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Australia’s tech lobby wants deregulated ‘digital embassies’ for offshore clients

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Angus Dowell, University of Auckland, Waipapa Taumata Rau

When Australian Prime Minister Anthony Albanese meets US President Donald Trump on Monday, the visit is expected to seal major big tech investment deals on artificial intelligence (AI) and data centres.

In the lead-up, Atlassian cofounder Scott Farquhar (in his role as chair of the Tech Council of Australia) has been pitching a plan to make Australia a “regional AI hub”.

In July, Farquhar unveiled his vision in a speech at the National Press Club of Australia in which he held up Singapore and Estonia as proof that nimble regulation to attract foreign capital can turn nations into digital powerhouses.

But based on my research on the geopolitics of data-centre markets, these examples don’t quite hold up – and following them risks narrowing the debate about Australia’s tech future at a crucial moment.

However, as Australia advances its AI agenda, these examples can offer important lessons if read more carefully.

The Estonian data embassy

Farquhar proposes Australia should host “digital embassies”. These would be datacentres on Australian soil owned by foreign companies and exempt from Australian law. He cites as a precedent Estonia’s data embassy in Luxembourg.

Estonia’s case, though, is quite different from what Farquhar proposes. After a series of Russian cyberattacks in 2007, Estonia sought to guarantee the continuity of government if its domestic systems were ever disabled.

The result was a bilateral treaty with Luxembourg. The treaty allows encrypted copies of critical state registries – citizenship, land and business records – to be stored under Estonian jurisdiction abroad.

It was an act of defensive statecraft built on the Vienna Convention. This agreement grants diplomatic immunity to state functions but explicitly excludes commercial activity.

By contrast, the digital embassies proposed by Farquhar would cater both to states and to foreign corporates. It would allow them to operate under their own law but draw on Australian resources.

Farquhar himself concedes this would necessitate revising the Vienna Convention. But this would undermine six decades of established diplomatic practice and further destabilise an already fragile international system.

Without the diplomatic costume, Farquhar’s digital embassies look more like special economic zones. These are areas designed to attract investment through the strategic loosening of laws.

What really transformed Singapore

Farquhar’s reading of Singapore’s example similarly overlooks its deeper economic and political foundations.

Singapore is often romanticised by neoliberal thinkers as a haven of free enterprise. But Singapore’s success in using its natural strengths and foreign direct investment has rested on massive state-led investment and equity in infrastructure and firms.

Through its sovereign wealth funds, Temasek and GIC, Singapore retains dominant stakes in its airlines, banks, ports and telecoms. That same strategic state investment produced Changi Airport and the Jurong Industrial Estate, cornerstones of Singapore’s regional hub status.

Australia has taken a different path.

For example, recent Australian Tax Office data shows major technology firms – such as Amazon Web Services, Microsoft and Google – have secured billions in government contracts while contributing relatively little in tax.

In 2024, Microsoft reported $8.63 billion in Australian revenue, but only $118 million – about 1.4% – was payable in tax. Amazon Web Services earned $3.4 billion locally yet paid just $61 million after deductions reduced its taxable income to $204 million.

Much of this is explained by profit-shifting arrangements. Most revenue is booked in tax havens such as Ireland through inter-company “service fees”.

US tech companies have undoubtedly captured significant domestic value. However, local benefits, such as jobs, exportable digital industries and global competitiveness, remain largely hypothetical.

A cloudy memory

Australia has chased the dream of jurisdictional deregulation before.

More than a decade ago, Google and Microsoft told then prime minister Julia Gillard they could build a “Silicon Beach” here. This echoed Ireland’s “Silicon Docks” – a digital growth strategy of creating a deregulated haven for big tech.

Farquhar’s AI-hub vision appeals to the same logic. However, it has even thinner appreciation for the statecraft and public investment required.

Without it, Australia is unlikely to achieve AI hub status.

Some will argue Australia’s minerals and favorable relations with the US make it an inevitable frontier of data-centre expansion. Yet that position also gives Australia leverage to define sovereign growth on its own terms.

As economist Alison Pennington has asked, “is a shift from foreign-owned mining to foreign-owned data mining with even less control the best we can do?”

If Australia wants to build a resilient and credible AI sector, it won’t find its edge by joining the global race to the bottom – puncturing its territory with legal carve-outs and filling them with foreign-owned and unfettered direct investment.

Instead, Australia could build a model of sovereign control by investing in public infrastructure, skills and governance frameworks that secure national forms of ownership and accountability.The Conversation

Angus Dowell, PhD Candidate, University of Auckland, Waipapa Taumata Rau

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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As Black Friday sales kick off, these are the dodgy sales tactics to look out for

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Jeannie Marie Paterson, The University of Melbourne

Once again, the annual shopping extravaganza known as “Black Friday” is nearly upon us, this year falling on November 28. But the sales are already well underway.

What started as a single-day discounted shopping event on the Friday after Thanksgiving in the United States has blown out to a weeks-long sales festival, in stores and online. And it has spread around much of the world – including to Australia.

It might feel like a great time to try to score a bargain. But this week, the Australian Competition and Consumer Commission (ACCC) put retailers on notice. The consumer watchdog announced it would be watching out for various kinds of misleading sales conduct that can be used to trick consumers.

If found to be engaging in misleading or deceptive sales conduct, retailers may face heavy financial penalties. But as a consumer, it also pays to understand how these dodgy tactics work, so you can’t be duped this sales season.

Dodgy sales tactics

The ACCC says it is on the lookout for a range of misleading or deceptive sales advertising tactics. Examples include:

  • advertising sales as “storewide” when only some items are discounted
  • countdown clocks or timers that show a shorter period than the actual sale (to create false urgency)
  • fine-print disclaimers that exclude some items from the sale
  • “up to X% off” discounts that only apply to a few items (or the “up to” text is not prominently displayed)
  • price comparisons of before and after sale discounts that are not accurate (including where the price has gone up in a short period before the discount was applied).

Sadly, there are many examples of allegedly misleading sales conduct occurring at peak shopping periods.

Following a similar sweep of last year’s Black Friday sales, the ACCC recently fined three retailers for allegedly
misleading customers by advertising discounts as “storewide” when only some items were on sale.

In 2019, the online marketplace Kogan offered a “tax time” discount of 10% on products that had had their price increased immediately before the promotion (by at least 10% in most cases). It was subsequently fined A$350,000 for misleading conduct in breach of Australian Consumer Law.

Why is the ACCC so strict about this kind of conduct?

These examples of dodgy conduct might seem annoying. But they don’t seem earth-shatteringly bad – such as selling physically dangerous products.

Why is the ACCC so concerned about misleading conduct at Black Friday sale time, and indeed retail pricing more generally?

Shouldn’t consumers just be more careful? The answer lies in the cumulative harms of misleading pricing conduct.

composite image showing various online advertisements
Examples of advertising tactics the ACCC is investigating, including potentially misleading countdown clocks, sitewide sales with exclusions and hard-to-spot text.
Supplied, ACCC

Manipulating consumers through marketing

Sales rely on consumers thinking they are getting a good deal on products they want. And sometimes sales marketing seeks to persuade consumers the deal is better than it really is.

Marketing strategies such as countdown timers, strike-through prices or promoted large percentage discounts are designed to appeal to consumers’ emotions and to rush them into closing off a purchase.

Consumers with heightened emotions or feeling pressure to grab a deal are less likely to make a rational assessment of the real value of the discount being offered to them. This is why truth in sales advertising is so important.

What consumer protection laws are for

We have strong protections against misleading conduct in Australia for good reason. If sellers can trick consumers into buying goods at discounts that are actually illusory, those dishonest sellers gain an advantage over honest sellers selling at a transparent and accurate price.

This risks a market that rewards poor conduct and encourages an overall rush to the bottom.

Australian Consumer Law takes the view that consumers should be able take the advertisements they see at face value. Consumers shouldn’t have to assume they are going to be tricked by sellers.

Such an approach would not conform to the object of enhancing the “welfare of Australians” through “the promotion of competition and fair trading” that underlies Australian Consumer Law.

Stopping a bad deal

If you are considering buying goods at the Black Friday sales, it is a good idea to screenshot the item before it goes on sale. That way you can check if the sale discount is genuine and the item is actually the same as the one you want (not an older or cheaper model).

When shopping at a sale, take time to look at the discount offered. Is it a real discount? Does it justify the spend coming up to the holiday period? Discounts may be marked up in an attractive colour but still not represent good value.

Finally, if you think you have been misled by a pricing strategy, such as a discount that isn’t genuine or a fine-print qualification on the discount that is advertised, you can complain to the ACCC.

Ideally, take screenshots of what was advertised and what you received to support your claim to be treated fairly at sales time.The Conversation

Jeannie Marie Paterson, Professor of Law (consumer protections and credit law), The University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Trump’s ratings slump as shutdown grinds on; Democrats have big wins in state elections

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Adrian Beaumont, The University of Melbourne

Donald Trump’s net approval has slumped to its lowest this term as the United States government shutdown breaks the record for the longest shutdown. Democrats had big wins in state elections on Tuesday.

I previously covered the ongoing US government shutdown on October 9, eight days into a shutdown that began on October 1. This shutdown has now lasted 38 days, beating the previous record 35-day shutdown that was set during Trump’s first term.

Although Republicans hold the presidency and majorities in both chambers of Congress, they cannot pass a budget without Democratic support in the Senate owing to the Senate’s requirement for 60 votes out of 100 senators to invoke “cloture” and end a “filibuster”.

Republicans hold a 53–47 majority over Democrats in the Senate, so they need seven Democrats to vote with them to obtain cloture. Democrats are refusing to help to pass a budget unless health insurance subsidies are extended.

For the first three weeks of the shutdown, Trump’s ratings were resilient, with his net approval in analyst Nate Silver’s aggregate of national polls rising slightly to -7.5 on October 19.

But since then, Trump’s net approval has slumped 5.5 points to -13.0, a low for him this term. Currently, 55.1% disapprove of Trump’s performance while 42.1% approve.

Trump’s net approval on the four issues tracked by Silver have all fallen recently. He now has a net approval of -4.9 on immigration, -17.6 on the economy, -17.8 on trade and -28.9 on inflation.

In Silver’s historical comparison on how Trump’s ratings compare with previous presidents since Harry Truman at this point in their presidencies, Trump’s net approval is only better than during his own first term. Joe Biden’s net approval was -8.3 at this point, making him the next worst on net approval.

Since a peak for the US benchmark S&P 500 stock market index on October 29, it has lost 2.5%. But in the last six months, it has gained nearly 20%.

Trump’s ratings will probably rebound if the shutdown ends soon. Unless something goes badly wrong with the US economy or the stock market, his ratings will probably return to net high single-digit negative, not net double-digit negative.

Democrats had big wins at state elections

US state elections occurred on Tuesday in New Jersey and Virginia. Democrats won the Virginia governorship by 57.2–42.6 over Republicans, a gain for Democrats. They also won the other two statewide races for lieutenant-governor and attorney-general.

Democrats won the lower house of the Virginia legislature by 64–36, a 13-seat gain for Democrats. The upper house was not up for election, but Democrats hold a 21–19 majority there. At the 2024 presidential election, Kamala Harris defeated Trump in Virginia by 5.8 points, though Trump won the overall popular vote by 1.5 points.

Democrats held the New Jersey governorship, winning by 56.4–43.0, far exceeding polls that gave Democrats a low single-digit lead. They lead in the lower house by 53–19, with eight seats uncalled.

If the uncalled seats go to current leaders, Democrats will win by 57–23, a five-seat gain. Democrats hold the upper house by 25–15, which was not up for election. Harris beat Trump in New Jersey in 2024 by 5.9 points.

In June, democratic socialist Zohran Mamdani had won the New York City Democratic mayoral nomination, defeating former New York governor Andrew Cuomo by 56.4–43.6 after preferences to win the Democratic primary. On Tuesday, Mamdani defeated Cuomo, who ran as an independent, in the general election
by 50.4–41.6, with 7.1% for a Republican.

Unlike the primary, the general election used first past the post. But preferences would not have changed the outcome as Mamdani exceeded 50%.

In response to Texas Republicans gerrymandering Texas to create five additional federal Republican seats, California Democrats proposed retaliatory gerrymandering of California’s federal seats. A referendum was needed to approve this gerrymander. With 79% reporting, “yes” to gerrymandering had won by 63.9–36.1. Harris won California in 2024 by 20.1 points.

See also my coverage of these elections for The Poll Bludger. In this piece, I wrote about past and upcoming elections in the Netherlands, Bolivia and Chile.

Implications for the 2026 midterm elections

At November 2026 midterm elections, all of the House of Representatives and one-third of the Senate will be up for election. In Virginia and New Jersey’s gubernatorial elections, there were respectively 8.8 and 7.5 point swings to Democrats from the 2024 presidential margin in those states.

If these swings are applied to Trump’s national margin of 1.5 points in 2024, Democrats would win nationally by 6.0 points (New Jersey swing) or 7.3 (Virginia swing). So if the swing in either state occurs nationally in 2026, Democrats are very likely to gain control of the House.

There will be 35 seats up for election in the Senate next November (33 regular and two special elections). Republicans hold 22 and Democrats 13, but only two Republican seats are thought vulnerable: Maine and North Carolina.

In 2024, Harris won Maine by 6.9 points and Trump only won North Carolina by 2.2 points. Trump won all other states Republicans are defending by at least a double-digit margin. Even if the swing in Virginia happened nationally, Democrats would gain only two seats and Republicans would hold the Senate by 51–49.

It’s become increasingly difficult for Democrats to win the Senate, as the two senators per state rule skews Senate elections towards low-population, rural states.

In the Fiftyplusone generic ballot average, Democrats lead Republicans by 45.0–41.9. The low single-digit lead for Democrats hasn’t changed since April. The current 3.1-point Democrat lead is below what happens from applying the swing in New Jersey and Virginia nationally.

While Trump’s ratings have dropped, there hasn’t been a Democratic surge on the generic ballot. That suggests voters are blaming both parties for the shutdown.The Conversation

Adrian Beaumont, Election Analyst (Psephologist) at The Conversation; and Honorary Associate, School of Mathematics and Statistics, The University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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‘America’s big case’: the US Supreme Court raises doubts about Trump’s tariff regime

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Catherine Gascoigne, Macquarie University

The US Supreme Court has heard arguments overnight on the legality of President Donald Trump’s “liberation day” tariffs on most countries around the world.

The number of sceptical questions posed by the justices in the hearings was striking for a court that is dominated by conservative appointees by six to three.

At stake is not only whether the sweeping tariffs will be upheld, but the extent to which the Supreme Court is willing to extend the limits of presidential power.

So, what will the the court have to consider?

Where’s the emergency?

Trump issued these tariffs in April claiming an economic emergency, using the International Emergency Economic Powers Act (IEEPA) of 1977. So, the two primary legal questions for the court to consider are:

  1. whether the IEEPA authorises Trump to issue widespread tariffs; and
  2. if the IEEPA does authorise tariffs, whether it delegates authority to the president in an unconstitutional manner.

These questions have already been considered by three lower US courts, including the United States Court of International Trade. All three courts found that Trump’s tariffs were illegal.

Trump claims his power to impose tariffs is derived from the words “regulate … importation” in the IEEPA. However, justices from both sides of politics expressed scepticism about how much authority that implied. The majority in one of the lower courts described the phrase as “a wafer-thin reed”.

Supreme Court Justice Brett Kavanaugh, a Trump appointee, said:

Figuring out what ‘regulate importation’ means is – is obviously central here […] One problem you have is that presidents since IEEPA have not done this.

Chief Justice John Roberts and Justice Amy Coney Barrett, both conservatives, expressed doubt about that phrase authorising tariffs of the scale of the “liberation day” tariffs. Justice Roberts said:

The justification is being used for a power to impose tariffs on any product from any country for – in any amount for any length of time. […] that’s major authority, and the basis for the claim seems to be a misfit.

Justice Elena Kagan, a Democratic appointee, seemed to sum up the case when she quipped that the IEEPA “has a lot of verbs … It just doesn’t have the one you want”.

In short, whether such an ambiguous phrase could confer such sweeping powers was sharply questioned by justices on both sides of politics.

Discussion of refunds on tariffs already paid

The fact the Supreme Court went on to consider the question of remedies for potentially striking down the tariffs is also a telling sign.

Specifically, Justice Barrett asked how the process for issuing refunds for the potentially illegally collected tariffs would work.

Counsel for the plaintiffs explained the five businesses that brought the action against Trump’s tariffs would be reimbursed first.

As to the imports from the rest of the world, given the case was not a class action, the process would be “a very complicated thing”. As the lawyers for the businesses elaborated on what the refund process might look like, Justice Barrett interjected with the summation: “So, a mess”.

Counsel for the businesses noted there may be legal precedent for the court to limit its decision to “prospective relief”. This means the Supreme Court’s decision would only affect tariffs collected after the court’s judgement, with no effect on tariffs collected before it.

If this legal precedent were to be followed, refunds would not be issued for tariffs collected before the Supreme Court decision (except for the five businesses that brought the case). The court did not pass any comment on the likelihood of following such a precedent.

Regardless of how the refunds might be issued, it is clear they would result in economic and political upheaval, both for the US and exporters from around the world.

Nonetheless, counsel for the businesses noted the Supreme Court had previously said in a case from 1990, “a serious economic dislocation” was not a reason not to do something. In other words, the fact the reimbursement process would be difficult to administer should not be a block to the Supreme Court ruling the tariffs are illegal.

When will the justices rule?

The court agreed to hear the case on an “expedited” basis, but has not set a date for when it will rule. Betting markets were swift to react, though, with traders marking down the chances of the court ruling in Trump’s favour to 30% after the hearing, from nearly 50% before.

Never one for understatement, Trump has said, “I think it’s the most important decision … in the history of our country”.

Despite Trump’s hyperbole, the case currently before the US Supreme Court is not just about the “liberation day” tariffs. It is also about the role of the judiciary in limiting ever-expanding presidential power. This role is so important that it transcends political lines.The Conversation

Catherine Gascoigne, Macquarie Research Fellow in International Economic Law, Macquarie University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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