OECD Warns Australia On Rising Debt Burden

Economic

Summary:

The OECD is ringing alarm bells for Australia. With states and territory governments planning bigger infrastructure projects, an aging population and a creaking tax system, Australia is facing soaring debt if it can't fix its finances. At least the government has two years until the next election. Over in New Zealand, Prime Minister Christopher Luxon has little more than nine months to convince voters to give him a second term in office, with an election now set for Nov. 7. Meanwhile on the other side of the world, US President Donald Trump says he'll hold off on planned tariffs after reaching a "framework of a future deal" over Greenland.

Australia's national debt will "rise rapidly" over coming years unless the Labor government is prepared to overhaul a sclerotic tax system to boost revenue or cut spending to reflect its more constrained means, the Organization for Economic Co-operation and Development said in its annual assessment of the economy.

New Zealand Prime Minister Christopher Luxon and his National Party are betting a sustained economic recovery over the next nine months will help it win an election due to be held on Nov. 7, after their vote slipped in recent opinion polls to be neck-and-neck with the main opposition Labour Party.

US uranium miner Energy Fuels is gunning for a key role in the West's challenge to China on rare earths, striking a $299 million takeover deal to acquire Australian Strategic Materials and build a "mine-to-metal" supply chain for the critical commodities.

India's southern state of Andhra Pradesh is studying Australia's ban on children under 16 years of age from using social media, its minister in charge of technology and human resources told Bloomberg News on the sidelines of the World Economic Forum in Davos. "I believe we need to create a strong legal enactment," Nara Lokesh said.

Lynas Rare Earths is trying to secure a deal with the US Department of Defense to get government-backed price floors for its supplies, similar to those granted to a major US producer last year, Chief Executive Officer Amanda Lacaze said in an interview. However discussions between the Pentagon and the Australian company were delayed by the US government shutdown.

US stocks bounced strongly after President Trump said he reached the "framework" of a deal on Greenland. Gains were tempered as he later said that his nation is to be involved in mineral rights. Treasuries rose and the dollar less so in the overall response. Kiwi and Aussie continued their rally with the latter well placed for further gains on a strong jobs print today. New Zealand has some bonds to sell. ASX futures are higher after three days of losses.

A trade deal between the US and European Union is on hold after the European Parliament decided to freeze a ratification vote in response to President Trump's escalating threats to seize Greenland. The Parliament's trade committee postponed the vote indefinitely on Wednesday, casting doubt on whether the pact will ever get across the finish line.

As artificial intelligence threatens to upend job markets in countries around the world, Nvidia Chief Executive Officer Jensen Huang brushed off longer term concerns and made the case that skilled vocational workers are seeing increasing demand now.

US Supreme Court justices suggested they are wary of President Trump's effort to fire Federal Reserve Governor Lisa Cook over unproven mortgage-fraud allegations, saying the move could upend the Fed's independence and rattle markets.

Apple plans to revamp Siri later this year by turning the digital assistant into the company's first artificial intelligence chatbot, thrusting the iPhone maker into a generative AI race dominated by OpenAI and Google. The chatbot — code-named Campos — will be embedded deeply into the iPhone, iPad and Mac operating systems and replace the current Siri interface, according to people familiar with the plan.

Source: Bloomberg Europe

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OECD Warns Australia On Rising Debt Burden

Source: Bloomberg Europe

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