No images? Click here 7 JULYA tale of two pandemicsPresident Biden celebrated what he called “independence from a deadly virus” in his Fourth of July address this week. Despite missing his goal of having 70 per cent of American adults receive at least one vaccine dose by July 4 (falling short by only three per cent), the President remained upbeat about the future of America, as a thousand visitors celebrated Independence Day on the White House Lawns in a glimmer of returned normality. The White House event provided a start contrast with Australia, where many continue to face various stages of lockdown as a result of a recent surge in COVID cases (see this week's By the Numbers feature below to see a quantitative comparisons of the two countries). The pandemic is one of a number of challenges leading to declining US foreign direct investment in Australia, according to the United States Studies Centre's Director of Trade and Investment Dr Stephen Kirchner. According to new research he released this week, Australia experienced the most significant outflow of US foreign direct investment in 15 years in 2020. While some aspects were exacerbated by the pandemic, Australian lawmakers should still consider revising a number of domestic policy settings that are unfriendly to foreign capital, Dr Kirchner said. NEWS WRAPTax time for Trump Org
Two hundred and forty-five years ago, we declared our independence from a distant king. Today, we’re closer than ever to declaring our independence from a deadly virus. That’s not to say the battle against Covid-19 is over. We’ve got a lot more work to do. The United States has traditionally been Australia’s most important investment partner. The bilateral investment relationship was valued at just under $1.8 trillion in 2020. However, even before the pandemic, there were emerging signs of weakness in that relationship. US investment in Australia significantly underperformed in 2020, continuing a three-year trend. More competitive US tax settings due to former President Trump’s tax reforms have been an important factor in this underperformance. The Biden administration will again revamp the US corporate tax system, with the G20 also agreeing to rewrite global tax rules. In this context, Australia will need to pay careful attention to the competitiveness of its own tax and other policy settings to maintain the interest of US and global investors. For the OECD area, foreign direct investment (FDI) inflows fell 51 per cent in 2020. Australia’s experience was in line with this performance, with a 48 per cent decline in inbound FDI. However, US investment in Australia fell by even more, with an outflow of $12 billion, the first such outflow since 2005. The US share of the stock of FDI in Australia has declined for two straight years, while the US share of total foreign investment in Australia has been declining for three years. Data from the US Bureau of Economic Analysis shows that since the passage of President Trump’s Tax Cuts and Jobs Act in 2017, Australia has underperformed peer economies and regions in attracting US FDI. Canada, Europe, the United Kingdom, New Zealand and the Asia-Pacific region ex-Australia all outperformed Australia in attracting US investment. A number of factors explain the weakness in US investment in 2020 in particular. The pandemic saw significant repatriation flows, as global investors, including those in the United States, sold foreign assets to raise cash. The main outflow of US investment in Australia in 2020 was holdings of Australian debt securities and unwinding derivatives hedging those positions. This is an excerpt from an article by Dr Stephen Kirchner published by The Mandarin and based on research in his latest report Australia-US bilateral investment in 2020: Taxing times. Click below to read the full article. DID YOU USSC?THE LATEST FROM USSC EXPERTSANALYSISDealing with authoritarian regimes is oldest challenge in American history Dr Charles Edel in The Hill. NEW RESEARCHAustralia-US bilateral investment in 2020: Taxing times BY THE NUMBERSWhere do states stand on COVID deaths and vaccine rollouts?Sarah Hamilton The United States is certainly beating Australia on the COVID-19 vaccine rollout but by how much exactly? Vaccine rates vary considerably between US states but to put Australia's numbers in perspective: ACT leads Australian state and territories in having the highest number of vaccine jabs per 1,000 of its total population (373). But even Mississippi, which ranks last among US states in having the lowest number of jabs per 1,000 people (646), still has a a rate nearly 1.7 times greater than ACT's. Vermont, which ranks first at 1362 jabs per 1,000 people, has a rate 3.6 times greater than ACT's. In terms of death rates, Victoria leads Australian states and territories in having 0.1 COVID-19 deaths per 1000 people. US death rates range from 23.2 times Victoria's rate in New Jersey to 2.8 times Victoria's death rate in the state of Hawaii. VIDEOUS Politics and Policy Series with special guest Annelise NeilsonDid you miss last month's episode of the US Politics and Policy Series? The webinar featured Sky News Australia political reporter and first dedicated Washington correspondent Annelise Neilson in conversation with hosts Professor Simon Jackman (CEO, USSC) and Professor Gordon Flake (CEO, Perth USAsia Centre) Manage your email preferences | Forward this email to a friend United States Studies Centre |