Chalmers says Australia ‘uniquely placed’ to weather Trump tariff storm
The treasurer, Jim Chalmers, and the finance minister, Katy Gallagher, are speaking in Sydney on all things economic: the stock markets going, the pre-election fiscal outlook and that modelling below of the impact of Trump’s tariffs.
The escalating trade tensions are “casting a dark shadow” over the global economy, Chalmers says, but claims Australia is “uniquely placed” and well prepared to deal with any fallout.
Chalmers says the situation could lead to the Reserve Bank cutting interest rates in May by up to 50 basis points, but he won’t “preempt those decisions”
We are seeing very substantial volatility now in global stock markets and in our own markets as well. Today in Australia the market lost about 4% of value on Friday, the US about 6%.
What we’re seeing here is the impact of a series of bad decisions taken about tariffs. And the whole world is trying to get their head around the impacts on their own economies and the global economy as well.
Key events
It’s 7 April and I’d love to remind you all that today is the last day you have to enrol for the election on 3 May!
The roll closes at 8pm tonight, and Matilda Boseley can tell you everything you need to know below:
Star in deal with US casino giant Bally’s
Star Entertainment has reportedly struck a $300m deal with a US casino giant to stave off financial collapse after teetering on the brink for months, AAP reports.
The embattled casino operator’s board has agreed to hand control of the group to Bally’s Corporation to avoid going belly up, the Australian Financial Review reports.
Bally’s operates 19 casinos across the US and online sports betting operations.
The American giant is expected to inject $250m into the business and Star’s largest shareholder, Bruce Mathieson, will provide $50m under the deal.
Star Entertainment was contacted for comment.
The group had been on the verge of folding for months but kept its head above water by offloading its 50% stake in a new Brisbane precinct, and a $250m short-term bridging loan.
ASX ‘bloodbath’
So what actually happened to the stock market this morning, and how has it fared throughout the day?
The ASX 200 sank 6% within minutes of opening, back to levels not seen since late 2023, before bouncing back slightly.
Jonathan Barrett and Luca Ittimani have all the lows (and lows) of the market “bloodbath” today:
Treasury does not predict recession in Australia despite slowing growth, Chalmers says
Treasury isn’t expecting a recession in Australia, with growth to continue despite growth predicted to slow or go backwards elsewhere.
Chalmers says there will be “substantial” implications for growth and inflation in the US and elsewhere, but the Australian economy is not expected to go backwards:
The damage being done by the tariffs decision is now very clear for all to see. Now, you can see in the forecasts in the pre-election outlook that our Treasury is not expecting the Australian economy to go backwards. In fact, what we are forecasting or what they’re forecasting our economy is for growth to continue to gather pace, but it acknowledges there’s much more substantial risks to that outlook.
The government last week announced additional support for Australian industry to find new markets away from the US in response to the tariffs. It also announced funding to strengthen anti-dumping laws and the establishment of a strategic reserve for critical minerals.
Chalmers says focus currently on working with regulators and industry for updates on super hack – not compensation
The Australian Prudential Regulation Authority (Apra) has written to superannuation funds, reportedly telling funds to come clean on whether they’ve also been affected by the cyber hacks that took place on two major funds on Friday.
Chalmers says the government and agencies, including the national office of cyber security, are coordinating between industry, regulators and stakeholders to deal with the breach. He says super members should all check their accounts.
Apra and Asic are engaging with all of the potential impacted super funds to support safe outcomes for members. On Friday, we convened the council of financial regulator agencies to get an update on their ongoing response to this incident as well. That’s working around the clock in response to the incident and it’s all about protecting fund members and improving security measures.
Chalmers is asked whether the members should be compensated, but he says that’s not something that’s being currently contemplated.
He later clarifies that comment to say “Don’t read too much into my answer before, which was to say our focus right now is working with the authorities and with the regulators. That’s our focus.”
Chalmers: Coalition policy a ‘bin fire of cuts and chaos’
Katy Gallagher, who is also the minister for the public service and a senator for the ACT, is also weighing in on the Coalition’s work from home and public service backflip which she calls a “shambles”.
Gallagher warns that there’s a much higher turnover amongst frontline staff (ie that natural attrition won’t work because all those frontline staff will need to be rehired).
He [Dutton] tells us that 41,000 jobs will be cut by natural attrition, but frontline services will be protected. The reality is where those high turnover departments, where we see turnover in public service, they’re in frontline public service agencies. It’s simply not believable.
Jim Chalmers then takes back the mic and describes the Coalition’s platform more broadly as “an absolute bin fire of cuts and chaos”:
There could not be a worse time to risk wages and tax cuts and secret cuts in a world which is this uncertain. Peter Dutton represents an unacceptable risk to our economy and to household budgets at the same time.
Chalmers says he has spoken with RBA Governor Bullock on best response to Trump tariffs
Chalmers says the modelling by Treasury has already been updated three times, and while forecasting is “difficult enough in more stable times, [it’s] especially so in uncertain times”.
As we brought you earlier, Chalmers confirms the modelling shows there will be big hits to growth in the US and China. But Australian GDP will also be impacted and inflation will be higher than otherwise in the short term.
Chalmers says he spoke with Reserve Bank governor Michele Bullock this morning on how to respond to the situation.
Both of us… are working out how to ensure that we can best calibrated for this economic uncertainty. As I said before, Australia is really well placed and we’re well prepared to deal with this global economic uncertainty
What we’re seeing around the world vindicates the strategy we have taken to fight inflation without ignoring the risks to growth.
Chalmers says Australia ‘uniquely placed’ to weather Trump tariff storm
The treasurer, Jim Chalmers, and the finance minister, Katy Gallagher, are speaking in Sydney on all things economic: the stock markets going, the pre-election fiscal outlook and that modelling below of the impact of Trump’s tariffs.
The escalating trade tensions are “casting a dark shadow” over the global economy, Chalmers says, but claims Australia is “uniquely placed” and well prepared to deal with any fallout.
Chalmers says the situation could lead to the Reserve Bank cutting interest rates in May by up to 50 basis points, but he won’t “preempt those decisions”
We are seeing very substantial volatility now in global stock markets and in our own markets as well. Today in Australia the market lost about 4% of value on Friday, the US about 6%.
What we’re seeing here is the impact of a series of bad decisions taken about tariffs. And the whole world is trying to get their head around the impacts on their own economies and the global economy as well.
Fuel me once, shame on you … fuel me four times, shame on me?
It took Peter Dutton almost a week to get himself to a petrol bowser for a picture opportunity (after announcing the policy during his budget reply), but he’s now gone four times in the last four days.
No doubt the opposition leader is trying to pump up some interest in his policy.
Dutton has struggled to get much traction so far in the campaign and polls are showing voters are driving their support back towards Labor. The opposition leader will need plenty more fuel in his own tank to try to turn that around in the next four weeks.
Treasury releases modelling of impact of Trump tariffs
Jim Chalmers has released modelling by the Treasury department on the impact of Donald Trump’s “liberation day” tariffs.
Treasury estimates US GDP will decline “significantly” due to the cost of imports being much higher and expects the impact on China and other countries facing higher US tariffs to also be “significant”.
Australia, it says, will be impacted in a more “modest way” and will face higher inflation and lower GDP growth in the short term.
Australia’s real GDP is estimated to decline by 0.1% and inflation to increase by 0.2 percentage points in 2025 relative to a baseline scenario with no tariffs.
Over the medium term, Australia’s GDP will be permanently lower, while the effect on inflation will be temporary.
Treasury says 80% of the total impact on Australia will come indirectly from the effects of US tariffs on Chinese demand. Australia will also be impacted by a reduction in demand for Australian goods from other major trading partners like Japan and South Korea.
