Outgoing financial services minister Jones takes swipe at US protectionism

Outgoing financial services minister Stephen Jones warns of downside risks to the economy from tariffs and slower global growth.

Outgoing financial services minister Stephen Jones says Australia has benefited from open trading arrangements and a rules-based order. Picture: John Appleyard/NewsWire

Outgoing financial services minister Stephen Jones has taken a swipe at Donald Trump’s tariff war, saying Labor would “aggressively defend” open trading arrangements and rules-based order, as he warned of significant downside risks to the economy.

Two days after Jim Chalmers handed down his last budget before the federal election, Mr Jones also took the opportunity to hit out at the Coalition, saying Labor had “cleaned up” a lot of the problems caused by the Morrison government and brought fiscal control back into the budget settings over its three-year term.

“Treasury’s estimates for global growth are modest when you look over the last decade … that is factoring in the impact of slowing growth in China, pretty tempered economic circumstances throughout Europe and the downside risks of a trade war and slowing economy in the US as well,” Mr Jones said at a Financial Services Council post-budget briefing on Thursday.

“We had the hard conversation in the 80s around an open economy, the benefits of free trade, the benefits of an economy which produces more than it consumes, needing to look to the world to trade and to get the benefits of efficiencies in other countries in our trade and goods sector.

“We have no interest in winding it back in Australia, and we have no interest in that occurring throughout the globe. We have massively benefited from open trading arrangements and a rules-based order, and we will be a voice which is aggressively defending those settings,” Mr Jones said.

The US president on Wednesday (Thursday morning local time) took aim at overseas carmakers, announcing a 25 per cent tariff on all global car imports to the US, as he followed through on his pledge to penalise foreign automakers in a bid to bring manufacturing back to the US.

It is the latest in a series of protectionist moves that include slapping a 25 per cent tariff on Australian aluminium and steel.

“Australians don’t need to look too far to see the direct impact of those sort of restrictive and contractionary policies on the Australian economy, all they need to do is look at their superannuation balances,” Mr Jones said.

“The average balance has probably come off about 10 per cent over the last few months. That’s a direct feed from international and domestic equity markets and a lack of optimism in what’s going on in some of those international movements.”

Mr Jones, who will retire from politics at the federal election to be held in May, said his government had shown “very sturdy economic management” through its three-year term.

“The first part was cleaning up a lot of the problems that we inherited, ensuring we could get some fiscal control back into the budget settings, particularly coming out of the Covid settings. So winding back, a lot of what we saw was some unnecessary spending.”

Mr Jones leaves politics without getting crucial financial advice changes over the line. Draft legislation for the second tranche of the Delivering Better Financial Outcomes reforms was released last week but the more contentious elements, including updates to the Best Interests Duty and details on a new class of adviser, were not included.

“I had a choice: do I wait or do I get the stuff out that is complete and get people pouring over that? I took the choice to get as much out as we possibly could … it’s about momentum. I want to ensure the momentum is not lost.”

The Financial Advice Association Australia has already hit out at the second round of reforms, saying they lay the groundwork for super funds to collectively charge members for advice in retirement, whether they receive it or not.

The FAAA has also taken issue with the government’s move to omit the new class of adviser in the reforms, with CEO Sarah Abood telling The Australian her members were “pretty furious” at lack of certainty over who can provide the retirement advice and what qualifications they would need.

“Our concern is if (more comprehensive advice) is provided by someone who does not have the qualifications and experience and ethical guardrails to do so, it undermines the professionalisation of the financial advice sector,” Ms Abood said.

In an attempt to reassure the advice community, Mr Jones said the policy could be finetuned if necessary to avoid unintended consequences.

Originally published as Outgoing financial services minister Jones takes swipe at US protectionism