Month: March 2025

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Care required not to trigger duty or double duty 10 min read

The recent Tasmanian case of Van Dairy¹ suggests that an agreement to procure a sale of property might be liable to duty as an agreement for sale, even if the owner of the property is not a party to it. This is significant because, in the context of this case, it meant the Sale and Purchase Agreement (SPA) triggered adverse stamp duty implications. This included that the purchaser became a land-rich entity before completion, so that a double duty liability was triggered by the transfer of its shares before completion of the land purchase.

To ‘change your mind’ after the contract is signed involves a major risk of incurring double duty under the landholder duty provisions of each Australian jurisdiction.

The principle in the case is potentially relevant when a corporate or other entity, which wholly controls one or more subsidiaries, undertakes to procure or arrange for those subsidiaries to sell land, shares or other assets held by them to a buyer.² It could potentially apply to impose duty on other agreements where the owners of the relevant sale property are not parties, such as scheme implementation agreements, or global business sale agreements in which parent companies of global groups undertake to procure their subsidiaries in various countries to buy and sell relevant businesses or companies.

We understand that the taxpayers have appealed the decision, and it remains to be seen whether the decision is overturned, or whether it will be followed in other Australian jurisdictions.

The case is also a salutary lesson about the importance of establishing ownership of a special purpose entity before it enters into a contract to acquire land assets, to ensure double duty does not arise under the landholder duty provisions in any Australian jurisdiction.

Key takeaways

• A sale and purchase agreement under which a controlling entity agrees to procure the sale of property by an entity which it controls, can potentially be characterised as a binding agreement for the sale of that property, even though the entity that owns the property is not a party to the agreement. Thus, such an agreement can trigger adverse duty consequences.
• Taxpayers establishing entities to acquire land assets or other property should strive to establish them with the correct or intended ownership prior to signing any contract to purchase the assets. To ‘change your mind’ after the contract is signed involves a major risk of incurring double duty under the landholder duty provisions of each Australian jurisdiction.
• This is subject to the potential for a taxpayer that is a member of a corporate group being able to rely on corporate reconstruction exemptions and concessions, to obtain an exemption or reduction in duty for a change in ownership within a corporate group of the special purpose entity after it acquires the land assets.

Who in your organisation needs to know about this?

Members of the tax and legal teams, and others involved in negotiating SPAs and global sale agreements, and in establishing special purpose entities to acquire land or other assets.

A summary of the Van Dairy case

Facts

In October 2015, certain Tasmanian properties (the Woolnorth properties) were marketed for sale. They were then owned by two companies named Van Diemen’s Land Company (VDL) and Tasman Ferndale Pty Ltd (TFPL), both of which were wholly owned by Tasman Land Company (TLC).

Mr Lu Xianfeng (Mr Lu) wanted to purchase the Woolnorth properties and related assets that were to be sold by interests controlled by TLC. Mr Lu at all relevant times controlled the corporate appellants in the matter. On 30 October 2015, Moon Lake Investments Pty Ltd (Moon Lake) was incorporated, with Mr Lu as the sole shareholder, holding all five shares in the company.

On 20 November 2015, Mr Lu, Moon Lake and TLC executed a written agreement referred to as the SPA. Under this agreement, as per clause 3, TLC agreed to ‘procure the sale and transfer to [Moon Lake] of the Assets … with affect from Closing’. The Assets referenced were owned by ‘the group’, which consisted of TFPL and VDL, which—as noted above—were wholly owned subsidiaries of TLC.

On 12 January 2016, according to the Moon Lake share register held by the Australian Securities and Investments Commission, Mr Lu’s five shares in Moon Lake were transferred to Ningbo Kaixin Investment Co Ltd (Ningbo).

On 24 March 2016, Ningbo’s shares in Moon Lake were then transferred to Van Dairy (Hong Kong) Group Ltd (VDHK).

On 31 March 2016, completion of the sale of the land took place. Moon Lake partly funded payment of the purchase price by issuing a large number of shares to VDHK. Moon Lake received the executed land transfers from VDL and TFPL and, on around 4 April 2016, these were lodged to be assessed for stamp duty by the State Revenue Office (SRO), together with payment of estimated duty of over $8 million.

Subsequently the SRO told Moon Lake’s solicitors it would give further consideration as to whether Ningbo and/or VDHK had any liability to pay land-rich duty, separately from Moon Lake’s liability to pay duty on the acquisition of the Woolnorth properties.

On 28 January 2021, the corporate appellants received a notice from the SRO that it intended to investigate whether Ningbo and/or VDHK had acquired any relevant interest in a land-rich corporation.

On 20 April 2021, Moon Lake received further correspondence from the SRO, which included the following statement:

The acquisition by shares by [Ningbo] on 15 January 2016 and then subsequently by [VDHK] on 24 March each resulted in a separate dutiable transaction under s66 of the Act as at the time of each of those majority acquisitions, Moon Lake was deemed to be a land-rich company.

On 5 July 2021, the SRO informed Ningbo and VDHK that each were liable to pay duty interest and penalty tax in the sum of approximately $10.5 million.

On 2 September 2021, Ningbo and VDHK each lodged notices of objection with the Commissioner regarding the 5 July 2021 assessments. The Commissioner disallowed their objections (apart from a reduction in the quantum of each assessment). The assessments, as revised, were the subject of challenge in the case.

Issues

The most significant issue from a duty viewpoint was whether the SPA was an uncompleted agreement for the sale of land, despite the fact that the owners of the land were not parties to the agreement. If so, it meant the SPA had the effect of causing Moon Lake to be a land-rich corporation both at the time of the transfer of its shares to Ningbo and then to VDHK, triggering multiple duty.

The decision on whether the SPA was an uncompleted agreement for the sale of land

Under section 60(1) of the Duties Act 2001, a private corporation was land rich if:

• it had land holdings in Tasmania where the unencumbered value is $500,000 or more; and
• its land holdings in all places, whether within or outside Australia, comprised 60% or more of the unencumbered value of all its property.

A land holding included any interest in land, with some exceptions that were not relevant to the facts of the case.³

Under section 61(4), the vendor and the purchaser under an uncompleted agreement for the sale of land were each taken to be separately entitled to the whole of the land. While the land-rich duty provisions in Tasmania were subsequently replaced by landholder duty provisions (removing the 60% requirement), there is an equivalent provision in section 79(1) of the current Act. In addition, all Australian jurisdictions have an equivalent provision in their landholder duty legislation.

Before the Supreme Court of Tasmania, Ningbo and VDHK argued that s61(4) did not deem Moon Lake to be entitled to the whole of the land the subject of the SPA as it was not a purchaser under an uncompleted agreement for the sale of land. The basis of this argument was that the SPA was a contract between TLC and Moon Lake. The land was not owned by TLC, but by companies controlled by TLC. Ningbo asserted that this is different from TLC itself selling the land to Moon Lake.

Acting Justice Marshall noted that the proper interpretation of s61 was central to the resolution of this issue. Firstly, his Honour noted that the expression ‘agreement for the sale of land’ was not defined in the Act. In turning to the ordinary natural meaning of the words, his Honour held:

“The ordinary natural meaning of the words is to provide a description of an agreement which results in the sale of land. The words in the section are not “an agreement for the sale of land by a vendor and its purchase by a buyer”.

This approach highlights that the words ‘for the sale of land’ are the key element of the description of the agreement and should not be construed narrowly or pedantically. The words indicate binding agreements by which the sale of land is effected. On the facts of the case there was no doubt TLC was able to secure the sale of the land to Moon Lake as required under the SPA. Therefore, Moon Lake was a purchaser under an uncompleted agreement for the sale of land, and was treated as holding an interest in the land for the purposes of s61(1) of the Act.

The court also referred to the judgment of Justice Fullagar in Hall v Busst, where his Honour said there were ‘three essential elements’ required for a concluded agreement including the parties, the subject matter and the price.⁴ All three were satisfied in Van Dairy, including the parties.

Implications

Corporate reconstruction exemptions and concessions

For the purposes of changing the structure of a corporate group or changing the holding of assets within a corporate group, a taxpayer may seek to consider corporate reconstruction exemptions and concessions. A corporate group broadly consists of a parent corporation and its subsidiaries where there is at least 90% ownership.⁶ Where such an exemption or concession is available, it provides some flexibility to change the ownership of a landowning entity within a corporate group even after it has acquired land or entered into a contract to acquire land.

By way of example, the Duties Act 1997 (NSW) relevantly provides for a duty concession for corporate reconstruction transactions. For eligible transactions that occur on or after 1 February 2024, the duty is reduced to 10% of the duty that would otherwise be payable.

Section 273B applies to a transaction if the Chief Commissioner is satisfied, on application by a party to the transaction, that—

• the transaction is a corporate reconstruction transaction, and
• the transaction, or the series of transactions of which the transaction is a part, is undertaken for the purpose of either or both of the following—
  • changing the structure of a corporate group,
  • changing the holding of assets within a corporate group, and
• the transaction, or the series of transactions of which the transaction is a part—
  • is not undertaken for a purpose of avoiding or reducing duty under this Act on another transaction, and
  • is not undertaken for the sole or dominant purpose of avoiding or reducing a liability for tax, other than duty under this Act, under a law of an Australian jurisdiction.

All Australian jurisdictions have broadly similar exemptions or concessions, including Tasmania. The Tasmanian exemption was presumably not available in Van Dairy for the transfers of shares in Moon Lake. In the case of the first transfer from Mr Lu to Ningbo, Mr Lu, as an individual, could not have been a member of a relevant corporate group. In the case of the second transfer from Ningbo to VDHK, presumably the two companies were not part of the same corporate group as defined under the duties legislation.

Actions you can take now

• Exercise caution when establishing the ownership of a purchaser entity and seek to have the correct ultimate shareholders in place prior to the signing of a contract to acquire land or completion of the purchase. Be aware of the double duty risk if you ‘change your mind’ later.
• Consider the duty implications of entering into sale and purchase agreements, including where the intended seller or purchaser of the property is not a party to the agreement. Seek timely advice.

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A low bar for ‘intention to use’ 6 min read

The Australian Trade Marks Office recently decided two related actions for removal for non-use against registered marks owned by Mae Watson: the first, ‘Whiplash’, and the second ‘WHIPLASHED’, both for beauty salon and beauty-related services including lash extensions.

The decisions shed light on whether an applicant can limit a removal action under section 92 of the Trade Marks Act 1995 (Cth) (TMA) to particular states in Australia and the threshold question of the ‘intention to use’ under s92(4)(a).

In this Insight, we outline the details of each decision and what trade mark owners can do to avoid the risk of removal actions being brought.

Key takeaways

• If, after filing a s92 TMA removal action (which requires an applicant to be satisfied, on its enquiries into use, that the owner has not used the relevant mark in Australia), it becomes clear throughout the evidentiary process or at hearing that there is some use, but only in a specific geographical location, the applicant may, in certain circumstances seek that the Registrar invoke the s102 TMA discretion, and request that the mark remain on the register but be subject to a geographical limitation.
• ‘Intention to use’ in a s92(4)(a) TMA removal action is a low bar. The act of filing the trade mark application combined with a positive statement by the owner confirming an intention can be enough to shift the onus to the removal applicant to show a lack of intention.

Delegate declines two related non-use removal actions

Beauty salon, Whiplash’d Pty Ltd (the Removal Applicant), brought two related removal actions against Mae Watson (the Owner)’s registered marks ‘Whiplash’ and ‘WHIPLASHED’:

• an application for complete removal (excluding WA) of ‘Whiplash’, brought on the basis of non-use for a period of three years in all states except WA (s92(4)(b)); and
• an application for complete removal of WHIPLASHED brought on the basis of a lack of intention to use in good faith and non-use in the relevant period (s92(4)(a)).

Action for removal of ‘Whiplash’

The Owner argued that she had used Whiplash in all states in Australia, predominately in WA, in connection with lash extension services throughout the relevant three-year period, and further that the COVID pandemic was an impediment to broader use of the mark in Australia.

The Removal Applicant sought to qualify the removal action to removal except for the state of WA. The Delegate, however, considered that there is no provision in s92 for a removal application to be qualified in that manner. Section 92(4) requires that a removal applicant seek removal for all or any of the goods and/or services in respect of which the trade mark is registered in Australia (and not a part of Australia).

Section 102 provides the Registrar with a discretion to impose a territorial restriction on the registration of a trade mark where there has been no use of the mark in a particular place in Australia for a three-year period, where certain conditions are met. These include that the applicant for such an action is either the registered owner of a trade mark that is:

• substantially identical with or deceptively similar to the challenged mark,
• registered in respect of the same goods and/or services specified in the application, and
• subject to the condition that the use of the trade mark be restricted to a specific place in Australia;

or the Registrar is of the opinion that the trade mark may be registered by the applicant with that condition or limitation.

The quirk of s102 is that it can only be invoked if an applicant has a removal action (s92(4)(b)) on foot for all of Australia. In this case, as the Removal Applicant had not invoked s102, the Delegate considered the removal action as if it applied to all of Australia. The Owner exhibited evidence of use of the mark in respect of beauty salon services in the relevant period in (at least) WA. Given that the Delegate was satisfied there was use in WA, it was unnecessary to consider whether the mark had been used outside of WA. Further, even if that Applicant had invoked s102, it had not made any arguments that it would satisfy the criteria outlined above. Ultimately, the Delegate found the ‘Whiplash’ trade mark had been used in the three-year period in Australia, and so, could remain on the register unamended.

Action for removal of ‘WHIPLASHED’

To succeed in opposing the action against WHIPLASHED, the Owner had to rebut the allegation that, at the time of filing, she had no intention in good faith to use the mark, or show that the trade mark was used in good faith in the relevant period.

The Delegate noted that the burden on the Owner of establishing the requisite intention is not high and that the filing of a trade mark is prima facie evidence of an intention to use the mark in respect of all the services claimed. The act of filing, combined with a positive statement by the Owner (such as ‘when I registered WHIPLASHED I was committed to using it’ or ‘I had an intention to provide services under the WHIPLASHED brand throughout Australia’) was sufficient to shift the onus to the Removal Applicant to prove a lack of intention. The Removal Applicant did not cast any doubt on the genuineness or reliability of the Owner’s evidence of intention to use, so the Delegate was satisfied that the intention was made out.

In terms of demonstrating actual use, the Owner provided evidence of use in the relevant period in relation to beauty services and the Removal Applicant failed to cast doubt on this evidence. The Owner also provided evidence of use of ‘Whiplash’ in relation to beauty salon services, and the Delegate accepted that use of ‘Whiplash’ constituted use of WHIPLASHED under s100(2)(a), as it was use with ‘alterations not substantially affecting the identity’ of the mark.

In the result, the Owner had established both an intention to use as at the filing date, and use of the mark during the relevant period, and the mark remained on the register.

Actions you can take now

• Companies seeking to limit a competitor’s registered trade mark to exclude the state in which they operate should consider if they meet the criteria to invoke s102 (for instance, whether they own a similar mark on the register that is itself subject to a geographical limitation). Removal applicants face somewhat of a conundrum, in that, the initial non-use removal application would have to be framed to claim that there is no use in Australia, and the subsequent invoking of s102 could then seek to limit the registration to a particular geographical location.
• Once a company settles on branding, it should register any relevant marks it intends to use as soon as possible to avoid competing marks being entered onto the register and gaining priority.
• If a competing mark has priority on the register, a company can nevertheless consider investigating whether the competing mark is being used in all the geographical locations, and in respect to all the goods and/or services for which it is registered, to inform whether to bring a non-use action.
• Companies intending to operate Australia-wide should ensure that all relevant registered marks are being used as trade marks in all relevant jurisdictions—particularly where there are competing marks on the register subject to geographical limitations—to avoid the risk of a removal action being brought that invokes s102.

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Deadline to carry out risk assessments is fast approaching 8 min read

Certain online service providers must complete a risk assessment and implement required compliance measures by 21 June 2025. This relates to the following types of material:

• child sexual exploitation
• pro-terrorism
• extreme crime and violence (Class 1A material)
• crime and violence
• drug-related material (Class 1B material).

This is required by two industry standards referred to as the Phase 1 Standards:

• Online Safety (Relevant Electronic Services)—Class 1A and Class 1B Material) Industry Standard 2024 (the RES Standard); and
• Online Safety (Designated Internet Services—Class 1A and Class 1B Material) Industry Standard 2024 (the DIS Standard).

In this Insight, we cover who needs to carry out a risk assessment and the obligations that two new industry standards impose.

Key takeaways

• The Phase 1 Standards came into effect on 22 December 2024.
• As soon as practicable, and by no later than 21 June 2025, providers of certain relevant electronic services (RES) and designated internet services (DIS) must conduct their own risk assessment to determine the likely risk of class 1A¹ and class 1B² materials being accessed, generated, distributed or stored using their service.
• The Phase 1 Standards impose a range of obligations depending on the service provider’s risk tier (ie Tier 1 (high), Tier 2 (medium) or Tier 3 (low)), or the type of service it is pre-assessed or defined to be if it has a unique risk profile (eg a High impact generative AI DIS or a dating service).
• New regulation of the access and exposure to class 1C³ and class 2⁴ material on service providers is forthcoming. By no later than 28 February 2025, industry bodies will submit the phase 2 industry codes for the eSafety Commissioner (the Commissioner) to assess whether they should be registered under the Act.
• The Government also tabled the statutory review of the Online Safety Act on 4 February 2025. It contains 67 recommendations, most notably: introducing a digital duty of care, raising the civil penalties for non-compliance and empowering the Commissioner with greater investigative, information-gathering and monitoring powers. The Government has not currently proposed any legislation to implement the recommendations, but it is a key area to watch with the federal election looming.

How did we get here?

The Act provides for industry bodies to develop new codes to regulate Class 1 and Class 2 materials. The industry bodies (including the Communications Alliance, Australian Mobile Telecommunications Association, Digital Industry Group, and Interactive Games and Entertainment Association) adopted a two-phase approach to develop these codes.

During phase 1, industry bodies drafted eight codes to regulate Class 1A and Class 1B material. Six of these industry codes were registered in 2023, and they apply to the following sections of the online industry: social media services, app distribution services, hosting services, internet carriage services, equipment providers and search engine services. The other two codes were not registered because the Commissioner was not satisfied that they provided appropriate community safeguards. As a result, the Commissioner developed and registered the RES Standard and DIS Standard.

Development of the phase 2 industry codes have been underway since July 2024, with public consultation concluding on 22 November 2024. These codes are intended to deal with class 1C and class 2 materials, which includes online pornography and other high-impact material.

Phase 1 Standards

Obligations that flow from risk assessment

The Phase 1 Standards impose a range of obligations depending on the service provider’s risk tier arising from the risk assessment (ie Tier 1, Tier 2 or Tier 3), or the type of service it is pre-assessed or defined to be if it has a unique risk profile (eg Telephony RES, High impact generative AI DIS or dating service).

A high-level summary of the obligations that may be applicable to certain RESs and DISs include:

• Implement, enforce and publish relevant terms of use.
• Ensure that there are systems in place to address circumstances where there is a breach of terms in respect of class 1A and class 1B material, including processes to report such material to an enforcement authority if it represents a serious and immediate threat to a person in Australia.
• Implement a system for disrupting access and distribution of class 1A materials through the RES or DIS.
• Implement a system to detect and remove class 1A materials that is accessible through the RES or DIS.
• Implement reporting arrangements to ensure compliance with the Phase 1 Standards.
• Ensure that features and settings that would minimise the risk of class 1A or class 1B material are incorporated before material changes are made to the service.
• Ensure end-users can effectively control associated communication functions.
• Implement policies, procedures and mechanisms to report or make complaints, and to respond to complaints.
• Notify the Commissioner of proposed changes to the features and functions of the service, unless the change will not significantly increase the relevant risk.
• Cooperate with and report to the Commissioner as required.

What’s next?

The Commissioner has stated that no enforcement action will be taken in the first six months of the Phase 1 Standards coming into effect, apart from in exceptional circumstances—eg in response to serious or deliberate non-compliance. The initial focus will be on working with industry bodies and service providers to raise awareness of their obligations under the Phase 1 Standards.¹³

The Commissioner has a range of enforcement options under the Act to address non-compliance with the Phase 1 Standards. These include:

• a formal warning
• an enforceable undertaking
• an injunction
• an infringement notice
• civil penalty proceedings or a court order requiring a service provider to cease its service.

Notably, failure to comply with the Phase 1 Standards may, currently, result in a penalty of up to $49.5 million.¹⁴ Service providers should promptly take proactive measures to ensure they are complying with their obligations under the Phase 1 Standards (including conducting a risk assessment if necessary) to avoid enforcement action by the Commissioner, which may commence from 22 June 2025.

Service providers should also be aware that new regulation of the access and exposure to class 1C and class 2 material is forthcoming. The Commissioner will undertake an assessment of whether the draft phase 2 industry codes meet the statutory requirements when they are submitted for registration, which must be no later than 28 February 2025.

Review of Online Safety Act

On 4 February 2025, the Government tabled the statutory review of the Online Safety Act (the Report). This independent review was initially delivered to the Government in October 2024 and makes 67 recommendations aimed at strengthening Australia’s online safety framework.

Key recommendations in the Report include:

• Legislating a statutory digital duty of care that is intended to place the onus on digital platforms to prevent online harms.
• Raising the civil penalties for breaches of the Act (ie the maximum penalty to be increased to the greater of 5% of global annual turnover or $50 million).
• Empowering the Commissioner with stronger investigative, information-gathering and enforcement powers, such as the power to require certain providers of online service to undertake compliance audits at their own expense.
• Requiring providers of services with the greatest reach or risk to provide an annual transparency report and publish a summarised version on its website.

There is currently no proposed legislation (or timetable for legislation) to implement the recommendations, but the Government has said it will continue to carefully consider all recommendations put forward in the Report and respond in due course. With the federal election looming, the Government’s (and Opposition’s) response to online safety reform is a key area to watch.

Source: Australian Attorney General’s Agencies

Andrew Clennell: The Trade Minister, Don Farrell, joins me now from Adelaide. Don Farrell, thanks for your time. You’re due to talk to the US Trade Ambassador tomorrow.

Minister for Trade: Pleased to be with you.

Andrew Clennell: And you spoke at two o’clock Friday morning to Commerce Secretary Howard Lutnick. How did your chat with Mr Lutnick go and what are you hoping to achieve with Mr Greer?

Minister for Trade: Look, Andrew, I did speak with Commerce Secretary Lutnick. That’s the second contact we’ve had with one another since he just recently was appointed to that position. I obviously expressed my disappointment that we had not been able to reach an agreement over the suspension of tariffs on steel and aluminium. But I did say that there’s obviously a further review, and you’ve talked about some of the issues that potentially arise, that the U.S. Government is undertaking by the early part of April. I indicated to him that we want to continue to talk with them. I find that discussion is the best way to resolve these issues. Not retaliatory tariffs, but discussion. What we need to do, Andrew, is find out what it is that the Americans want in terms of this relationship between Australia and the United States and then make President Trump an offer he can’t refuse.

Andrew Clennell: And did Howard Lutnick give you any indication of what they might be after? Because obviously you offered them some form of critical minerals deal. Did he give any, any ray of light you had a chance? I mean, I think you’ve said that President Trump allowed Australia or the Prime Minister to believe there was a chance when there wasn’t. Has he given you any suggestion there’s a chance, or was he holding the line and saying, look, this is our America First policy, that’s it.

Minister for Trade: Look, it wasn’t a pessimistic conversation, I’m pleased to say, Andrew. but look, he gave, you know, no assurances about what might happen in the next round of negotiations. Our job is to sit down and continue to talk. I think the important thing here to understand, Andrew, is that when President Trump, in his first iteration, gave Australia an exemption to Prime Minister Turnbull, it was one of over 30 exemptions that the United States gave to a range of countries around the world. So, more than 30 countries, including most of our competitors in the American market, were able to get an exemption. On this occasion, not one country, not one country got an exemption on either steel or aluminium. Now, that’s obviously, we think that’s bad news. We think it’s bad news, obviously, for the companies that trade in Australia with the United States. It’s also bad news for the Americans because what that has done is simply pushed up the price of steel and aluminium in the US market and that has to have an impact both on, on inflation and on jobs. So, part of my job is to continue to put the arguments to the Americans that in fact, this is the wrong policy to adopt. We should actually be doing the opposite. We should be making more free trade, more fair trade, rather than less trade.

And of course, one of the things that we’ve done in government is diversify our trading relationship. So, we have new agreements with the United Kingdom, we’ve got new agreements with India. I think we’re just about to get another offer from the Indians to even expand our trading relationship with India. We’ve signed a new agreement with the United Arab Emirates. This is like dealing with the Woolies warehouse of the Middle East. If you can get your products into the United Arab Emirates, then you can get it all around the Middle East. On Tuesday night, I spoke with my Korean counterpart, Mr. Ahn, and we’ve got identical problems with the United States. Of course, they sell a lot more steel into the United States than we do. But we are talking about how we can expand our relationship with Korea so that we can sell more product into Korea.

So, it’s a two-pronged approach. Andrew, we are continuing the discussions with the United States. We’ll continue to discuss. We’re not going down the track of some countries in applying retaliatory tariffs. I don’t think that will work, it hasn’t worked for any other country, why would it work for us? We want to explain our position and we want to get those exemptions for Australian companies because it’s good for prosperity in the United States, but it’s also good for prosperity in Australia.

Andrew Clennell: Well, I think you’ve got Buckley’s chance of arguing free and fair trade to the Trump administration, to be frank Minister, but what’s the worst-case scenario here? What’s the worst-case scenario? $30 billion, our exports to the U.S. Could we lose it all?

Minister for Trade: Look, I don’t believe so, Andrew. And just on that first point you made, Buckley’s chance. When I came to this job three years ago, we had $20 billion worth of trade bans in China. People told me, look, you will never, never, ever get that trade back. At the end of last year, the last of the products that had been subject to those trade impediments, namely crayfish, we got back into China. And since then, in the first month of that new trade, we got $188 million of crayfish sold into China. You can reverse these decisions, Andrew, so, don’t give up on us just yet. You can get countries to realise. You can get countries if you keep talking to them and you keep making your arguments, which is exactly what I intend to do. If you keep making your arguments, you can in fact convince countries that the policies that they are adopting are in fact counterproductive, just as they were with China.

Andrew Clennell: Okay, but what’s the worst-case scenario? What’s the worst-case scenario here?

Minister for Trade: Look, I wish I could tell you exactly what the American Government is finally going to do. To be honest with you, I suspect they don’t even know themselves right now. They’re conducting this review. They’re conducting the review in respect of every single trade agreement they have. It’s not just Australia, it’s every country. And my job in the discussions that go on in this coming week and in the weeks ahead is to get the best result for Australian producers, and that’s what I intend to do. And it’ll only be by reaching out, by having discussions, by putting our point of view that we’re going to get an acceptable outcome here.

Andrew Clennell: In any of these discussions, do you talk about the prospect of a phone call between Prime Minister Albanese and President Trump?

Minister for Trade: Oh, that’s way above my pay grade, I’m afraid, Andrew.

Andrew Clennell: Is it though? Kevin Rudd asks.

Minister for Trade: Well, he’s the ambassador, of course he asks, and that’s the job of the ambassador to do that representation on behalf of the Australian Prime Minister.

Andrew Clennell: How many times has he asked, do you know?

Minister for Trade: No, I don’t know the answer to that question, Andrew. But you know, we were amongst the first countries to ring President Trump when he was elected and congratulated him. The Prime Minister did that. And we of course got a second phone call with him to express our concerns about the direction that he was taking in respect of tariffs.

To the best of my knowledge, we were the only country in the world where he said, I’m going to give some consideration to not applying these tariffs to you. Now, I know we didn’t get the exemption in the end, but we were the only country that at least got him to say, look, we’re going to give some consideration to this. Ultimately, the consideration was that they would not do it.

As I’ve said on Sky previously, the people around President Trump, particularly Mr. Navarro, I think, were determined that they weren’t going to go down the track that they went down last time. So, I mentioned before over 30 countries got exemptions for steel and aluminium. They were determined, the people around President Trump were determined not to go down that track again. They were going to apply the tariffs, the 25 per cent tariffs, and no country was going to get an exemption. But look, we will continue to talk. As I said, I’ve spoken to Commerce Secretary Lutnick on Friday morning, tomorrow US time, so, Tuesday morning, I think 7:30, I’m going to have my conversation with Jamieson Greer. We’re going to work out firstly what it is that the Americans want out of this arrangement, because it’s still not clear to me what it is that they are seeking. But once we find that out, we’ll work through this issue and we’ll work through it in Australia’s national interest.

Andrew Clennell: Why haven’t you been to the US, yourself?

Minister for Trade: Look, can I say this, Andrew, modern communications these days, a telephone call, a video conference, which is what I’ll be doing with Jamieson Greer, Ambassador Greer, on Tuesday, we’re getting our message across. After that first conversation between President Trump and Prime Minister Albanese, we embarked on a course of action which was determined in consultation with the officials in the United States about how best to progress our concerns about the introduction or the reintroduction of tariffs. We followed that. We followed that course of action and we followed it until last Wednesday when it became clear that the Americans were not going to give us an exemption. So, we had a plan. We had a plan for how we deal with this issue. We were hopeful, certainly based on early discussions, that we would get a successful result here. In the event that that didn’t happen. But we’re not giving up. We’re continuing the talks. And in fact, in lots of ways, the talks will be beefed up in the weeks and the months ahead as we try and resolve all of these issues, but these are not easy issues, Andrew.

Andrew Clennell: No, they’re not. But Peter Dutton says you haven’t got the relationships. He’s pointed the finger at Kevin Rudd. The suggestion is Albanese, the Prime Minister, was seen as too close to Joe Biden. Penny Wong found out from the media that this had occurred. What do you say to all that? I mean, his contention as we go into an election campaign is their government would have better luck with the US Administration. What do you say to that?

Minister for Trade: Look, Peter Dutton couldn’t go two rounds with a revolving door Andrew. What happened? When we came to government, there were $20 billion worth of tariffs and trade impediments with the Chinese. If Peter Dutton’s so good at building relationships and solving problems, they didn’t get a cent, they didn’t get a cent or a single tariff removed in that previous three years in government. We got the best result or the best response of any country in the world. We got a consideration by the President to review these tariffs. Now ok, it didn’t ultimately result in us getting the tariffs removed and we accept that. We accept that situation. I’d ask your listeners, who do you think is going to be better to negotiate with the United States? Somebody with a proven record of getting results or somebody, when they had the opportunity to get some results, did nothing. Did nothing. They did nothing.

Andrew Clennell: What would a tariff do to the beef industry?

Minister for Trade: It would certainly have a clearly a negative impact. The United States I think is, if it’s not the largest export market for our beef industry, it would have a significant impact. We are expanding our beef exports, our beef exports right now thanks to the Albanese Labor Government, are the best that they’ve ever been. We’re exporting more beef than we ever have. The significance, of course to the United States about our beef exports is that most of it goes into McDonald’s hamburgers. And if you push up the price of those beef exports by 25 per cent or 10 per cent or whatever the figure is, then you simply push up the price of hamburgers in the United States. It doesn’t make any sense, Andrew. It doesn’t make any sense at all.

Andrew Clennell: Sure.

Minister for Trade: You want to be pushing prices down. You don’t want to be pushing them up.

Andrew Clennell: Indeed. There’s also speculation the trade war could harm the PBS somehow and cause pharmaceutical prices to go up. How would that occur and what do you make of that speculation?

Minister for Trade: Well, it simply is speculation. That’s all it is, Andrew. I’ve not heard one comment from any person in the United States that refers to the PBS. We’ve got a terrific health system. We’re continuing to improve all the time. Minister Butler is always coming up with new ideas to improve our health system. The PBS is an essential part of our health system and there will be absolutely nothing that the Americans can do to impact on our health system or the PBS system. And we certainly, we certainly would not contemplate doing anything at any stage that makes our health system more expensive. We want to put downward pressure on the cost of health and we’re going to continue to do that, especially if we get re-elected in a few weeks’ time.

Andrew Clennell: It’s been reported the deal that Australia put on the table was access to our critical minerals like lithium, manganese, what’s the nature of that deal? Presumably America would still have to pay for the minerals. Would they get the minerals at a cheaper rate? Would they have the first right of refusal on the minerals? What are the minerals to be used for? Making mobile phones, electric cars and the like?

Minister for Trade: Yeah, look, Australia is very fortunate in the sense that we have either the largest or the second largest reserves of all critical minerals and rare earths in the world. Now, critical minerals are different from other minerals. If you go up to the Pilbara, you can see iron ore as far as the eye can see, Andrew. Critical minerals tend to be in much smaller deposits and they’re much deeper down. Two things about that. They are more expensive to extract and they take longer to dig out of the ground and they don’t last as long so you’ve got to keep finding new resources. What this means for what we were proposing to the Americans was continued and improved investment in getting access to those critical minerals. We’ve got some of the most sophisticated miners in Australia, Andrew. We’ve got a very sophisticated mining operation here, much more sophisticated than the Americans. But the thing we often don’t have is access to capital. So, the offer to the Americans was, look, we’ll work with you. You want these critical minerals, you want them for electric batteries in cars, you’ve mentioned some of the other things, mobile phones, all of these sorts of things. But the process of extraction is expensive, we need capital. We want to work with other countries. We want to particularly work, for instance, with the Europeans. We’ve made them some offers in this regard. It’s not about cheaper prices, it’s not about preferred access. It’s about ensuring that they’ve got a reliable supply chain to ensure that when they need these critical minerals, you’ve got a reliable country like Australia who can provide them.

Andrew Clennell: So, would that be Australian money or American money? When you talk about increased investment –

Minister for Trade: Both. Both.

Andrew Clennell: Okay. So, an Australian financial offer was put on the table?

Minister for Trade: No, it wasn’t a financial offer in that sense. It was a way forward to try and get support both in Australia and in the United States for extracting these critical minerals. So, if we’re going to go down the track of decarbonising our economies, this is the way we need to go. But it’s going to require investment, significant investment. The Australian Government is already making significant investments in this area. But to get to where we want to get to in terms of that net zero project, then we need more investment and – 

Andrew Clennell: Do you see the hand of Elon Musk? Do you see the hand of Elon Musk in any of this? The keenness of the Americans for these critical minerals.

Minister for Trade: Well, look, they didn’t accept our offer. So, if Mr Musk was involved in this, then he doesn’t appear to have influenced the result, if that was what he was after. To the best of my knowledge, Mr. Musk was not involved in any of these discussions that I –

Andrew Clennell: All right, no worries. We’re nearly out of time. Overnight, the PM reiterated in a meeting with European leaders he would consider sending peacekeepers to Ukraine if there was peace. That’ll be controversial with a lot of Australians because it’s not our region. We know Peter Dutton doesn’t support this. Is the PM trying to muscle up here after Peter Dutton has continually called him weak? What’s the motivation to get involved in this conflict?

Minister for Trade: Andrew, for the last 80 years, in other words, since the end of World War II, Australia has been involved in peacekeeping missions all the way around the world. We’ve come out right from day one, Prime Minister Albanese has been very clear and very strong on this, we support Ukraine. Ukraine’s fight for democracy. Ukraine’s fight for its sovereignty is Australia’s fight. It’s Australia’s fight. We’ve made significant financial contributions to Ukraine to ensure that they can defend themselves from this illegal and immoral monster, Putin, and we’ll continue to do that. And if Prime Minister Starmer says, look, will you contribute to peacekeeping? I think that’s the right thing to do. Look, it’s not all about popularity and so forth, but it’s the right thing to do. We want to see peace around the world. The best thing that Australia can do in terms of any international relationship is to support peace. And if we can make a contribution to that peacekeeping effort, then I think we should. And I think Mr. Dutton is completely on the wrong track here. Australians support the Ukrainian fight. I was on the steps of Parliament House just a couple of weeks ago with Premier Malinauskas. His background is Lithuanian. He knows exactly what happens if you don’t stand up to bullies like Putin. It’s in our interest to defend democracy in Ukraine. It’s in our interest to be part of a peacekeeping force when there’s peace.

Andrew Clennell: Finally, and briefly, there was something of a blow to the government late last week with the default market offer out, that Australians face price rises of up to 10 per cent on their power bills. Will the government’s electricity subsidy be extended and increased in the budget?

Minister for Trade: Well, you know the answer to that question, Andrew. You’ll have to ask the Treasurer, and you’ve only got a few more sleeps to find out what’s going to be in the next budget.

Andrew Clennell: Well, I might ask him on the show next week. Thanks very much, Don Farrell.

Minister for Trade: Nice talking with you Andrew. 

Source: Murray Darling Basin Authority

Better connecting vocational education and training (VET) and higher education will help more people gain the skills and qualifications they need.

That’s according to a new report released today from Jobs and Skills Australia, entitled Opportunity and Productivity: Towards a Tertiary Harmonisation Roadmap. 

The report says a more connected tertiary education system has the potential to lift workforce productivity and skill levels and help build the workforce we will need in the future. 

The report also finds that better connecting VET and higher education will help improve access to tertiary education and improve the status, sustainability, and impact of TAFE and the wider VET system.  

The Australian Universities Accord was clear that more people need to participate in tertiary education in the future to deliver the large and skilled workforce that Australia needs. 

In response to the Accord, the Albanese Labor Government invested $27.7 million as part of first steps towards breaking down barriers between VET and higher education to ensure a more seamless and aligned tertiary education system.  

It also includes facilitating better student pathways by improving guidance on credit and recognition of prior learning and streamlining regulation for dual sector providers.  

This complements the Government’s investment in establishing more nationally networked TAFE Centres of Excellence, which are built on partnerships between TAFEs, universities and industry. 

It also complements funding for TAFEs and other high quality not-for-profit specialist providers to significantly expand their higher education offerings, including delivering degrees.  

Jobs and Skills Australia’s report builds on this critical work already underway with additional recommendations to further support tertiary harmonisation over the longer term. 

The Government will consider the report’s recommendations and respond in due course, including the establishment of a council with state and territory representation to drive tertiary harmonisation reform. 

Quotes attributable to Minister for Education Jason Clare: 

“We are not going to fix the skills shortages we have, and will have, unless we better integrate higher education and vocational education and training. 

“We have already started work on breaking down the artificial barrier between uni and VET, but there is a lot more to do.

“Breaking down these barriers and allowing people to move more seamlessly between VET and higher education will give people the skills they need.”  

Quotes attributable to Minister for Skills and Training Andrew Giles: 

“When we came to government, we were faced with the worst skills shortage in more than half a century, after a decade of neglect by the Liberals, where they ripped billions of dollars out of TAFE and training. 

“This report highlights how tertiary harmonisation is an opportunity to create deeper connections and greater collaboration between our two high-quality tertiary education sectors.

“Our investment in Free TAFE and getting more apprentices into the workforce is testament to our commitment to ensure every Australian has an opportunity to attain higher education which leads to good, secure jobs.”