POWER SHOCK FOR PRICES; SUPER BOOST

Electricity price rises drive inflation rebound

Annual inflation has taken a sharp turn upwards, jumping from 2.1 per cent in the June quarter to 3.2 per cent for the 12 months to the end of September. Consumer Price Index (CPI) figures from the Australian Bureau of Statistics attributed the rebound in inflation to a spike in electricity prices, which rose almost 24 per cent over the year and by nine per cent in the September quarter as government-funded power rebates expired. Higher property rates and charges imposed by local government rose by 6.3 per cent over the year – the highest level since 2014. Trimmed mean inflation, the so-called annual core inflation that excludes large price variations, rose from 2.7 per cent in the June quarter to three per cent in September. CPI-measured annual headline inflation also varied widely among capital cities, with Brisbane (4.7 per cent) almost double that of Adelaide (2.4 per cent).

Australia on way to world No.2 in retirement savings, says Chalmers

Federal Treasurer Jim Chalmers says Australia is on its way to having the second largest pool of retirement savings in the world, making the nation a “force multiplier” in the global arena. In a radio interview, Dr Chalmers said it was remarkable that Australia was the 14th or 15th largest economy in the world, but with presently the fourth biggest pool of retirement savings. He said the superannuation sector helped Australia strengthen its economic relationships and partnerships with other countries, citing the US as a destination for fund investments. In addition to the US, a lot of substantial superannuation-sourced funds were investing in Australia, in energy assets, infrastructure, artificial intelligence and digital economy infrastructure. Australia’s total superannuation assets were estimated at $4.1 trillion in March this year.

Golden run lifts export prices, as gas, iron ore fall

Australians paid more for their imports but received barely more for their exported goods in the past 12 months, according to the latest official figures. International trade price index figures released by the Australian Bureau of Statistics show that export prices fell by 0.9 per cent in the September quarter, and rose just 0.1 per cent for the 12 months. Import prices fell by 0.4 per cent in the September quarter – aided by a slight appreciation of the Australian dollar – but rose 2.3 per cent for the year. Lower export prices for natural and manufactured gas and for iron ore contributed to falling export returns, offset by higher gold export prices. Non-monetary gold export prices rose by more than 42 per cent over 12 months to September, helping to just keep export prices in the black.

More reforms flagged for foreign investment regime

On inbound investment, Treasurer Jim Chalmers has flagged further reforms to the foreign investment regime, in a bid to streamline applications and expedite the approvals process. Releasing a discussion paper that canvasses the proposed changes, Dr Chalmers said competition for global capital was becoming more intense. The paper canvasses an automatic approval pathway so that low-risk actions from trusted investors would require notification but no sign-off. In addition, the paper outlines proposals to reduce reporting and approval requirements, better manage approved investments, and provide more certainty on timely decisions. Another proposal is to strengthen conditions and enforceable undertakings to ensure they were in the national interest. According to the discussion paper, the vast majority of investment proposals are approved – around 94 per cent over the past five years.

King signs agreement with Canada on critical minerals cooperation

In the wake of signing an agreement with the United States to increase security of supply of critical minerals and rare earths, Australia has endorsed a similar deal with Canada. Resources Minister Madeleine King, in Toronto, signed a joint declaration of intent to promote and strengthen cooperation and trade in critical minerals value chains. Ms King said the declaration would seek to advance projects of mutual interest, encourage commercial partnerships and research collaborations, and address policy challenges faced by producer nations. She said Canada, like Australia, held some of the world’s most significant critical minerals and rare earths reserves.

US strikes deal with China on rare earths, farm tariffs

Meanwhile, US President Donald Trump has struck an agreement with China that moves to suspend China's current and proposed export controls on rare earths and critical minerals and removes retaliatory tariffs on a range of US farm products. The White House said China would issue general licences valid for exports of rare earths, gallium, germanium, antimony, and graphite for the benefit of US end users and their suppliers around the world. In addition, China would suspend tariffs on a swath of US agricultural products including soybeans, chicken, wheat, corn, beef and pork. Under the agreement, China would purchase at least 25 million tonnes of US soybeans in each of 2026, 2027 and 2028.