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The Guardian
9 hours ago
- Business
- The Guardian
Richard Marles welcomes US commitment to Indo-Pacific in face of China's military buildup
Australia's defence minister Richard Marles has lauded the US's strategic commitment to the Indo-Pacific as'deeply welcome' amid the risk of global nuclear proliferation, while calling for the stabilising force of liberal trade in the region. In an address at the Shangri-La Dialogue in Singapore on Saturday, Marles said the region had become the 'world's most consequential strategic arena'. Earlier on Saturday the US defence secretary, Pete Hegseth, told the conference that the Indo-Pacific was a 'priority theatre', in an address calling on Asian countries to boost military spending to increase regional deterrence against China. In response to his US counterpart's remarks, Marles said the US's commitment to the region was 'deeply welcome'. 'The reality is that there is no effective balance of power in this region absent the United States,' he said. 'But we can not leave it to the United States alone.' Sign up for Guardian Australia's breaking news email Marles urged 'other countries' to contribute and said that Australia was making the 'largest peacetime increase in defence spending' since the end of the second world war, including what he called a 'generational transformation of the ADF [Australian defence force]'. He added that the Aukus partnership was 'essential' to Australia's security while playing a role in the region. 'While war and disorder rages in European and Middle Eastern theatres, we can not be complacent here,' Marles said. He said Russia's threats to use nuclear arms in Ukraine had 'dire consequences' for the Indo-Pacific – which had become the venue for the world's largest conventional military and nuclear rearmament, as well as 'ground zero in the race for technological supremacy'. Marles said China had decided to 'pursue rapid nuclear modernisation and expansion, which aims in part to reach parity with or surpass the United States'. He added that it had 'embarked on the largest conventional military buildup since the end of world war two, and it's doing so without providing any strategic transparency or reassurance'. 'We also have to counter the grim, potentially imminent possibility of another wave of global nuclear proliferation as states seek security in a new age of imperial ambition,' he told the Asian defence summit. In Hegseth's address earlier on Saturday, the US defence secretary said the US would conduct its 'first-ever live-fire test of its mid-range capability system in Australia' in coming months. In comments before the summit, Marles said he had told Hegseththat Australia would be willing to have a 'conversation' about increasing defence spending, but 'wouldn't put a number on it'. 'What I made clear is that this is a conversation that we are very willing to have, and it is one that we are having, having already made very significant steps in the past,' he told the ABC's Afternoon Briefing on Friday. In his address, Marles also said that trade had been the 'lifeblood of the Asian region' and the 'shock and disruption to trade from high tariffs has been costly and destabilising'. The region has been rocked by the US's 'liberation day' tariffs, including a 10% across-the-board tariff on all Australian imports to the US. On Saturday, Trump announced a doubling of steel and aluminium tariffs to 50%. Marles made the case for liberal trade as a stabilising factor in a 'regional balance' , adding that with trade and investment came incentives to 'keep the peace'. 'Interdependence is no panacea, but nor is securitisation … Liberal trade matters,' he said. 'Australia will always ensure due attention is paid to the requirements of security, and likewise, we will continue to advocate for closer regional trade and investment integration,' he said. Timor-Leste president, Dr José Ramos-Horta, speaking alongside Marles in the session discussing the risks of nuclear proliferation in the Asia-Pacific, said that his country watched 'from the periphery with growing concern' about the dismantling of the post-second world war order. In his keynote speech at the summit on Friday, French president Emmanuel Macron said European and Asian countries should form a 'positive new alliance' based on shared principles, security, defence and trade, away from the battling superpowers of the US and China.
The Print
a day ago
- Business
- The Print
Why RBI's dividend to Centre is at a record high in FY25 & a volatile history of its surplus transfers
The ECF governs how much capital the RBI should maintain to cover its various risks and how much of its surplus income can be transferred to the government. The Reserve Bank of India Act, 1934, gives the RBI paid up equity capital of Rs 5 crore. However, under the provisions of Section 47 of the Act, the RBI created discretionary reserves and revaluation accounts to account for fluctuations on its assets side as well as unforeseeable expenses. The announcement of surplus transfer followed a review of the Economic Capital Framework (ECF), which is used to determine provisioning for various kinds of risks the central bank is subjected to and surplus distribution by the central bank. Last week, the Reserve Bank of India (RBI) announced a record Rs 2.69 lakh crore annual dividend to the central government for FY 25. The record transfer is in spite of the RBI raising the Contingency Risk Buffer (CRB) to 7.5 percent of the balance-sheet from its previous level of 6.5 percent in 2023-24. There are five major reserves operated by the RBI that have quasi-equity like functions. They are Contingency Fund (CF), Asset Development Fund (ADF), Currency and Gold Revaluation Account (CGRA), Investment Revaluation Account (IRA) and Foreign Exchange Forward Contracts Valuation Account (FCVA). The CF represents the amounts added on a year-to-year basis for meeting unexpected and unforeseen contingencies. The ADF was created to make investments in subsidiaries and associated institutions. The Currency and Gold Revaluation Account (CGRA) reflects the unrealised gain/losses on revaluation of Foreign Currency Assets and Gold which are credited/debited to this account. The Investment Revaluation Account-Foreign Securities (IRA-FS) and the Investment Revaluation Account-Rupee Securities (IRA-RS) account for unrealised gains/losses in foreign and rupee-dated securities, respectively. The unrealised gains/losses arising from forward contracts (marked to market revaluations) are accounted for in the FCVA. The RBI's total economic capital includes the realised equity (CF and ADF) plus the three revaluation balances. Also read: UK FTA is good news for India amid global turbulence. Domestic reforms must follow market access Risks These reserves are maintained to deal with risks. The determination of capital is based on the risk a central bank may face. Market risk captures the risk of losses arising from adverse movements in valuation of assets of the RBI, including foreign reserves, gold and government securities. Credit risk arises if a borrower fails to default on any type of debt. This is not a very prominent source of risk for a central bank. Operational risk may emerge from the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. For a central bank, the most important source of risk emerges from its monetary policy operations and financial stability mandate. Forex intervention (buying of dollar and sale of rupees) in the wake of capital inflows increases domestic liquidity. If sterilisation operations are conducted to absorb the excess liquidity, it changes the composition of the balance sheet by increasing the forex component. This not only increases the currency risk of the RBI, but also reduces its income as it replaces high yielding domestic securities with lower yield foreign securities. Revised ECF The revised ECF was introduced by RBI in May 2025, marking the first major update since the 2019 framework based on the recommendations of the Bimal Jalan Committee report. The changes aim to enhance flexibility, risk sensitivity, and financial resilience amid evolving macroeconomic challenges. Some of the key changes include the raising the CRB and the inclusion of off-balance sheet exposures in market risk assessment. CRB is a component of RBI's realised equity that accounts for operational, credit, and financial stability and monetary risks. Below is a comparison of the new framework with its predecessor: Stability risk buffer and distribution smoothing RBI noted that in the previous years the surplus transfers made to the government have been volatile. To solve this, the monetary and financial stability risk buffer range has been increased to 5 percent ± 1.5 percent, allowing provisioning between 3.5 percent to 6.5 percent. It was stated that the earlier range did not provide adequate flexibility to smoothen the transfer to the government. Therefore, the revised range is said to provide RBI with ample room to determine its buffer amount while also smoothening the transfers made to the government. Distribution smoothing is a model of remittance that reduces the volatility of the surplus transferred to the government. The volatility is typically reduced through clear rule-based methodology for transfers made by the central bank. For instance, the National Bank of Switzerland has entered into an agreement with the Department of Finance to determine the annual amount of transfer to the government for a 5-year period. This agreement aims to even out any medium-term volatility. Similarly, the Swedish central bank, Riksbank, smoothens its remittances by transferring a 5-year average of its net adjusted income to the government. These are explicit smoothing arrangements aimed at addressing the distribution asymmetry arising from income fluctuations for central banks. The adoption of the ECF added structure to RBI's surplus distribution policy, but the framework relies on broad principles when provisioning for monetary and financial stability risks. While increased flexibility allows for adaptability to changing risk environments, its use for smoothing of transfers, in the absence of a clear methodology, can give rise to unpredictability. The core issue here is not of flexibility but flexibility without clarity. The provision to be made each year appears to be based on the discretion of the central bank. This could mean that the increased buffer range may not necessarily solve the issue of erratic transfers. A clear rule-based framework for provisioning within the given range could provide more transparency and lead to less volatility in transfer of surplus to the government. Radhika Pandey is an associate professor and Nipuna Varman is a research fellow at the National Institute of Public Finance and Policy. Views are personal. Also read: Moody's US credit rating downgrade may usher in a new era—waning investor interest in US govt bonds
Yahoo
2 days ago
- General
- Yahoo
Supreme Court Declines To Hear 'Two Genders' T-Shirt Case, Sparking Free Speech Debate
The U.S. Supreme Court declined to hear a Massachusetts student's challenge after he was barred from wearing a T-shirt that read 'There are only two genders' to school on May 27. The Court's decision preserves a lower court ruling siding with Nichols Middle School in Middleborough, Massachusetts, which had told then-seventh grader Liam Morrison to remove the shirt or leave school. The case, L.M. v. Town of Middleborough, drew national attention and divided legal experts, parents, and civil liberties groups over how far First Amendment protections extend inside public school classrooms. Morrison, who brought the case with the help of his father and stepmother, was represented by the Alliance Defending Freedom (ADF) and the Massachusetts Family Institute. His legal team argued that his constitutional rights were violated when he was sent home twice in 2023 for refusing to remove T-shirts bearing messages critical of gender ideology—one reading 'There are only two genders,' and a second with 'There are [censored] genders' written on tape covering the original wording. School officials reportedly defended their actions with complaints from others in the school and concerns that the shirts made classmates—particularly those who identify as 'transgender'—feel unsafe. Both a federal district court judge and the Boston-based First U.S. Circuit Court affirmed the school's decision. The Supreme Court's refusal to intervene was announced as part of a routine order list. While most denials are unsigned and unexplained, Justices Clarence Thomas and Samuel Alito both dissented, warning that the case raised significant questions about student expression and viewpoint discrimination. In a detailed dissent, Alito called the situation 'an issue of great importance for our Nation's youth,' arguing that schools cannot selectively permit speech based on whether it aligns with their ideological preferences. 'Public schools may not suppress student speech either because it expresses a viewpoint that the school disfavors or because of vague concerns about the likely effect of the speech,' Alito wrote. Thomas, who has previously argued that student speech rights may not be protected by the Constitution at all, nonetheless joined Alito in dissent. He emphasized that under Tinker v. Des Moines—a 1969 Supreme Court precedent that prohibits schools from censoring student speech unless it causes substantial disruption—Morrison's shirt did not meet the standard for suppression. Thomas wrote, 'Unless and until this Court revisits it, Tinker is binding precedent.' ADF Senior Counsel David Cortman said in a statement that the group was 'disappointed' by the Court's decision. 'Students don't lose their free speech rights the moment they walk into a school building,' Cortman said, pointing to what he described as a double standard where schools allow pro-LGBT messages while censoring dissenting views. The case reignited debate about how far public schools should go in managing speech. In online forums, including a Reddit thread that received over a thousand upvotes and comments, users were sharply divided. 'The fact that this case even made it to the Supreme Court in the first place is laughable,' one Reddit user wrote. 'And the fact that Alito and Thomas wanted to waste time ruling on it is telling.' Others disagreed. 'It's truly insane how the courts have bastardized the Tinker test,' another user posted. 'We're now in a place where political viewpoints that make someone feel uncomfortable are deemed dangerous.' In Tinker v. Des Moines Independent Community School District (1969), the Supreme Court ruled in favor of a group of students who had been suspended for wearing black armbands to school to protest the Vietnam War. The Court held that students do not 'hold their constitutional rights to freedom of speech or expression at the schoolhouse gate.' The decision established a key precedent: public school officials cannot censor student speech unless it would cause a substantial disruption to the school's operation. The ruling underscored the principle that student expression, even if politically charged or controversial, is protected under the First Amendment. In the Tinker case, the Court found that the students' silent protest did not disrupt the educational environment and, therefore, could not be lawfully punished. The case has since become a cornerstone of student free speech rights in America, frequently cited in legal arguments and public debates involving expression in schools and online platforms. This latest case echoes previous high-profile student speech battles, including Morse v. Frederick (2007), in which the Court sided with a school that disciplined a student for displaying a 'BONG HiTS 4 JESUS' banner. In that case, both Thomas and Alito were part of the majority, though Alito issued a narrower opinion reserving room for political expression. While the Court's decision not to take the case leaves the appeals court ruling intact, it does not establish a national precedent.
West Australian
2 days ago
- Politics
- West Australian
EDITORIAL: Prime Minister Anthony Albanese's strategy of denial won't keep Australia secure
The Australian Strategic Policy Institute's report on national defence spending makes for sombre reading. 'We are confronted simultaneously by the rise of aggressive authoritarian powers, multiple conflicts around the world, persistent and evolving terrorism, foreign interference and the normalisation of cyberwarfare,' ASPI executive director Justin Bassi wrote. And yet, we are woefully under-prepared to respond to any potential crisis in the near to medium term. There are massive spending projects on the way, including acquiring new frigates, and nuclear-powered submarines through the AUKUS partnership. But the first of those ships and subs, essential as they are, aren't scheduled for delivery until well into the 2030s. Until then we risk being left with a 'paper ADF that lacks the readiness and size to meet near-term threats', according to ASPI analysis. We have a problem now, and a solution decades down the track will come too late. The report advocates for urgent acquisition of air and missile defence systems, long-range strike munitions, autonomous systems. Anthony Albanese's response to this warning was to dismiss it as a work of hysterical partisan hackery. 'Well, that's what they do, isn't it? ASPI. I mean seriously, they need to, I think, have a look at themselves as well and the way that they conduct themselves in debates,' he said. It seems his is a strategy of denial. ASPI, given its close connections to the ADF and the defence industry, is naturally hawkish, particularly on China. That doesn't make it wrong. Its warnings on China have been proved prescient by China's growing antagonism of Australia. Deliberate provocations earlier this year such as the circumnavigation of Australia by Chinese spy ships, and unannounced live-fire exercises in the Tasman Sea are designed as intimidatory shows of military might. Parades of ministers, including the Prime Minister, acknowledge we are living in 'uncertain times'. So Mr Albanese's refusal to take ASPI's warnings seriously is concerning. Much of the debate on defence spending gets caught up on a handful of numbers — what is the percentage of GDP we can or should be spending on building and maintaining our defence capability? But even bucketloads of money won't ensure our nation's security unless it is backed up with a cohesive and apt plan. There's little doubt that many of the issues highlighted in the ASPI report — including low morale affecting personnel recruitment and retention — are real. Successive governments have failed to come up with solutions. Australia's defence strategy has long been centred on the premise that if under threat, we can rely on the Americans to help us. US President Donald Trump, however, had made it clear he expects America's allies to take a greater stake in their own defence. That's a warning Mr Albanese doesn't have the luxury of dismissing so easily.
Daily Mail
3 days ago
- Business
- Daily Mail
Experts sound the alarm about the huge threat to Australia - and why Albanese needs to do something before it's too late
Australia must urgently boost its defence funding otherwise it risks being stranded in 'no-man's-land' with a 'paper IDF', a prominent thinktank has warned. A report from the Australian Strategic Policy Institute praised the Labor government's commitment to long-term defence projects, such as the AUKUS submarine deal, but warned it was not doing nearly enough in the immediate future. 'That slow pace risks leaving the ADF ill-prepared for current threats and unable to keep pace with future challenges, creating a "no-man's-land" of preparedness,' the report's author, former Home Affairs deputy secretary, Marc Ablong wrote. 'The timelines for major acquisitions, especially the nuclear-powered submarines under the AUKUS partnership, extend well into the next decade and beyond. 'While those future capabilities are strategically important, they offer little immediate enhancement, thus creating a "paper ADF" that lacks readiness for near-term conflict scenarios.' The report, published on Thursday, argued that the March budget was an 'opportunity lost' to increase defence spending. Mr Ablong called for 'defence funding to be increased to reflect the reality of the threats facing Australia'. 'While the Australian Government claims to have made a "generational investment in Australia's Defence", that investment has been put off for another generation,' he wrote. He pointed out that the majority of the billions promised by Labor would not arrive until after 2029. 'While consistency can often be a virtue, it reveals a business-as-usual approach to a world now in crisis and conflict,' Mr Ablong added. 'The rhetoric recognising the threats isn't translating into action to deal with the threats, meaning the government continues to deprioritise the readiness and sustainability of the current force-in-being, with the largest spending increases on capability sustainment tied to the F-35 Lightning force ($190 million) and Collins-class submarines ($235 million).' Mr Ablong further warned that Australia risked falling behind other major players, such as China, in the Indo-Pacific. 'Australia risks a brittle and hollowed defence force, diminished industrial sovereignty, and compromised national security in a volatile Indo-Pacific region,' he added. The criticisms were rejected by Prime Minister Anthony Albanese who slammed the 'predictable' report, claiming ASPI was 'run by people who've been in a position to make a difference in the past as part of former governments'. 'I think they need to have a look at themselves as well and the way that they conduct themselves in debates,' Albanese said on Thursday morning. 'We've had a Defence Strategic Review. We've got considerable additional investment going into defence – $10 billion.' There is growing tension in the Indo-Pacific region.
