of tradable goods will be slightly dampened. "Together, these two outcomes mean that inflation is forecast to be a little lower than at the February Statement on Monetary Policy, settling around the midpoint of the 2-3 per cent target range. "This forecast is based on several judgments and assumptions about the potency of the transmission channels I have discussed today," she said.
