10% US TARIFF ON EXPORTS; INFLATION DIPS

Base US tariff rate imposed on Australian goods exports

Australian goods exported to the United States will face a 10 per cent tariff, under the tariff regime finalised by President Donald Trump. The 10 per cent rate represents the baseline tariff, also imposed on other less-penalised nations including Brazil and the United Kingdom. Under the revised tariff regime, goods exported to the US by Japan, the European Union and New Zealand will face a 15 per cent import tariff. Switzerland’s goods exported to the US face a 39 per cent tariff. In the Executive Order issued by the President, goods subject to transshipment via a third country to avoid higher tariff rates, will be struck with an additional 40 per cent tariff. While the 10 per cent baseline tariff applies to Australian goods, aluminium and steel exports to the US are still subject to a tariff of 50 per cent.

Lower fuel costs, services inflation drive fall in CPI

Annual inflation in Australia continued to ease in the June quarter, with the annual headline rate of inflation falling to 2.1 per cent, its lowest level in four years. Consumer Price Index data released by the Australian Bureau of Statistics show that lower services inflation – from 3.7 per cent to 3.3 per cent – and lower fuel costs contributed to falling prices. The annual level of core inflation, or the so-called trimmed mean, was the lowest since December 2021, falling from 2.9 per cent to 2.7 per cent. Of the state and territory capitals, Canberra and Darwin recorded the lowest headline inflation rate for the June quarter, at 1.6 per cent, with Perth the highest, 2.7 per cent.

Productivity Commission moots plan to slash company tax rate

Ahead of the Federal Government’s economic roundtable on August 19-21, its chief economic advisory body has proposed a radical tax plan in a bid to lift the nation’s flagging business investment. The Productivity Commission has proposed that Australia lower its company income tax rate to 20 per cent and introduce a new net cashflow tax of five per cent. The PC says the cashflow tax would reward companies for capital expenditure by reducing their taxable income by the value of their investments. It says that modelling suggests that a reformed company tax system could lift investment by $7.4 billion (1.6 per cent) and gross domestic product by $14.6 billion (0.5 per cent). The 20 per cent company tax rate would apply to companies with revenue below $1 billion.

Espionage costing economy $12.5 billion, says ASIO head

Espionage cost the Australian economy around $12.5 billion in 2023-24, according to the head of the nation’s intelligence agency. ASIO Director-General of Security Mike Burgess cited the direct costs of known espionage incidents, such as the state-sponsored theft of intellectual property, as well as the indirect costs of countering and responding. In a major address, Mr Burgess said the Australian Institute of Criminology estimated that foreign cyber spies stole almost $2 billion of trade secrets and intellectual property from domestic companies and businesses. In one example, Mr Burgess said, spies hacked into the computer network of a major Australian exporter, giving a foreign company a significant advantage in subsequent contract negotiations and costing Australia hundreds of millions of dollars.

Defence ministers hail lift in ADF enlistment

Defence Minister Richard Marles says the Australian Defence Force achieved its highest annual intake for 15 years in 2024-25, enlisting more than 7000 permanent full-time personnel. Mr Marles and Defence Personnel Minister Matt Keogh said the 17 per cent annual increase took the permanent and full-time ADF workforce to 61,189 people. They said the ADF received more than 75,000 applications in 2024-25, the highest application number in five years. In addition, they said the ADF-wide separation rate fell to 7.9 per cent, which was well below the 10-year average. Mr Marles and Mr Keogh said the Government had an ADF target of 69,000 of permanent Average-Funded Strength by the early 2030s.

AUKUS review months from completion, says US

Meanwhile, a US review into the AUKUS defence partnership is unlikely to be concluded for months, according to the US Department of Defense. In a published update, the US DoD said the review was anticipated to be complete this fall (September 21 through December 21). The DoD said the purpose of the review was to provide President Trump and his senior leadership team with a “fact-based, rigorous assessment” of the AUKUS initiative. It said the review would ensure the defence pact would align with the President’s ‘America First’ approach. Ongoing engagement on AUKUS would continue with other parts of the US government, the US Congress, and with AUKUS defence partners, Australia and the UK.