Albanese needs to get off his knees and punch back at Trump
While Anthony Albanese’s political and media opponents will revel in his failure to secure an exemption from the Trump administration’s tariffs on steel and aluminium, it represents a rare late-term opportunity for the prime minister to reshape his image with voters.
The Americans have set out to damage the Australian economy, as well as their own, while ignoring rational, well-evidenced arguments for why they shouldn’t. Bizarrely, American businesses and consumers will bear the brunt by paying more for key building materials, even if our exports to the US are worth a mere $1 billion a year. It also brazenly breaches the Australia-US free trade agreement, a document that, for the Coalition and News Corp, once possessed talismanic properties demonstrating the wisdom of slavishly adhering to the US, but about which we’ve heard curiously little lately.
The advice to Albanese will be to grin and bear it, to stay silent about Trump’s assault on reason and order and to continue the bipartisan gaslighting of Australians, as Malcolm Turnbull calls it. There will be sections of the media that back such a course. In disgraceful editorials this morning, the Australian Financial Review and The Australian both attacked Turnbull for speaking the truth about the extent to which Australia’s current leaders are deluding voters about maintaining business as usual in a world turned upside-down.
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This is the counsel of appeasers and sycophants. Albanese should learn from Turnbull’s extensive experience of dealing with Trump and abandon the cowering silence. Banal responses like “unjustified” and “disappointment” from Albanese — as he offered this morning — are simply bringing a letter-opener to a gunfight. Offering lessons about how “friends” act toward each other, as he did, is pointless.
The US is no longer any kind of friend and cannot be treated as such. Actions now count far more than diplomatic language, and putting forward propositions “in good faith” means nothing.
Albanese must get transactional — which, Trump’s enablers and apologists insist, the president is all about. Not with tariffs of our own, as the Canadians have, which as Albanese rightly says will simply harm our businesses and consumers, but with non-tariff measures that make good policy sense.
Sadly, Labor gave up one of those when it handed America a US$500 million cheque for AUKUS in early February. But there is no reason why the government couldn’t suspend the entire AUKUS program pending a root-and-branch independent review, one that, incidentally, is desperately needed given no-one of any credibility now believes we’ll ever get any submarines.
With the budget just days away, now is a good time for Labor to join the United Kingdom, Canada, France and many other countries in introducing a digital services tax aimed at the big tech companies (and, purely coincidentally, strong Trump supporters) that make large revenues in Australia but pay relatively little tax.
According to Australian Tax Office data, in 2022-23, Meta made $1.26 billion in Australia but paid tax of just $37.9 million. Google made more than $2 billion in revenue (although it says in its own documents it made up to $8 billion) and paid $124 million. Microsoft made over $7.5 billion and paid $118 million. Amazon made $2.6 billion but paid less than $46 million; its cloud services made $2.8 billion in revenue and paid $51 million (and for those wondering, Tesla made $1.7 billion in revenue and paid $16.3 million).
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A digital services tax (DST) is a highly efficient tax. An assessment by the UK’s National Audit Office showed the UK’s version had produced more revenue than forecast. DSTs were supposed to be phased out globally as part of the broader international agreement on minimum taxation levels forged by the OECD, but that process was put into a coma by the Biden administration and killed off entirely by Trump. The Canadians have only just kicked off their version.
The Greens, who back a DST, recently had the Parliamentary Budget Office (PBO) cost one very similar to ones in operation elsewhere, aimed at imposing a 3% tax on companies with global revenue of €750m. The PBO estimated the Greens’ proposal would affect 16 companies (including REA and Seek, as well as major gig economy services) and deliver around $1 billion a year, or more than $11 billion over a decade — net of reduced company tax revenue.
While the Greens would be unimpressed, Albanese could shortcircuit criticism from The Appeasement Financial Review and The American by earmarking that revenue for increased defence spending. A counterpunch at Trump, a fairer tax system and one part of the solution of where greater defence spending is going to come from — which goes to the bigger, more important challenge of what path Australia forges in the new world of disorder.
There are other non-tariff measures available: limiting intelligence-sharing or the rotation of Marines through Darwin, but there’s virtue in starting small and scaling up Australia’s response if need be. Either way it is, once again, an opportunity for a government characterised by timidity and fear to show voters it can creatively prosecute Australia’s interests in a world where long-held truths have vanished and certainties abandoned. That starts with getting off our knees.
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