Politics

Political news that affects economic policies and markets.

Politics
Tax reforms key takeaway from productivity summit
Treasurer Jim Chalmers has opened the door for a broader tax reform that addresses intergenerational inequity as he wraps up his three-day productivity summit. While there was no clear consensus on the specifics of the tax reform, there was a general recognition among the 23 attendees that the system was unfairly skewed away from young people. “I think our tax system is imperfect, and one of its most troubling imperfections is best seen through an intergenerational lens, which is why we take our responsibilities to the coming generations seriously,” Chalmers said. Chalmers also kept the possibility of adopting the Productivity Commission recommendation to introduce a headline company tax of 20% for businesses with turnovers under A$1 billion open. Tax rates of 30% would remain for companies with turnovers of A$1 billion or more, and all businesses, regardless of turnover, would pay a 5% tax on cash flow, which could be offset by investment. According to Chalmers, there is no need for another tax review and that the government would formulate reforms based on the following three principles:“A fair go for working people, including in intergenerational equity terms” “An affordable, responsible way to incentivise busin
Politics
US Justice Department calls for Cook to step down
The United States Department of Justice has called for Federal Reserve Governor Lisa Cook to step down from the central bank after commencing an investigation into the allegations brought against her by President Donald Trump and his allies. In a letter to Fed chair Jerome Powell, senior justice department official Ed Martin said the allegations made by the federal housing agency this week against Cook required “further examination". He also suggested Cook be immediately dismissed from her position on the central bank’s board. “At this time, I encourage you to remove Ms Cook from your board,” wrote Ed Martin, a Justice Department official appointed by President Donald Trump in the letter seen by the Financial Times. “Do it today before it is too late! After all, no American thinks it is appropriate that she serve during this time with a cloud hanging over her.” Despite Martin’s demand, the Fed chair has no authority under the Federal Reserve Act to remove one of the board’s governors. These aren’t the first allegations that have been brought against Cook, who was an appointee of Trump’s predecessor, Joe Biden. Earlier this week close ally of Trump and the head of the U.S. Federal Housing and Finance took to X
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Trump civil business fraud fine overturned by NY court
A New York appeals court has overturned a US$500 billion (A$778.3 billion) civil business fraud fine imposed on United States President Donald Trump and his company last year, arguing the fine was excessive. The suit had been filed by New York Attorney General Letitia James. The court’s five judges unanimously ruled that the fine should be thrown out under the Constitution’s Eighth Amendment’s ban on excessive fines, despite two judges saying the suit was rightly decided. “While harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half billion-dollar award to the State,” wrote appeals court judge Peter Moulton in an opinion. “Additionally, a fine cannot be proportionate to the offense unless it is reasonably calculated to encompass only the actual proceeds that defendants realized from their fraud.” The court’s ruling upheld non-monetary sanctions imposed by the Manhattan Supreme Court on the defendants, however, which would limit Trump and other defendants from the Trump Organization from doing business in New York. James said she would appeal the ruling to the state’s highest Court of Appeals. Manhattan Supreme Court Judge Arthur Engoron handed down the fine in February 2024, while
Politics
Trump calls for Fed Governor Lisa Cook to step down
United States President Donald Trump has called for Federal Reserve Governor Lisa Cook to step down immediately in his continued attacks on the central bank’s independence as officials mull the next steps on interest rates. A close Trump ally and head of U.S. Federal Housing and Finance took to X to post his Criminal Referral Letter on Cook, accusing the Joe Biden appointee of “potentially committing mortgage fraud” and urged the U.S. Department of Justice to investigate. Trump then leapt on the allegations on his own social media, Truth Social, saying, “Cook must resign, now!!!”. In response to the unconfirmed allegations, Cook said she had “no intention of being bullied” into stepping down. “I learned from the media that FHFA Director William Pulte posted on social media that he was making a criminal referral based on a mortgage application from four years ago, before I joined the Federal Reserve,” Cook said in a statement. “I do intend to take any questions about my financial history seriously as a member of the Federal Reserve, and so I am gathering the accurate information to answer any legitimate questions and provide the facts.” This furthers Trump’s push for the Fed to slash interest rates in a pressure c
Politics
AI, upskilling take centre stage at economic roundtable
The first day of Jim Chalmer’s economic reform roundtable focused on a range of economic reforms, with discussions regarding training, skills and worker mobility. Top economists, business leaders, and unions were part of the discussions in Canberra aimed at boosting productivity and the Australian economy. One of the starting blocks of the three-day roundtable was how to take advantage of the opportunities presented by artifical intelligence (AI). Prime Minister Anthony Albanese said that the new technology presented both opportunities and challenges, but its impacts on productivity are still largely unknown. “We have the biggest revolution since the industrial revolution with clean energy. We have a revolution that is less certain as well, artificial intelligence and new technology,” he said. “The impact of that on the nature of work, on the economy and the way that we function as a society as well.” While some ideas from the forum will be addressed more immediately, Albanese said some ideas, like AI, would require a longer period of work and would be included in the next federal budget. “I don’t expect that you will solve all of those issues in the next three days, but what you will have is ideas and input t

Politics
Trump weighs Intel stake via CHIPS Act conversion
The Trump administration is exploring converting Intel's CHIPS Act grants into equity, making Washington the chipmaker's largest shareholder with a stake worth roughly US$10.4 billion (A$16.02 billion), according to Bloomberg.CHIPS Act funding distributionThe 2022 Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act has allocated an eye-whopping $39 billion in manufacturing subsidies, and 25% investment tax credits to rebuild the United States' chip-making capacity. The incentives have sparked over $630 billion in announced private sector investments across the semiconductor supply chain. As part of the Trump administration's call to manufacture in-house, Intel secured $7.86 billion in grants for its $100 billion domestic expansion. Foreign competitors have also received funding: TSMC's $6.6 billion for Arizona fabs, Samsung's $4.75 billion (reduced from $6.4 billion) for Texas facilities, and Micron's $6.1 billion for New York and Idaho plants.Intel's strugglesLast year, Intel lost 60% of its value. The company has struggled to gain traction in AI and has yet to capture significant foundry customers - despite heavy investment. To make matters worse, its CEO Lip-Bu Tan met with Trump at the Whi
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Trump shifts strategy after Zelenskyy White House talks
United States President Donald Trump has dropped his ceasefire demands of Russia and Ukraine, adopting Vladimir Putin's preference for proceeding directly to a peace agreement during a meeting with Volodymyr Zelenskyy. A meeting between Trump and the Ukrainian President addressed crucial peace negotiations at the White House, which was joined by an extraordinary assembly of EU leaders in a show of support for Ukraine. Takeouts included a notable change in tone from February's heated Oval Office confrontation, where Trump and Vice President JD Vance publicly berated Zelenskyy on camera. This time, Zelenskyy thanked Trump "for your efforts, personal efforts, to stop killings and stop this war," while the U.S. President called it an honour to host the Ukrainian leader. The talks followed Trump's Friday summit with Vladimir Putin in Alaska, which was unable to deliver a ceasefire despite earlier threats of "very severe consequences" if Russia didn't agree. Trump has since dropped his ceasefire demands, adopting Putin's preference for proceeding directly to a peace agreement. European leaders in attendance included British Prime Minister Keir Starmer, German Chancellor Friedrich Merz, French President Emmanuel Macron,
Politics
Productivity summit focus on boosting national economy
Top economists, business leaders and unions are set to gather in Canberra for the three-day productivity summit. Treasurer Jim Chalmers has called upon those attending the summit to come up with “concrete” ideas to help turbocharge the economy. Chalmers said he will urge participants to focus on three objectives: making the economy more productive to lift living standards, measures to sandbag Australia’s economy and repairing the budget. "Global uncertainty surrounds us, big economic challenges confront us, and our ambitions must meet this moment," he is expected to say. "Our progress in the near term … gives us the time and space to attend to the bigger, more persistent structural issues." This comes as Australia’s productivity rate continues to fall. According to the Australian Bureau of Statistics (ABS), the long-term 20-year average growth rate fell to 0.9% in 2022-23. This is a 1.2% fall from 2021-22 and a 1.8% drop from 2003-04.Credit: ABSThe Reserve Bank also forecasts a downgrade of productivity growth, down from 1% to 0.7% last week. Other important items on the table include NDIS reform, due to its rapid growth in the federal budget and a potential EV road user charge. Annual costs for the NDIS ar
Politics
Europe rallies around Ukraine for high-stakes talks
Half a dozen European leaders will be flanking Ukrainian President Volodymyr Zelenskyy when he meets Donald Trump in Washington on Monday, in an unprecedented diplomatic show of support designed to prevent another Oval Office disaster. The European mobilisation comes after Trump's Alaska summit with Vladimir Putin failed to produce a ceasefire, leaving Ukraine facing renewed pressure to accept territorial concessions. French President Emmanuel Macron, German Chancellor Friedrich Merz, British Prime Minister Keir Starmer, European Commission President Ursula von der Leyen, and NATO Secretary-General Mark Rutte have all confirmed their attendance. The coordinated European response reflects deep anxiety about Trump's February meeting with Zelenskyy, which devolved into a heated confrontation where the U.S. President and Vice President JD Vance publicly berated the Ukrainian leader for alleged ingratitude. European officials fear a repeat could undermine Ukraine's negotiating position at a critical juncture.Putin's territorial demands emergeSources briefed on the Alaska talks revealed that Trump and Putin discussed proposals for Russia to relinquish small pockets of occupied Ukraine in exchange for Kyiv ceding fortified ea