PNG ON BOARD FOR TREATY: GOLDEN SHINE
Australia-PNG Mutual Defence Treaty signed
Australia and Papua New Guinea have finally signed a Mutual Defence Treaty, almost three weeks after it was deferred during Prime Minister Anthony Albanese’s visit to Port Moresby. Mr Albanese said the alliance would be Australia’s first in more than 70 years, and Papua New Guinea’s first with any country. Signed in Canberra with PNG PM James Marape, the Pukpuk Treaty contains mutual defence obligations. The two leaders said both countries recognised an armed attack on either would be a danger to the peace and security of both, and declared they would act together to meet the common danger. It provides for the expansion and modernisation of Australia’s and Papua New Guinea’s defence relationship, including potential future recruitment of each countries’ citizens into respective forces. Consultations will commence on a recruitment pathway to enable Papua New Guinea citizens to join the Australian Defence Force. From January 1, 2026, eligible permanent residents living in Australia who are also PNG citizens will be able to apply to join the ADF.
Gold to shine amid lower export earnings for resources, energy
Australia’s resources and energy exports are tipped to deliver $369 billion in earnings in 2025-26, down around $16 billion on the previous year, according to official forecasts. While exports continue to grow, the impact on earnings will be offset by falling prices for some commodities, says the Department of Industry, Science and Resources’ latest quarterly report. Resources Minister Madeleine King said higher volumes and prices for gold exports – up by $13 billion to $60 billion – would partly offset the effect of weaker-than-expected liquefied natural gas (LNG) prices in 2025-26. Demand for copper and critical minerals, such as lithium, were tipped to remain strong, she said. The report said that iron ore would still account for more than 25 per cent of all resource and energy commodities over the outlook period, but lower prices would see iron ore exports fall by almost $4 billion to $113 billion in 2025-26.
East coast gas supplies deemed safe for early 2026
The Federal Government will not activate the Australian domestic gas security mechanism (ADGSM) to shore up natural gas supplies in early 2026. A statement by the Federal Department of Industry, Science and Resources said the government was confident that Australia’s east coast gas market would have enough supply from January through March next year. Domestic demand for the east coast gas market could be met without reducing gas exports, the department said. It added that there were sufficient mitigations to address supply-demand imbalances for the east coast and the West Australian gas markets. Under a Heads of Agreement, LNG producers must offer their uncontracted gas to the domestic market ahead of export.
PM acclaims free trade deal with United Arab Emirates
Prime Minister Anthony Albanese has welcomed a free trade agreement with the United Arab Emirates that came into effect on October 1. Visiting Abu Dubai, the PM said that under the free trade agreement, more than 99 per cent of Australia’s exports would enter the UAE duty-free, saving Australian exporters $185 million in the first year alone. The PM said the UAE was already Australia’s largest trade and investment partner in the Middle East, with more than $12.3 billion in two-way goods and services trade in 2024. An additional $678 million in annual exports was forecast under the free trade agreement. Mr Albanese said the agreement would also help to attract some of the largest sovereign wealth funds to invest in Australia.
Sharp fall in goods trade surplus
Meanwhile, Australia has recorded a sharp fall in its monthly trade balance on goods, with a slide in iron ore, thermal coal and LNG export earnings driving a 7.8 per cent fall in goods exports in August. The Australian Bureau of Statistics registered a 3.2 per cent increase in imports, as the monthly trade surplus on goods fell from $6.6 billion to $1.8 billion, seasonally adjusted. Importation of consumption goods rose 5.8 per cent in August.
RBA head cautious on effects of services inflation
Reserve Bank of Australia Governor Michele Bullock said that a higher-than-expected upward pressure of inflation was contributing to a more cautious outlook, against a backdrop of persistent inflation in services. Ms Bullock said it was important for inflation to be kept low and stable, and unemployment as low as possible. She said many countries had seen goods price inflation fall, but market services inflation remained “sticky”. Market services inflation often had a high labour input, Ms Bullock said in her post-monetary policy decision media conference. If services inflation remained persistent, the RBA may have to be cautious on forecasting how far inflation would come down.