1 00:00:00,920 --> 00:00:04,280 S1: Hi, it's Jacqueline Maley here. Inside politics is on a 2 00:00:04,280 --> 00:00:07,320 S1: break over summer, and our dear chief political correspondent, Paul 3 00:00:07,320 --> 00:00:10,240 S1: Circle is probably off on a yoga retreat somewhere in Bali. 4 00:00:10,480 --> 00:00:12,399 S1: But we do return at the end of January for 5 00:00:12,400 --> 00:00:16,239 S1: another fun filled year of inside politics. In the meantime, 6 00:00:16,239 --> 00:00:19,759 S1: we're bringing you some old episodes from 2025, and we 7 00:00:19,800 --> 00:00:22,520 S1: cannot ignore the impact that Donald Trump had on domestic 8 00:00:22,520 --> 00:00:25,600 S1: politics last year. So for this episode, we return to 9 00:00:25,640 --> 00:00:28,240 S1: a point in time when most of the press pack 10 00:00:28,240 --> 00:00:31,600 S1: was obsessed with whether Anthony Albanese would meet with the 11 00:00:31,600 --> 00:00:35,280 S1: US president. It finally happened, and we recorded this episode 12 00:00:35,280 --> 00:00:38,160 S1: about a week before the meeting would take place. Paul 13 00:00:38,159 --> 00:00:41,640 S1: is joined by our special guest star and economics correspondent, 14 00:00:41,640 --> 00:00:44,920 S1: Shane Reisch, to forecast the details of the meeting before 15 00:00:44,920 --> 00:00:49,199 S1: they argue about Treasurer Jim Chalmers abandonment of superannuation reforms. 16 00:00:52,880 --> 00:00:54,680 S2: I'm still waiting for the music to come in for 17 00:00:54,680 --> 00:00:56,400 S2: my special guest appearance. I know. 18 00:00:56,440 --> 00:00:58,600 S1: I know, I've got it. I keep forgetting to push 19 00:00:58,600 --> 00:01:00,760 S1: the button. I do want to do a shout out 20 00:01:00,760 --> 00:01:03,880 S1: to Shane Wright's t shirt, which, if you're listening and 21 00:01:03,880 --> 00:01:07,720 S1: not watching, it's a Kate Bush tribute, which is which 22 00:01:07,720 --> 00:01:10,000 S1: would fetch a lot of good money in a vintage store. 23 00:01:10,040 --> 00:01:10,680 S1: No offence. 24 00:01:11,440 --> 00:01:16,360 S2: Well, she's she's no vintage star. She's she's live and 25 00:01:16,520 --> 00:01:17,440 S2: pumping it all out. 26 00:01:17,480 --> 00:01:18,800 S1: She is, she is. 27 00:01:18,840 --> 00:01:21,800 S3: I didn't realise my my comments to you in private. 28 00:01:21,800 --> 00:01:23,360 S3: Jack will make it into your intro. So I've got 29 00:01:23,360 --> 00:01:25,560 S3: to be a bit careful now going forward. 30 00:01:26,080 --> 00:01:29,240 S1: Oh, right. The pulling pants down thing. Should we. We can, 31 00:01:29,280 --> 00:01:29,640 S1: we can. 32 00:01:29,840 --> 00:01:32,480 S3: No, no, I'm just joking. That's fine. I stand. 33 00:01:32,480 --> 00:01:34,679 S1: By it. I thought it was very colorful phrasing. And 34 00:01:34,680 --> 00:01:37,680 S1: we'll get into what it really means later. Um, Paul, 35 00:01:37,680 --> 00:01:39,800 S1: when does the Prime Minister leave for Washington? 36 00:01:40,440 --> 00:01:43,520 S3: He leaves on Sunday, I believe, in the afternoon. And 37 00:01:43,520 --> 00:01:46,560 S3: it's a quick trip because he just spent, I think, 38 00:01:46,560 --> 00:01:50,360 S3: nearly ten days in New York longer. Yeah. Well, it 39 00:01:50,360 --> 00:01:52,680 S3: was about 3 or 4 days in London, maybe ten 40 00:01:52,680 --> 00:01:55,600 S3: days in New York for the United Nations General Assembly, uh, 41 00:01:55,600 --> 00:02:00,430 S3: which was about a fortnight ago. So he's all, uh, 42 00:02:00,870 --> 00:02:03,870 S3: jet lagged out and keen to do some domestic politics 43 00:02:03,870 --> 00:02:06,510 S3: ahead of even more summits at the end of this 44 00:02:06,510 --> 00:02:09,910 S3: month at Asean and APEC. So it's a quick trip. 45 00:02:09,910 --> 00:02:13,549 S3: He'll be in Washington for two working days. I believe 46 00:02:13,590 --> 00:02:17,510 S3: he meets with Trump on Tuesday at 2 a.m. Australian time. 47 00:02:17,870 --> 00:02:20,310 S3: So you've got to be pretty hardcore to stay up 48 00:02:20,310 --> 00:02:22,230 S3: that late or wake up at that time or feel 49 00:02:22,230 --> 00:02:24,709 S3: like a, you know, a Socceroos World Cup game when 50 00:02:24,710 --> 00:02:27,750 S3: just the diehards on Twitter are live tweeting through it? Yeah, 51 00:02:28,030 --> 00:02:28,549 S3: and it could be. 52 00:02:28,590 --> 00:02:30,950 S2: It could be an interesting scoreline though out of this one. Yeah. 53 00:02:30,950 --> 00:02:31,350 S2: You never do. 54 00:02:31,350 --> 00:02:33,030 S3: You reckon which which which way will this be a 55 00:02:33,030 --> 00:02:36,829 S3: Fabio Grosso Italy versus Socceroos style national tragedy moment or 56 00:02:36,870 --> 00:02:38,750 S3: a or a conquest? 57 00:02:39,550 --> 00:02:41,950 S2: This is one of the great questions and as as 58 00:02:41,990 --> 00:02:44,670 S2: I'm not going to express an opinion on the Socceroos 59 00:02:44,669 --> 00:02:48,350 S2: as I am not an expert in that field. But, uh, yes, 60 00:02:48,350 --> 00:02:50,270 S2: it could. This could go any way. 61 00:02:50,310 --> 00:02:52,549 S1: It could. I mean, and Paul Paul's got views on 62 00:02:52,550 --> 00:02:54,710 S1: that too, I know. Um, the PM of course, copped 63 00:02:54,710 --> 00:02:57,030 S1: a lot of criticism from the media about the fact 64 00:02:57,030 --> 00:02:59,950 S1: that he hadn't gotten a meeting with the with Trump 65 00:02:59,950 --> 00:03:02,270 S1: since his inauguration in January, and that it was all 66 00:03:02,270 --> 00:03:04,510 S1: too late. But now he's got the meeting. What form 67 00:03:04,510 --> 00:03:06,030 S1: will the meeting take? Do we know? 68 00:03:06,590 --> 00:03:09,269 S3: It's not a formal state visit. There'll be no big 69 00:03:09,270 --> 00:03:11,150 S3: state dinner. And it will not be full of that 70 00:03:11,150 --> 00:03:14,270 S3: kind of pomp. It's. It's been called a working visit, 71 00:03:14,590 --> 00:03:17,269 S3: which will take the form of, you know, elbow walking 72 00:03:17,270 --> 00:03:21,149 S3: into the Oval Office, do a quick handshake photograph and 73 00:03:21,150 --> 00:03:24,870 S3: then a longer sit down meeting in the in the 74 00:03:24,870 --> 00:03:27,430 S3: Oval Office. There may be a huge pack of journalists 75 00:03:27,430 --> 00:03:29,990 S3: in there asking all kinds of questions, and it may 76 00:03:30,030 --> 00:03:32,030 S3: be a more rambunctious affair. 77 00:03:32,070 --> 00:03:35,070 S1: Yeah, but the actual meeting itself obviously takes place in private. 78 00:03:35,070 --> 00:03:37,910 S1: And then they ask the journalists in. Yeah. So and 79 00:03:37,910 --> 00:03:40,150 S1: that could be a freewheeling press conference. That's sort of 80 00:03:40,150 --> 00:03:42,790 S1: where the fireworks happen, right, with, with a Trump press conference. 81 00:03:42,790 --> 00:03:45,430 S1: Because you never know what he's going to say. There's always, 82 00:03:45,470 --> 00:03:48,150 S1: I think, a little bit of tension, dramatic or otherwise, 83 00:03:48,150 --> 00:03:50,670 S1: on the part of the foreign leader who's visiting. And then, 84 00:03:50,670 --> 00:03:52,830 S1: of course, you've got the white House press corps, which 85 00:03:52,870 --> 00:03:55,180 S1: are by no means a conventional press corps Prescott anymore. 86 00:03:55,380 --> 00:03:57,420 S1: So what does he want to accomplish in this meeting? 87 00:03:57,420 --> 00:03:59,140 S1: What does he need to accomplish in this meeting? He's 88 00:03:59,140 --> 00:04:01,220 S1: got to really make make it work for him, right? 89 00:04:01,820 --> 00:04:03,900 S3: Yeah. There's a lot of pressure going into it, although 90 00:04:03,900 --> 00:04:05,620 S3: I feel I mean, it's only a few days away 91 00:04:05,660 --> 00:04:09,420 S3: now and there's not a huge amount of media speculation 92 00:04:09,420 --> 00:04:11,860 S3: about it. I'm surprised at how long it's taken for 93 00:04:12,180 --> 00:04:14,180 S3: attention to turn to it, and I wonder if that's 94 00:04:14,180 --> 00:04:17,620 S3: because there's a bit of fatigue on on previewing this 95 00:04:17,620 --> 00:04:20,779 S3: potential meeting, because it was meant to occur at Canada, 96 00:04:20,779 --> 00:04:23,380 S3: at the G7 in whenever that was June, and then 97 00:04:23,380 --> 00:04:25,300 S3: it was meant to happen again at the United Nations 98 00:04:25,300 --> 00:04:27,820 S3: General Assembly. And so I wonder if people are just 99 00:04:27,820 --> 00:04:29,740 S3: a bit sick of forecasting what will occur. 100 00:04:29,940 --> 00:04:31,780 S1: Tell us quickly what he needs to do there, because 101 00:04:31,779 --> 00:04:33,020 S1: he wrote about that this week. 102 00:04:33,220 --> 00:04:36,260 S3: Well, Critical Minerals is turning into I interviewed Richard Marles, 103 00:04:36,260 --> 00:04:39,380 S3: the defence and defence minister and deputy prime minister, last week, 104 00:04:39,380 --> 00:04:41,580 S3: and I said, how big a deal is this becoming 105 00:04:41,820 --> 00:04:45,260 S3: geopolitically for Australia as it crystallizes in the minds of 106 00:04:45,260 --> 00:04:48,299 S3: many Western leaders, but in particular Trump and his key allies, 107 00:04:48,580 --> 00:04:51,460 S3: that this is a core part of the contest with China. 108 00:04:51,460 --> 00:04:53,420 S3: So to explain to listeners, critical minerals are a whole 109 00:04:53,540 --> 00:04:57,100 S3: bunch of elements in the periodic table that are becoming 110 00:04:57,100 --> 00:04:59,940 S3: much more in demand because they're used in modern defense 111 00:04:59,940 --> 00:05:03,460 S3: technologies and really core to the green revolution for solar 112 00:05:03,460 --> 00:05:07,099 S3: panels and magnets and also semiconductors and many different new 113 00:05:07,100 --> 00:05:10,300 S3: modern age products. China has cornered this market for about 114 00:05:10,300 --> 00:05:13,660 S3: 20 or 30 years, so they mine about 75% and 115 00:05:13,660 --> 00:05:17,540 S3: they produce about 90%. Yeah, they're not actually that rare. 116 00:05:17,540 --> 00:05:19,659 S3: There are many big deposits in the world, but they're 117 00:05:19,660 --> 00:05:22,940 S3: very expensive to mine. But Australia has a tremendous amount. 118 00:05:22,980 --> 00:05:25,539 S3: We effectively have the whole periodic table, but we've not 119 00:05:25,540 --> 00:05:27,820 S3: invested enough in it over time to actually bring them 120 00:05:27,820 --> 00:05:30,979 S3: out of the ground. The US now acknowledges that Australia 121 00:05:30,980 --> 00:05:34,179 S3: is arguably the most important place it can start supplying 122 00:05:34,180 --> 00:05:37,300 S3: critical minerals from. And so there's a huge push being 123 00:05:37,300 --> 00:05:39,460 S3: led by Kevin Rudd in Washington, who's been doing this 124 00:05:39,460 --> 00:05:42,260 S3: for the best part of two years to get US 125 00:05:42,260 --> 00:05:44,940 S3: and European investment to dig it out of Australia and 126 00:05:44,940 --> 00:05:49,180 S3: create a non-china supply chain. And Richard Marles argument was that, 127 00:05:49,220 --> 00:05:52,450 S3: you know, this is not some second tier interest of Trump. 128 00:05:52,450 --> 00:05:55,409 S3: This is a core interest of the Trump administration, brought 129 00:05:55,410 --> 00:05:59,690 S3: to light last week when China started again restricting these 130 00:05:59,970 --> 00:06:02,730 S3: exports to the US, which has sparked another bout in 131 00:06:02,730 --> 00:06:04,529 S3: the trade war between China and the US. 132 00:06:04,570 --> 00:06:07,010 S1: And Shane, our interests, our economic interests really align with 133 00:06:07,010 --> 00:06:09,529 S1: the US on this. I mean, we also need these 134 00:06:09,529 --> 00:06:13,050 S1: critical minerals and we are also reliant on China. If 135 00:06:13,050 --> 00:06:15,089 S1: China's got more or less a monopoly on at least 136 00:06:15,089 --> 00:06:17,610 S1: producing them because they're very dirty to produce and expensive, 137 00:06:17,650 --> 00:06:18,529 S1: as Paul said. 138 00:06:19,170 --> 00:06:21,690 S2: Yeah. Um, I don't know if the economic interests are 139 00:06:21,690 --> 00:06:25,850 S2: aligned specifically with, uh, the US as also China. Remember, 140 00:06:25,890 --> 00:06:28,570 S2: China is still the big cash cow for this country 141 00:06:28,570 --> 00:06:33,170 S2: with iron ore. So the context is someone there are 142 00:06:33,170 --> 00:06:38,330 S2: two big competing forces for these these minerals. We can't 143 00:06:38,570 --> 00:06:41,890 S2: refine them and use them because we're too small a country. 144 00:06:41,930 --> 00:06:44,650 S2: We're too far away from the main sources, like some 145 00:06:44,650 --> 00:06:46,730 S2: of the stuff that ends up in semiconductors, which are 146 00:06:46,730 --> 00:06:50,969 S2: vital to the AI revolution. Like we are not going 147 00:06:50,970 --> 00:06:55,210 S2: to replicate Taiwan and become a great producer of semiconductors. 148 00:06:55,210 --> 00:07:01,770 S2: So ultimately we actually have a really strong position economically 149 00:07:01,770 --> 00:07:07,289 S2: with both powers because China, yes, China does have 75%, 150 00:07:07,290 --> 00:07:09,770 S2: but they don't have all of them. They're not as 151 00:07:09,770 --> 00:07:12,050 S2: easy to mine in parts of China as they are 152 00:07:12,050 --> 00:07:15,090 S2: in Australia. Like you get out into parts of Western Australia. Yep. 153 00:07:15,370 --> 00:07:17,650 S2: Pick it up, dig it out. Off you go. A 154 00:07:17,650 --> 00:07:20,690 S2: lot easier. So I find it really interesting that like 155 00:07:20,730 --> 00:07:25,210 S2: at that economic power play that's going on between China 156 00:07:25,210 --> 00:07:28,410 S2: and the US and how Central Australia is to both 157 00:07:28,410 --> 00:07:29,490 S2: of those nations. 158 00:07:29,490 --> 00:07:31,250 S1: So we're almost like a sort of we're a pivot 159 00:07:31,250 --> 00:07:33,650 S1: point or we've got leverage on both sides. 160 00:07:33,690 --> 00:07:34,370 S4: Yeah, yeah. 161 00:07:35,050 --> 00:07:36,690 S1: Paul I want to ask you about tariffs as well, 162 00:07:36,690 --> 00:07:39,890 S1: because that's another thing that Albanese will be perhaps delicately 163 00:07:39,890 --> 00:07:42,210 S1: raising in this meeting. What does he want to achieve 164 00:07:42,210 --> 00:07:43,010 S1: on tariffs. 165 00:07:43,730 --> 00:07:47,410 S3: Well we're subject to the lowest baseline tariff of 10%. 166 00:07:47,450 --> 00:07:51,160 S3: No country has had that has been exempted from that. 167 00:07:51,760 --> 00:07:53,000 S1: And across the board tariff. 168 00:07:53,360 --> 00:07:56,000 S3: Across the board tariff, which in a relative sense, given 169 00:07:56,000 --> 00:07:58,760 S3: much of the world is at a higher baseline rate, 170 00:07:58,960 --> 00:08:01,840 S3: we are put at a competitive advantage because of that. 171 00:08:01,840 --> 00:08:04,320 S3: And the Productivity Commission has actually said that we might 172 00:08:04,360 --> 00:08:07,400 S3: benefit in the long run if other countries escalate and 173 00:08:07,400 --> 00:08:10,000 S3: do reciprocal tariffs. That hasn't quite happened yet to the 174 00:08:10,000 --> 00:08:11,560 S3: extent that we thought, but we're still yet to see 175 00:08:11,560 --> 00:08:13,720 S3: the consequences of what happens with China and the US, 176 00:08:14,520 --> 00:08:17,680 S3: which has been delayed, the consequences of that tariff war, 177 00:08:17,680 --> 00:08:20,880 S3: in part because the US backed away from Chinese tariffs, 178 00:08:20,880 --> 00:08:25,360 S3: because when China responded by blocking critical minerals, Ford and 179 00:08:25,360 --> 00:08:27,640 S3: other car manufacturers said, hey, can we not tariff them 180 00:08:27,640 --> 00:08:29,840 S3: because we actually need these things to build cars and 181 00:08:29,840 --> 00:08:32,480 S3: our economy will stop. So these things are all intertwined. 182 00:08:32,760 --> 00:08:35,439 S3: Don Farrell, every time he speaks, the trade minister says, 183 00:08:35,480 --> 00:08:37,679 S3: you know, we still want to get rid of that 10% 184 00:08:37,679 --> 00:08:39,160 S3: and we still want to get rid of that steel 185 00:08:39,160 --> 00:08:42,720 S3: and aluminium tariff. I think there's there's more that's more 186 00:08:42,760 --> 00:08:45,360 S3: of a talking point now than anything. I don't think 187 00:08:45,360 --> 00:08:45,840 S3: the government. 188 00:08:45,880 --> 00:08:48,160 S1: Does that mean that Albanese just won't raise tariffs. Or 189 00:08:48,160 --> 00:08:49,920 S1: will he sort of say, oh mate, you know, what 190 00:08:50,080 --> 00:08:51,959 S1: do you want to think about that 10% and then 191 00:08:51,960 --> 00:08:52,679 S1: just drop it. 192 00:08:52,840 --> 00:08:54,560 S3: I think he'll raise it because it has to be 193 00:08:54,559 --> 00:08:57,840 S3: part of the readout, the readout being what they tell 194 00:08:57,840 --> 00:09:00,400 S3: the Australian public he raised. We can't be seen to 195 00:09:00,440 --> 00:09:02,160 S3: have given up on it, but I don't think there's 196 00:09:02,160 --> 00:09:05,160 S3: any likelihood of dropping the 10%. There is a prospect, 197 00:09:05,160 --> 00:09:07,800 S3: if there in some broader critical minerals deal, which the 198 00:09:07,800 --> 00:09:11,680 S3: government is very quiet about, given the sensitivity that there's 199 00:09:11,679 --> 00:09:14,400 S3: a potential that we get some sort of carve out 200 00:09:14,400 --> 00:09:17,360 S3: in the steel and aluminium space, and maybe a deal 201 00:09:17,360 --> 00:09:20,840 S3: for to ensure that CSL, the drug manufacturer, doesn't get 202 00:09:20,840 --> 00:09:23,960 S3: caught up in the pharmaceutical tariffs. Keir Starmer got some 203 00:09:23,960 --> 00:09:26,840 S3: adjustments to auto tariffs and steel I believe, when he 204 00:09:26,840 --> 00:09:27,920 S3: did a deal with Trump. 205 00:09:28,640 --> 00:09:31,120 S2: But he got an adjustment. They're still paying tariffs and 206 00:09:31,440 --> 00:09:35,920 S2: the US budget and every like Scott Bessent, the Treasury secretary, 207 00:09:35,960 --> 00:09:40,240 S2: keeps reminding him you actually need the tariff revenue because 208 00:09:40,240 --> 00:09:42,280 S2: of the huge deficit that the because. 209 00:09:42,280 --> 00:09:42,520 S3: He keeps. 210 00:09:42,520 --> 00:09:45,840 S2: Cutting taxes. So it's like the whole argument that, oh 211 00:09:45,950 --> 00:09:49,910 S2: you'll get a country like whoever whichever political leader turns 212 00:09:49,910 --> 00:09:53,230 S2: up in Washington says, get an exclusion on tariffs. Trump 213 00:09:53,230 --> 00:09:58,550 S2: cannot do that without absolutely crushing even further a terrible 214 00:09:58,550 --> 00:09:59,630 S2: budget situation. 215 00:09:59,670 --> 00:10:02,470 S1: So just really quickly, Shane, and this is probably a 216 00:10:02,470 --> 00:10:05,150 S1: much bigger conversation. But, you know, we heard so much 217 00:10:05,150 --> 00:10:09,150 S1: panic mongering amongst people like yourself, economists about the tariffs 218 00:10:09,150 --> 00:10:10,870 S1: and that they were going to crash the US economy 219 00:10:10,870 --> 00:10:13,070 S1: and they were going to push up inflation. And, you know, 220 00:10:13,110 --> 00:10:15,310 S1: people were even worried about a sort of global recession 221 00:10:15,309 --> 00:10:17,510 S1: in some cases. What has been the impact of the 222 00:10:17,510 --> 00:10:19,190 S1: tariffs so far that we can see. 223 00:10:19,670 --> 00:10:23,870 S2: It's pushing up inflation. It's starting to slow the American economy. Yeah. 224 00:10:24,230 --> 00:10:28,470 S2: If it wasn't for the AI data build out that's 225 00:10:28,470 --> 00:10:30,510 S2: occurring across the United States. The US would be in 226 00:10:30,510 --> 00:10:34,910 S2: recession right now. And and Trump is causing that. The 227 00:10:34,950 --> 00:10:38,910 S2: thing that hasn't happened and most and every economist is going, 228 00:10:38,950 --> 00:10:41,710 S2: thank God, is that there hasn't been the retribution from 229 00:10:41,710 --> 00:10:44,829 S2: everybody else. Yeah. That's that's what it all swung on 230 00:10:44,830 --> 00:10:49,230 S2: because at this point, Trump is causing pain to his 231 00:10:49,230 --> 00:10:51,870 S2: own economy and to his own residence. And you can 232 00:10:51,870 --> 00:10:55,270 S2: see that as much as like we hear about how 233 00:10:55,270 --> 00:10:58,750 S2: successful Trump is, he is so underwater in the American polls. 234 00:10:59,429 --> 00:11:00,910 S2: All of the opinion polls. 235 00:11:00,950 --> 00:11:01,310 S1: Oh, yeah. 236 00:11:01,350 --> 00:11:03,910 S2: Because of the cost of living pressures that are going on, 237 00:11:03,910 --> 00:11:07,470 S2: and because you can see the softness in the jobs 238 00:11:07,470 --> 00:11:11,030 S2: market and you can see businesses are just they did 239 00:11:11,270 --> 00:11:15,710 S2: bought a lot of pre tariff products into the US. 240 00:11:16,190 --> 00:11:19,590 S2: And they're now having to start pass on that increase 241 00:11:19,590 --> 00:11:20,030 S2: in prices. 242 00:11:20,070 --> 00:11:21,630 S1: So there's a lag effect. But it's only going to 243 00:11:21,670 --> 00:11:24,590 S1: kind of there's the momentum on the inflation front is 244 00:11:24,590 --> 00:11:27,030 S1: only going to build on the US economy. I just 245 00:11:27,030 --> 00:11:29,790 S1: want to switch now. Obviously we Albanese will be talking 246 00:11:29,790 --> 00:11:32,110 S1: also about Aukus just very quickly, because you did have 247 00:11:32,110 --> 00:11:36,230 S1: this interesting interview with Richard Marles that was published this week, 248 00:11:36,270 --> 00:11:39,630 S1: where he talked about how vice president JD Vance is 249 00:11:39,670 --> 00:11:42,350 S1: actually sort of like the Trump whisperer or the guy 250 00:11:42,390 --> 00:11:46,420 S1: that Miles really wanted to build a connection with in 251 00:11:46,420 --> 00:11:49,060 S1: order to sort of have an end to the Trump administration. 252 00:11:49,059 --> 00:11:50,579 S1: Tell us about what Miles said. 253 00:11:51,059 --> 00:11:55,820 S3: Yeah. Well, there was this, um, much discussed trip that 254 00:11:55,860 --> 00:11:58,740 S3: Miles did. He was a bit secretive. He went without 255 00:11:58,740 --> 00:12:01,540 S3: giving the Australian media much notice in August, and it 256 00:12:01,540 --> 00:12:04,540 S3: was a key part of the focus from the Australian 257 00:12:04,540 --> 00:12:06,900 S3: media was whether he would get this formal meeting with 258 00:12:06,900 --> 00:12:10,500 S3: Pete Hegseth, his defense counterpart. He's met Pete Hegseth a 259 00:12:10,500 --> 00:12:13,380 S3: number of times before, but Miles opened up in an 260 00:12:13,380 --> 00:12:15,180 S3: interview with me last week on the on the real 261 00:12:15,179 --> 00:12:17,740 S3: purpose of that trip. And the the key thing he 262 00:12:17,740 --> 00:12:20,459 S3: was seeking to do was to build a political deputy 263 00:12:20,500 --> 00:12:23,940 S3: to deputy relationship with JD Vance. JD Vance is doing 264 00:12:23,940 --> 00:12:26,740 S3: a lot of one to ones with foreign leaders, Keir 265 00:12:26,740 --> 00:12:29,140 S3: Starmer and others. He's been seen as a kind of 266 00:12:29,179 --> 00:12:33,140 S3: intellectual thought leader of the MAGA foreign policy, clearly a 267 00:12:33,140 --> 00:12:35,580 S3: very influential figure close to Trump. Many people think he'll 268 00:12:35,580 --> 00:12:38,540 S3: succeed Trump. And so Miles said that that's a key 269 00:12:38,540 --> 00:12:42,420 S3: relationship for the government to effectively build trust, to emphasize 270 00:12:42,420 --> 00:12:47,020 S3: the points of shared values, shared language, shared strategy in 271 00:12:47,020 --> 00:12:50,060 S3: the Indo-Pacific with Vance, and to use that as a 272 00:12:50,059 --> 00:12:52,300 S3: way to pave the way for Albanese to meet Trump 273 00:12:52,620 --> 00:12:56,620 S3: this month. Yeah. Marles as you said, Jack Aukus will 274 00:12:56,620 --> 00:12:59,420 S3: be key to the meeting as well. The Pentagon still 275 00:12:59,420 --> 00:13:03,340 S3: reviewing it. Marles said that he received only positive feedback 276 00:13:03,340 --> 00:13:07,660 S3: from Marco Rubio, JD Vance, Pete Hegseth and Stephen Miller, 277 00:13:07,660 --> 00:13:11,300 S3: Trump's influential deputy chief of staff. During that one and 278 00:13:11,300 --> 00:13:13,700 S3: two days of meetings, which was really, um, to give 279 00:13:13,740 --> 00:13:16,220 S3: Marles credit, this government has copped a lot of flak 280 00:13:16,220 --> 00:13:19,939 S3: for their relationship with the Trump administration. Some of it justified, 281 00:13:19,940 --> 00:13:22,020 S3: some of it not. But to meet those four guys 282 00:13:22,020 --> 00:13:23,780 S3: within the space of I think it was really one 283 00:13:23,780 --> 00:13:26,660 S3: day is a pretty impressive swing through Washington. 284 00:13:27,179 --> 00:13:29,780 S1: Just coming back to the domestic front. Obviously the Prime 285 00:13:29,780 --> 00:13:32,540 S1: Minister's in such a powerful, powerful position at the moment. 286 00:13:32,580 --> 00:13:35,340 S1: He's you know, he's flying high in the polls. He's 287 00:13:35,340 --> 00:13:38,300 S1: had all these sort of foreign policy successes. He's almost 288 00:13:38,340 --> 00:13:41,220 S1: sort of like floating above domestic politics in a way 289 00:13:41,260 --> 00:13:43,540 S1: at the moment. But we did see this week that 290 00:13:43,540 --> 00:13:45,660 S1: there was the back down on the super changes. And 291 00:13:45,660 --> 00:13:48,060 S1: I know we've already canvassed in other podcasts, like the 292 00:13:48,100 --> 00:13:50,900 S1: sort of ins and outs of the actual changes themselves. 293 00:13:51,260 --> 00:13:54,140 S1: It was basically an abandonment of these reforms, or a 294 00:13:54,140 --> 00:13:56,459 S1: partial abandonment of these reforms that they were hoping to 295 00:13:56,460 --> 00:13:59,940 S1: get more tax from high super earners. I want to 296 00:13:59,940 --> 00:14:02,700 S1: talk about the politics of it, because it was reported that, 297 00:14:02,700 --> 00:14:05,940 S1: as Paul said, that Chalmers got his pants pulled down 298 00:14:05,940 --> 00:14:09,020 S1: by the PM, the PM basically overruled him and said, look, 299 00:14:09,059 --> 00:14:10,740 S1: you've got to you got to get rid of this. 300 00:14:11,059 --> 00:14:11,900 S1: Shane what happened? 301 00:14:12,860 --> 00:14:17,740 S2: Yeah. And ultimately, this is how past relationships between treasurers 302 00:14:17,740 --> 00:14:23,900 S2: and prime ministers work. Um hawke-keating Howard-costello hockey and Abbott, 303 00:14:23,900 --> 00:14:26,900 S2: which a lot of people tend to forget, uh, what 304 00:14:26,900 --> 00:14:30,580 S2: went on there. There's always a tension. Yeah. Um, and 305 00:14:30,580 --> 00:14:35,940 S2: in this case, Albanese's effectively said come up with something different. Yeah. 306 00:14:35,980 --> 00:14:39,530 S2: And that's what he's done. The ultimate end game is 307 00:14:39,530 --> 00:14:43,330 S2: that the tax on high end superannuants is going up 308 00:14:43,850 --> 00:14:47,930 S2: by not an inconsequential amount, but nowhere near by as much. 309 00:14:47,970 --> 00:14:50,290 S1: And it leaves. It leaves Jim Chalmers with a problem, 310 00:14:50,290 --> 00:14:52,410 S1: because now he's got a hole in the budget where, 311 00:14:52,450 --> 00:14:54,650 S1: you know, the projections of what they were going to 312 00:14:54,690 --> 00:14:57,170 S1: save with those costings has sort of gone. 313 00:14:57,410 --> 00:14:59,609 S3: And it's really one of their only savings measures. 314 00:14:59,650 --> 00:15:00,530 S1: Yeah, yeah. 315 00:15:00,570 --> 00:15:02,210 S2: I wouldn't call it a savings measure. This was a 316 00:15:02,210 --> 00:15:03,850 S2: revenue measure. This was increasing tax. 317 00:15:03,930 --> 00:15:05,330 S3: Revenue measure to actually bring in cash. 318 00:15:05,370 --> 00:15:05,610 S4: Yeah. 319 00:15:05,650 --> 00:15:09,690 S2: So this this I think rule of thumb rather than 320 00:15:10,130 --> 00:15:13,690 S2: say 40 billion, which is we actually have some idea 321 00:15:13,730 --> 00:15:16,410 S2: because the Liberal Party went to the last election saying 322 00:15:16,410 --> 00:15:19,450 S2: we're going to repeal this tax. So there was an 323 00:15:19,450 --> 00:15:22,170 S2: analysis done by the Parliamentary Budget Office which said the 324 00:15:22,170 --> 00:15:27,890 S2: cost of repealing that tax, the original tax proposal was 43, 325 00:15:27,930 --> 00:15:32,050 S2: 44 billion over the next ten years. Nothing to sneeze at. Um, 326 00:15:32,170 --> 00:15:34,370 S2: the cost of that was much larger for the coalition, 327 00:15:34,370 --> 00:15:36,450 S2: because they were going to blow up the whole thing. 328 00:15:36,450 --> 00:15:38,130 S2: There was going to be extra government debt as well, 329 00:15:38,130 --> 00:15:41,770 S2: so the total cost was 50. Bill coming back to 330 00:15:41,810 --> 00:15:46,330 S2: where Chalmers has ended up. The change to indexation. By 331 00:15:46,330 --> 00:15:50,930 S2: indexing these thresholds, he has changed remarkably how much they're 332 00:15:50,930 --> 00:15:53,489 S2: going to earn. I'm thinking about half. 333 00:15:53,690 --> 00:15:53,810 S1: Of. 334 00:15:53,850 --> 00:15:54,090 S2: That. 335 00:15:54,370 --> 00:15:56,810 S1: But they haven't given us any official costings on, like 336 00:15:56,850 --> 00:15:59,010 S1: we were going to. We were saying back then that 337 00:15:59,010 --> 00:16:00,850 S1: we were going to, you know, save all this money, 338 00:16:00,850 --> 00:16:02,730 S1: but now it's actually only going to be this tiny 339 00:16:02,730 --> 00:16:03,410 S1: amount of money. 340 00:16:04,290 --> 00:16:07,930 S2: Well, you mean you say 43 billion is a lot 341 00:16:07,970 --> 00:16:11,290 S2: in 2020? Billions. Nothing like I don't know where you shop, Jack, 342 00:16:11,290 --> 00:16:14,410 S2: but more than half I'm getting. I'm getting worried, Jack. Jack, 343 00:16:14,450 --> 00:16:16,690 S2: about your spending proclivities. 344 00:16:16,730 --> 00:16:20,170 S1: I know, I know. I mean, yeah. Um, so am I. 345 00:16:20,410 --> 00:16:22,450 S1: I guess what I'm saying is, what I'm trying to 346 00:16:22,450 --> 00:16:24,890 S1: get at is that they had this economic roundtable, which 347 00:16:24,890 --> 00:16:27,050 S1: was obviously pushed by Jim Chalmers. They were like, you know, 348 00:16:27,090 --> 00:16:29,490 S1: we're really interested in tax reform. We're open to it. 349 00:16:29,690 --> 00:16:32,130 S1: It's on the table. But they're not really are they? 350 00:16:33,570 --> 00:16:36,720 S2: No, there are there are other things coming? 351 00:16:37,080 --> 00:16:37,960 S1: What? There are. 352 00:16:38,280 --> 00:16:40,800 S2: Well? What's coming? I'm not going to give it all 353 00:16:40,800 --> 00:16:41,280 S2: away right. 354 00:16:41,280 --> 00:16:42,160 S1: Now on this podcast. 355 00:16:42,200 --> 00:16:44,560 S2: I think you will see the next budget. There'll be more. 356 00:16:44,600 --> 00:16:48,000 S2: There'll be more changes. Okay. Like. Right. Everyone's forgotten what 357 00:16:48,040 --> 00:16:52,720 S2: actually went on during those three days. And we focus 358 00:16:52,720 --> 00:16:56,520 S2: on tax. Yeah. But say for instance, this week a 359 00:16:56,520 --> 00:16:58,960 S2: big shift which the reserve Bank has been banging on 360 00:16:58,960 --> 00:17:01,360 S2: about is the lack of competition in the country. Yes, 361 00:17:01,360 --> 00:17:04,680 S2: the government's competition reforms in that space actually took another 362 00:17:04,680 --> 00:17:05,960 S2: step forward this week. 363 00:17:06,000 --> 00:17:07,320 S3: Epbc act is coming. 364 00:17:07,359 --> 00:17:11,480 S2: Epbc there are those things like ultimately they are good 365 00:17:11,480 --> 00:17:13,959 S2: for the economy and for the budget, but they are 366 00:17:13,960 --> 00:17:16,480 S2: not nearly as sexy as write a tax change. 367 00:17:17,160 --> 00:17:20,880 S1: Paul. Treasurers and prime ministers have to work together. Their 368 00:17:20,920 --> 00:17:24,160 S1: success depends on each other. They're so interdependent and yet 369 00:17:24,160 --> 00:17:27,480 S1: they do, you know, always traditionally have a rivalry. Do 370 00:17:27,480 --> 00:17:29,399 S1: we see any of that with Albanese and Chalmers? I 371 00:17:29,400 --> 00:17:32,280 S1: know they have a good working relationship. I would not say. 372 00:17:32,280 --> 00:17:34,040 S1: You couldn't say at the moment that they have a 373 00:17:34,119 --> 00:17:37,320 S1: rivalry with each other. But could there be a rivalry 374 00:17:37,320 --> 00:17:39,760 S1: in the future? They have very different interests, don't they? 375 00:17:40,200 --> 00:17:43,280 S3: Yeah, there. There's a big age gap between them as well. 376 00:17:43,320 --> 00:17:45,919 S3: Chalmers is from the Queensland right. Albanese is from the 377 00:17:45,920 --> 00:17:49,720 S3: labor left. They're institutionally different characters. I mean they're both 378 00:17:49,760 --> 00:17:51,520 S3: they are both. I think Phil Currie wrote this this week, 379 00:17:51,520 --> 00:17:53,480 S3: both kind of working class guys who love rugby league. 380 00:17:53,480 --> 00:17:55,880 S3: So there's some similarities there. But they're from different parts 381 00:17:55,880 --> 00:17:58,640 S3: of the party. They have fundamentally different interests. In terms 382 00:17:58,640 --> 00:18:00,760 S3: of Chalmers trying to build himself up to become the 383 00:18:00,760 --> 00:18:05,080 S3: prime minister and Albanese trying to retain this immense power 384 00:18:05,080 --> 00:18:07,639 S3: and this special position he has now with this big majority. 385 00:18:07,880 --> 00:18:11,200 S3: But it's not you mentioned earlier, Jack, and I'm not 386 00:18:11,200 --> 00:18:13,720 S3: not to quibble with your language, but it's not just 387 00:18:13,720 --> 00:18:15,600 S3: my view that he got rolled by the PM. He 388 00:18:15,600 --> 00:18:20,000 S3: just he just did. Yeah. Um, Chalmers has been defending 389 00:18:20,000 --> 00:18:22,919 S3: this policy for two years, not giving any room to 390 00:18:22,960 --> 00:18:26,160 S3: the criticism that taxing paper profits might set a bad 391 00:18:26,160 --> 00:18:29,800 S3: precedent for the government for it to be potentially, you know, 392 00:18:29,840 --> 00:18:32,360 S3: if a if a negative scare campaign is launched by 393 00:18:32,359 --> 00:18:34,670 S3: the Liberal Party to suggest that it would be used 394 00:18:34,670 --> 00:18:36,790 S3: on the family home or whatever else. He gave no 395 00:18:36,950 --> 00:18:39,870 S3: room to that theory. The Prime Minister, before the election, 396 00:18:39,869 --> 00:18:42,909 S3: we reported this yesterday, started to become concerned about the 397 00:18:42,910 --> 00:18:45,950 S3: prospects of a scare campaign. He decided not to make 398 00:18:45,950 --> 00:18:49,350 S3: any changes pre-election because Angus Taylor, who was widely criticised, 399 00:18:49,670 --> 00:18:53,190 S3: criticised as an incompetent shadow treasurer, didn't weaponize the issue. 400 00:18:53,470 --> 00:18:56,510 S3: Tim Wilson then got elected after the election. Tim Wilson, 401 00:18:56,550 --> 00:18:59,070 S3: the master of a big scare campaign against the labor 402 00:18:59,070 --> 00:19:01,830 S3: tax policy. He started banging the drum through the Australian 403 00:19:01,830 --> 00:19:05,430 S3: Financial Review and other newspapers. The Australian became interested through 404 00:19:05,430 --> 00:19:10,189 S3: their economics correspondent, who was just quite dogmatic about this policy. 405 00:19:10,710 --> 00:19:14,669 S3: And so the campaign unusually, very unusually, came to life 406 00:19:14,670 --> 00:19:17,630 S3: after the election. And so this raised up the fear 407 00:19:17,630 --> 00:19:20,670 S3: and the Prime Minister's mind again, that he had pre-election 408 00:19:20,670 --> 00:19:23,389 S3: and around the time of the economic Roundtable, which was August, 409 00:19:23,390 --> 00:19:25,390 S3: which we spent a lot of time in here calling 410 00:19:25,430 --> 00:19:29,310 S3: Canberra's Coachella, the Prime minister said to Chalmers, look, we're 411 00:19:29,310 --> 00:19:32,109 S3: not going forward with this proposal in its current form. 412 00:19:32,109 --> 00:19:33,870 S3: I'm not going to tell you how to suck eggs. 413 00:19:33,869 --> 00:19:36,150 S3: You need to own this, but it can't have these 414 00:19:36,150 --> 00:19:39,470 S3: components of unrealized gains and no indexation. Come up with 415 00:19:39,470 --> 00:19:42,070 S3: a new plan. That's my order. I was told the 416 00:19:42,070 --> 00:19:45,350 S3: Prime Minister barely even consulted his cabinet on this. He 417 00:19:45,350 --> 00:19:48,590 S3: made a call off his own judgment with some key lieutenants, 418 00:19:49,230 --> 00:19:52,830 S3: and Chalmers was forced to announce this on Albanese's first 419 00:19:52,830 --> 00:19:55,469 S3: day in the Pacific Islands on holiday. It was a 420 00:19:55,470 --> 00:19:58,790 S3: proverbial sandwich for the treasurer, and kind of leads to 421 00:19:58,830 --> 00:20:02,150 S3: questions about his authority around the cabinet table and his 422 00:20:02,150 --> 00:20:04,750 S3: ability to pursue reform. If this is, if he backs, 423 00:20:04,750 --> 00:20:06,710 S3: if he's been forced to back down on something that, 424 00:20:06,750 --> 00:20:10,429 S3: you know, many commentators, I think rightfully said was not 425 00:20:10,430 --> 00:20:12,990 S3: as big a deal as some of the critics made out. 426 00:20:13,030 --> 00:20:14,550 S3: Then what does that say about his ability to do 427 00:20:14,550 --> 00:20:15,230 S3: bigger things? 428 00:20:15,270 --> 00:20:17,510 S1: Well, that's what I'm sort of interested in on an 429 00:20:17,510 --> 00:20:21,909 S1: interpersonal level, because it's a humiliating thing to be, to 430 00:20:21,950 --> 00:20:24,389 S1: have to back down publicly from this policy that you've 431 00:20:24,390 --> 00:20:27,710 S1: been touting and really backing for two years. How does 432 00:20:27,710 --> 00:20:30,020 S1: that feel for Chalmers? And does that not breed some 433 00:20:30,020 --> 00:20:32,179 S1: resentment towards the Prime Minister, who maybe could have let 434 00:20:32,180 --> 00:20:34,340 S1: him know a little bit sooner, perhaps, that, you know, 435 00:20:34,380 --> 00:20:38,020 S1: he was not in favour of this, you know, reasonable 436 00:20:38,060 --> 00:20:40,060 S1: sort of change in a lot of people's minds. 437 00:20:40,580 --> 00:20:42,860 S3: Well, that's a good question. I can't read Chalmers mind. 438 00:20:42,900 --> 00:20:44,620 S3: I mean, he was pretty stony face in that press 439 00:20:44,619 --> 00:20:48,180 S3: conference on Monday in the Blue Room. He's a master politician, 440 00:20:48,180 --> 00:20:50,420 S3: Jim Chalmers. He knows how these things work. I think 441 00:20:50,420 --> 00:20:53,139 S3: he did as good a job as possible as presenting 442 00:20:53,140 --> 00:20:56,260 S3: this new change as, um, good reform. And in some 443 00:20:56,260 --> 00:20:58,500 S3: ways it is good reform. What he did to the 444 00:20:58,700 --> 00:21:01,420 S3: top tax bracket and the low income measure to give 445 00:21:01,460 --> 00:21:04,620 S3: the green something the new policy is not it will 446 00:21:04,619 --> 00:21:07,220 S3: have more fans than the old policy. So I think 447 00:21:07,220 --> 00:21:10,659 S3: he's found a good solution. But I think it Marginalises 448 00:21:10,660 --> 00:21:14,060 S3: Chalmers in the government, it enhances the idea that the 449 00:21:14,060 --> 00:21:16,940 S3: Prime Minister has ultimate control. To your point, earlier, Jack, 450 00:21:16,980 --> 00:21:21,619 S3: about how the special position the Prime Minister is in, 451 00:21:21,780 --> 00:21:22,980 S3: I don't know if I should say this, but I'll 452 00:21:22,980 --> 00:21:24,619 S3: say it anyway. The Prime Minister was walking out of 453 00:21:24,619 --> 00:21:27,500 S3: Question Time on Wednesday or Thursday last week, and there 454 00:21:27,500 --> 00:21:30,500 S3: was a small a small group of people in the corridors. 455 00:21:30,540 --> 00:21:33,500 S3: And he joked that the only thing his colleagues were 456 00:21:33,500 --> 00:21:35,140 S3: split on was whether he was going to serve 5 457 00:21:35,140 --> 00:21:38,540 S3: or 6 terms. He was absolutely joking. But it's just 458 00:21:38,540 --> 00:21:41,340 S3: it's a sign of where he's at. Chalmers. Chalmers has 459 00:21:41,380 --> 00:21:43,740 S3: been overshadowed by Tony Tony Burke at the moment in 460 00:21:43,740 --> 00:21:46,619 S3: some ways. Um, Mark Butler is growing. 461 00:21:46,660 --> 00:21:51,020 S2: I want to wind you back there. Marginalising treasurers. Doesn't happen. Well. 462 00:21:51,340 --> 00:21:53,420 S3: I'm not saying he's marginalised, but I just did. 463 00:21:53,460 --> 00:21:56,580 S2: You just said this marginalizes the treasurer. I'm going to 464 00:21:56,619 --> 00:22:00,739 S2: pull you up because historically, the guy and they've all 465 00:22:00,780 --> 00:22:05,180 S2: been guys who holds the finances of the country is 466 00:22:05,180 --> 00:22:08,860 S2: impossible to marginalize because, remember, because you've got the Treasury. 467 00:22:08,900 --> 00:22:13,460 S2: The Treasury itself has so along with finance, they have 468 00:22:13,460 --> 00:22:17,580 S2: so much control of everybody else's, like the political. 469 00:22:17,619 --> 00:22:19,419 S3: I just think it's happened here to some extent, to 470 00:22:19,460 --> 00:22:20,180 S3: some extent. 471 00:22:20,300 --> 00:22:22,140 S2: To some extent. But I don't think it can go 472 00:22:22,180 --> 00:22:24,740 S2: its end of days. Oh, not at all. But marginalising 473 00:22:24,740 --> 00:22:28,090 S2: it because ultimately the budget, which is pivotal to how 474 00:22:28,090 --> 00:22:31,690 S2: a government runs, that's that's the that's the purview of 475 00:22:31,690 --> 00:22:32,689 S2: the treasurer of the day. 476 00:22:32,690 --> 00:22:34,570 S3: And he'll bounce back. But this is a low moment. 477 00:22:34,609 --> 00:22:37,530 S1: Yeah, yeah. Thanks, guys. That was a very interesting wild 478 00:22:37,530 --> 00:22:40,449 S1: roving chat. I really enjoyed it. See you very soon. 479 00:22:40,930 --> 00:22:42,450 S2: It's always a pleasure to see you, Jack. 480 00:22:47,690 --> 00:22:51,170 S1: Today's episode was produced by Kai Wong with technical assistance 481 00:22:51,170 --> 00:22:55,010 S1: from Debbie Harrington. Our executive producer is Tammy Mills. Tom 482 00:22:55,010 --> 00:22:58,010 S1: Mackendrick is our head of audio. To listen to our 483 00:22:58,010 --> 00:23:01,970 S1: episodes as soon as they drop, follow Inside Politics on Apple, Spotify, 484 00:23:01,970 --> 00:23:05,050 S1: or anywhere else you listen to your podcasts. To stay 485 00:23:05,050 --> 00:23:07,570 S1: up to date with all the politics, news and exclusives, 486 00:23:07,570 --> 00:23:11,050 S1: visit The Age and The Sydney Morning Herald websites. To 487 00:23:11,090 --> 00:23:14,010 S1: support our journalism, subscribe to us by visiting The Age 488 00:23:14,010 --> 00:23:20,169 S1: or smh.com.au. Subscribe. I'm Jacqueline Maley. Thank you for listening.