Labor’s budget cash splash takes on Trump storm

Good morning. Here's what happened overnight and what you need to know today.

---

1.

Federal Budget: Handing down his fourth budget last night, Treasurer Jim Chalmers framed the government’s plans around two key measures likely to be front of mind for voters ahead of the upcoming federal election. First, Chalmers unveiled plans to address the cost-of-living crisis by putting an extra $268 in the pockets of almost all Australians from July 2026, and $536 the following, as well as an increase to the Medicare levy low-income thresholds. Second is the $3 billion injection to support production of green aluminium and iron ore. While notably absent from the Budget was any direct reference to President Trump, Capital Brief reports that the green metals investment via the Future Made In Australia plan appears designed to head off the impacts of Trump's freewheeling economic aggression. When asked by Capital Brief how he could rely on Treasury's forecasts during such global turbulence — and the choices made by the Trump administration — Chalmers conceded there was significant uncertainty in the outlook for the US, but he was confident about Australia's ability to define its own future amid the “storm”, "dark shadow" and dangers offshore. (Capital Brief)

2.

Budget reax: Independent economist Chris Richardson described Labor’s surprise tax cuts as “not great, but also not dangerous”, summing up broader reactions to a budget seen as politically savvy but lacking economic reform. The Coalition said it would oppose the $17.1 billion in tax cuts, calling them “an election bribe by a weak Prime Minister.” The Greens called it a “tiny tax tweak” but will not block it. BCA chief executive Bran Black welcomed the tax relief but said “we have not seen the policies or reform to drive investment and business-led growth”. KPMG noted the tax cuts are debt-funded, not backed by windfalls, and warned public spending is at its highest share of the economy since WWII. Richardson, a former Treasury official, praised the government’s move to ban non-compete clauses for those earning up to $175k per year as “real reform”, saying “it is the loveliest thing in the budget.” Labor’s pre-election budget projects gross debt will crash through $1 trillion for the first time and a $42.1 billion deficit next year. (Capital Brief)(ABC News)(AFR)

3.

War talks: Russia and Ukraine have agreed to a truce in the Black Sea and will work towards mechanisms to ban strikes against energy infrastructure. The White House published separate statements detailing the outcome of three-day technical talks held with delegations from Russia and Ukraine in Saudi Arabia. Earlier on Tuesday, Russia had said that details of the talks would not be made public until the US published agreed statements. The two countries agreed to “ensure safe navigation” and “prevent the use of commercial vessels for military purposes in the Black Sea.” The US will help “restore Russia’s access to the world market for agricultural and fertilizer exports, lower maritime insurance costs, and enhance access to ports and payment systems for such transactions.” President Trump was reportedly able to secure agreement from the leaders for a 30-day truce covering energy infrastructure last week, however specifics around its enforcement were unclear. (White House Ukraine statement)(White House Russia statement)(Capital Brief)

4.

Spy hire: A network of companies operated by a secretive Chinese tech firm has been trying to recruit recently laid-off US government workers, Reuters reported citing research and job ads. Max Lesser, a senior analyst at the Foundation for Defense of Democracies, said the companies were “part of a broader network of fake consulting and headhunting firms targeting former government employees and AI researchers.” The companies shared overlapping websites, were hosted on the same server, or had other digital links. Their websites were hosted alongside Smiao Intelligence, whose site became unavailable during reporting. Attempts to contact the companies led to fake addresses, disconnected phones, and deleted ads. Job postings by RiverMerge Strategies and Wavemax Innovation sought workers with US government and policy backgrounds. Reuters could not determine any link to the Chinese government or whether any workers were recruited. The FBI warned Chinese intelligence officers can pose as recruiters. A Chinese embassy spokesperson said Beijing was unaware of the entities and respects data privacy and security. (Reuters)

5.

Quantum raise: Quantum computing startup PsiQuantum is raising at least USD750 million ($1.2 billion) at a USD6 billion pre-money valuation, according to sources cited by Reuters. The US and Australian governments have both invested in PsiQuantum, with the Labor-led federal and Queensland governments investing a combined $940 million in the Californian startup in 2024. The startup aims to use manufacturing techniques from the semiconductor industry to make quantum chips with the potential to enable breakthroughs in medicine, engineering and green technology. In September last year, PsiQuantum co-founder and chief scientific officer Pete Shadbolt said that the company will need more funding to make good on its ambition of building the world’s first commercially useful quantum computer in Brisbane by the end of 2027. Earlier this month, Opposition Leader Peter Dutton threatened to scrap the federal government’s $470 million PsiQuantum investment, while Queensland reviews its own stake in the startup. (Reuters)(Capital Brief)

6.

Trade war: India is considering cutting tariffs on over half of US imports to the country, as it seeks to mitigate impending reciprocal tariffs imposed by the US administration, according to government sources cited by Reuters. India would cut tariffs on 55% of US imports, amounting to USD23 billion ($36.4 billion) worth of goods, in the first phase of a trade deal currently under negotiation. The US goods which India is open to reducing tariffs on, are currently subject to tariffs ranging from 5% to 30%. Within this category, India is ready to lower or cancel tariffs entirely. US President Donald Trump’s worldwide tariffs due to come into effect from 2 April could hit 87% of India’s total exports to the US, worth USD66 billion. USD11 billion worth of Indian pharmaceutical and automotive exports could be at risk. Trump has previously referred to India as a "tariff abuser.” (Reuters)(Capital Brief)

7.

EU break: Apple is set to stave off a possible fine and an EU order over its browser options on iPhones after it made changes to comply with landmark EU rules, Reuters reported citing unnamed sources. The European Commission, which launched an investigation in March 2023 under the Digital Markets Act (DMA), is expected to close its investigation early next week. It had been concerned that Apple’s design of the web browser screen on iPhones may hinder users from switching to a rival browser or search engine. The Commission’s decision to close the investigation will come as it hands out fines to Apple and Meta Platforms for DMA violations and issues orders to comply with the legislation, the sources told the publication. In that case, the issue with Apple is whether it imposes restrictions that hinder app developers from informing users about offers outside its App Store free of charge. The Meta case concerns its no-ads subscription service launched in Europe in November 2023. (Reuters)

8.

New rules: The UK’s Financial Conduct Authority (FCA) has unveiled a five-year plan to be more helpful to consumers and improve financial services. The watchdog has been accused of stifling innovation and investment with its overzealous regulatory obligations, responding with the new bid to “deepen trust, rebalance risk, support growth and improve lives.” The 2025-2030 strategy will see the FCA change its approach to supervision to become more efficient, including pursuing a “less intensive approach” to firms seeking to do the right thing, streamlining how it sets its supervisory priorities, and reviewing whether it can stop requiring certain data returns. The FCA will scrap over 100 pages of regulations and will withdraw hundreds of supervisory publications to give more flexibility to firms. The current Labour government plans to take action if regulators are found to be getting in the way of the country’s growth required to rebuild public finances. (FCA)(FT)(Capital Brief)