Australian news and politics live: Prime Minister Anthony Albanese unveils economic vision for second term

Anthony Albanese says America’s “Liberation Day” tariffs will have little impact on Australia and people should keep in mind this is an act of “economic self-harm” by the Trump Administration.

Australian exports to the United States will be hit with a 10 per cent impost on July 9 when the tariffs come into effect after a 90-day pause ends.

But every indication is that 10 per cent is US President Donald Trump’s base rate, and no one will be able to negotiate something lower.

The Prime Minister said Australia’s beef exports to the US were up despite the Trump Administration’s tough talk, but steel and aluminium had taken a slight hit since they had a 25 per cent tariff, which Mr Trump subsequently increased to 50 per cent.

“We are in a position where on July 9, that won’t really have an impact on us, because that’s about other countries who have higher rates overnight,” he said on Friday.

“We continue to be engaged with our American friends, but they have a different position on tariffs. I have said that’s an act of economic self-harm. I stick to that.”

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Coalition frontbencher Bridget McKenzie has accused the Government of spending its first term “smashing” small business through industrial relations policies and regulations.

She said it needed to use its landslide election win to help the country become more prosperous.

“Use the huge mandate that the Australian people have given you to set our country up for the future, and we will back you the whole way,” she told Sky News on Friday.

“If Labor wants us to be more productive, wants the private sector to grow and prosper, then it needs to look at removing red tape and make tough decisions that their traditional supporters might not like.”

Anthony Albanese has promised to get out of the way of businesses to help the private sector resume its “rightful place” as the primary driver of the nation’s economic growth.

Unlike the PM’s first three years in power when fighting inflation and easing cost-of-living pressures took up much of the government’s bandwidth, boosting productivity has been identified as Labor’s main concern this term.

“In a strong, dynamic and ­productive economy, government should be a driver of growth, but not the driver of growth; facilitating private sector investment and job creation, not seeking to replace it,” Mr Albanese said.

While tax reform would form an important part of the conversation, he acknowledged the need to cut red tape to make it easier for businesses to create jobs.

But any businesses hoping for a relaxation of industrial relations protections will be disappointed.

Despite boasting higher wages than other countries in the region, Australia could recapture its manufacturing edge without cutting labour costs, Mr Albanese insisted.

But the nation must make the most of new technologies and capitalise on its ability to locate industrial facilities alongside renewable energy resources.

“In the years ahead, comparative advantage in manufacturing will not be defined by minimising the cost of labour,” Mr Albanese said.

“It will be secured by the most productive use of technology, by cutting transport costs and by cheaper, cleaner energy.”

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Prime Minister Anthony Albanese has trimmed expectations Australia’s goods and services tax could be raised as part of a suite of changes that includes lower income taxes.

While he did not want to rule any policy changes in or out of the Government’s economic reform agenda, Mr Albanese was far from supportive of increasing consumption taxes in comments to reporters on Friday.

Some economists have called for the GST to be lifted from 10 to 15 per cent and the base broadened to include items like private health insurance and fresh food to provide revenue in order for other levies like income tax to be lowered.

But that would mean making the tax system more regressive, resulting in lower earners contributing more as a share of their incomes.

“I’m a supporter of progressive taxation,” Mr Albanese said, in the clearest indication yet that GST won’t be increased after an economic reform roundtable in August.

“Consumption taxes, by definition, are regressive in their nature. So that’s something that, you know, doesn’t fit with the agenda.”

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The PM says he wants to govern like the Hawke-Keating government.

“I think that is the way that I’ve always governed, and the way that I sought to govern,” Anthony Albanese told Australia’s Economic Outlook event.

“And what I put forward from the day that I became Labor leader in 2019.

“If you look at the work that we’ve done, take our emissions program.

“We did that, stood up at a press conference with the Business Council Australia, the Australian industry group, ACCI, conservation groups and the ACTU.

“That’s always been my model. I think that Australia works better when we engage people across business, unions as well as civil society.

“The CFMEU was let rip under the former government. My Government intervened to put it into administration, when it was appropriate.

“My Government has always sought, and I’ve always sought and built, a really strong relationship with business.”

Turning to the topic of economic reform, Anthony Albanese refuses to engage with questions of his view on suggestions the Government should increase the rate of the GST and lower income tax.

He echoes Jim Chalmers’s plea from last month about being open-minded on all ideas and noth ruling anything in or out prematurely.

“What we’re trying to do is to have an adult conversation,” he said.

“Consumption taxes, by definition, are regressive in their nature, so that’s something that doesn’t fit with the agenda, but people are entitled to put things up.”

Anthony Albanese again defends the job Kevin Rudd is doing as ambassador to the US, saying the Trump administration hasn’t said anything bad about the role the former prime minister is playing.

“The discussions that I’ve had have been very positive, nothing but positive,” he says.

Mr Albanese also makes the point that no American politician would talk down the role and access of their ambassador to Australia, suggesting people here should take a team Australia approach.

The Trump administration has yet to nominate a new ambassador to send to Canberra. In Donald Trump’s first term, it took him two years to fill the key position despite the close alliance between the two countries.

The first question in a Q&A session following Mr Albanese’s speech is about the elusive meeting with US President Donald Trump.

The Prime Minister gives much the same answer as he did in a breakfast TV blitz the other day, replying that he and Mr Trump should be at several international summits together later in the year, and there are plenty of chances to meet.

“I’m confident as well that we will be constructive,” he says of Australia’s approach.

On the tariffs, Mr Albanese says the change coming on July 9 “won’t really have an impact on us” because the impost on Australia should stay at 10 per cent while other countries will be pushed higher than that.

“(Mr Trump) has also said that there’s no more beautiful word in the English language than ‘tariff’. Now we have … a different view,” Mr Albanese said.

Anthony Albanese said the “essential purpose” of the economic reform roundtable he and Treasurer Jim Chalmers are convening in August is to look at how to allow private enterprise to return as the central driver of growth.

Although much of the focus ahead of the roundtable has been on Dr Chalmers’s declaration that tax reform must be part of the answer, Mr Albanese says it won’t be the sole focus.

Government spending has pulled the government out of the high-inflation, sluggish growth state that followed the pandemic, but Mr Albanese wants this to switch.

“Government should be a driver of growth, but not the driver of growth, facilitating private sector investment and job creation, not seeking to replace it,” he said.

“We are seeking a broad range of views so we can build broad agreement for action.

“Tax reform will be an important part of this conversation, but not the whole of it, because this is also an opportunity to build consensus around practical measures that can be implemented quickly, dealing with urgent challenges in a way that builds for the future.”

Mr Albanese says none of the “profound opportunity” that is there at the moment will be gifted to Australia.

“We have to back ourselves, to go out and seize it,” he said, adding that is the government’s focus with its “future made in Australia” agenda.

That plan isn’t yearning for days of old, but recognising a new economic model is emerging around the world, he says.

It will also increase Australia’s resilience in a turbulent strategic environment, because making more things here means the country is “not always the last link in the global supply chain”.