Australian shares hit second consecutive record high as investors hope for trade truce
The S&P-ASX200 index leapt to a new peak of 8639.1 points in early trading on Wednesday before paring back its gains to finish just 4.9 points better at 8592.1, extending the year's growth to 5.3 per cent.
It is up 9.5 per cent for the quarter, on track for its biggest advance since the 2020 fourth quarter, after recovering from the April lows plumbed in the wake of US President Donald Trump's announcement of wide-ranging tariffs against China and most of his country's other trading partners.
Since its low on April 7, the S&P-ASX200 incredibly has clawed back 19.8 per cent, helped by Mr Trump's deferment of the levies until next month.
In recent days, investors have drawn hope from promising signs of a thawing of trade tensions between the US and China off the back of trade talks in London.
In particular, US negotiators said they 'absolutely expect' that issues around shipments of rare earths would be resolved as part of a trade accord.
Seven of the ASX200's 11 sectors finished in the green on Wednesday, led by real estate (up 0.9 per cent) and energy (up 0.8 per cent).
Banking stocks, notably Commonwealth Bank of Australia, also lifted the market early but fell away in later trading.
CBA, which has been on a flyer, hit a record high of $183.19 before closing down 0.3 per cent at $181.40.
Woodside Energy was the best of the energy stocks, adding 1.8 per cent, while Fortescue and BHP climbed 3.5 per cent and 1.5 per cent respectively as iron ore prices gained.
Buy now, pay later group Zip Co was jumped 15.5 per cent after upgrading its annual earnings guidance, citing strong growth momentum in the US.
Johns Lyng Group surged 17.7 per cent after confirming a media report that Pacific Equity Partners had lobbed a buyout offer for the construction company.
Monash IVF recovered 11 per cent after giving up 28 per cent on Tuesday on disclosure of a second embryo mix-up at its Melbourne laboratory.
Pepperstone head of research Chris Weston attributed the market's 'impressive snapback' since April to a combination of the tariff pauses, 'resilient and even improving US and global economic data', along with US company upgrades and a sharp reduction in investment volatility.
'We continue to be reminded that the share market is not reflective of the economy,' Mr Weston said.
'As we know, the Aussie economy is hardly blowing the lights out ... in fact, the idea that growth remains sluggish reinforces the notion that the RBA will cut interest rates' next month.
The market recovery over the past two months has been led by tech stocks, which have gained 42 per cent. They have easily outperformed the energy sector (up 25 per cent) and the financial index (up 21 per cent).
The Australian dollar remained around the US65¢ mark.
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Perth Now
4 minutes ago
- Perth Now
‘Nothing we can do': RBA's grim admission
Australians' living standards will fall and there's very little the central bank can do about it. According to the Reserve Bank's statement on monetary policy, there will be lower pay rises, weak consumer spending, falling business profits and an overall drop in living standards over the medium term. The central bank put the issue squarely on Australia's lack of productivity and points out it is powerless to stop it. 'Lower productivity growth means slower growth in business revenues, household incomes and ultimately demand,' the RBA's quarterly statement on monetary policy said. Despite the grim outlook, the RBA boss Michele Bullock was quick to point out there was little the central bank could do to fix these issues, even as she announced last Tuesday that the board was cutting interest rates by 25 basis points to 3.60 per cent. RBA governor Michele Bullock explains why the RBA can't help with productivity. Christian Gilles / NewsWire Credit: News Corp Australia '(The) productivity slowdown is a matter for the government that they are taking on,' Ms Bullock said. 'They're looking at what they can do.' Ms Bullock said businesses were also looking at the issue. 'There's nothing the Reserve Bank can do,' she continued. 'All the Reserve Bank can do is make sure we have low and stable inflation, and if we have full employment, both of those things are very stable environments for businesses to think about how they might improve productivity, how they might produce more for the same amount of labour and capital input.' The RBA's call comes just days ahead of Treasurer Jim Chalmers' much-hyped economic roundtable Economists, unions, business people and politicians will all head to Canberra next week for a three-day discussion aimed at lifting Australia's falling productivity. Australia's Cash Rate 2022 Why does it matter? Simply put, productivity matters because it improves living standards, leads to economic growth and a greater economy. Productivity is the measure of how efficiently resources such as time, effort and materials are used to produce a given output. According to the Australian Bureau of Statistics, Australia's long-term productivity has slumped. In 2003-2004, productivity grew at 1.8 per cent a year; in 2022-2023, it was down to just 0.9 per cent a year. Australians will be thousands of dollars worse off if productivity continues to slump. NewsWire / Nicholas Eagar Credit: NewsWire Under this grim reality, Australians' living standards are falling. To put a dollar figure on it, the Productivity Commission estimated that full-time workers would be $14,000 a year worse off by 2035 if Australia couldn't rediscover its previous growth and continued on its current trend. Separate RBA research found the slump in productivity came at the same time as a lack of competition in business, costing every Aussie about $3000 in today's dollars. Australians remain in the dark Despite having a wide-ranging impact on their lives, most Australians are unaware of what the government is doing or trying to achieve with its productivity roundtable. According to Amplify and YouGov polling, three in four Aussies haven't heard of the roundtable and a further 60 per cent are not confident it would lead to meaningful change. Amplify chief executive Georgina Harrisson said this issue hits every Australian household, but too often governments propose solutions that pit different parts of the community against each other. 'This roundtable can't just be a talkfest limited to the Canberra bubble – not when the issue is being felt in every Australian home,' she said. 'Australians are doing it tough, with rising bills, higher housing costs and lower productivity. NED-9175-Australia's GDP 'The government can't afford to waste this moment on words alone; we need action that delivers real wins in people's pockets.' Ms Harrisson said the government needed to do far more to bring the voices of everyday Australians into the discussion. 'When the community don't trust or feel understood by their political representatives, it is more important than ever to be reaching out and letting them in to the conversations that affect them most,' she said. Most Australians are unaware of the productivity roundtable despite it impacting all of them. Credit: News Corp Australia, NewsWire/ Monique Harmer Four things to lift productivity Meanwhile, AMP chief economist Shane Oliver says there are four key ways the government can lift productivity. He believes too much regulation, the current tax system, a lack of competition and government overspending is all holding Australia back. Dr Oliver said productivity is the 'secret sauce' that enables strong growth in real wages, living standards and profits while, at the same time, keeping inflation low. 'So hopefully, the Roundtable will kick off a process of economic reform that will boost the ability of the economy to produce goods and services with the aim of boosting long-term living standards,' he said. Dr Oliver said the government should lift productivity through removing red tape, tax reform, increasing competition and having government spending capped at 25 per cent of GDP. It is currently 28 per cent. 'Combined it should free up the supply side of the economy to make it easier for the economy to supply goods and services for any given level of hours worked by Australian workers,' he told NewsWire. 'For example, it should enable us to build more homes and allow businesses to produce more.' As part of the roundtable, the economist said there needs to be a rebalance away from income taxes to a broader GST, while compensating those on a lower income, and removing nuisance taxes like stamp duty, would be key to getting Australia's productivity back on track. Dr Oliver said an uplift in productivity was key to living standards. NewsWire / John Appleyard Credit: News Corp Australia 'This sounds politically difficult but if combined with an adjustment to income tax scales to offset the regressive nature of the GST, some measures to cap property tax concessions (like cutting the overly generous capital gains tax discount) and better tax gas exports a broad consensus could be reached,' he said. Dr Oliver also proposed keeping government spending below 25 per cent of GDP as it would ensure budget stability and boost productivity by not having the government taking more than required when it comes to workers. 'The reality of course is that everyone has their wish list and expectations running into the Roundtable appear to be running too high. It's likely just the start of long process through which (hopefully) the government will pick the best options and make some compromises,' he said. NAB chief executive Andrew Irvine said stronger business investment and less regulation was required to help lift Australia's ailing productivity. 'The vast amount of job growth in our country in the last 10 years has been in the public sector, not the private sector,' he said at the Australian Banking Association annual conference in Sydney. 'When I speak to our business customers, they say it's just too hard to start, scale and grow a business. We need to fix that and reduce red tape to create more jobs in the private sector.'
The Advertiser
2 hours ago
- The Advertiser
The US has changed. Australia hasn't. It's time to talk about where the relationship goes from here
Seven months after Donald Trump was inaugurated for a second term as US president, we are facing the most important moment in Australia's foreign policy since the Iraq war. Australia needs to have a national conversation on the future of its alliance with the United States. The alliance was on the line with Trump's tariff decisions on August 1. The consensus was Australia dodged a bullet, and life goes on. But this was no flesh wound. By dictating and unilaterally imposing the terms of trade between the US and Australia - affirming the "reciprocal tariffs" of 10 per cent imposed on Australia, plus the tariffs of 50 per cent on both steel and aluminium - Trump has trashed the historic US-Australia Free Trade Agreement. Trump has not provided a good answer to the question of what he is doing to one of the US's strongest and most consistent allies. And there is more to come. The president will also place a tariff on US imports of Australian pharmaceuticals. There is also far more to come on the future of the US-Australia alliance. Media have been full of opinions on what the relationship between the two countries ought to look like. These interventions have assayed the crucial importance of Australian Prime Minister Anthony Albanese meeting personally with Trump; whether Washington was rattled by Albanese's visit to China, whether Australia should "fortify northern Australia into an allied military stronghold for the region"; and whether the relationship is being mismanaged. The best model for this conversation would be the economic roundtable Treasurer Jim Chalmers will host in Canberra this month. Its purpose, Albanese said, is to "build the broadest possible base of support for further economic reform". Why not apply the same process to the future of our foreign policy and alliance with the US? A similar roundtable, convened by the foreign minister and bringing together the smartest and most experienced people from across the political and foreign policy spectrum to discuss all these issues, would provide the best and most sincere guidance for the country. There are three bedrock truths that are unimpeachably clear since Trump reassumed power in the US. First, Australia has not changed; the US has changed. Albanese and his government has not changed its posture towards the US. Trump has profoundly changed America's posture towards Australia. Second, the US is no longer the leader of the free world, because the free world is no longer following America. The democracies with which the US has been allied since the end of the Second World War are no longer acting in concert with the US, but in reaction to what Trump is doing across the global landscape - from the Americas, to the Atlantic, Russia, the Middle East, China, the Indo-Pacific and Australia. Third, Trump has destroyed the economic and trading architecture erected after the Second World War to promote growth and prosperity. Nations engaging economically with the US are no longer trading partners but trading victims. The "deals" Trump boasts about are involuntary. Trump's imposition of tariffs even on countries with a trade deficit with the US shows that his trade policy is, at heart, the unilateral exercise of US political power to force concessions to US domination. What is under profound challenge today - 84 years after prime minister John Curtin turned to the US and 73 years after the ANZUS treaty came into effect - is whether the US under Trump is still aligned with the vision the two countries have shared for decades. Australians have serious doubts about the relationship. The latest polling by Resolve Political Monitor documented "a strong desire for the country to assert more independence from the United States amid Donald Trump's turbulent presidency". Fewer than 20 per cent of Australian voters believe Trump's election victory was good for Australia. Nearly half of voters believe it would be "a good thing" for Australia to act more independently of the US. Pew Research reported in July that only 35 per cent of Australians believe the US is a top ally. Trump is driving away US allies. Canadian Prime Minister Mark Carney said after winning office, "Our old relationship with the United States, a relationship based on steadily increasing integration, is over." When the leaders of Japan and South Korea received Trump's insulting letters of demarche on trade, they each said the correspondence was "deeply regrettable", with Japan's prime minister adding, "extremely disrespectful". Trump has also precipitated a trade war with India. How effective can the Quad - established by the US, Japan, India and Australia to serve as a counterweight to China - be if three of its four members are victims of Trump's tariffs? Australia has also broken with Trump on recognition of Palestine - issues of the highest importance to the president. Moreover, if the terms of whatever Trump is conjuring up with Putin to end the war with Ukraine are unacceptable to Ukraine and Europe, and Trump sides with Putin, a further sharp break by Australia with Trump is likely. The "soft power" wielded by Australia is also involved here. From the UN's inception, Australia has supported the architecture required to help secure peace, security, stability and the health and welfare of all peoples. But Trump has now withdrawn the US from UNESCO, the World Health Organisation, the World Trade Organisation, the Paris climate accords, the UN Human Rights Commission and others. He has terminated the USAID programs that delivered crucial health care and crisis relief. Medical studies project that millions of people will die as a result in the coming years. Australia uses that architecture to help change the world for the better. Trump is making that work much harder. Trump is repealing all US programs that combat global warming - the most important environmental issue of our times and the number-one existential security issue for Asia-Pacific nations. Australia shares their urgency. Since Trump's inauguration, AUKUS has consistently been viewed as a bellwether for the relationship. Australia's need for a modern submarine fleet is an existential issue for the country's defence capability. Will Trump, during the Pentagon's review of AUKUS, change its terms to be more favourable to the US? Is Australia spending enough on defence? Will the pace of submarine construction ensure Australia receives the subs in the 2030s? If not, are there better solutions than AUKUS? But the most important question is the most known unknown. What does Trump want from China? Trump has never outlined his endgame with President Xi Jinping. Yes, of course, the trade deal of the century. But at what price, particularly with respect to Taiwan? What are the consequences of all the scenarios and what does Australia need to do to be prepared? Trump is president and will continue to act with power and drama. Albanese will respond on behalf of Australia. That would be business as usual. But without the benefit of a considered national conversation about the future of the Australian-US alliance and what is in Australia's national interest, the current state of play does not rise to the challenges posed by Trump to Australia. US baseball legend Yogi Berra once said, "When you come to a fork in the road, take it." That's where we are. Let's talk about it. Seven months after Donald Trump was inaugurated for a second term as US president, we are facing the most important moment in Australia's foreign policy since the Iraq war. Australia needs to have a national conversation on the future of its alliance with the United States. The alliance was on the line with Trump's tariff decisions on August 1. The consensus was Australia dodged a bullet, and life goes on. But this was no flesh wound. By dictating and unilaterally imposing the terms of trade between the US and Australia - affirming the "reciprocal tariffs" of 10 per cent imposed on Australia, plus the tariffs of 50 per cent on both steel and aluminium - Trump has trashed the historic US-Australia Free Trade Agreement. Trump has not provided a good answer to the question of what he is doing to one of the US's strongest and most consistent allies. And there is more to come. The president will also place a tariff on US imports of Australian pharmaceuticals. There is also far more to come on the future of the US-Australia alliance. Media have been full of opinions on what the relationship between the two countries ought to look like. These interventions have assayed the crucial importance of Australian Prime Minister Anthony Albanese meeting personally with Trump; whether Washington was rattled by Albanese's visit to China, whether Australia should "fortify northern Australia into an allied military stronghold for the region"; and whether the relationship is being mismanaged. The best model for this conversation would be the economic roundtable Treasurer Jim Chalmers will host in Canberra this month. Its purpose, Albanese said, is to "build the broadest possible base of support for further economic reform". Why not apply the same process to the future of our foreign policy and alliance with the US? A similar roundtable, convened by the foreign minister and bringing together the smartest and most experienced people from across the political and foreign policy spectrum to discuss all these issues, would provide the best and most sincere guidance for the country. There are three bedrock truths that are unimpeachably clear since Trump reassumed power in the US. First, Australia has not changed; the US has changed. Albanese and his government has not changed its posture towards the US. Trump has profoundly changed America's posture towards Australia. Second, the US is no longer the leader of the free world, because the free world is no longer following America. The democracies with which the US has been allied since the end of the Second World War are no longer acting in concert with the US, but in reaction to what Trump is doing across the global landscape - from the Americas, to the Atlantic, Russia, the Middle East, China, the Indo-Pacific and Australia. Third, Trump has destroyed the economic and trading architecture erected after the Second World War to promote growth and prosperity. Nations engaging economically with the US are no longer trading partners but trading victims. The "deals" Trump boasts about are involuntary. Trump's imposition of tariffs even on countries with a trade deficit with the US shows that his trade policy is, at heart, the unilateral exercise of US political power to force concessions to US domination. What is under profound challenge today - 84 years after prime minister John Curtin turned to the US and 73 years after the ANZUS treaty came into effect - is whether the US under Trump is still aligned with the vision the two countries have shared for decades. Australians have serious doubts about the relationship. The latest polling by Resolve Political Monitor documented "a strong desire for the country to assert more independence from the United States amid Donald Trump's turbulent presidency". Fewer than 20 per cent of Australian voters believe Trump's election victory was good for Australia. Nearly half of voters believe it would be "a good thing" for Australia to act more independently of the US. Pew Research reported in July that only 35 per cent of Australians believe the US is a top ally. Trump is driving away US allies. Canadian Prime Minister Mark Carney said after winning office, "Our old relationship with the United States, a relationship based on steadily increasing integration, is over." When the leaders of Japan and South Korea received Trump's insulting letters of demarche on trade, they each said the correspondence was "deeply regrettable", with Japan's prime minister adding, "extremely disrespectful". Trump has also precipitated a trade war with India. How effective can the Quad - established by the US, Japan, India and Australia to serve as a counterweight to China - be if three of its four members are victims of Trump's tariffs? Australia has also broken with Trump on recognition of Palestine - issues of the highest importance to the president. Moreover, if the terms of whatever Trump is conjuring up with Putin to end the war with Ukraine are unacceptable to Ukraine and Europe, and Trump sides with Putin, a further sharp break by Australia with Trump is likely. The "soft power" wielded by Australia is also involved here. From the UN's inception, Australia has supported the architecture required to help secure peace, security, stability and the health and welfare of all peoples. But Trump has now withdrawn the US from UNESCO, the World Health Organisation, the World Trade Organisation, the Paris climate accords, the UN Human Rights Commission and others. He has terminated the USAID programs that delivered crucial health care and crisis relief. Medical studies project that millions of people will die as a result in the coming years. Australia uses that architecture to help change the world for the better. Trump is making that work much harder. Trump is repealing all US programs that combat global warming - the most important environmental issue of our times and the number-one existential security issue for Asia-Pacific nations. Australia shares their urgency. Since Trump's inauguration, AUKUS has consistently been viewed as a bellwether for the relationship. Australia's need for a modern submarine fleet is an existential issue for the country's defence capability. Will Trump, during the Pentagon's review of AUKUS, change its terms to be more favourable to the US? Is Australia spending enough on defence? Will the pace of submarine construction ensure Australia receives the subs in the 2030s? If not, are there better solutions than AUKUS? But the most important question is the most known unknown. What does Trump want from China? Trump has never outlined his endgame with President Xi Jinping. Yes, of course, the trade deal of the century. But at what price, particularly with respect to Taiwan? What are the consequences of all the scenarios and what does Australia need to do to be prepared? Trump is president and will continue to act with power and drama. Albanese will respond on behalf of Australia. That would be business as usual. But without the benefit of a considered national conversation about the future of the Australian-US alliance and what is in Australia's national interest, the current state of play does not rise to the challenges posed by Trump to Australia. US baseball legend Yogi Berra once said, "When you come to a fork in the road, take it." That's where we are. Let's talk about it. Seven months after Donald Trump was inaugurated for a second term as US president, we are facing the most important moment in Australia's foreign policy since the Iraq war. Australia needs to have a national conversation on the future of its alliance with the United States. The alliance was on the line with Trump's tariff decisions on August 1. The consensus was Australia dodged a bullet, and life goes on. But this was no flesh wound. By dictating and unilaterally imposing the terms of trade between the US and Australia - affirming the "reciprocal tariffs" of 10 per cent imposed on Australia, plus the tariffs of 50 per cent on both steel and aluminium - Trump has trashed the historic US-Australia Free Trade Agreement. Trump has not provided a good answer to the question of what he is doing to one of the US's strongest and most consistent allies. And there is more to come. The president will also place a tariff on US imports of Australian pharmaceuticals. There is also far more to come on the future of the US-Australia alliance. Media have been full of opinions on what the relationship between the two countries ought to look like. These interventions have assayed the crucial importance of Australian Prime Minister Anthony Albanese meeting personally with Trump; whether Washington was rattled by Albanese's visit to China, whether Australia should "fortify northern Australia into an allied military stronghold for the region"; and whether the relationship is being mismanaged. The best model for this conversation would be the economic roundtable Treasurer Jim Chalmers will host in Canberra this month. Its purpose, Albanese said, is to "build the broadest possible base of support for further economic reform". Why not apply the same process to the future of our foreign policy and alliance with the US? A similar roundtable, convened by the foreign minister and bringing together the smartest and most experienced people from across the political and foreign policy spectrum to discuss all these issues, would provide the best and most sincere guidance for the country. There are three bedrock truths that are unimpeachably clear since Trump reassumed power in the US. First, Australia has not changed; the US has changed. Albanese and his government has not changed its posture towards the US. Trump has profoundly changed America's posture towards Australia. Second, the US is no longer the leader of the free world, because the free world is no longer following America. The democracies with which the US has been allied since the end of the Second World War are no longer acting in concert with the US, but in reaction to what Trump is doing across the global landscape - from the Americas, to the Atlantic, Russia, the Middle East, China, the Indo-Pacific and Australia. Third, Trump has destroyed the economic and trading architecture erected after the Second World War to promote growth and prosperity. Nations engaging economically with the US are no longer trading partners but trading victims. The "deals" Trump boasts about are involuntary. Trump's imposition of tariffs even on countries with a trade deficit with the US shows that his trade policy is, at heart, the unilateral exercise of US political power to force concessions to US domination. What is under profound challenge today - 84 years after prime minister John Curtin turned to the US and 73 years after the ANZUS treaty came into effect - is whether the US under Trump is still aligned with the vision the two countries have shared for decades. Australians have serious doubts about the relationship. The latest polling by Resolve Political Monitor documented "a strong desire for the country to assert more independence from the United States amid Donald Trump's turbulent presidency". Fewer than 20 per cent of Australian voters believe Trump's election victory was good for Australia. Nearly half of voters believe it would be "a good thing" for Australia to act more independently of the US. Pew Research reported in July that only 35 per cent of Australians believe the US is a top ally. Trump is driving away US allies. Canadian Prime Minister Mark Carney said after winning office, "Our old relationship with the United States, a relationship based on steadily increasing integration, is over." When the leaders of Japan and South Korea received Trump's insulting letters of demarche on trade, they each said the correspondence was "deeply regrettable", with Japan's prime minister adding, "extremely disrespectful". Trump has also precipitated a trade war with India. How effective can the Quad - established by the US, Japan, India and Australia to serve as a counterweight to China - be if three of its four members are victims of Trump's tariffs? Australia has also broken with Trump on recognition of Palestine - issues of the highest importance to the president. Moreover, if the terms of whatever Trump is conjuring up with Putin to end the war with Ukraine are unacceptable to Ukraine and Europe, and Trump sides with Putin, a further sharp break by Australia with Trump is likely. The "soft power" wielded by Australia is also involved here. From the UN's inception, Australia has supported the architecture required to help secure peace, security, stability and the health and welfare of all peoples. But Trump has now withdrawn the US from UNESCO, the World Health Organisation, the World Trade Organisation, the Paris climate accords, the UN Human Rights Commission and others. He has terminated the USAID programs that delivered crucial health care and crisis relief. Medical studies project that millions of people will die as a result in the coming years. Australia uses that architecture to help change the world for the better. Trump is making that work much harder. Trump is repealing all US programs that combat global warming - the most important environmental issue of our times and the number-one existential security issue for Asia-Pacific nations. Australia shares their urgency. Since Trump's inauguration, AUKUS has consistently been viewed as a bellwether for the relationship. Australia's need for a modern submarine fleet is an existential issue for the country's defence capability. Will Trump, during the Pentagon's review of AUKUS, change its terms to be more favourable to the US? Is Australia spending enough on defence? Will the pace of submarine construction ensure Australia receives the subs in the 2030s? If not, are there better solutions than AUKUS? But the most important question is the most known unknown. What does Trump want from China? Trump has never outlined his endgame with President Xi Jinping. Yes, of course, the trade deal of the century. But at what price, particularly with respect to Taiwan? What are the consequences of all the scenarios and what does Australia need to do to be prepared? Trump is president and will continue to act with power and drama. Albanese will respond on behalf of Australia. That would be business as usual. But without the benefit of a considered national conversation about the future of the Australian-US alliance and what is in Australia's national interest, the current state of play does not rise to the challenges posed by Trump to Australia. US baseball legend Yogi Berra once said, "When you come to a fork in the road, take it." That's where we are. Let's talk about it. Seven months after Donald Trump was inaugurated for a second term as US president, we are facing the most important moment in Australia's foreign policy since the Iraq war. Australia needs to have a national conversation on the future of its alliance with the United States. The alliance was on the line with Trump's tariff decisions on August 1. The consensus was Australia dodged a bullet, and life goes on. But this was no flesh wound. By dictating and unilaterally imposing the terms of trade between the US and Australia - affirming the "reciprocal tariffs" of 10 per cent imposed on Australia, plus the tariffs of 50 per cent on both steel and aluminium - Trump has trashed the historic US-Australia Free Trade Agreement. Trump has not provided a good answer to the question of what he is doing to one of the US's strongest and most consistent allies. And there is more to come. The president will also place a tariff on US imports of Australian pharmaceuticals. There is also far more to come on the future of the US-Australia alliance. Media have been full of opinions on what the relationship between the two countries ought to look like. These interventions have assayed the crucial importance of Australian Prime Minister Anthony Albanese meeting personally with Trump; whether Washington was rattled by Albanese's visit to China, whether Australia should "fortify northern Australia into an allied military stronghold for the region"; and whether the relationship is being mismanaged. The best model for this conversation would be the economic roundtable Treasurer Jim Chalmers will host in Canberra this month. Its purpose, Albanese said, is to "build the broadest possible base of support for further economic reform". Why not apply the same process to the future of our foreign policy and alliance with the US? A similar roundtable, convened by the foreign minister and bringing together the smartest and most experienced people from across the political and foreign policy spectrum to discuss all these issues, would provide the best and most sincere guidance for the country. There are three bedrock truths that are unimpeachably clear since Trump reassumed power in the US. First, Australia has not changed; the US has changed. Albanese and his government has not changed its posture towards the US. Trump has profoundly changed America's posture towards Australia. Second, the US is no longer the leader of the free world, because the free world is no longer following America. The democracies with which the US has been allied since the end of the Second World War are no longer acting in concert with the US, but in reaction to what Trump is doing across the global landscape - from the Americas, to the Atlantic, Russia, the Middle East, China, the Indo-Pacific and Australia. Third, Trump has destroyed the economic and trading architecture erected after the Second World War to promote growth and prosperity. Nations engaging economically with the US are no longer trading partners but trading victims. The "deals" Trump boasts about are involuntary. Trump's imposition of tariffs even on countries with a trade deficit with the US shows that his trade policy is, at heart, the unilateral exercise of US political power to force concessions to US domination. What is under profound challenge today - 84 years after prime minister John Curtin turned to the US and 73 years after the ANZUS treaty came into effect - is whether the US under Trump is still aligned with the vision the two countries have shared for decades. Australians have serious doubts about the relationship. The latest polling by Resolve Political Monitor documented "a strong desire for the country to assert more independence from the United States amid Donald Trump's turbulent presidency". Fewer than 20 per cent of Australian voters believe Trump's election victory was good for Australia. Nearly half of voters believe it would be "a good thing" for Australia to act more independently of the US. Pew Research reported in July that only 35 per cent of Australians believe the US is a top ally. Trump is driving away US allies. Canadian Prime Minister Mark Carney said after winning office, "Our old relationship with the United States, a relationship based on steadily increasing integration, is over." When the leaders of Japan and South Korea received Trump's insulting letters of demarche on trade, they each said the correspondence was "deeply regrettable", with Japan's prime minister adding, "extremely disrespectful". Trump has also precipitated a trade war with India. How effective can the Quad - established by the US, Japan, India and Australia to serve as a counterweight to China - be if three of its four members are victims of Trump's tariffs? Australia has also broken with Trump on recognition of Palestine - issues of the highest importance to the president. Moreover, if the terms of whatever Trump is conjuring up with Putin to end the war with Ukraine are unacceptable to Ukraine and Europe, and Trump sides with Putin, a further sharp break by Australia with Trump is likely. The "soft power" wielded by Australia is also involved here. From the UN's inception, Australia has supported the architecture required to help secure peace, security, stability and the health and welfare of all peoples. But Trump has now withdrawn the US from UNESCO, the World Health Organisation, the World Trade Organisation, the Paris climate accords, the UN Human Rights Commission and others. He has terminated the USAID programs that delivered crucial health care and crisis relief. Medical studies project that millions of people will die as a result in the coming years. Australia uses that architecture to help change the world for the better. Trump is making that work much harder. Trump is repealing all US programs that combat global warming - the most important environmental issue of our times and the number-one existential security issue for Asia-Pacific nations. Australia shares their urgency. Since Trump's inauguration, AUKUS has consistently been viewed as a bellwether for the relationship. Australia's need for a modern submarine fleet is an existential issue for the country's defence capability. Will Trump, during the Pentagon's review of AUKUS, change its terms to be more favourable to the US? Is Australia spending enough on defence? Will the pace of submarine construction ensure Australia receives the subs in the 2030s? If not, are there better solutions than AUKUS? But the most important question is the most known unknown. What does Trump want from China? Trump has never outlined his endgame with President Xi Jinping. Yes, of course, the trade deal of the century. But at what price, particularly with respect to Taiwan? What are the consequences of all the scenarios and what does Australia need to do to be prepared? Trump is president and will continue to act with power and drama. Albanese will respond on behalf of Australia. That would be business as usual. But without the benefit of a considered national conversation about the future of the Australian-US alliance and what is in Australia's national interest, the current state of play does not rise to the challenges posed by Trump to Australia. US baseball legend Yogi Berra once said, "When you come to a fork in the road, take it." That's where we are. Let's talk about it.
Sky News AU
3 hours ago
- Sky News AU
Kosha Gada: Labor leads Australia into oblivion with net zero's trifecta - grid insecurity, solar's hidden costs and the blight of wind farms
Few issues cut deeper into national survival or division than energy policy. In 2025, the Western world faces a stark split: the US, under President Donald Trump, has abandoned net zero to pursue fossil fuel dominance, while Canada, Europe, and Australia double down on costly climate pledges. Within minutes of taking office on January 20, Trump pulled the US from the Paris Agreement and declared a National Energy Emergency to unleash oil, gas, and coal for affordability, security and dominance. In contrast, Canada, the EU and Australia cling to net zero targets despite mounting costs. Australia's uniquely punishing burden Australia's situation is extreme. A July 2025 ACCC report warns that outdated market rules are driving grid volatility and soaring household bills. With just 27 million people and a $200 billion fossil fuel export economy, rigid net zero targets mandated by the 2022 Climate Change Act risk crushing both grid and economy. The law demands a 43 per cent emissions cut by 2030 and net zero by 2050, while the 2024 Future Made in Australia Act pledges $22.7 billion for green industries. A 2035 target of 65 to 75 per cent reduction looms. Unlike the UK, the EU, Canada and Japan, which rely on nuclear or hydro, Australia has vast coal, gas, lithium and uranium reserves yet no comparable low-carbon baseload options. Net zero requires slashing domestic fossil fuel use while still exporting them- a hypocrisy critics call 'starving while selling bread'. With a sparse population and sprawling grid, renewable intermittency hits harder than in denser nations. Failures such as Queensland's $14 billion hydrogen project collapse and soaring transmission costs expose the fragility of the plan. Ross Garnaut warns the absence of a carbon price makes the Net Zero Plan incoherent, while years-long project approvals add delays. Net zero's 'catastrophic trifecta' - grid instability, solar's hidden costs and wind's environmental damage - reveals deep flaws in the policy's economic and ecological logic. Grid on the precipice: Physics versus fantasy The National Electricity Market (NEM) is straining under the shift from coal (down 35 per cent since 2000) to 83 per cent renewables by 2030, as projected by AEMO. Intermittent solar and wind lack the synchronous inertia of coal and gas, destabilising frequency- a weakness exposed by the 2016 South Australia blackout and recent solar output cuts in North Queensland. Australia's vast, lightly populated grid cannot match the resilience of Japan's compact network or Canada's hydro-backed system. Gas 'peaking' plants and unproven long-duration storage are stopgaps, but one in four households already struggles with energy bills. A 2022 NSW price spike forced AEMO intervention, and the Productivity Commission warns of 'massive costs' to triple NEM capacity by 2030, with storage needs rising from 3 GW to 49 GW by 2050. The physics - not politics - make net zero's ambitions unattainable without destabilising supply. Solar illusion: Hidden costs and false promises Large-scale solar farms, costing over $1 billion per gigawatt, require massive public and private investment plus billions more for grid integration. Solar's daytime-only output forces reliance on backup generation. End-of-life disposal is a looming crisis: panels contain toxic materials, last only 20 to 30 years, and Australia lacks scalable recycling. Panel manufacturing depends heavily on coal-powered Chinese factories, which control 80 per cent of global supply, binding Australia to environmentally damaging and strategically risky supply chains. Land use is another issue - vast farms consume thousands of hectares, fragmenting ecosystems, and competing with agriculture. These costs undermine solar as a pillar of reliable, affordable energy. The windfarm contradiction: a renewable hellscape Wind farms scar iconic landscapes, from Tasmania's hills to Queensland's coasts, fuelling rural resentment. A 2023 CSIRO survey found widespread opposition, citing the visual blight of 200-metre turbines. Wildlife suffers: thousands of birds and bats die annually, including protected species, while offshore projects threaten marine life through underwater noise. Turbine blades, made of non-recyclable composites, are piling up in landfills. Decommissioning costs often fall to taxpayers, and vast transmission projects fragment habitats while inflating costs. For a sparsely populated country with unique wilderness, wind power's environmental toll contradicts net zero's 'green' image. Government's true duty The government's first responsibility is reliable, affordable energy, not pursuing an abstract 'luxury belief' of net zero. Cheap, stable power underpins households, farms, and industries, sustaining the $200 billion fossil fuel export economy and Australia's living standards. With one in four households in energy hardship, intermittent renewables risk further strain. Reliable energy safeguards jobs, competitiveness, and national security. Net zero, by contrast, is a distant goal disconnected from Australia's immediate needs and advantages. The debate is fundamentally about the role of government - keeping lights on and costs down versus chasing utopian ideals. The righteous fight In Canberra, opposition is hardening. Senior Liberal Andrew Hastie vows to keep fighting net zero despite electoral headwinds, citing public anger over prices. Nationals MP Barnaby Joyce has introduced a bill to repeal the target, backed by Senator Matt Canavan, who calls net zero 'crazy and insane'. Regional MPs like Garth Hamilton and Alex Antic argue it betrays Australia's resource wealth. Nationals leader David Littleproud has labelled the target 'impossible'. Moderates like Andrew Bragg and Zoe McKenzie warn that abandoning net zero risks losing urban seats to the Greens and independents. The Coalition's May 2025 election loss - Labor won a historic majority - has deepened divisions. Pro-climate independents and the Greens gained ground, while the Coalition's pro-nuclear, pro-gas platform failed to win undecided and female voters. For the Coalition, the stakes are existential: Net zero threatens regional economies and energy security, yet dropping it risks alienating urban voters. The challenge is to reframe the issue - not just about reliability and affordability, but about national pride and energy supremacy. Australia, as the 'lucky country,' could deliver abundant, cheap power, thriving industries and jobs while fuelling the world's energy needs. Selling that vision could unite rural and urban voters, dismantle net zero's hold and restore Australia's economic leadership. Kosha Gada is a tech entrepreneur and broadcast commentator on US and international current affairs, appearing live three nights a week on Sky News Australia. She is a board member of sports betting platform PointsBet
