Latest news with #SamHawley
ABC News
2 days ago
- Health
- ABC News
Laura Tingle on who can stop Israel
Sam Hawley: Israel says there's no starvation in Gaza. The pictures tell a very different story and there's now growing condemnation from some of Israel's closest supporters, including Australia. Anthony Albanese says the images of suffering are completely indefensible. Today, Global Affairs Editor Laura Tingle on the mounting pressure and what will really get Benjamin Netanyahu to change course. I'm Sam Hawley on Gadigal land in Sydney. This is ABC News Daily. Sam Hawley: Laura, the world is increasingly horrified by what is unfolding in Gaza. Hunger is taking hold, children are dying of starvation. The images are horrifying. Laura Tingle: They're completely horrifying, Sam. I mean, they've been horrifying for a long time and, you know, you just don't think it can get worse and it keeps getting worse. It's just beyond belief. Apart from the fact there's no food or water or sanitation, so much of the Gaza Strip has been bombed to oblivion and to the point where the Israeli government is now just unilaterally clearing out large areas that weren't even bombed, particularly in the south. You just wonder how people are surviving. Sam Hawley: Yeah, and no one's outside the scope of this, you know, doctors, nurses, journalists, aid workers. There's actually not enough food for anyone. Laura Tingle: The reports of doctors feeling dizzy and fainting and aid workers feeling dizzy and fainting because of lack of food. I mean, it just really brings it home just that there is just not enough to eat for, you know, a couple of million people. Sam Hawley: Yeah, there's a story from one of our ABC Middle East correspondents that a member of the team that they're relying on in Gaza, he no longer had enough strength to actually hold up the camera. He's lost 34 kilos. Matthew Doran, ABC Middle East Correspondent: And it's important to point out his story is not isolated. Other members of our team in Gaza have also spoken of their hunger. These are Gazans reporting on Gazans and experiencing what Gazans are being subjected to as the war in the Strip drags on. Sam Hawley: Well, the Israeli Prime Minister, Benjamin Netanyahu denies that there is starvation in Gaza. Benjamin Netanyahu, Israel Prime Minister: Israel is presented as though we are applying a campaign of starvation in Gaza. What a bold face lie. There is no policy of starvation in Gaza and there is no starvation in Gaza. Sam Hawley: But Israel has begun airdrops of aid and it has paused military operations between 8am and 10pm in three parts of Gaza to allow aid in. But is that enough, Laura? What are people saying? Laura Tingle: Well, I think that the aid agencies in particular who are the best people to judge this because they're on the ground are saying, no, it's not enough. Because people are desperate, it becomes even harder because, you know, you do these airdrops and often you just, we saw the last time this happened that sort of ended up just being more chaotic than normal aid. And the agencies say it's not sufficient. And of course, a lot of this problem has been exacerbated by the arrangements that have been in place since March with this US-Israeli operation, which has ended up seeing people being killed while they've been lined up for food and water. It's just beyond belief. Sam Hawley: So, Laura, given what the world is now bearing witness to in Gaza, it's not surprising that many people are asking the question, why isn't more being done to end this suffering? So let's unpack what nations, including Australia, are doing and saying. Initially, of course, when the humanitarian crisis began to grow in Gaza, Australia and others were in lockstep with Israel, weren't they? Laura Tingle: Well, I don't know that they were in lockstep with Israel about the humanitarian crisis. I think because the start of this obviously was the Hamas atrocities on October 7, for some period of time there was this view that what's happening is terrible, but of course what happened on October 7 was terrible. And they were very reluctant to sort of take a moral position, if you like, because the original events had been so horrendous. Anthony Albanese, Prime Minister: Israel has a right to defend itself and it will be doing so. This is an attack on Israel by Hamas that has no precedent for what is occurring here. Laura Tingle: Now, you know, they were horrendous, but you've now had over 50,000 people killed in Gaza. Most of them are not Hamas activists. Certainly the children aren't, the women and children aren't. And the pressure and the position of Israel and its support from the United States as a Western ally, I think has really made it very hard for Western governments to actually say, wait a minute, the way Israel is now performing, it's a different place to the one that has been a traditional ally. But I think also there's this general view that you can't go full steam against Israel because, you know, there's this sort of sneaking suspicion that it won't actually make any difference so that all you can do is gradually ramp up the pressure because the Israelis keep ramping up the pressure. We've seen some concessions to the international pressure in the last few days, but it's only, it has that feeling of doing something to just look like it's got an excuse for continuing its actions. And I think this is the crucial and difficult dilemma for other countries that clearly Israel doesn't care what other people say about it now. It believes or its government believes, let's be clear about that, the Netanyahu government does not care what other states say about it. Sam Hawley: All right, well, the Israelis might not be listening, but the international condemnation is growing. We've seen that with our own Prime Minister. His language really started to change in May. Anthony Albanese, Prime Minister: Well, Israel's actions are completely unacceptable. It is outrageous that there'd be a blockade of food and supplies to people who are in need in Gaza. Sam Hawley: You then interviewed him, of course, after his visit to China recently. He went further then. And then again on the weekend on the Insiders program, really strong language from Anthony Albanese. So just tell me about that progression and why you think it's happened. Laura Tingle: Well, of course, there are domestic pressures as well, sort of from local communities about this, not just communities with ties into Gaza, but more broadly, people, as you say, are horrified about what they're seeing. In the government's mind, I think, and in government's minds, they are responding to individual step ups in what the Israelis have been doing. Now, the sort of cutting off of aid started in March and the government has been responding to particular steps along the way. And what really struck me when I interviewed the PM in China at the end of his trip was that you'd say to him, look, the Israel we thought we knew has changed, hasn't it? And he'd say, oh, well, no, it's still this country that blah, blah, blah. And you'd say, but people are now starving. And he'd said, well, we've taken these actions and we've got these sanctions against ministers, but they are all linked to former escalations of Israeli activity. And I had to press him a bit to say, look, we now have people starving. What is your response to that? And it was in response to that that he said that what was happening was completely indefensible. Laura Tingle: With respect, things have escalated. We're now seeing Palestinians regularly killed while waiting for food and water. Do we need to start changing our view of what's happening in Israel? Anthony Albanese, Prime Minister: Well, that is completely indefensible. And we've called that out each and every time that that has occurred. Laura Tingle: Now, as you say, on insiders, he's now stepped that up even further. Anthony Albanese, Prime Minister: Well, quite clearly, it is a breach of international law to stop food being delivered, which was the decision that Israel made in March. David Speers, Insiders host: So it's breached international law? Anthony Albanese, Prime Minister: Well, I'm not a lawyer. Those things will play out their course. But I tell you what it's a breach of. It's a breach of decent humanity and of morality. And everyone can see that. Laura Tingle: But clearly, Australia wants to have this position of being part of an international condemnation. It doesn't want to be standing out at the front of that. I think the prime minister has been quite clear about that. He's always said, look, we act in lockstep with other countries. And I think that's partly because they think that that's going to be more influential. But I think things have got so desperate in Gaza now and the images are so desperate. It's taken a very long time for the government to just go, wait a minute, the way Israel is behaving now is something above and beyond anything we've experienced. They still do, I think, want to keep some options open to them so that they can escalate the language and the actions further. Sam Hawley: And there has been, of course, more debate over the use of the term genocide and what that actually means. But Australia and others are certainly not labelling it genocide at this point, are they? Laura Tingle: No. And I think this has become one of those things where it's very tied up in the legal definition of genocide because there is now this action as well in the International Court of Justice about genocide. And there are these very legalistic terms. You've basically got to, genocide has got to be about wiping out an entire race. And so there's this sort of semantic argument going on about genocidal intent and all these sorts of things. And of course, there's also the whole overlay of the history of the creation of the state of Israel and the connections with the genocide of the Second World War against the Jews, which has made people very reluctant to use the term. And I think some people have argued that it's Israel sort of regards it in what happened in the Second World War as something above and beyond anything else that could happen. So they react really furiously if anybody dares to use the term genocide against them, no matter what they might be doing. Sam Hawley: Laura, France and its President Emmanuel Macron has announced it will recognise Palestinian statehood. Anthony Albanese and the Foreign Minister Penny Wong say they won't do that yet. How significant is that debate, do you think, going on internationally? Laura Tingle: Well, the Prime Minister and Penny Wong argue that there's a whole range of reasons why you don't do it at the moment, which is because essentially, you know, what is the state of Palestine? You don't want Hamas being the governing authority. There are deep flaws in the Palestinian Authority, which means that the question of who actually would be running a state of Palestine are very complex and difficult and cause problems all of their own. So that's their argument. But it's been an incredibly powerful symbol for Emmanuel Macron as the first leader of a major Western country to do it because it shows the sorts of arguments that are going to become the next step along the way, if you like, about what's going to happen. It also, it's a warning shot to Israel, I suppose, at a time when they are actually levelling large parts of Gaza, that you know, you can't just keep taking the rest of the world for granted in the way you've annexed the West Bank, or you're effectively annexing Gaza. I mean, all the language around these things has become so complex. I mean, when is annexing something, annexing it or not officially annexing it when you're forcibly moving people regularly from one place to another? There's sort of something a little bit sick about the sort of semantic arguments, if you like, as opposed to what's actually happening on the ground. Sam Hawley: All right, well, Laura, international condemnation of Israel's actions in Gaza is clearly increasing, but ultimately, more aid is still needed and a ceasefire is crucial. So what can nations like Australia actually do to make that happen? Or really, does it all just rest again with Donald Trump? Laura Tingle: I fear that it largely does because he has got that capacity to pressure Israel. Now, as with everything else, he's been incredibly erratic about this. He's talked about, you know, starvation in Gaza at various times, but he's also talked in recent days about how they've got to basically get rid of Hamas. Donald Trump, US President: Hamas didn't really want to make a deal. I think they want to die. And it's very, very bad. And it got to be to a point where you're going to have to finish the job. Laura Tingle: And, you know, he swings from day to day, but certainly doesn't seem to have any clear resolve to get that involved in this dispute. If there's any pattern we can see out of the way he behaves in terms of his interventions in the Israel-Iran conflict, he likes to have a short, sharp impact and get out again. And how you have a short, sharp impact in something as intractable as Israel and the Palestinians, it's not clear that there is one. So, you know, you can't be at all optimistic that this can be a viable option. Sam Hawley: Laura Tingle to the ABC's Global Affairs Editor. This episode was produced by Sydney Pead. Audio production by Sam Dunn. Our supervising producer is David Coady. I'm Sam Hawley. Thanks for listening.
ABC News
3 days ago
- Business
- ABC News
How easy is it to trick the Australian Taxation Office?
Sam Hawley: How easy is it to trick the Australian Tax Office? Well, for fraudsters it's not hard at all and plenty have done it costing taxpayers billions of dollars that have never been recovered. Today, Angus Grigg on his Four Corners investigation into the biggest GST scam in history and how the ATO dropped the ball. I'm Sam Hawley on Gadigal land in Sydney. This is ABC News Daily. Sam Hawley: Angus, you've been hard at work looking into what's going on at the Australian Tax Office. And you've really been having a deep look into this huge GST scam. Now, this unfolded in no other than Mildura in north-west Victoria. So, take me there and tell me about local resident Sarah. Angus Grigg: Yeah. Mildura is a really beautiful town, an irrigation town on the Murray in North West Victoria. And this GST scam really took off in Mildura. And it really was circulating within a sort of population that you might say is low socioeconomic groups, people on welfare, people with addiction issues. And we went to interview one person called Sarah. She was going through quite a bit of financial hardship at the time. I think she'd separated from her partner who was facing pretty serious charges at the time as well. And she was short of money because she needed to have some dental work done. So one of her friends showed her how to use a business that had been registered and an ABN linked to GST to claim GST refunds fraudulently. 'Sarah': The people that I was associating with at that time, they had done it and told me how easy it was to get a large amount of money quickly. And I just thought at the time it was a good idea because I was in a bit of financial trouble. Angus Grigg: She pretended, if you like, to be a hairdresser, despite the fact that she had no hairdressing qualifications. She'd never worked in a hairdresser, hadn't hired premises, had no equipment. And so she logged into her myGov account and first of all, claimed $15,000 and then did it a second time and got another $15,000. 'Sarah': I don't even really still understand how it went through. I was a single parent and then all of a sudden I'm a hairdresser that's getting this return put into my account with no other payments from clients or anything like that to balance it was needed. Like no proof. Angus Grigg: Now, bear in mind, the money went into the same account as her welfare payments and the money went within about 10 days without any verification, without any checks, without anyone from the tax office ringing and saying, what did you spend this money on? Do you have hairdressing qualifications? Have you hired premises? You know, she just absolutely couldn't believe how easy it was. 'Sarah': Yeah, I just couldn't believe it that it was just sitting there on my everyday access debit bank card. Angus Grigg: Now, the other thing to bear in mind, to receive a GST refund of $30,000, she would have needed to have capital expenditure or bought stock and other items for her hairdressing business of about $300,000. Now, surely a single mother living on welfare, getting family tax benefits, that should have been a red flag for the tax office. Sam Hawley: Wow. Okay. So Sarah, which is not her real name, just by the way, you've changed that for this story to keep her anonymous. She just tells the ATO she's a hairdresser and then the tax office falls for it. That's extraordinary. Angus Grigg: It is. And the fact that you don't need a receipt, you don't need any proof of the line of work you're in is extraordinary. And that's because the tax office basically fired most of the humans in the loop and started relying on algorithms or computers, if you like, to make these payments. They wanted to ensure the timely payment of GST refunds to businesses. But in doing that, they really opened the door up to fraud. Sam Hawley: Right. Sure. So the tax office wants to streamline things. But in the meantime, people like Sarah are all of a sudden dabbling in fraud. And as we've mentioned, she's not the only one. There's a lot of other people doing a very similar thing. Tell me about Linden Phillips. What was he up to? Angus Grigg: Linden Phillips, once again from Mildura, for us, he was like patient zero. It looks like he was the really one of the very, very early people in this scam. So what happens is that Linden Phillips gets out of jail in August 2021. And he already has a company registered. And so he reactivates his GST registration through his ABN and his MyGov account. And then within a couple of weeks of getting out of jail, he does what I'd sort of call a test run. And he claims $13,000 in GST refunds from the tax office. Once again, no documents, no receipts, no verification required. He gets that money within a couple of weeks and clearly then thinks, OK, I'm going to go for the big one. And so what he does is he lodges 46 backdated GST claims for an amount of $821,000 in GST. And the real kicker here is that for most of the period those GST claims are lodged, he's actually in jail. Sam Hawley: Oh my gosh. Angus Grigg: I know. He just couldn't make it up. Sam Hawley: What does he do with all that money? Angus Grigg: Well, of course, he spends it, right? Within a couple of weeks, the money's completely gone. He buys himself a second-hand Porsche. Somewhat endearingly, he buys his mother a house. But the really damning thing here is that the tax office notice it. Finally, someone, there's a human in the loop and they pick up the fact that, hey, maybe something's a bit wrong here. And so they ring him up and he says, oh yeah, no, it's all legitimate. I'll get my accountant to call you. The accountant never calls. They send him some emails. They write him some letters. He ignores them all. And the really damning thing here is the tax office does nothing for four months. And in that four month period, this scam absolutely explodes. So what we did is we went back and we deconstructed, if you like, the tax office's narrative. And the narrative was that this fraud took off on social media. The tax office noticed it. They cracked down really hard, really quickly, and they brought it under control. Now we sort about testing that idea. Sam Hawley: So the ATO says it did this great job. It cracked down on this fraud. But what actually happened? Because you actually had a look at that and discovered, in fact, the ATO didn't do much at all. Angus Grigg: No, exactly. So Linden Phillips does finally get caught, but it has absolutely nothing to do with the ATO. It all comes down to the smarts of a local detective in Mildura named Vanessa Power. Now, she is attending Phillips's house on a drugs and gun charge, and she searches his premises, his house, and she confiscates a phone. And using the sort of smarts that the ATO should be employing, she sees that on his phone there appears to be a pretty elaborate GST scam. And in fact, it looks as though that Linden Phillips had helped 60 other people perpetrate this scam. Linden Phillips is arrested. And then a few weeks later, the ATO finally launch what they call Operation Protego, which is to crack down on this GST scam. Sam Hawley: Wow. Okay. And at that point, of course, Sarah, who we spoke about earlier, she was also arrested back in December 2022. But the thing is, the money, it's sort of gone, right? 'Sarah': I can't pay it back. It's not even an option at the moment. Or it probably never will be. Sam Hawley: Is there any way the tax office can actually get these funds back? Angus Grigg: Well, this is the point, right? In the end, $2 billion was stolen from the tax system by 56,000 people. Now, the ATO tell us that of those 56,000 people who perpetrated this scam, just 120, I think it might be 122 now, have been convicted. Secondly, of the $2 billion stolen, the ATO tells us that only 160 million, or around 8% of that, has been recovered. Sam Hawley: And, Angus, that money, it really is just a drop in the ocean, right? Because you've also looked at all the other funds that the ATO hasn't managed to collect, and you've spoken to Karen Payne. Now, she's a former Inspector General of Taxation. She basically says if the ATO had collected what it was owed, then we would all be paying less tax. Angus Grigg: Yeah. Karen Payne, she really focused on what's called collectible debt. And that is this sort of giant number that the ATO doesn't like to talk about. And when she started looking at it, it was about $30 billion. Then it rose to about $50 billion. The figure is now $53 billion. And that is the amount of money or taxes that the ATO has levied, if you like, but not collected. Karen Payne, Inspector General of Taxation, 2019-24: The large percentage of the debts that were due were in fact owned by a very small number of taxpayers or they're related to a small number of taxpayer accounts. So you'd kind of think it's a small number of people you need to be chasing. Angus Grigg: And the point that Karen Payne was making is that if we collected all that tax, perhaps we would not have to pay as much tax, all of us, but also we'd have more money to spend on really basic things like schools, roads and hospitals. Karen Payne, Inspector General of Taxation, 2019-24: The fact that it keeps rising is troubling. So it's fundamental, I think, that we've got good administration of the tax system because the integrity of the tax system is fundamentally important to all of us. It pays for all of the services that we benefit from. Sam Hawley: Angus, despite everything that you have said, which is frankly really concerning, the ATO itself thinks it's doing a pretty good job, right? Because Chris Jordan, who was the tax commissioner up until 2024, he's been putting a rather positive spin on the ATO's work. Angus Grigg: Yeah. This is the really extraordinary thing. Despite all these scandals, the ATO tells us they are doing a great job. Just before Chris Jordan stepped down as tax commissioner, he did a victory lap, if you like, at the National Press Club, and he pointed out all the great, terrific things that the ATO has done. Chris Jordan, Tax Commissioner, 2013-24: We've successfully charted a massive program of transformation. We've cut red tape and we've modernised our administration of the tax system as part of the digital revolution to make tax just happen.
ABC News
6 days ago
- Business
- ABC News
Can Trump contain China's AI boom?
Sam Hawley: For so long, the tech bros of Silicon Valley have dominated the AI race. Now there's a boom underway in China, giving them a run for their money and Donald Trump doesn't like it. Today, Kyle Chan from the global policy think tank, the Rand Corporation, on why the president is so desperate for the US to beat Beijing. I'm Sam Hawley on Gadigal land in Sydney. This is ABC News Daily. Sam Hawley: Kyle, there's a global race going on right now to be the world leader in AI. This is a race basically to make technologies that rival the human brain, right? Kyle Chan: Yeah. So there really is this global race. And in particular, you have the US and China with many of the world's best AI models. And it's quite impressive to see almost every day, it feels like a new model coming out with new advanced capabilities. So, yes,getting close, if not even beating what we can do ourselves. Sam Hawley: Yeah, it's fascinating to watch how quickly this is moving. Donald Trump, US President: I don't like the name artificial anything because it's not artificial. It's genius. It's pure genius. Sam Hawley: Donald Trump, of course, wants to make sure that America wins this race. Donald Trump, US President: America is the country that started the AI race. And as president of the United States, I'm here today to declare that America is going to win it. We're going to work hard. We're going to win it. Sam Hawley: He even gave a speech with that title, winning the AI race. Donald Trump, US President: Because we will not allow any foreign nation to beat us. Our children will not live on a planet controlled by the algorithms of the adversaries advancing values and interests contrary to our own. Sam Hawley: He's pretty invested in this, isn't he? Kyle Chan: That's right. Yeah, this has been a big topic throughout his administration so far. I think a lot of what US policy is focused on, including the current Trump administration, is on winning the race to AGI. I think there's a strong sense that this could be a pivotal turning point. Sam Hawley: Remind me, what is AGI? Kyle Chan: So artificial general intelligence. There's this idea that perhaps one day it could reach a point where it could replicate or even exceed the abilities of humans to do, say, certain kinds of office work or certain kinds of research. This could even extend into areas like military capabilities, like autonomous weapon systems, for example. Reaching this stage where AI is as good as, if not better than, human reasoning. Sam Hawley: So we might not be needed actually anymore. We won't need to think anymore, right? Kyle Chan: We'll see. Sam Hawley: Exactly. All right. Well, Kyle, of course, up until now, the US has really dominated this market. All the big tech giants who've developed AI, things like ChatGPT, they're sitting there in Silicon Valley. Kyle Chan: Oh, yeah. So you have OpenAI, currently led by Sam Altman. You have Google, which has been coming out with a number of various sort of cutting edge models with its Gemini series. You have Claude, which is very well known from Anthropic, well known for its coding capabilities. You have Meta as well as xAI. So there's actually quite a quite a large roster of strong American AI companies. Sam Hawley: So for many, many years, America's really led the world when it comes to AI development. But as you say, China has been creeping up on it. And that has the US administration a bit worried. It even tried to stop Beijing's advancement in this space, didn't it? By banning Nvidia from selling advanced chips to China. Just remind me what happened then. Kyle Chan: Yes, that's right. So this was actually in the Biden administration. You had very strong export controls placed on especially Nvidia's more advanced chips. And so here you actually have several rounds of downgrading of what kinds of Nvidia chips could be exported in China. Sam Hawley: So the US, in part, was saying that it was deeply concerned that AI could be used by the Chinese for military purposes. Kyle Chan: That's right. Yeah. And, you know, to be sure, it was also part of this broader idea that advanced semiconductors in general can be used for a whole range of important applications. So in addition to AI, there are also more direct military implications for this ban. Sam Hawley: All right. So Biden brought in this ban to stop these really advanced chips from being exported from the United States to China. But intriguingly, Trump just recently has now removed that ban. Do we know why he did that and how significant is that decision? Kyle Chan: Yes. What's interesting is I think whereas before people expected maybe a continuous ratcheting up of these export controls, Trump has reversed the ban on the H20 chips. Interestingly, a new line of argument has gotten a lot of prominence, which is that Nvidia and other US tech companies who sort of, you know, quote, unquote, sell the picks and shovels, that is, build the infrastructure and build the sort of underlying platforms for AI development, that American companies should be the ones who are dominant in the world and that people should build on the American tech stack as it were, rather than cede, say, the Chinese market to its competitors like Huawei, which is also developing its own AI chips. So the idea here was that rather than block out the Chinese market entirely, that the US should stay engaged, at least in terms of providing some kind of sweet spot of infrastructure, but not not too advanced in order to actually accelerate China's efforts. Sam Hawley: And that's the argument that the Nvidia boss, Jensen Huang, has been making to Donald Trump. Jensen Huang, Nvidia CEO: This is a once in a lifetime opportunity for America to have AI technology leadership. This is a once in a lifetime opportunity for China to have AI leadership. And if we want to be a leader, we have to engage developers all over the world. We have to engage markets all over the world. Sam Hawley: So the best way to beat China at AI is to actually help China to compete. Have I got that right? Kyle Chan: Yes. Yes. The logic, it can be hard to parse out sometimes, but yes, this is one of the main arguments. Sam Hawley: All right. So, Kyle, Donald Trump, he's delivered this speech outlining the importance of the US dominating the AI market. Donald Trump, US President: America needs new data centres, new semiconductor and chip manufacturing facilities, new power plants and transmission lines. And under my leadership, we're going to get that job done. Sam Hawley: But as we mentioned, in China, it's full speed ahead. There really is a boom going on there right now, isn't there? Kyle Chan: Absolutely. Yeah. So, I mean, everyone now knows about DeepSeek and the DeepSeek moment. News report: The release of a high performing Chinese rival to chat GPT has sent shockwaves through the global tech sector and caused US tech stocks to fall. Kyle Chan: A Chinese AI model for the first time seemed to be almost on par with the US leading models. And this was done at a fraction of the cost in terms of compute. And this was done sort of in defiance of US efforts to put on export controls and to restrict Chinese compute capacity. But DeepSeek is really the tip of the iceberg. So there's a whole set of very competitive Chinese AI models. You think about Alibaba's Qwen, you think about Tencent, ByteDance. There's Moonshot, a whole host of startups as well. Most of these companies now, they all have their own sort of chatbot like chat GPT, where anyone can download the app or go to the website and just start chatting directly with the AI model, the underlying model itself. And so what's interesting is that it's not just one company or one startup per se. It's actually a whole sort of lineup, in a way, a Chinese team competing with the US one. Sam Hawley: And these AI apps, what they haven't needed, that chip that was banned, I guess, from being exported from the United States. China's done it on its own, has it? Kyle Chan: Well, yeah. So it's complicated because actually many of these Chinese AI companies, they do use Nvidia chips. They do, including the chip that was banned, the H20. At the same time, though, they're trying to experiment and test Chinese domestic alternatives, knowing very well that, you know, in the long run, they may no longer have access to Nvidia's GPUs. So there's a question right now within the Chinese tech community, Chinese AI policy about how hard to push for this domestic alternative versus to continue to rely on what are otherwise better performing Nvidia chips. Sam Hawley: All right. Well, Kyle, just unpack for me now. What's actually driving this AI boom in China? Because it has a lot to do with the Communist Party's backing of this, doesn't it, of the government's funding of it. Kyle Chan: That's right. So what's interesting is that Beijing is pouring resources into the entire, what I call the entire AI tech stack. So they're investing in not only chips, as we mentioned earlier, but in the rollout of data centres, often tied to renewable energy. They are investing in the development of foundation models. They have special local government AI labs. And then all the way to applications, especially in so-called hard tech areas like robotics and industrial automation. So you can see sort of this full range of support. And of course, at the very heart of this, I think is ultimately the emphasis on talent development and basic research. So a lot of the universities in China, many of them are producing really world class AI developers. Sam Hawley: And we've seen this before, haven't we? From the Chinese government when it wanted to boost the EV market. It did the same thing. It did the same thing with solar and it works. Kyle Chan: Yeah, that's right. They've tried this playbook before and they're going to try it again. But the funny thing is, yeah, AI is sort of a different beast. And so, you know, for example, just in the past year, we have this shift towards reason models. And that already has thrown a bit of a wrench into some of the industrial policy efforts that China has made in AI. So some of the data centre build out that was government backed. You know, there's a question now about whether that is fit for purpose with the shift towards this sort of new AI paradigm. And it could change again. So it's a fast moving space. Sam Hawley: All right. So, Kyle, there is this race going on between the United States and China to dominate AI development. But tell me, why is that so important? Why does it matter who wins this race in the end? Kyle Chan: So the AI race, I think, is especially important now because it has implications for economic growth, long term productivity. There's a sense both in the US and in China that AI could help boost a whole range of sectors. From education, health care, biotech, drug discovery, manufacturing services. So on the one hand, you have this sort of economic implication. On the other hand, there are military implications. So AI could be used for developing autonomous systems. You think about drones or swarms of drones that are able to navigate on the battlefield on their own. Or you think about missile defence capabilities that might use AI or satellite technology that might use AI. So there are both security and economic repercussions for, you know, the question of sort of who is ahead in the race for AI. Sam Hawley: Yeah. And I note that Sam Altman from OpenAI says he wants to make sure that democratic AI wins over authoritarian AI. What do you make of that? Kyle Chan: Yeah, that's right. I mean, it's an interesting idea because right now there's also this battle over sort of diffusion and who can get their models out into the world. And so it's not just a matter of, you know, who has the best model, but also which model is more widely used. And I think right now what's interesting is a lot of Chinese models are open source or at least open weights. That is people, companies, organisations, individuals can download these models and run them locally, run them themselves. And what this means is that a Chinese type of AI might end up diffusing more broadly, perhaps maybe outside of the U.S. into other countries. Sam Hawley: All right. Well, it's a fascinating battle. Kyle, what do you think? What's your prediction? Who's going to come out on top in the end? Kyle Chan: In a sense, I do see that with some of the industrial policy in China, with some of the government support, as well as perhaps more importantly, different sorts of attitudes towards AI in China. There are some surveys that have shown that people in China more broadly seem to be more open to adopting AI and see it as a more positive force in society. That could play a key role in rolling out and incorporating AI into more areas of life. So that's one area that I would watch very closely. Sam Hawley: Kyle Chan is a postdoctoral researcher at Princeton University and an adjunct researcher at the Rand Corporation. This episode was produced by Sydney Pead and Sam Dunn. Audio production by Cinnamon Nippard. Our supervising producer is David Coady. I'm Sam Hawley. ABC News Daily will be back again on Monday. Thanks for listening.
ABC News
25-06-2025
- Politics
- ABC News
Will Putin help Iran rebuild its nuclear program?
Sam Hawley: One of Iran's closest allies is Russia. So why did Vladimir Putin decide not to come to Tehran's aid and provide military support as Israel, and then America, worked to destroy its nuclear program? Today, Middle East expert Anna Borshevskaya from the Washington Institute on what the war means for Moscow and whether Putin might help Iran now to rebuild its nuclear capability. I'm Sam Hawley on Gadigal land in Sydney. This is ABC News Daily. Sam Hawley: Anna, it's been an incredible few weeks with Donald Trump, of course, always there. His latest spray at Israel and Iran was, well, quite something. Anna Borshchevskaya: Yes, it was. Yes, it was. It's definitely a change from what we're used to hearing from American presidents. Donald Trump, US President: You know what, we basically have two countries that have been fighting so long and so hard that they don't know what the f*** they're doing. Do you understand that? Sam Hawley: Yes, that's right. All right. Well, the ceasefire, of course, is in place, although everything can change very quickly. And we have these reports of preliminary classified findings out of the US that the Iranian nuclear program has been set back only by a few months. And I want to talk to you about that in just a moment. But of course, we're here to talk about Russia, because that is your expertise. When Israel first began its strikes on Iran, there was immediate concern, of course, that there could be a major escalation. And I think it's fair to say that many people's minds drifted to what Russia might do. Anna Borshchevskaya: Yes, there were very good reasons to think about what Russia might do, because in the last several years, but really under all of Putin's presidency, Russia had moved closer to Iran. Putin, by and large, attempted to play this balancing act across the Middle East of building good ties with everyone in the region, including, of course, Israel. But in reality, he empowered Iran and its proxies along with, until last December, the Assad regime in Syria. In other words, Putin, on the one hand, tried to play this balancing act of being able to have good relations with everyone. But in reality, he was closer with anti-American forces in the region. Sam Hawley: And important to remember, as we discuss this, is that Russia is a nuclear state, of course. Anna Borshchevskaya: Of course, absolutely it sure is. And Putin never fails to remind us that Russia is a nuclear state. The Kremlin regularly engages in nuclear sabre rattling to scare the West into concessions on Ukraine, most recently, but also on other issues. Sam Hawley: All right. Well, I know Russia didn't come, of course, to Iran's aid during this conflict, unlike North Korea has done for Vladimir Putin in the war in Ukraine. And of course, as Iran has done by providing short-range missiles and drones to Russia. So we're going to come to why that is in a moment. But it's really good just to step back and understand the history of this relationship between Iran and Russia, because they have a really complicated past, don't they? Anna Borshchevskaya: Absolutely. They do have a very complicated past. It is a history that spans over 500 years, most of it coloured by distrust. Historically, it is Iran, remember, that lost wars to Russia, not the other way around. The fact of the matter is, probably as early as the 1980s or late 1980s, the Soviet Union and Iran did begin to take steps towards improving relations. And those efforts continued in the 1990s. It was Russia that began constructing Iran's nuclear facilities, nuclear programs, the Bushehr reactor. Again, as I said earlier, Putin wanted to build good ties with all actors in the Middle East, but he did lean closer to anti-American forces. And it was Syria that really brought the Russia-Iran relationship to unprecedented heights. Remember, Russia intervened militarily in Syria in late 2015. And of course, in January of this year, the two countries, Russia and Iran, that is, signed a strategic partnership agreement. So Russia and Iran continued getting closer and closer, which brings us to the present moment. And as you said, Russia did not come to Iran's rescue. Sam Hawley: Yeah, absolutely. So the war in Ukraine has provided a strategic reason for Russia and Iran to work more closely together. Anna Borshchevskaya: That's right. The war in Ukraine certainly provided more reasons for Russia and Iran to work more closely together. Russia found itself isolated by the West, as did Iran. But also, even before the invasion of Ukraine, these countries shared a larger geostrategic vision for the world. In other words, they both resented American leadership. They wanted to see a different world order, and they wanted to see what they often call a quote-unquote multipolar world. And certainly they wanted to reduce American influence specifically in the Middle East. Sam Hawley: All right, well, Anna, given this closer alliance that we've discussed, let's look at what role Russia could have played in this war when Israel began its strikes on Iran. Vladimir Putin thought initially he could be a peacemaker. Tell me about that. Anna Borshchevskaya: Yeah, and this is Putin's favourite role to play in the Middle East. And this goes back to what I said earlier. If you see how he tried to position himself as somebody that can talk to all sides, typically conflicting sides in the Middle East, who has somebody who has good relations with everyone, you can see why somebody in that position would want to cast themselves as a mediator. But really, it's a way for Putin to position Russia as an indispensable actor, somebody without whom you cannot solve major world events. News report: Russian President Vladimir Putin held a 50-minute phone call with the US President Donald Trump, the Kremlin condemning Israel's attacks, both sides saying it's not too late for Iran to strike a deal. Donald Trump, US President: As you know, Vladimir called me up. He said, can I help you with Iran? I said, no, I don't need help with Iran. I need help with you. Anna Borshchevskaya: If the West and if Israel and Iran, along with Europe and the US, were to accept Russia as a mediator, it would take Russia out of this perceived pariah status in the West and again would cast Russia as important. Sam Hawley: So he wanted to be a peacemaker, which of course did not happen. But given this relationship with Iran, why didn't Putin render any sort of assistance whatsoever to the regime? Anna Borshchevskaya: Well, I think there's several reasons. And one thing I said very early on, if you read the strategic partnership agreement between Russia and Iran that I mentioned earlier that the two countries signed in January, it doesn't actually obligate Russia to come to Iran's aid. There is no clause that obligates them to come to defence of each other. It's not like the NATO charter. But also, Russia would expect the country to formally ask for assistance. This is a very different view of what a strategic partnership is. It's a far more limited view. And I think also, certainly given how bogged down Putin is in Ukraine, he had little to spare. He frankly would have, I think in the beginning of this conflict, probably expected it to end fairly quickly. His biggest concern would be Iran turning pro-Western. But if there were limited strikes against Iran that weakened the regime a little bit, that would not have gone contrary to his interests because he sees Russia at the top of a power pyramid and he wants Russia to be powerful than others. That is how he sees all relationships. Lastly, we saw a very interesting thing going on with oil prices. There was a spike very quickly in oil prices, but then it went down. But certainly the potential for oil prices rising also would have very much benefited Putin's war effort in Ukraine, because that is one important way that how he's able to fund his war. I do think, though, I will say this, Iran turning pro-Western is a big concern for Russia. And that is why I did wonder if potentially if things were to change, again, the situation has been moving very quickly, if Russia could do maybe a little bit more to help Iran. But also given Russia's ties with all other actors in the region, with the Gulf states and with Israel, Putin wanted to take a very cautious approach here. Sam Hawley: But what you're saying is if Vladimir Putin sensed perhaps that the Iranian regime was about to fall, that perhaps he would change his decision on this and render support. Anna Borshchevskaya: Yeah, it is something that I wondered. But, you know, there's several questions to ask here also. What could realistically Russia offer? And two, with the United States entering the conflict, that's a whole different ballgame. Sam Hawley: Yeah. All right, well, let's then, Anna, unpack what the consequences of this Israel-Iran conflict could be for Russia and what sort of relationship it might now have with Iran. There are negatives in all of this, aren't there, for Vladimir Putin? Not least of which it has exposed Moscow's limitations and the fact that it's not a particularly reliable ally. Anna Borshchevskaya: Yeah, absolutely. If there is no regime collapse in Iran, certainly it's hard to see how this regime comes out strong. In other words, we're going to more likely see a significantly weakened regime in Tehran. And that does hurt Russia's overall strategic position in this region, because Putin did position himself as somebody who supported these forces. And again, Putin doesn't understand the term ally the same way as we do. But the fact that he did not come to Iran's rescue does quite a bit of damage to Russia's reputation as a reliable partner. But it does hurt Russia's strategic position in the region. I would say far more so, I would say, than the fall of the Assad regime in last December. Sam Hawley: Yeah, on the flip side, of course, of this, as you've mentioned, there are some positives for Russia because attention has well and truly drifted away from his own conflict, Vladimir Putin's conflict in Ukraine, which has really intensified over the last few weeks. Anna Borshchevskaya: That's absolutely right. And especially it intensified specifically on June 13, when Israel began its campaign against the Iranian nuclear facilities. World distraction from Ukraine is absolutely still very much a benefit to Russia. And that is a chief priority for Putin. Sam Hawley: And what about the fact that Israel and the US acted alone? They did not go through the normal international diplomatic channels, if you like. Will Russia exploit that? Anna Borshchevskaya: Well, they've already begun exploiting that. There was no shortage of rhetoric coming out condemning the perceived unilateralism and perceived American cynicism and hypocrisy of America as a hypocrite country, as America supposedly preaching about liberal values but breaking them. And certainly, I think we can expect the Kremlin to continue to attempt to capitalise on theme with countries outside the liberal free world. Sam Hawley: So, Anna, what now for this relationship? As we said, the latest, and they are preliminary findings from US intelligence, suggests that Iran's nuclear program has only been set back by a few months. Could Russia now help Iran on that front, help to rebuild its capacity, do you think? Anna Borshchevskaya: I wouldn't, you know, I wouldn't rule it out. Remember again that Russia did build the Bushehr reactor in Iran in the first place. Russia was a key supporter of the Iranian nuclear program and they were champions of claiming that the Iranian nuclear program is peaceful. Provision of high technology goods such as nuclear reactors is Russia's competitive advantage. So I think, again, the story is not over and Russia's relationship with Iran is not broken. Sam Hawley: So how interested then is Russia in keeping this really quite tight alliance continuing on? Anna Borshchevskaya: I think they would want to continue this alliance because, again, Russia has empowered Iran and its proxies across the region with the aim of weakening American influence in this region. So if that regime collapses, that is a far bigger concern for them than Iran turning nuclear. Historically, Russia simply never worried about the Iranian nuclear program the same way that the West or Israel did. But they did worry about Iran turning pro-Western. And historically, they had good reasons to do so, because remember that prior to the 1979 revolution, Iran was pro-Western. And Russians do understand history. So they also know that the Iranian people are far more pro-Western than the Iranian regime. Iran turning pro-Western would be a big strategic loss for Russia. Sam Hawley: Anna Borshevskaya is a senior fellow at the Washington Institute, an American think tank. This episode was produced by Sydney Pead. Audio production by Sam Dunn. Our supervising producer is David Coady. I'm Sam Hawley. ABC News Daily will be back again tomorrow. Thanks for listening.
ABC News
04-06-2025
- Business
- ABC News
Alan Kohler on making housing a bad investment
Sam Hawley: Interest rates might be coming down, but house prices are, once again, heading in the other direction. Given there is a major problem with housing affordability, and there are so many people who can't even afford to enter the market, why on earth is that? Today, the ABC's finance expert, Alan Kohler, on how conditions are ripe for a housing price surge, just as they were back in the early 2000s. In other words, why history's repeating. I'm Sam Hawley on Gadigal Land in Sydney. This is ABC News Daily. Sam Hawley: Alan, interest rates are coming down and they could drop even further this year. So that should mean houses are more affordable for borrowers. But it's not that simple and you're going to explain to us why. Now, to do that, let's go back to the turn of the century. In 2001, the Reserve Bank was cutting rates just like it is now, wasn't it? Alan Kohler: Correct. Sam Hawley: What was going on back then? Alan Kohler: In 2001, the Reserve Bank cut interest rates six times that year. News report: Nervous anticipation for one of the Reserve Bank's most expected interest rate cuts, the sixth and last this year. Alan Kohler: And that was in response to the dot-com crash in the United States, which happened on basically in March of 2000. It continued for a while. The Nasdaq halved, more than halved. And there was a recession in the United States. The Reserve Bank was concerned that the Australian dollar would rise too much because of that, because obviously the US Federal Reserve was cutting interest rates in response to the recession. So the Reserve Bank of Australia cut interest rates in precaution, even though there was no recession in Australia. The economy did slow a bit. There was a bit of a fall in the share market, but not anything like what happened in the US. Sam Hawley: And the other thing that was happening back then was there was some pretty major policy changes, including the introduction of the capital gains discount and the return of a first home buyers grant. So just remind me of those policies at that time. Alan Kohler: Yes. So in 1999, the Howard Government appointed a business tax review committee, a panel of three businessmen to report on the business tax system. And what they wanted to do, what Howard and Costello wanted to do then, was to reduce the company tax rate from 36 to 30%. So they asked some businessmen to tell them whether that was a good idea. And well, they told them it was a great idea. Go ahead. But in the course of doing that, they also recommended a change in the capital gains tax regime so that instead of the capital gains tax being adjusted for inflation, they recommended a simple 50% discount, which the Howard Government duly applied. Peter Costello, then-Treasurer: Under the reforms which we announced today, a 50% reduction in the taxable gain, that is 50% of the gain is not taxable. Alan Kohler: And although it's the case that that didn't really change the amount of capital gains tax at the time because inflation was quite high. So actually, the 50% discount was roughly the same as the inflation adjustment for the average time that people were holding assets. What I think happened was that it changed the psychology of investing in property because everyone understands a discount, whereas nobody really gets inflation and certainly can't do it in their heads. Sam Hawley: So even if you don't understand capital gains tax, just understand that if it's 50% discount, that's a good thing. Alan Kohler: Exactly. Sam Hawley: If you're a homeowner, right? Alan Kohler: Precisely. And that added to negative gearing, which had been in place for a long time, to make investing in housing an attractive thing to do. The businessmen who recommended it thought that it would lead to Australia becoming a nation of share owners and buy the shares of their companies and drive the prices higher and lower their cost of capital. But that, in fact, didn't happen because people just want to invest in housing. And that's what happened. And as you say, also the Howard government reintroduced first homebuyer grants in 2000, which had been out of action for a while. The first homebuyer grant was in the 1960s under Menzies, but the Hawke-Keating government didn't do them and Howard reintroduced them. Sam Hawley: Okay, so rates are going down. There's these two major policy changes. And at the time, there was a simply huge rise in immigration. Alan Kohler: Exactly. And what caused that in around about 2005 was a change to the way foreign students were assessed in 2001. On July 1st, 2001, the system was changed. Up to that point, foreign students' visas were issued on the basis of either gazetted countries or non-gazetted countries. China and India were included in the non-gazetted countries and it was very difficult for students from those places to get a visa. After July 1st, 2001, that changed and became the same for everybody, which is the way it ought to be, of course. But that led eventually to a huge increase in students from China and India from the mid-2000s. And that led to a doubling and then tripling of net overseas migration into Australia. At the time. Sam Hawley: Wow. All right. So we get a pot and then we put all these things into it and we stir it around. So there's the capital gains tax, there's the first homeowner's grant, the rates are dropping and there's this massive increase in immigration. And when you stir it all around, you come out, Alan, with house prices rising. Alan Kohler: Yes. Well, so all of those four things that we've discussed added to demand from investors and migrants and so on. So there was a big increase in demand, but there was no response in supply. The government did nothing about increasing supply at the time. And the result was that for 10 years, between 2005 and 2015, there was a dire, big shortage of housing, an undersupply of housing for a decade, which really set the scene for a big increase in house prices. And what happened was that the house price to income ratio rose from between three to four times incomes, this is average incomes in 2000, to eight or nine times incomes at the end of that time. And that was a huge change in the way that housing related to people's incomes and also GDP of the there was a stop to immigration during the pandemic. And then post the pandemic, population growth has gone back to more than 2% per annum, which is what it was in the period after 2005. Sam Hawley: All right. So, Alan, that's the history of the skyrocketing house prices and how we ended up here. Now, today, interesting that we have exactly the same conditions. Alan Kohler: That's right. The Reserve Bank is cutting interest rates, probably not by six times, but by probably four or five times this year, possibly into next year as well. We've got first time buyer grants back on. We've got a big increase in migration. I mean, the Treasury forecast in the budget for this financial year, net overseas migration is 335,000. But in the first nine months of the year, it's already 360,000 and looks like being 400,000 this year. There's no targets on immigration, but there's a Treasury forecast and net overseas migration is going to well exceed the Treasury forecast. And of course, there's been no change in the capital gains tax discount because the Labor Party failed to win in 2016 and 2019, where that is their policy to reduce it 25%. All the conditions are in place for another rise in house prices. Sam Hawley: Exactly. So what are we seeing already and what do we expect to see then when it comes to the cost of housing in Australia? Alan Kohler: Between November last year and January this year, house prices actually fell by close to 1%. This is the national median price, having increased 17% in the previous 12 months or so. And since January, they've risen again by more than the increase in average wages over that period. News report: House prices are continuing to rise across the country, with experts predicting property values to grow between 6 and 10% by the end of the year. All the capitals rose more than 0.4 of a percent in May. That brings the national index 1.7% higher over the first five months of the year. Alan Kohler: House prices are already starting to rise in excess of the rise in incomes. And the thing is, you know, everyone says houses are unaffordable, which is kind of true, which you would think would mean house prices don't rise very much now, because if they're unaffordable already, then people can't afford them. But in fact, falling interest rates makes them more affordable. The determinant of affordability is the amount you can afford in terms of interest repayments or mortgage repayments. Really, a better measure might be time to save a deposit, because the problem is that deposits are becoming unreachable for a lot of people. So housing is becoming inaccessible. It's OK if you've got a deposit, because your parents have given you one, given you the money, but those who don't have access to some sort of provision of a deposit can't get into housing. And that's the problem. Sam Hawley: Yeah. There's just a certain number of people that keep buying properties and pushing the amount or the cost of properties up. I mean, there's enough people that can afford the properties because the property price keeps going upwards and upwards. Alan Kohler: Correct. The truth is that if you don't have a parent who can give you the money for a deposit or some other way of getting ahold of a deposit, as opposed to saving it, you're a renter. You cannot buy a house. That is the reality of the situation, particularly in Sydney, Brisbane and Melbourne, but increasingly in Perth and Adelaide and Hobart as well, and also everywhere in Australia. I don't know what's to be done about it, really. Sam Hawley: All right. Oh, gosh. So, dare I ask you then, if you don't have the bank of mum and dad or any family members that can actually help you in this process of getting this massive deposit to buy a home, is there really no chance ever that you're going to land in the property market at this point? Alan Kohler: Well, there has to be a big shift in the value of housing versus incomes. Prices would need to go back to the sort of relationship to incomes that they were 25 years ago, which is three to four times instead of the current sort of nine or 10 times. And the only way that's going to happen is if house prices stay where they are for a while, like a long time, like 20 years. Now, that will only happen if there's an oversupply of housing for that period. Both the federal government and the state governments are all doing what they can. They're working hard. I know, you know, they're genuinely working hard to increase supply, but there's a problem. The trouble is that the construction industry doesn't have the capacity, partly because productivity is so low. In fact, the Committee for Economic Development in Australia, CEDA, released a report about construction productivity and why is it so low. And they do say in the report that we're building now half as many houses per worker as we did in the 70s. So that's fallen by half. But not only is productivity low, the number of workers is also in decline because the average age of builders tends to be quite high. They're all retiring and there's not enough apprentices coming through. The government is talking about increasing the number of tradies who they bring in as migrants, which is definitely what's needed. They're not talking about anywhere near enough of them coming in. And any way, the regulator of the industry is reluctant to recognise foreign qualifications in the construction industry. So, you know, there's a real kind of blockage of kind of productivity and number of people in the construction industry. I think it's going to be difficult to achieve the kind of oversupply of housing over the next sort of decade or two that is required. Sam Hawley: And Alan, while we're waiting for all these houses to be built, conditions are absolutely ripe for house prices just to keep surging. Alan Kohler: Yeah. And the governments, in addition to doing the work that they're doing on supply, which is good, they're also kind of doing short-term band-aid measures, including helping first homebuyers, either through help to buy schemes or grants and so on. And so that just tends to increase demand and increase prices, because a lot of those grants just end up on the price. So, yeah, look, I don't think it's particularly good news on the subject of housing. I'd like it to be different. And there's no big magic bullet. There's just going to be a lot of sort of small work, grinding work to be done. And, you know, the fact is we have to go through a period where housing is a really bad investment. Sam Hawley: Alan Kohler presents the Finance Report on the ABC's 7pm News. This episode was produced by Sydney Pead. Audio production by Adair Sheppard. Our supervising producer is David Coady. I'm Sam Hawley. Thanks for listening.
