We hope you are enjoying our weekly wrap-up and perhaps even learning something new about what is going on in Australia and around the world.
Having previously worked within government and particularly within the trade/foreign affairs portfolio, we thoroughly enjoy highlighting how Australia’s global interactions impact domestic policy and therefore the lives of all Australians. With the Treasurer visiting India this week for the G20 Finance Ministers Meeting, there is a lot to discuss.
However, let’s start here at home with what’s been happening across the nation this week.
Politics
We’re sure no one will be surprised that we are kicking it off with Dan Andrews’ decision to cancel the 2026 Victorian Commonwealth Games.
Dan Andrews Under Fire
Earlier this week, Victorian Premier Daniel Andrews announced that due to cost blow-outs, Victoria was pulling out of their contract to host the 2026 Commonwealth Games. This is despite the fact that just four weeks ago he was celebrating ‘1000 days to go’ and talking up the value of the games to Victoria.
Andrews sited cost blow outs for the cancelation and said that the cost of hosting had blown out by billions – originally estimated to be $2.6 billion and now anticipated to be “$6 billion or as high as $7 billion”. However, he offered no evidence as to where the cost blowouts were incurred, and this claim has been furiously disputed by Commonwealth Games organisers who said other options had been proposed.
Those same organisers are said to have only received notice of the decision eight hours before Andrews made the public announcement. We all know Andrews is an expert at press conferences having held one almost everyday for two years during the pandemic, but perhaps some advice on stakeholder management is needed.
After announcing a myriad of projects and ‘splashing the cash’ before the November 2022 election – which he easily won – commentators are surprised by Andrews’ “new-found concern for fiscal responsibility”. Criticism from the Victorian Liberals is of little concern to Andrews who has managed to control the state for over nine years despite some controversial decisions during his tenure – including the longest pandemic lockdown in the western world!
There is no doubt this decision will negatively impact Victoria’s, and indeed Australia’s, reputation to host global sporting events in the future. Gold Coast Mayor Tom Tate is doing everything he can to bring the Games back to the Gold Coast (after successfully hosting in 2018) but with the Queensland Premier all but ruling it out, the move seems unlikely.
Fadden by-election
Both major parties were jostling to claim a win in the aftermath of LNP candidate Cameron Caldwell’s victory in the Fadden by-election over the weekend.
The government claims the swing to the LNP (2.8 per cent as of today) was an extremely poor result for the opposition, not even reclaiming the 3.5 per cent lost to Labor at the 2022 election. Senior Labor figures also slammed the LNP’s $600,000 campaign spend, which they say proves the opposition was fearful about a repeat of the Aston by-election loss.
The LNP, however, says the win is a rebuke of the Albanese Government’s economic policies and the state Labor government’s apparent loss of control of the youth crime crisis on the coast. They argue, on booth-by-booth results, the by-election saw large swings of up to 8 per cent away from the government amongst ‘middle Australia’ voters in the suburbs.
Both campaigns said in the lead up to election day the number one issue being raised with candidates was the rising cost of living. Seniors, families and small business owners all highlighted their budget struggles and how rising grocery costs, electricity bills and interest rates were causing them serious pain. No doubt the LNP will use this when Parliament resumes on 31 July to attack the government.
Caldwell’s northern Gold Coast council seat will now be vacated, and councillors – rather than residents – will vote to select his replacement given the proximity to the next election in March.
Education accord
Minister for Education Jason Clare on Wednesday released the Australian Universities Accord interim report, a review of Australia’s higher education system, and outlined Labor’s plans to overhaul the university sector.
Among the significant changes announced, Clare confirmed the government would give universities extra funding to guarantee places for every applicant from an Aboriginal or Torres Strait Islander background who meets eligibility requirements and scrap rules introduced under the Coalition government that stripped students of Commonwealth funding if they failed more than half their subjects.
The government’s clear objective is to increase the number of Australians from poor backgrounds or with Indigenous heritage who hold university degrees, with Clare saying on Wednesday that young Indigenous males are currently more likely to go to jail than university – a striking statistic.
There are also policies on the table which would completely upend the current higher education funding system, with the report proposing a new needs-based “Gonski-style” system and a new tax on foreign student fees – being vigorously fought by Australia’s sandstone universities.
The government’s handpicked Accord panel is seeking submissions and feedback on the more than 70 proposed policies in the interim report and will deliver a final report to the government by the end of the year.
Education funding and university policy has often been a significant point of difference between the two major political parties. With neither party controlling the Senate, any legislation that eventuates will likely be subject to negotiation with The Greens and the Crossbench.
Global
This week world governments have been focused on the G20 as they discuss a variety of global economic issues and seek to steer us through the significant challenges we are currently facing.
With high inflation and a slowing economy, the world is waiting to see what recommendations and action come from this week’s G20 meetings.
What is the G20?
The G20 stands for ‘Group of Twenty’ and serves as a forum for international economic cooperation. They play an important role in shaping and strengthening global economic policy.
The twenty members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkiye, the United Kingdom, the United States and the European Union.
The G20 is extremely important and influential as the members represent 85% of global GDP, 75% of international trade and two-thirds of the global population.
India currently holds the Presidency of the G20 – it rotates between members each year – and this week they hosted the Finance Ministers from member countries for the third meeting this year – Australia’s Treasurer the Hon Jim Chalmers MP was present.
Australia was President in 2014 and held the G20 Leaders’ Summit in Brisbane in November that same year. The Summit brought then US President Barack Obama and Russia’s Vladimir Putin to our shores, along with many other world leaders, and resulted in the most impressive security display ever seen in Australia. Working for one of the Australian Government’s Treasury Ministers at the time, we can attest to the amount of work and planning that goes into organising a G20 meeting. In our experience, aside from the security requirements, the management of personalities (think every world leader in one room) was the greatest challenge (but also highly entertaining in retrospect).
Chalmers meets with China Finance Minister
In addition to the formal G20 meetings, Finance Ministers use this opportunity to meet with their international counterparts one-on-one.
In an important step forward for the Australia-China relationship, Australian Treasurer Jim Chalmers met with China’s Finance Minister Liu Kun. Chalmers is the first Australian Treasurer to meet with his Chinese counterpart in four years.
The Treasurer used this meeting to ask for trade restrictions to be lifted and highlight Australia’s desire to see the release of two Australian citizens – writer Yang Hengjun and journalist Cheng Lei – who are detained in China.
While this meeting might not seem important to most people, it is in fact a significant improvement in the Australia-China relationship and a change from the often-frosty reception Australian officials have received in recent times.
The real test of the relationship will come on 11 August which is the deadline Australia has set for China to lift the current trade sanctions on Australian barley. Chinese officials feel they have already made significant concessions for Australia but with a pending China visit for the Australian Prime Minister, all eyes will be on 11 August.
Some might question the importance of the Australia-China relationship, especially considering Australia’s deepening defence ties with the US, UK and Japan, however, the economic relationship between our two countries is extremely important for the Australian economy.
China is Australia’s largest two-way trading partner and accounts for nearly one-third of our trade with the world. But more importantly for the Australian economy, we run a trade surplus with China – this means we export more goods and services to China than we import from them – thanks largely to coal. This means billions of dollars for the Australian economy and keeps millions of people employed.
G20 Outcomes
As G20 meetings are a sharing of ideas to strengthen economies, the meetings result in a series of commitments or recommendations. The theme for India’s Presidency is “One Earth, One Family, One Future” so at this meeting Ministers committed to prioritise the wellbeing of people and the planet, while also reaffirming their commitment to steer the global economy towards strong, sustainable, balanced and inclusive growth.
Managing global debt was an important area of consideration by G20 members and as Australia’s debt has increased to record levels, it is an important topic for us. All economies suffered as a result of the pandemic and the measures taken by governments has resulted in significant global debt. At 28 October 2022, Australian Government gross debt was $894.9 billion and Budget forecasts this will increase to $1.159 trillion (43.1% of GDP) by the end of the 2025–26 financial year. Some would argue this debt is justified because government spending during the pandemic, particularly JobKeeper, is what kept our country going and why our economy, although it has now slowed, is still stronger than many other developed nations.
As the world changes and becomes more reliant on digital services, the G20 members also discussed the implications of crypto assets and further work in this area will be completed before the Leaders’ Summit in September this year.
Australia’s position within the G20 should not be underestimated or undervalued. For a small population, we certainly punch well above our weight on the global stage.
Sport and Pop Culture
As always, we like to finish with some sport and pop culture news that you might find interesting or enjoyable.
The Writers Strike
In May this year, many Hollywood productions were suspended when negotiations between the writers’ union and the studios broke down. The Writers Guild of America took strike action when they failed to reach agreement with the studios on several matters including better pay, minimum work guarantees and, most importantly, rewriting the rules of residual payments due to the new streaming era.
The introduction of streaming services means the previous business model where writers, actors and directors received a residual every time the show or movie they worked on was aired has changed. Now with streaming, the platform licenses the product from the production company and the deal is done. Residuals aren’t then paid based on how many times the program is watched on the platform or for how long it airs.
Popular US late night shows – like Jimmy Kimmel Live and Saturday Night Live – were almost immediately shut down, and more and more shows have been impacted as time goes on. Initially it was thought the impact on Australia might not be noticeable due scripted shows and movies being filmed so far in advance of their release date, however just this week we have seen several Australian productions shut down – including three on the Gold Coast.
The broader impact is a result of actors’ and directors’ unions joining in the strike action and they are making similar demands in terms of residual payments from streaming services.
Picket lines have formed outside major studios, including Paramount CBS, Warner Bros, Netflix and Universal Studios. Many famous actors/actresses have joined picket lines, abandoned movie premieres, and walked off set in support of the strike action. Last week, the stars of new film Oppenheimer, including Matt Damon and Emily Blunt,left the London premiere early in act of solidarity for those striking.
Fran Drescher, better known as The Nanny (a personal favourite), has become the face of the strike due to her role as the President of SAG-AFTRA (actors union). She has been very vocal in her criticism of studio executives and explaining how streaming has “drastically changed” the business model for actors, writers and directors.
The last writers’ strike in 2007-08 lasted more than three months and is estimated to have cost the LA economy $US2.5 billion. It impacted hit shows like Gossip Girl, Big Bang Theory, and Breaking Bad.
FIFA World Cup
Last night the Matilda’s kicked off their World Cup campaign in front of a vocal crowd of 92,000. Despite losing captain Sam Kerr to a calf injury before the game, the Matilda’s defeated Ireland 1-0 with replacement captain Steph Catley scoring the games only goal with a second half penalty.
Australia plays Nigeria next week and then Canada on July 31 – that match will likely decide who tops Group B.
Meanwhile, our neighbours across the ditch achieved New Zealand’s first ever win in a men’s or women’s FIFA World Cup by defeating Norway 1-0. The passionate crowd at Eden Park exploded when Hannah Wilkinson scored five minutes after half-time.
It is awesome to see the coverage and hype around the Women’s World Cup – these women deserve all the attention and support.
If you haven’t watched the Matilda’s documentary on Disney+, we strongly recommend it. The show covers their journey to the World Cup and highlights the challenges they face along the way. These talented women are playing professional sport while also managing children and jobs – their strength, courage and determination is truly inspiring.
Collecting Sporting Teams
We’ve added this topic for two reasons – firstly, you might be surprised to know we are big NFL fans – secondly, we find it fascinating that an individual (with the help of some investors) is able to own some of the biggest sporting teams in the US.
This week, billionaire Josh Harris (and purchasing partners) has officially taken ownership of NFL team Washington Commanders for a hefty price of over $6 billion. He adds this NFL team to his other sporting teams – the NBAs Philadelphia 76ers and NHLs New Jersey Devils.
The Washington team has endured scrutiny for a number of years and recently changed their name from the Washington Redskins to the Commanders. However, their $6.05 billion sale crushes the previous $4.65 billion paid to purchase the Denver Broncos in 2022.
As an Australian, the ownership of sporting teams in the US is fascinating and occurs across all sporting codes. For example, Inter Miami (professional soccer team in Miami, Florida) is owned by superstar David Beckham. Either an astute businessman or surrounded by good advisers (perhaps both), Beckham was able to purchase Inter Miami thanks to a clause in his players contract with LA Galaxy that entitled him to purchase a US expansion team for only $25 million. After this week announcing the signing of seven-time Ballon d’Or winner (and absolute football superstar) Lionel Messi, the club could now be valued as high as $1.5 billion.
That’s a wrap on this week. If there are ever any topics or current affairs you’d like to know more about, please send us a message.