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00:00Prime Minister Albanese had an outstanding meeting with President Trump today.
00:04We're very, very pleased with how the meeting went.
00:07And the critical minerals framework is really one of the most important bits of progress that we saw in those discussions.
00:15And what that's all about is about helping to ensure Australia becomes a world leader in the export of rare earths and critical minerals.
00:23It's all about making sure that we strengthen our trade ties with the US,
00:27that we strengthen supply chains,
00:30and that we make sure that this remarkable opportunity that Australia has with rare earths and critical minerals is properly maximised.
00:40So who will decide which projects are viable?
00:45Is the government choosing the winners here?
00:47Well, this industry already, we think there are about $13 billion Australian of projects in the pipeline.
00:59A really extraordinary opportunity for Australia, a golden opportunity.
01:04And what the American administration and the Australian government have agreed is that each of us will invest a billion dollars over the next six months,
01:13as you rightly said in your introduction, in some of these really important projects.
01:17We believe Australia can be and will be a world leader in the supply of rare earths and critical minerals.
01:24The agreement and the framework that was agreed with President Trump today is an important part of that effort.
01:31It's a golden opportunity for Australia and we intend to maximise it.
01:34The thing is, there is reason to think that there could be competition between an American and Australian company.
01:43I'm just wondering, how will it be decided when it comes to that?
01:47For instance, if you have liners and empty materials at odds, how will you decide?
01:51Well, it's not beyond us for the commercial arrangements to reflect the scale of this opportunity and our obligations to each other under this framework.
02:05Obviously, rare earths and critical minerals have a number of important applications, including in defence and technology
02:11and in the industries that the US administration are very keen to work closely with Australia on.
02:18We intend to be a reliable supplier around the world.
02:21But this agreement with the US is about strengthening trade ties with the Trump administration and the US more broadly.
02:27It's about making sure that those supply chains are robust and reliable.
02:32We will have markets all around the world for these critical minerals and that's a good thing.
02:37But the American relationship is very important to us and today we strengthened it.
02:43When you think about these rare earth deals and the projects which are coming up,
02:48we know that Gina Reinhardt, for instance, has a finger in a lot of these pies and some are raising the concern
02:54that perhaps taxpayers' money would end up at one end of town, which is the richer end of town.
03:02I mean, how do you respond to such concerns?
03:04Well, this critical minerals opportunity for Australia is a big opportunity for our workers,
03:12our local communities, for our businesses and our investors.
03:16And there's more than one investor or owner of critical minerals resources in Australia.
03:21But whether it's mining, refining, adding value, processing, working with our international partners,
03:28we shouldn't see this as anything other than a massive opportunity for Australia.
03:33It's why we put so much effort into engaging, whether it be with the US administration,
03:37whether it be here in APEC with the 21 economies of our region.
03:41We recognise that Australia's got a lot to offer the world.
03:45We've got important relationships right around the region and we intend to supply other economies
03:53with our critical minerals and rare earths in a way where the benefits in Australia are broadly shared,
03:59including amongst our world-leading mining workforce.
04:04Do you think China overplayed its hand in imposing the cards on rare earth supplies?
04:11I wouldn't engage in that sort of commentary.
04:18We engage with the Chinese administration in good faith and in Australia's national interest.
04:25We engage with all of our trading partners in that fashion.
04:28I'll leave the analysis to others.
04:31Our interest here is in making sure that we continue to be a reliable supplier,
04:37that we play an important role in strengthening supply chains in this industry,
04:42whether it's in the United States or elsewhere.
04:45But our relationship with China is important to us in economic terms as well.
04:50We've put a lot of effort into stabilising that relationship.
04:53The Chinese economy is not without its fair share of challenges,
04:57but we are confident that it will continue to be an important source of growth in our own economy in Australia.
05:03And we believe it's possible to engage with the Americans in the way that we have been
05:07and to continue to stabilise and invest in that very important China relationship at the same time.
05:15Treasurer, so it all sounds good for the Australian economy.
05:18Let's take a look at your budget.
05:20What are the prospects of a narrowing of your budget deficit,
05:24given that the commodity space is doing really well?
05:27Take a look at where gold is in terms of tax receipts from miners.
05:31That should be looking pretty good as well.
05:35How is that deficit looking for you?
05:41Well, in our first term of government, our first three years in office,
05:44we engineered the biggest positive turnaround in our budget
05:47in a single parliamentary term in Australian history, in nominal terms.
05:51We delivered two surpluses, and in the most recent year,
05:55the deficit was around a fifth of what we inherited from our predecessors.
05:59And so we've made good progress on the budget,
06:01but we know that there is more work to do.
06:03A big reason for that progress has been the strength of our labour market,
06:09but also we found $100 billion in savings.
06:12We've shown spending restraint.
06:14We've banked most of the upward revisions to revenue,
06:16which comes from a stronger labour market and relatively strong commodity prices.
06:21And so that has improved the budget, but we know that there is more work to do.
06:25And when you spend time in these international forums, as I have been,
06:29in North America last week and in Asia this week,
06:33it becomes very clear that Australia's budget is in much better nick,
06:37much better condition than a lot of other budgets around the world.
06:40In fact, the gross debt for the year just finished is $188 billion lower
06:46than what was projected just three years ago.
06:48So we've made good progress.
06:50We know there's more work to do to make our budget more sustainable,
06:53but because of the progress we've made,
06:55we've got the debt down and we've got the debt interest down as well,
06:58and that's been important.
07:01Is there a potential for a surplus, Treasurer?
07:04We're not forecasting that for the coming fiscal year.
07:14There are pressures on the budget which are frankly intensifying rather than easing,
07:18including in the care economy and elsewhere.
07:20But we will continue to manage the budget in the most responsible way that we can.
07:24We will build on the very substantial progress that we have made already
07:29to continue to ensure that our budget is as sustainable as it can be,
07:34in the face of all of this global economic uncertainty
07:36and in the face of the spending pressures which are familiar
07:40to a lot of the economies that we're engaging with here in Incheon.
07:45Treasurer Chalmers, all eyes on monetary policy as well.
07:50The market's pricing in two more rate cuts.
07:53In your opinion, is that enough for the Australian economy?
07:56Well, there are good reasons why Australian Treasurers don't engage in commentary
08:04about the future movement of interest rates.
08:06We don't predict or pre-empt decisions taken independently by our Reserve Bank board.
08:13Interest rates have already been cut three times in Australia
08:16in the space of the last seven or eight months or so.
08:19The market is expecting further interest rate cuts before long.
08:25My job is to focus on the economic fundamentals, which are strong in Australia.
08:30We are genuinely an island of opportunity and resilience and reliability
08:35in a sea of global economic uncertainty and risk.
08:39So as to continue to tend to the macroeconomic fundamentals of our economy,
08:44the strong labour market, the fact that we've got inflation down considerably,
08:48that's my focus.
08:50I'll leave decisions on monetary policy to our independent Reserve Bank.
08:55So when you take a look at the economic fundamentals in Australia,
09:00are you perhaps frustrated by the gradual pace?
09:03Because when you take a look at what other central banks around the world have been doing,
09:08they've been more aggressive in terms of the rate cuts to help the economy grow faster.
09:13Well, obviously, when interest rates are cut, that has a positive impact on the economy.
09:23I think that's self-evident.
09:25That's economics 101.
09:27And because of the progress we've made in our economy, particularly on inflation,
09:32but we've been able to get that progress on inflation without paying for it
09:35with substantially higher unemployment, we've got real incomes growing again.
09:38So there's a lot to be proud of in the Australian economy,
09:41and that has given the Reserve Bank the confidence to cut interest rates three times already this year.
09:48Again, I'm not going to engage in anything that goes beyond that,
09:52or which could be misread as encouraging the independent Reserve Bank one way or the other.
09:58But I think certainly any objective observer of our economy over the last 12 or 18 months
10:03would recognize we've continued to see it grow.
10:07We've managed to get real incomes growing again.
10:09We've managed to keep the labor market relatively strong, certainly by historical standards.
10:14We've managed to get inflation down very considerably from its peak a couple of years ago.
10:18And when the Reserve Bank meets to take these decisions independently, they will weigh all of that up.
10:25And, Treasurer, speaking of the economy, you have to talk about China,
10:29which is your largest trading partner, its, I guess, economic recovery is pretty sluggish,
10:36and it's been trying to reverse that.
10:39How are you factoring that into your own projections on growth going forward?
10:49Well, obviously, Australia's got a lot of skin in the game when it comes to prospects for the Chinese economy.
10:55As I said a moment ago, there are no shortage of challenges in the Chinese economy and its property sector
11:01and in other important respects.
11:04But we're very confident that China's growth will continue to be an important source of Australia's economic success.
11:12We have put a lot of effort into stabilizing that relationship, maximizing that opportunity,
11:17given China is such a big and important trading partner of ours.
11:22Like the rest of the world, we will watch closely the developments around the new five-year plan
11:27when that's announced before long.
11:30But as I said, China will continue to be a really important part of Australia's economic prospects.
11:37It warrants and receives a lot of our attention.
11:40And that will be especially the case as we see the developments around the five-year plan.
11:45And when it comes to our forecasts, we'll update them in the usual way in the budget update
11:49towards the end of the year.
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