Australian news and politics live: Chalmers reveals first batch of economic reform invitees

Australian superannuation investors have been spared from a potentially costly new tax, after the United States confirmed it will withdraw a controversial measure targeting foreign capital from Donald Trump’s signature economic legislation.

US Treasury Secretary Scott Bessent announced on Friday that Section 899 — dubbed the “revenge tax” — would be removed from the President’s “Big, Beautiful Bill” following progress on a new G7 tax agreement.

Treasurer Jim Chalmers welcomed news of the change, calling it a “welcome one for Australians and for the Australian business and institutional investor community”.

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Ex-Australian ambassador to the US Joe Hockey has warned if Australia doesn’t take a US request to raise defence spending seriously it could become a “tier three” ally.

“But the fact is, we do need the United States. They’re the biggest investor in Australia. They are crucial to the Indo Pacific.

“They’ve just shown the world their capability to deliver on their objectives, and importantly, they are a force for good, and have been throughout our history.

“Now we have an open display of incredible power to be able to deliver on the objectives of the Western world, and we should be embracing that, not not fearing it, not being worried or afraid to go to the Oval Office or anywhere else.

“So the danger is at the moment, that we can slip from being a tier one ally of the United States to a tier three ally.”

Ex-Australian ambassador to the US Joe Hockey said he could understand Anthony Albanse’s hesitation to lift defence spending while NATO leaders charge forward in expanding their budgets as his focus is on the Indo-Pacific.

But Mr Hockey warned that Australia needed to step up amid Beijing “aggression”.

“This is Beijing’s aggression that we need to stand up to. Chinese people are great people. It is Beijing,” he told Sky News on Friday.

“I can understand where Anthony Albanese is coming from.

“His focus is not really Europe, his focus is not really the Middle East. His focus is China and the Indo Pacific.

Ex-Australian ambassador to the US Joe Hockey says Australia needs to seriously consider a US request to boost defence spending and should “get on with building” defence infrastructure amid an increasingly volatile international environment.

Speaking to Sky News in Washington on Friday, Mr Hockey said the national defence department was “in a mix” and Richard Marles commitment to restructure it proved he knew it.

“If they’re serious about dealing with defence, they should treat it almost like the Olympics,” he said.

“Because defence now has to deliver an Olympic Games every year in order to meet its infrastructure needs.

“Set up a separate entity that is responsible for building and delivering all the defense infrastructure that we need.

“Keep it separate from the policy department. It’s now time to break them up.

“It’s now time to put it under some business leadership like you would the Olympics, and get on with building the stuff.”

Former Australian ambassador to Australia Joe Hockey says Anthony Albanese, Jim Chalmers nor Australian superannuation funds can’t claim credit for US Treasury Secretary Scott Bessent’s call to scrap a “revenge tax”.

The tax was included in Donald Trump’s “One Big, Beautiful Bill” and threatened to cut billions from returns of Australian superannuation funds.

The Prime Minister on Friday morning welcomed Secretary Besson’s call for lawmakers to walk it back and told reporters he had raised the issue with the US official in Canada on the sideline of the G7.

Treasurer Jim Chalmers had also personally raised it with Secretary Besson and a string of Australian superannuation funds had travelled to Washington to lobby against it too.

“He identified the G7 - which we’re not a member of - as being responsible. So, let’s be realistic about it. Calm down,” Mr Jockey told Sky News on Friday.

Anthony Albanese has noted an international relations win this morning after US Treasury Secretary Scott Bessent scrapped a “revenge tax” that threatened to cut billions from returns of Australian superannuation funds.

The tax had been a part of Donald Trump’s “One Big, Beautiful Bill” which included initiatives to retaliate against countries that impose taxes the US President considered unfair.

The Prime Minister told reporters in Sydney on Friday that it was an issue he had personally raised with Mr Bessent when they met on the sidelines of the G7 summit in Canada and welcomed him asking lawmakers to walk it back.

“This would adversely impact on an Australian investment if it had have been implemented, particularly on investment from superannuation companies,” he said.

“One of the things that we held earlier this year, in Washington DC, was a round table of Australian investment funds who are willing and keen to invest in the United States.

“It’s just one way in which the Australia-US economic relationship is an important one.”

Prime Minister Anthony Albanese has pushed back against mounting pressure from the White House to sharply increase Australia’s defence budget, insisting his government’s current plans are both responsible and in the national interest.

Speaking to reporters in Sydney on Friday, Albanese brushed off comparisons to Spain, which recently faced new US tariffs after refusing to lift its own defence spending.

“There’s a lot of focus on what’s happening with Spain and the United States, but my job is to look after Australia’s national interests,” he said.

“We put forward our budget, we took it to an election, and we received overwhelming support from the Australian people,” Mr Albanese continued.

“We’ll continue to invest in the capabilities that Australia needs—and we’ve already committed to increasing defence spending by $57 billion over the medium term, with more than $10 billion in the short term.”

He added: “I’m not going to comment on things between Spain and the United States. My focus is on ensuring Australia is secure, and that’s exactly what our defence investments are designed to do.”

Home Affair Minister Tony Burke has stressed that the fight against such groups is ongoing, after Terrogram was listed as a terrorist organisation.

“You never stop chasing these characters down,” he told ABC RN.

“This listing won’t be the last thing we have to do against far-right white supremacist groups. There’ll be more. Some groups have previously been listed, but Terrorgram is the first of this particular kind.”

Terrorgram has officially been listed as a terrorist organisation, with Home Affairs Minister Tony Burke warning that this move is just the beginning of Australia’s crackdown on far-right white supremacist groups.

Speaking to ABC Radio National on Friday morning, Mr Burke highlighted the unique nature of Terrorgram compared to other listed terrorist organisations.

“When people normally think about a terrorist organisation, they imagine small groups meeting in secret, recruiting and operating as a cell,” Mr Burke said. “But Terrorgram is different. Imagine a large chat group dedicated to hatred and violence—members might not even know each other, yet they’re united by a common threat to Australians.”

He described Terrorgram as a platform that not only spreads white supremacist ideology and extremism, but also encourages the sharing of violent acts and “how-to” guides for carrying them out.

“This is sometimes loosely referred to as extreme right-wing terrorism,” Mr Burke explained. “It’s about white supremacism and similar views. These groups don’t just share hatred—they share instructions for violence, posing a direct threat to the safety of Australians.”

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Opposition defence spokesman Angus Taylor has reiterated the Coalition’s push for defence spending to rise to “at least” 3 per cent of GDP, warning that Australia must respond as authoritarian regimes such as Russia and Iran become more assertive.

The call comes as Labor considers lifting defence funding above its current level of around 2 per cent of GDP, though its long-term projections only reach 2.3 per cent within the next decade.

Mr Taylor stressed the importance of greater investment in defence:“It’s essential Australia be in a position to stand on its own two feet alongside our allies like the United States and the UK, and that does mean we have to spend more on defence,” he told ABC News Breakfast.

When questioned about whether a future Coalition government would seek to match NATO’s new 5 per cent target, Mr Taylor said the immediate focus should be on fully funding the capabilities outlined in Labor’s Defence Strategic Review.

“Labor has not funded that appropriately and it needs to be funded. We do need 3 per cent of GDP to fund our own plan and that’s got to be the first port of call.”