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World News

Japan, Australian leaders share concern over East, South China Seas

TOKYO/SYDNEY (REUTERS) – Japanese Prime Minister Shinzo Abe and his Australian counterpart, Scott Morrison, shared serious concerns over various moves in the East and South China Seas in their video meeting on Thursday (July 9), a Japanese government spokesman said.

Asked at a media briefing if the two leaders’ concerns expressed in the meeting were directed to China, Japanese Deputy Chief Cabinet Secretary Naoki Okada declined to elaborate.

Australia too did not single out any particular country, though the meeting comes after several incidents involving China.

“They expressed serious concern about recent negative developments in the South China Sea, including the continuing militarisation of disputed features, the dangerous and coercive use of coastguard vessels and ‘maritime militia’,” an Australian government statement read.

In April, Vietnam lodged an official protest with China following the sinking of a Vietnamese fishing boat it said had been rammed by a Chinese maritime surveillance vessel near islands in the disputed South China Sea.

China claims most of the energy-rich South China Sea, within a U-shaped “nine-dash line” on its maps that is not recognised by its neighbours, several of whom have overlapping claims.

The United States has accused China of pushing its presence in the South China Sea while other claimants are pre-occupied with the coronavirus pandemic.

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World News

Coronavirus outbreak thwarts rescue plan for Australia's universities

SYDNEY (BLOOMBERG) – Plans to fly international students into Australia in time for the new semester later this month have collapsed due to a coronavirus outbreak that’s engulfed the country’s second-most populous state.

A pilot programme designed to allow 350 foreign students to resume their studies was postponed after the Australian National University (ANU) and Canberra University expressed concerns over the trajectory of the virus that’s prompted authorities to lock down the city of Melbourne for six weeks.

The universities, which had planned on paying for the students’ two-week mandatory quarantine with the help of the Australian Capital Territory government, said they’d press pause on the plans until the outlook becomes more clear.

“This is not an end to the programme – just a delay,” Professor Brian Schmidt, the ANU’s vice-chancellor and president, said in a statement Thursday (July 9). “We remain committed to ensuring our students can continue their studies back in Australia when the time is right.”

Similar trials in other states, including across Victoria and South Australia, were also thwarted by the recent surge in cases.

It’s a blow to the A$38 billion (S$36.8 billion) export industry, Australia’s fourth largest. The sector has become reliant on overseas students who make up roughly a quarter of all enrollments – the second-highest ratio in the world after Luxembourg – and 40 per cent of student revenues due to the higher fees they are charged.

The fallout from the virus is expected to cut revenues by A$16 billion by 2023.

The pandemic isn’t the sector’s only worry. With 37 per cent of its international university students coming from China in 2019, recent escalating tensions between Canberra and Beijing is adding to pressure on the industry.

Victoria state, which is the centre of the current outbreak, will also be hit by the double-barrelled setback. Its two largest exporters by value are the University of Melbourne and Monash University, and its economy is underpinned by education and tourism.

“Unfortunately, the reinstatement of Stage 3 restrictions across metropolitan Melbourne means we are unlikely to be able to progress with these plans at this time,” the University of Melbourne’s vice-chancellor Duncan Maskell said in a statement. “However, we will be ready to respond quickly when government policy changes and the time is right.”

It could be the final nail in the coffin for students waiting to recommence, or begin, their studies in Australia. The frustration is palpable within the international student cohort, and could risk damaging future demand.

Monash University student Jacky Zhang, 19, who is stuck in Guangzhou, China, has been waiting, alongside tens of thousands of others, for the Australian government to help him return to the country since December 2019 to continue his studies.

“We all had hope that Australia would bring us back,” he said, pointing to Canada, the UK and parts of Europe that have already permitted the return of international students.

The government’s sluggish response to predicaments like his, and the unpredictable messaging from the universities, have given him reason to consider transferring his degree to Europe or Malaysia, he said.

“They keep giving us hope, but we end up with disappointment.”

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World News

Melbourne's second lockdown will exact a 'catastrophic' cost

MELBOURNE (BLOOMBERG) – Melbourne’s Hotel Esplanade was just emerging from a two-month lockdown when it learned a second wave of virus infections would force it to shut again. Like hundreds of businesses across Australia’s second-largest city, it fears the impact this time will be worse.

“The first lockdown for hospitality was devastating,” said Andy Mullins, one of the co-owners of the beachside suburb pub affectionately known as The Espy. “I fear the second will be catastrophic.”

The six-week stay-at-home order that came into force at midnight across the Victoria state capital is set to devastate the city’s restaurants, cafes, beauty spas and small retailers, which were just taking their first tentative steps back to business-as-usual.

The sweeping restrictions threaten to deepen and prolong Australia’s first recession in almost 30 years. Victoria contributes about one-quarter of gross domestic product, but is now isolated from the rest of the country as other states shutter their borders against a worrying spike in community transmission.

Melbourne’s travails also provide a cautionary tale for other big, service economy-driven cities such as London, that are reopening pubs and restaurants in a bid to jump-start their crippled economies.

Australia had enjoyed early success in crushing the curve of virus infections by shutting its international border, social distancing measures and a widespread testing and tracing regime.

But a mixture of complacency as restrictions were eased, and missteps in the quarantining of travellers returning from overseas, has seen a fresh outbreak in Victoria. The state has now seen more than two weeks of double-digit daily increases and reported 165 new cases on Thursday (July 9).

The city of 5 million people prides itself on its world-class restaurants, vibrant cafe scene, and passionate sports fans, who flock to the 100,000-seat Melbourne Cricket Ground to watch Australian Football League matches.

Now, that’s all gone dark again.

“I am incredibly concerned for our small businesses in the restaurant, bar, club and hotel sector,” said Ana Marinkovic, head of small-business lending at Melbourne-based National Australia Bank, which has temporarily closed two office towers in the city while most staff work from home.

“They have just started to pick up and we have even had a small proportion of customers resume their payments,” she said. “Obviously all of that is going to get set back significantly.”

While the stay-at-home order only applies to metropolitan Melbourne – ranked as the world’s second-most liveable city last year – its effects will be felt across the state.

Within hours of the announcement, acclaimed eatery Brae, which is nestled in the rolling Otway hills some 140 kilometres southwest from central Melbourne, was hit by about 200 cancellations from would-be diners now unable to travel.

“Taking away the metro market for us is nothing short of crippling,” said Julianne Bagnato, operations manager at Brae, which peaked at 44 in the World’s 50 Best Restaurants list in 2017.

While it will remain open for people who can still travel from regional areas to sample its A$300 (S$291) set menu, it will probably be left operating at about 50 per cent of its already-reduced capacity, Bagnato said.

The return to lockdown “will kill many SMEs as they will not be able to survive a long-term path to a normal economy”, said John Vaz, a senior lecturer at Melbourne’s Monash Business School.

“It will take around three-to-five years to return to pre-Covid levels based on experience with previous recessions where high unemployment has prevailed.”

With Victoria the nation’s biggest economy after New South Wales, the lockdown has also dimmed Australia’s economic prospects.

James McIntyre, economist Westpac Banking chief economist Bill Evans now expects GDP to shrink 4.2 per cent this year, compared to a previous forecast of a 4 per cent contraction, because of the Melbourne shutdown.

“The new restrictions, along with border closures with other states, will hurt economic activity and delay the state’s recovery,” S&P Global Ratings, which lowered the outlook on Victoria’s AAA rating to negative in April, said in a statement on Wednesday (July 8).

The lockdown has also put an end to sports fans’ hopes of watching their teams in action anytime soon. While the AFL season had initially resumed behind closed doors, Victoria’s 10 clubs have decamped to hubs in New South Wales, Queensland and Western Australia for the foreseeable future.

And it’s just not the fans suffering. There’s the flow-on effect to pubs where they would usually congregate before and after games, along with security firms, caterers and stadium staff who are no longer needed.

For The Espy’s Mullins, the city’s social fabric and its allure to residents and tourists over the longer term is under threat if businesses don’t survive the lockdown.

“You come to Melbourne for the laneways, the food, the wine, the live music, the theatre,” he said. “It’s going to be devastating for the city when we’re all told to turn the lights back on and we realise the light switches were gone many, many months ago.”

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World News

Australia steps up Hong Kong action in wake of China security law

PM Scott Morrison suspends extradition pact with territory and extends visas for Hong Kong people already in Australia.

Australia’s Prime Minister Scott Morrison has suspended the country’s extradition agreement with Hong Kong and extended visas for an estimated 10,000 Hong Kong people already in Australia because of concerns about the impact of the national security law that China imposed on the territory 10 days ago.

Morrison said the extradition pact was being suspended because the security legislation represents “a fundamental change in circumstance”.

The prime minister also said the visas of about 10,000 Hong Kong people already living in Australia would be extended by five years, and those on student or temporary work visas would be offered a pathway to permanent residency.

“There will be citizens of Hong Kong who may be looking to move elsewhere, to start a new life somewhere else,” Morrison said. It was not clear what Australia might offer to those people still in Hong Kong. 

‘Increased risk’

The national security law – which bans what China calls secession, subversion, terrorism and collusion with foreign forces – was imposed on the eve of the anniversary of Hong Kong’s return to Chinese rule in 1997. The move followed months of protests, some of which turned violent, over perceived mainland encroachment into the autonomy and freedoms that were agreed under the so-called “one country, two systems” framework.

Taking to Twitter on Thursday morning, Australia’s Foreign Minister Marise Payne said the legislation “undermines” the principle of “one country, two systems”.

Her comment followed discussions with the foreign ministers of the United Kingdom, Canada, the United States, and New Zealand. Winston Peters, New Zealand’s foreign minister, later said the country was reviewing all its “relationship settings” with Hong Kong. 

The UK has already said it will give about three million Hong Kong people the right to live in the country and provide them with a pathway to citizenship. Canada is also said to be mulling higher immigration and has already suspended its extradition treaty with Hong Kong. 

Today I spoke with 🇬🇧 🇨🇦 🇺🇸 🇳🇿 on global security, including concerns that the NSL imposed on #HongKong undermines One Country Two Systems & trust in international agreements. We will work together for human rights & freedoms @DominicRaab @SecPompeo @winstonpeters @FP_Champagne

Australia is also making a pitch for international financial services, media, and consulting businesses to relocate and said it would offer incentives and visa packages for staff to help with any move.

“We want them to look to Australia, to come, to set up shop,” said acting Immigration Minister Alan Tudge.

The country also updated its travel advisory for Hong Kong, which is currently home to about 100,000 Australians. 

The travel advice says Australians “may be at increased risk of detention on vaguely defined national security grounds”.

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World News

Australia warns citizens of increased risk of detention in Hong Kong

SYDNEY (REUTERS) – Australia warned its citizens and residents in Hong Kong that they were at “increased risk of detention” there and urged them to reconsider their need to remain in the Chinese territory.

In an updated travel advisory issued on Thursday (July 9), the government said Hong Kong’s new national security law could be interpreted broadly and Australians may be at risk of getting deported to mainland China for prosecution.

The full extent of the law and how it will be applied are not yet clear, the advisory said.

Australia on Tuesday warned its citizens that they might be at risk of arbitrary detention in China. 

 Australian Prime Minister Scott Morrison will on Thursday announce measures to assist Hong Kong citizens, including visas and changes to an extradition agreement, two government sources told Reuters. 

The pending announcement comes after Australia’s Foreign Minister Marise Payne held a teleconference with her counterparts in the Five Eyes security arrangement, which includes the US, about Hong Kong overnight, the sources said. 

Morrison has previously signalled Australia might follow Britain in offering visas to Hong Kong citizens after China imposed a new security law on the city. 

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Economy

Australia banks extend loan holiday as 800,000 defer payment

SYDNEY (BLOOMBERG) – Some of Australia’s biggest banks will extend the deferral of loan repayments for up to four months as the nation scrambles to contain the threat of a second wave of coronavirus infections.

Customers who can resume paying their loans will be required to do so at the end of their six-month deferral period, the Australian Banking Association said in an e-mailed statement on Wednesday (July 8).

Customers with reduced incomes and ongoing financial difficulty due to Covid-19 will be contacted as they approach the end of the deferral period and granted an extension if they genuinely need some extra time. Options will include extending the length of the loan and converting to interest-only payments.

Economists had expressed concern that the nation faced a looming fiscal cliff, with a key wage subsidy package and the loan deferrals scheduled to run out at the end of September. Treasurer Josh Frydenberg has held talks with the banks, and indicated the government will taper support rather than going cold turkey.

Frydenberg said on Wednesday that the government will announce a “new phase” of targeted and time-limited income support when it hands down its economic and fiscal update on July 23.

With improving economic prospects albeit tempered by uncertainty about the health situation, many of the more than 800,000 Australians who deferred repayments are showing signs of recovering, according to the statement.

“Encouragingly, many customers have already chosen to resume making repayments,” ABA chief executive officer Anna Bligh said.

Commonwealth Bank of Australia said since the start of the pandemic it has provided repayment deferrals on almost 130,000 home loans and supported 100,000 business customers. These measures have injected about A$15 billion (S$14.5 billion) in direct financial support to customers and stimulus for the economy, the bank said.

The Australian Prudential Regulation Authority said it will extend temporary capital treatment for bank loans with repayment deferrals accordingly.

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World News

Australia warns citizens of 'arbitrary detention' risk in China

SYDNEY (REUTERS) – Australia has warned its citizens they may be at risk of arbitrary detention in China, in an updated travel advisory.

The travel advice for China on Australia’s Smart Traveller website includes the warning: “Authorities have detained foreigners because they’re ‘endangering national security.”

On Tuesday (July 6), a new warning was added by the Department of Foreign Affairs and Trade: “Australians may also be at risk of arbitrary detention.”

Diplomatic relations between Australia and top trading partner China became frayed after Canberra called for an international inquiry into the source and spread of the coronavirus, which emerged in the Chinese city of Wuhan.

Australia continues to advise its citizens not to travel to China, and under coronavirus control measures, its citizens cannot leave Australia without an exemption granted by the Home Affairs department.

Beijing has also recently imposed sweeping security legislation on Hong Kong that punishes what China defines as secession, subversion, terrorism and collusion with foreign forces, with sentences up to life in prison.

Late on Monday, Hong Kong released additional details of the law, saying security forces had overriding authority to enter and search properties for evidence and to stop people from leaving the city.

Australia’s Prime Minister Scott Morrison last week signalled his government may follow Britain in offering safe haven to Hong Kong citizens in response to the security law, and proposals would be considered by Cabinet soon.

Canada has also warned its citizens in Hong Kong they may be at risk of arbitrary detention and extradition to mainland China, and has suspended its extradition treaty with Hong Kong.

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World News

Australia to set up $183m fund to boost recycling following export curbs

SYDNEY (REUTERS) – Australia said on Monday (July 6) it will set up a fund worth A$190 million (S$184 million) to support companies which convert garbage into manufactured products, a move it hopes will stop millions of tonnes of landfill, after China put curbs on waste imports.

The Recycling Modernisation Fund will go to companies involved in sorting, processing and reusing commonly discarded materials like plastic, paper, tyres and glass, the federal government said in a statement.

The payments would depend on co-investment from the country’s eight state and territory governments, as well as the private sector.

The programme should attract about A$600 million of private investment, the statement said.

The decision to start the fund reflects the transitional state of the global waste management industry after China stopped accepting shipments of rubbish like plastic and paper in 2018, as part of a campaign against “foreign garbage”.

The ban affects 1.25 million tonnes of Australian waste, worth an estimated A$850 million, according to official figures, although the government said the new fund would ultimately divert more than 10 million tonnes of plastic, paper and glass waste away from landfills.

“As we cease shipping our waste overseas, the waste and recycling transformation will reshape our domestic waste industry, driving job creation and putting valuable materials back into the economy,” Environment Minister Sussan Ley said in the statement, which predicted the move would create 10,000 jobs.

The government would also spend A$24.6 million to improve data so it can measure progress on meeting the waste targets.

“This will mean Australia converts more waste into higher valued resources ready for reuse locally by manufacturers and brands in their packaging and products,” said Ms Rose Read, chief executive of the National Waste and Recycling Industry Council.

“The legacy of this investment will also serve future generations.”

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World News

Australians widen protests backing Black Lives Matter, indigenous people

SYDNEY (REUTERS) – Thousands gathered in Sydney and other Australian cities over the weekend  in support of the Black Lives Matter movement and an increased focus on the mistreatment of indigenous people.

A month since Australia’s first such rallies, the crowds were smaller amid health warnings about the spread of the coronavirus pandemic, as infections grow in the state of Victoria, home to the country’s second-largest city, Melbourne.

At the Sydney protest, masks and hand sanitiser were given out and organisers pleaded with people to maintain social distancing.

An ancient Aboriginal ceremony took place, with families of those who died in police custody circled it.

Protests in Adelaide, Brisbane, Cairns, Darwin, Perth and other cities the previous day drew smaller crowds. 

The greater global awareness over the treatment of minorities as a result of Black Lives Matter comes as Australia holds an inquiry into mining giant Rio Tinto’s destruction of two ancient and sacred Aboriginal caves. 

The latest government data shows Australia’s indigenous people make up just over 3 per cent of a population of about 25 million.

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Opposition candidate claims win in close Australia by-election

MELBOURNE (Reuters) – A candidate from Australia’s opposition claimed victory on Sunday in a close by-election seen as a referendum on Prime Minister Scott Morrison’s handling of bushfires and the COVID-19 pandemic.

Kristy McBain of the centre-left Labor Party claimed a narrow win over Fiona Kotvojs of Morrison’s conservative party in electorate of Eden-Monaro.

“I’m very pleased and honoured to be the next member for Eden-Moreno,” McBain said in televised remarks.

McBain received 50.58% of the votes, while Kotvojs got 49.42%, according to the Australian Electoral Commission’s website.

Although not a major blow to Morrison – the results will not affect the balance of power in parliament – McBain’s apparent victory shows that a recent rebound in the prime minister’s approval ratings has not decisively translated into votes.

Morrison’s uniting management style in the COVID-19 pandemic and his decisive measures have made him the country’s most popular leader in a decade.

That followed a steep decline in his popularity at the start of the year over his handling of the devastating bushfires that killed dozens of people and millions of animals, charring vast swaths of land.

“It has been an election that had been fought on local issues first and foremost,” said McBain, whose electorate on the south coast of New South Wales state has suffered severely from the bushfires.

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