OECD economists slash growth estimates and warn trade wars may push prices up
Patrick Commins
The Paris-based OECD – a 38-member grouping of rich countries, including Australia – on Monday evening issued a more downbeat assessment of the global economy, laying the blame on Donald Trump’s tariffs.
The OECD’s economists slashed their estimates for Australian real GDP growth from 2.5% in 2026 to 1.8% and well below the Reserve Bank’s forecast of 2.3%.
The same report warned the rise in protectionism would push consumer prices higher and could force central banks to start lifting interest rates to contain any inflationary resurgence – although the inflation outlook for Australia remained largely unchanged and even lower in 2026 as slower growth bites.
Jim Chalmers will warn Australia must focus on resilience over retaliation as the Trump administration overturns the rules that have governed the global economic order for the past four decades.
The treasurer will deliver a major economic address in Brisbane at lunchtime today, and we’ll bring that to you live. Read more:
Key events
Lambie backs Turnbull Aukus criticism
Tasmanian senator Jacqui Lambie was also on the program, and responded to those comments from Malcolm Turnbull that Trump would be wondering “who are these dumb guys who agreed to this deal” – regarding Australia’s involvement in Aukus.
Lambie backed his comments, and said:
Of course they’re (the US) laughing … and it’s only going to be a matter of time before he asks for more money … I think this is really highly embarrassing the way this deal has gone down, and I would never have given him that cheque.
‘Tariffs are a self-imposed own goal on Americans’, Rishworth says
Over the weekend, the trade minister Don Farrell told Sky News he was going to make Donald Trump “an offer he can’t refuse” in response to the US tariffs on steel and aluminium. He said at the time:
I find that discussion is the best way to resolve these issues. Not retaliatory tariffs, but discussion. What we need to do … 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.
The social services minister, Amanda Rishworth, was on the Today Show this morning, and was asked what this offer is? She didn’t answer directly, but said:
Don is a great negotiator … that managed to get some of those very difficult tariffs off our goods we import to China. But when it comes to the US, we’re making our position very clear that we want to see free and fair trade and that the tariffs that have been imposed on our steel and aluminium are unjustified.
She added that “tariffs are a self-imposed own goal on Americans”.
This is something that we are pursuing relentlessly to make sure that our producers are supported and that we do get exemptions …
Good morning
Emily Wind
And happy Tuesday – Emily Wind here, signing on for blogging duties. I’ll be bringing you our rolling coverage for most of today.
As always, you can reach out with any tips or questions via email: emily.wind@theguardian.com. Let’s go.
Greens call to scrap negative gearing and capital gains tax ahead of budget
Sarah Basford Canales
The Greens say “it’s time” for Labor to consider scrapping negative gearing and capital gains tax discounts ahead of the federal budget next week.
The minor party’s housing spokesperson, Max Chandler-Mather, and economic spokesperson, Nick McKim, wrote to the treasurer yesterday asking him to consider winding back the Howard-era changes that give property investors tax break incentives to accumulate more real estate.
Jim Chalmers conceded last year he had asked the Treasury department to get advice on the tax changes but insisted it was not part of Labor’s agenda.
Chandler-Mather and McKim described the tax breaks as “deeply unfair”, adding it was tilting the playing field in favour of “wealthy property investors” and making it harder for first-time homebuyers.
The Greens have proposed phasing out both negative gearing and the CGT discount, but grandfathering access to negative gearing for people with one existing investment property.
A Parliamentary Budget Office analysis, requested by the Greens last year, showed tax revenue forgone due to the federal government’s policies of negative gearing and capital gains tax discounts will total about $165.58bn between 2024-25 and 2033-24. The letter said:
It’s time for your party to make a choice – do you represent the property investor who owns 100 houses or do you stand with the young teacher or nurse who has given up on owning a home because negative gearing and capital gains discounts have stacked the deck in favour of the wealthy?
Latest polling puts Labor up ahead of the Coalition
Labor would be returned to government with an increased majority if the federal election was held tomorrow, the latest Roy Morgan survey finds today.
The poll puts Labor on 54.5% (up 3%) ahead of the Coalition on 45.5% (down 3%) on a two-party preferred basis.
It is the ALP’s largest lead in the Roy Morgan survey for more than 18 months since August 2023, tallying with our Essential poll out today that shows Anthony Albanese’s approval rating in positive territory for the first time since the voice referendum.
The Roy Morgan government confidence rating increased three points to 84.5, with 35% of Australians saying the country is “going in the right direction” (up 2%) compared with 50.5% (down 1%) who say the country is “going in the wrong direction”.
The Coalition primary vote lead was significantly reduced this week with support down 3% to 34%, while ALP support increased 2.5% to 32.5% and support for the Greens was unchanged at 13.5%, Roy Morgan said.
Support for One Nation was stable at 5% and support for independents was unchanged at 10.5%. Michele Levine, boss of Roy Morgan, says:
The latest Roy Morgan survey shows the Albanese Government gaining ground for a second straight week. Cyclone Alfred caused extensive disruption to millions of Australians in the last two weeks, but it has not hurt the Government’s standing – which has improved during this period.
For the first time in over nine months the Albanese Government has a two-party preferred lead that would deliver the party a clear majority in Parliament – if this support holds up until the election.
Opposition Leader Peter Dutton made a rare misstep two weeks ago when the Coalition asserted an L-NP Government would end working from home arrangements and force public servants to return to the office five days a week. Although the Opposition Leader has walked this pledge back in recent days, it appears to have done significant damage to the Coalition’s broader support.
More on the OECD outlook
For more on the OECD’s gloomy outlook, you can see our global story.
In short: The Paris-based boffins have downgraded the prospects for global growth this year and next, including a sharp hit to activity in the US, Canada and Mexico. The OECD said in its interim economic outlook report:
Significant risks remain. Further fragmentation of the global economy is a key concern. Higher and broader increases in trade barriers would hit growth around the world and add to inflation.
A broad-based further increase in trade restrictions would have significant negative impacts on living standards.
Read more:
OECD economists slash growth estimates and warn trade wars may push prices up
Patrick Commins
The Paris-based OECD – a 38-member grouping of rich countries, including Australia – on Monday evening issued a more downbeat assessment of the global economy, laying the blame on Donald Trump’s tariffs.
The OECD’s economists slashed their estimates for Australian real GDP growth from 2.5% in 2026 to 1.8% and well below the Reserve Bank’s forecast of 2.3%.
The same report warned the rise in protectionism would push consumer prices higher and could force central banks to start lifting interest rates to contain any inflationary resurgence – although the inflation outlook for Australia remained largely unchanged and even lower in 2026 as slower growth bites.
Jim Chalmers will warn Australia must focus on resilience over retaliation as the Trump administration overturns the rules that have governed the global economic order for the past four decades.
The treasurer will deliver a major economic address in Brisbane at lunchtime today, and we’ll bring that to you live. Read more:
Welcome
Good morning and welcome to our live news blog. I’m Martin Farrer with the best overnight stories and then it’ll be Emily Wind to take the reins.
Our top story this morning is that our latest Essential poll shows more Australians approve of Anthony Albanese as the country’s leader than disapprove of him. That’s the first time he’s been in positive territory since the voice referendum 18 months ago stalled his government’s momentum. On a two-party preferred basis, the major parties are neck-and-neck at 47% each, with 6% undecided. A separate Roy Morgan poll today puts Labor ahead of the Coalition by 54.5% to 45.5% on a two-party preferred basis.
Jim Chalmers will warn Australians today that the country must focus on resilience over retaliation as the Trump administration overturns the rules that have governed the global economic order for the past four decades. As the OECD downgraded the prospects for global growth this year and next, Chalmers will say that Donald Trump’s tariffs are “self-defeating and self-sabotaging”, but Australia will not “race to the bottom” in its reaction.
There’s also a report this morning that will shock many Australians because it shows that swimming standards are falling. Research by Royal Life Saving Australia says nearly half of all year 6 students can’t perform the basic benchmarks of swimming 50m and treading water for two minutes – and they’re not improving in high school.
