Jim Chalmers:
This is a time of great uncertainty in the global economy. This is a global economy which has been resilient so far, but which is still defined by risk. Even in a week where we saw a substantial de‑escalation in the Middle East, we saw the escalation of trade tensions, and that is just another reminder of the extreme volatility and uncertainty and unpredictability that we are all working through when it comes to the global economy.
So, there could not be a more important time to engage with our international colleagues and counterparts as we all seek to navigate this global economic uncertainty. For Australia, it’s about making sure that we are beneficiaries of all this churn and change in the world rather than victims of all of this churn and change in the world.
The purpose of my engagements over the course of the next week or so are, first of all, to engage with colleagues and counterparts from G20, the IMF, the World Bank and in Korea next week in Seoul and APEC. The second purpose is to engage with American friends in advance of Prime Minister Albanese’s meeting with President Trump here in Washington, D.C next week. And thirdly, to promote Australia as an investment destination, and I’ll be doing that particularly in New York City over the course of the next couple of days.
This is a time of great uncertainty, it’s a time of great opportunity for Australia. We have so much of what the world wants, when they want it, whether it’s critical minerals, whether it’s the skills of our people, the resilience of our economy. We’ve got so much going for us at a time when a lot is coming at us from around the world.
Today, I will be meeting with the Director of the National Economic Council, Kevin Hassett, to hold some discussions in advance of the Prime Minister’s meeting with the President next week. I look forward to those engagements tonight. But this morning, Australia signed the first‑ever tax treaty with Ukraine, and I was very pleased and proud to be able to join with my counterpart Sergii Marchenko, Minister Marchenko to sign a tax treaty between Australia and Ukraine.
We salute and we support the extraordinary bravery and courage of the Ukrainian people in the face of Russian aggression. We support the Ukrainian people and its government militarily. We support them across the board but today was an important demonstration of our ability to build even closer economic relations between Australia and Ukraine at a time when its economy, for obvious reasons, is under maximum pressure.
I’m going to hand over to Pat Conroy, and then we’re happy to take some questions.
Pat Conroy:
Thanks, Jim, and to start where Jim finished. We are honoured to be the biggest non‑NATO supporter of the Ukraine in terms of military assistance, over $1.3 billion. The majority of the Abrams tanks that we committed to have been delivered, and the rest are on the way and will arrive soon. We’ve had a very successful visit focusing on defence and the Pacific as well. During my time here, I’ve met with the Secretaries of the Navy, Air Force, senior reps from the Army. I’ve met with senior congressional leaders to talk about our deepening military cooperation and our deepening industrial cooperation. We have been met with real enthusiasm for the alliance. I’ve also met with the Commandant of the US Coast Guard and also engaged with leaders of the Congressional Pacific Caucus, as well as meeting with Pacific Finance Ministers.
Last night and today, I’ve been hosting an AUKUS industry update with Ambassador Rudd, where we’ve been focusing on talking about the practical delivery of AUKUS that is occurring right now. We’ve just passed the one‑year anniversary of the AUKUS licence‑free environment, and it’s been a tremendous success. During that period, we’ve exported over $150 million worth of technology to the United Kingdom and to the United States, licence‑free, over 1,200 individual transactions, nearly 500 Australian companies are now registered for licence‑free trade, and it’s making a huge impact on speeding up delivery of capability for our 3 militaries.
To give you one example, one Australian company entered into a contract with Northrop Grumman on radar technology. They plan to take 2 years to transfer the IP and the designs to Australia to get on with building it. Thanks to the licence‑free environment, instead of taking 2 years, it took 2 weeks. That’s speeding up the tech transfer, which means that we can get equipment into our war fighters’ hands faster, which deepens industrial collaboration and makes our 3 countries safer.
Journalist:
Treasurer, Scott Bessent said yesterday that the export controls which China has applied to rare earths to go ahead, the world will have no choice but to decouple from China. Do you share that assessment? And Minister Conroy, did you receive any assurances during your meetings that the AUKUS agreement would be going ahead in its current form?
Chalmers:
Australia’s interests are best served by more trade, not by more trade barriers. When it comes to critical minerals, Australia has so much to offer the world. We know that American companies desperately need critical minerals, and Australia is very well placed to service that need. This will be an important part of the discussions that I have with Kevin Hassett tonight, and no doubt it will be part of the discussions that Prime Minister Albanese has with President Trump next week.
The views that Secretary Bessent expressed is not the first time they’ve expressed views of that nature. I think when it comes to critical minerals, we are concerned that the market for critical minerals is not as reliable and robust as it could be when it comes to these supply chains. So, Australia’s got a lot to offer the world. We will engage with our partners to make sure that we can be a very reliable supplier to meet the critical minerals needs of this country, here in the US, and other markets around the world.
Conroy:
I’ve been met with huge positivity around AUKUS in my engagements. At a congressional level, I was meeting with senior leaders in Congress who were evangelical about the importance of AUKUS, who expressed real confidence that it would continue, and I also met with real positivity in my engagement at the Pentagon on the same issue.
While respecting their review, while giving them space to conduct a review, just like we conducted a review, and the UK did. I was able to brief, particularly the US Navy leadership, about our preparation for HMAS Stirling, and there’s a real spirit of commitment to seeing AUKUS through. As I said, Congress is a coequal branch of the government, it’s very confident about AUKUS continuing, and was really keen to talk about taking the next steps in it, and what are the next pieces of legislation to improve the licence free environment even further.
Journalist:
Minister Conroy, the Deputy Prime Minister has told the Today Show that we do have an idea of when that AUKUS review will be happening now? So will that be completed for when Anthony Albanese comes to the White House on Monday [inaudible]?
Conroy:
Look, I’m not going to get into timelines around that. That’s their review, it’s up to them to discuss the timelines with the media, but as the DPM said, its release is imminent. And I won’t foreshadow exactly what the 2 leaders will discuss, but security is sure to be canvassed, and I would imagine that would include AUKUS.
Journalist:
Treasurer, of course, a trade deal is certainly something that we’d like to see discussed between Australia and the United States. Will Australia secure that when Anthony Albanese meets with Donald Trump?
Chalmers:
This is a relationship of mutual economic benefit, and one of the areas where that will become more and more important is in the area of critical minerals. We had a number of discussions with the Americans in recent months. I intend to have discussions this evening with one of my counterparts about the Australian critical minerals opportunity. Obviously, we don’t pre‑empt the specific nature of the discussions that Prime Minister Albanese will have with President Trump next week. But clearly, the Americans have an interest in Australian critical minerals.
We see this as a huge economic opportunity for Australia and our critical minerals industry. And we will continue to work with partners like the United States to make sure that we can be a reliable supplier of critical minerals into this market and other markets, because that’s good for Australian workers, businesses, investors and our Australian economy more broadly.
Journalist:
And do you think we’ll be able to do a deal?
Chalmers:
I don’t want to pre‑empt the discussions that the leaders will have next week about critical minerals. It’s obviously been on the agenda for a little while now, and I’ll engage with one of my counterparts about that this evening. Now we want to make sure, and we will make sure that we make the most of this absolutely golden opportunity for Australia, which is critical minerals, and part of making the most of that opportunity is engaging with our partners to be a reliable supplier, to work together where we can to meet the substantial critical minerals needs of this economy.
Journalist:
Treasurer, it’s only hours until the vote in London in the International Maritime Organisation on this new global regime on emissions. Can you confirm Australia will be voting in support of that?
Chalmers:
Well, we’ve made our position on this clear in recent weeks. We know that this is a focus of the global community. I think you also know that Australia does what it responsibly can to contribute to global efforts on combating climate change.
Journalist:
So, is that a yes, you’ll be voting for it?
Chalmers:
I’ll leave it to other Ministers and other colleagues to make that clear, but I think we’ve made it clear in recent weeks that we support the world’s efforts to decarbonise. There are a number of ways that we support those efforts. We intend to continue to play a positive role when it comes to combating climate change. That’s why we announced our own emissions reduction targets in Australia and supported them with detailed economic modelling.
Journalist:
Treasurer, Donald Trump obviously told the United Nations –
Chalmers:
Does Michael always get multiple questions at these –
Journalist:
It’s a follow‑up, it’s a follow‑up.
Chalmers:
It’s a follow‑up, okay.
Journalist:
I’ll take advantage of the break in the music. Donald Trump, as we know, just told the world that climate change is a hoax. Is that something that you expect the Prime Minister to – will the Prime Minister be articulating the contrary view when he meets the President?
Chalmers:
Well, again, I’m not going to pre‑empt the specifics of those discussions. I think that Australia has made clear, not just with our words but with our deeds. We believe climate change is real, we see it as a risk, not just to the environment, but to the global economy. That is a view shared by the overwhelming majority of our trading partners. I think something like 80 or 90 per cent of GDP represented by our major trading partners have got net-zero targets, for example. And so we will continue to do the right thing by our economy and by our environment, taking decisive action on climate change, because we see the threat and the risk is a very real one.
Journalist:
Treasurer, yesterday, RBA Governor Michele Bullock expressed some concern about substantial budget deficits through the decade and said now, is this a time to be getting the budget in better shape while the economy is doing as well as it can? You said yourself it’s an uncertain time. What do you make of that criticism of the trajectory you’ve put the budget on?
Chalmers:
I wouldn’t characterise it the way that you have, and I’m not sure that Governor Bullock would either. It is a statement of fact that budgets are under pressure, and we’ve made it clear that we intend to continue our efforts to make the budget more sustainable. Don’t forget, you know, we have helped engineer the biggest positive turnaround in the budget in a single parliamentary term, in nominal terms, of any government ever. We’ve got the Liberal debt down by $188 billion, that’s saving Australians $60 billion in debt interest. We delivered 2 surpluses, and in the third year, our deficit is a fifth of what we inherited from our political opponents. So, we’ve made good progress on the budget, but we know that the work to make the budget more sustainable is never finished, it is ongoing.
Now, when it comes to the relationship between fiscal policy and monetary policy, the government spending was not a factor in the Reserve Bank’s most recent decision, we know that from the statement and from the minutes from the Governor’s own press conference. Public demand has not made a contribution to GDP growth at any point yet this year, in 2025. We’ve seen a private sector recovery, and that’s a welcome development as well. We acknowledge there’s more work to do on the budget, but we ask others to acknowledge, including our political opponents, that the budget’s in much better condition than what we inherited, and that’s because we’ve found $100 billion in savings. We banked most of the upward revision to revenue, we’ve shown spending restraint. Without those things, we wouldn’t have had 2 surpluses and a much smaller deficit in our third year.
Journalist:
Treasurer, do you have any reason to believe Australia could actually have the 10 per cent tariff removed, or are you treating that now as just the base for every country?
Chalmers:
We’ve made it clear for some time now that we believe that these tariffs on Australia are unnecessary and unwarranted. As I said before in responding to your colleague, Australia’s interests are best served by more trade, not by more tariffs or trade barriers.
We do have the lowest tariff applied to us of any country in the world, and I think that reflects this relationship of mutual economic benefit, the fact that the Americans run a trade surplus with us and the like. We would like to see those tariffs removed. We’ve engaged in that right for some time now. I’m not going to pre‑empt the nature of discussions between the Prime Minister and the President next week.
Journalist:
Are you scared that America is trying to force Australia to choose a side when it comes to conflict with China regarding critical minerals, and are you worried that you could earn the ire of China if Australia’s involved in helping America on the critical minerals side, given that it is such a strategic advantage for them?
Chalmers:
No, we engage with our major trading partners in good faith, and in Australia’s national economic interests. And I think it’s well understood here in Washington, D.C that Australia’s put a lot of effort into stabilising that key economic relationship with China. That’s been a good thing for our workers and our businesses, and investors in Australia.
I think it’s also well understood here that we see this economic relationship as one of mutual benefit in the United States. There is so much that we do together and so much more that we can do together, including in areas like critical minerals. So it’s possible for us to engage on both of those fronts, but more than possible, it’s necessary and important that we do that, because that’s in Australia’s national economic interest.
Journalist:
Minister Conroy, one for you, if you don’t mind. The US has made it clear that it wants its allies to share more of the burden when it comes to defence and defence spending. Australia’s only currently at about 2 per cent of GDP on defence spending. [inaudible] Prime Minister Albanese said to Donald Trump on Monday about how we really are, you know, carrying our weight when it comes to defence spending?
Conroy:
We are making a significant contribution to peace and stability in our region. As I said earlier in the week, when you look at the NATO measurement of defence spending as a percentage of GDP, which is what the United States uses. We are at 2.8 per cent of GDP. Let me repeat that – 2.8 per cent of GDP, which puts us higher than anywhere in Europe other than Poland and the Baltic States and puts us higher than any other Indo‑Pacific partner of the United States.
So we’re already doing very well in terms of our contribution to peace and stability, and our defence spending is increasing. It’s increasing quite significantly, and through the ‘24 National Defence Strategy we committed to the biggest increase in defence spending that has ever occurred in Australia in peacetime, and that will flow through to increase that 2.8 per cent over time even more. In addition to that, Prime Minister Albanese, the Deputy Prime Minister, and I made an announcement of a $12 billion investment in Henderson Maritime Precinct a few weeks ago, which pushes that figure even further.
So, on the spending front, we’ve got a clear plan, and we are delivering on that. Importantly, it’s not just about money. It’s how you spend that money and how you collaborate. So, to use an example in AUKUS, through Submarine Rotation Force – West, the rotation of 4 US attack submarines at HMAS Stirling will give them a direct entry point into the Indian Ocean, which is obviously of great value to the US Navy. Secondly, by us providing in‑water maintenance, we’ll be providing 1,800 maintenance days for US Navy, which will add skills for us. That will add the equivalent of 2 to 3 additional submarine deployments per year for the US Navy. So that’s an example of the contribution beyond spending that we provide. So, I’m very confident that we can make a good case about how we’re faring, doing our fair share of the burden.
Journalist:
Minister Conroy, there’s reports that Australia has been in discussions with America about potentially contributing personnel to an international stabilisation force in the Middle East. Can you tell us about those discussions and what that would potentially mean?
Conroy:
Well, I make a couple of points. First, no request has been made of Australia to make such a contribution. If a request is received, we would consider it in the normal course of action, and the government would make a decision on that. Our military, as is appropriate, talks to other militaries about contingency planning, and that’s the normal course of action.
But let me repeat, no request has been made. If a request is received, we’ll consider it, and the government will make a decision.
Journalist:
So, when you say no request has been received, there has been discussions though, and what are those discussions about?
Conroy:
I refer you to my earlier comments, no request has been made.
Chalmers:
Thanks very much.