GRACosway Weekly Wrap Up: Further drought relief announced

PM Scott Morrison and Trade Minister Simon Birmingham travelled to Thailand late last week for the ASEAN Summit, where Australia was one of 15 nations to join the Regional Comprehensive Economic Partnership (RCEP) – the world’s biggest trade pact. While India was initially expected to be part of the deal, Indian PM Narendra Modi withdrew amid concerns over the impact of Chinese goods on the Indian economy. Despite the setback, Mr Morrison declared the deal – which covers almost half of the world’s population – an “enormous” victory. The PM also held bilateral talks with his Indian counterpart, noting the door remains open for India to re-join the trade pact.

Mr Morrison also met with Chinese Premier Li Keqiang, dismissing concerns over diplomatic tensions between the two countries and insisting the relationship is built upon mutual respect. In an effort to further repair frosty trade relations between the two countries, Trade Minister Simon Birmingham travelled to Shanghai with a delegation of 200 Australian businesses, where he spruiked the benefits of the China-Australia Free Trade Agreement. Senator Birmingham conceded, however, that Australian companies continue to have problems with licensing and red tape in China, and confirmed that Australia will seize upon future opportunities to improve the China-Australia FTA.

Back home, the Federal Government has announced further drought relief, including $1 billion in concessional loans for small businesses and further funding for community infrastructure projects in drought-affected areas. Farmers will have access to loans with no interest or repayments for the first two years to help them pay for fodder, freight and staff. Deputy Leader of the Nationals Bridget McKenzie has called on states and territories to deliver programs alongside the Federal Government, insisting they have a role to play in drought relief. Meanwhile, the Nationals have again faced pressure on dairy prices, with Labor announcing it will vote with One Nation in the Senate next week to bring on debate of Senator Pauline Hanson’s dairy industry bill, which would set a minimum farm price for milk, among other measures. Senator Hanson has invited Nationals senators to cross the floor over the issue.

The Reserve Bank has kept interest rates on hold at the historically low 0.75 per cent, noting a “gentle turning point” in the economy. However, Australia’s biggest banks have urged the Federal Government to bring forward tax cuts to boost spending, while economists have warned another rate cut and even unconventional monetary policy measures such as quantitative easing may be necessary to improve Australia’s economic outlook.

Labor’s long-awaited election review – undertaken by party elders Jay Weatherill and Craig Emerson – was released on Thursday. The 90-page report concluded that Labor lost the election due to a weak strategy that didn’t adapt to the Coalition’s leadership change from Malcolm Turnbull to Scott Morrison; the size and complexity of its policy agenda; and Bill Shorten’s unpopularity in certain areas. The report also called for a more coherent Labor message.