The coalition will use higher income taxes to help pay for its pledge to dramatically boost defence spending, but it remains coy on key details like where the money will go.

Opposition Leader Peter Dutton on Wednesday unveiled a long-awaited plan to increase spending on national security, pledging an extra $21 billion over the coming five years.

The funding would lift the nation’s defence outlay to 2.5 per cent of Australia’s gross domestic product.

Spending would then increase to three per cent of GDP within the decade, in line with the figure the United States has called for allies to spend.

The money will be used to reinstate a fourth joint strike fighter squadron.

Drones, guided weapons, munitions and cyber capabilities would be included, though Mr Dutton cautioned, “we are not announcing procurement contracts from opposition”.

“It will be an important expenditure because we need to keep our country safe and if we’re to preserve peace and stability in our region,” he told reporters in Perth.

But the full details of how the increase would be funded or where the money would be spent are yet to be revealed.

Labor has questioned how the coalition will pay for the $21 billion additional spend as it had not released its costing as punters hit the polls for early voting. 

“Plucking a number out of thin air without explaining how you’re going to raise that and what you’re actually going to spend it on, that’s not defence policy,” Defence Minister Richard Marles said. 

Labor’s plan is for defence spending to rise to 2.4 per cent of GDP over a decade, accounting for an additional $57.6 billion, according to government figures.

Yearly defence spending will eclipse $100 billion by the 2033/34 financial year.

An increased budget was a good thing but numbers shouldn’t necessarily be tied to a target plucked out by an American defence official, national security analyst David Andrews said.

It’s in reference to Trump administration official Elbridge Colby saying he wanted Australia to increase spending to three per cent of GDP during a confirmation hearing for a senior Pentagon post in March.

“I don’t discount the ambition, I don’t necessarily think it’s useful to peg our funding ambitions to comments from Trump officials,” Mr Andrews told AAP.

“I’m sure he has a basis for making that assessment but we need to be doing what’s necessary for Australia’s defence.”

Mr Dutton didn’t deny the three per cent figure came from the Trump administration when pressed, but he said the coalition was guided by budget figures on how much could be reasonably spent on defence.

He said not going ahead with Labor’s income tax cuts, which baked in foregone revenue, would help fund the defence increase by saving $17 billion over three years from when they are due to come into effect in 2026.

Coalition defence spokesman Andrew Hastie refused to say whether cuts would be needed in other areas to fund the increase.

“We’ll release our costings in due course but there will always be trade-offs when you’re making decisions of state,” he said.

Defence funding needed to be sustainable and greater tax reform could help achieve that goal, Mr Andrews said.

“I’m not sure you can cut your way to increasing defence spending,” he said.

The spend was achievable but there needed to be more detail about where it would go, maritime security specialist and defence analyst Jennifer Parker said. 

More fighter jets would be nice to have but the priority needed to be on integrated air and missile defence to protect Australian bases and units as well as uncrewed systems, she said.

Australia’s growth outlook has been slashed by a major international body as US President Donald Trump’s trade upheaval sends market volatility skywards.

United Nations financial agency the International Monetary Fund said uncertainty had surged to unprecedented levels, in its World Economic Outlook for April.

Mr Trump’s latest comments – that the US would be “very nice” in negotiations with China – followed conciliatory remarks from US Treasury Secretary Scott Bessent that sent Wall St shares bouncing back from heavy losses overnight.

The Australian bourse jumped more than 1.5 per cent on Wednesday morning.

Despite the positive reaction, the fluctuating daily pronouncements are damaging the economy.

The fund downgraded Australia’s economic growth projection for 2025 to 1.6 per cent from 2.1 per cent in January.

Global growth is also expected to be half a percentage point lower at 2.8 per cent.

Equity markets had suffered heavy losses since Mr Trump’s tariff announcement on April 2, but US stocks potentially had further to fall, the IMF said.

“Major policy shifts are resetting the global trade system and giving rise to uncertainty that is once again testing the resilience of the global economy,” the agency said in the document, released on Tuesday, US time.

If the agency’s predictions are borne out, about $13 billion would be shaved off Australia’s economy.

The potential hit to the economy is worse than feared by Treasury, which predicted only a 0.1 per cent reduction in growth in its budget, reaffirmed in the pre-election economic and fiscal outlook earlier in April.

Treasurer Jim Chalmers said the government’s job was not to “follow the bouncing ball of daily announcements and shifts”, given the unpredictability around tariffs and trade negotiations.

“Our job is to make our economy more resilient, to engage with our colleagues and counterparts around the world, to find the most diverse, reliable markets that we can,” he told reporters on Wednesday.

“Obviously, a big concern to us is the impact on the Chinese economy of these escalating trade tensions.”

China’s GDP growth was downgraded by 0.6 per cent to four per cent in 2025, below Beijing’s target of five per cent growth.

Tariffs will dominate talks between global financial leaders gathering at IMF and World Bank meetings in Washington during the week.

Finance ministers from around the globe will be eagerly seeking meetings with Mr Bessent, who is leading trade negotiations, to strike a tariff exemption deal.

Dr Chalmers will be a notable absentee while he is tied up campaigning for the federal election.

He said Australians would be worse off and more vulnerable to global economic uncertainty if Opposition Leader Peter Dutton won the election on May 3.

Opposition finance spokeswoman Jane Hume said the downgrade was a warning that Australia needed fiscal buffers to the budget, which Labor had abandoned when it came into government.

“One of the things that we have said is that we will bring the budget back to a path of structural surplus,” she said.

“It’s going to take some time, because so much of that windfall revenue gain that has come through from the Labor government in the last couple of years has been squandered or it’s been spent in recurrent expenditure baked into the budget.”

Australian GDP growth is expected to pick up to 2.1 per cent in 2026, slightly lower than the 2.2 per cent projected in January.

Headline inflation is projected to come in 0.8 percentage points lower in 2025 than previously forecast, at 2.5 per cent, before accelerating strongly to 3.5 per cent in 2026, once federal energy rebates come off.

William Shakespeare’s four folios published more than 300 years ago are to go on auction in London.

They are expected to fetch between £3.5 million ($A7.3 million) and £4.5 million ($A9.4 million).

The books, which compile Shakespeare’s plays, will go on sale at Sotheby’s on May 23, a month after the Bard’s birthday on April 23. 

Experts say the first folio, which contains 36 of Shakespeare’s plays, is “the most significant publication in the history of English literature”, adding that without it up to half of the writer’s plays would have been lost, including Macbeth, Twelfth Night and Julius Caesar. 

Alongside the King James Bible, the auctioneers say the book has had “the greatest impact on the development of the English language itself”. 

The first book’s initial print run is thought to have been around 750 copies, which prompted the release of the subsequent volumes to keep up with demand, with the books published between 1623 and 1685. 

The folios were put together by John Heminges and Henry Condell, who were close friends of Shakespeare as actors and shareholders in the King’s Men, the acting company to which Shakespeare belonged for most of his career. 

Shakespeare even left the pair money for a mourning ring in his will. 

The earliest recorded purchase of the first folio was in December 1623, when Edward Dering bought two copies for £2. 

The third folio is the rarest of the books, with the Shakespeare Census listing 182 copies still in existence, just over half of the number of surviving second and the fourth folios. 

It is believed the third book’s rarity is because a proportion of stock was destroyed in the Great Fire of London in 1666. 

Born in 1564, Shakespeare is considered one of Britain’s greatest writers, with his best known plays including Romeo And Juliet, Macbeth and Hamlet. He died on his birthday in 1616 aged 52.

Stock markets were enjoying a much-needed relief rally in Asia on Wednesday after US President Donald Trump said he had no plans to fire the head of the Federal Reserve, and hinted at lower tariffs for China.

The dollar jumped across the board after Trump walked back on threats to dismiss Fed Chair Jerome Powell, which had badly shaken investor confidence in US assets.

Trump also reiterated he wanted to do a deal with China where tariffs would not be anywhere near 145 per cent, but added that he would set the terms of a deal if Beijing did not enter talks.

Earlier on Tuesday, Treasury Secretary Scott Bessent had been reported saying he believes there will be a de-escalation in US-China trade tensions, but negotiations with Beijing have not yet started and would be a “slog”.

“While it is still early days, the mood in the market is evidently shifting and what was a strong ‘sell America’ vibe flowing through markets yesterday has in part reversed,” said Chris Weston, head of research at broker Pepperstone.

“Markets are becoming ever more conditioned to the President shooting from the hip and then reversing the stance like it was never a big issue.”

Investors reacted by buying back into beaten-down stocks and Japan’s Nikkei jumped 2.3 per cent in early trade, while South Korea’s main index KS11 rose 1.2 per cent.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.3 per cent.

Wall Street extended an overnight bounce as S&P 500 futures climbed 1.8 per cent and Nasdaq futures 2.0 per cent. Sentiment had been helped by some upbeat earnings results, and even Tesla rebounded 5.0 per cent after the bell despite missing forecasts.

The dollar also recouped a little of its recent steep losses, rising 0.8 per cent on the Japanese yen to 142.72 and away from a seven-month low of 139.89.

The dollar rose 0.8 per cent on the Swiss franc to 0.8262, while the euro slipped 0.6 per cent to $US1.1348 ($A1.7803).

Longer-dated Treasuries rallied as Trump’s reversal on Powell seemed to ease the threat to US monetary and fiscal credibility.

Investors have been worried that White House pressure to cut interest rates would risk fuelling inflation just as Trump’s tariffs boost prices.

Yields on 30-year bonds fell 6 basis points to 4.812 per cent, while two-year yields rose 3 basis points to 3.83 per cent flattening the yield curve.

Fed fund futures ran into selling as investors scaled back the extent of rate cuts expected by year-end to around 81 basis points.

Tariffs are still seen dragging on the global economy as the International Monetary Fund on Tuesday slashed its forecasts for growth in the United States, China and most countries.

Still, the general improvement in risk sentiment helped oil prices recover some of their hefty losses.

Early Wednesday, Brent rose a further 67 cents to $US68.09 ($A106.82) a barrel, while US crude added 64 cents to $US64.31 ($A100.89) per barrel.

Safe-haven gold ran into profit-taking and slipped 0.8 per cent to $US3,353 ($A5,260) an ounce, off an all-time peak of $US3,500 ($A5,491).

Australia will sink billions of dollars more into defence if the coalition is elected, but questions remain over how the nation will pay for it.

Fresh off the third leaders’ debate, Opposition Leader Peter Dutton pledged to spend $21 billion over the next five years on defence, lifting the outlay to 2.5 per cent of Australia’s gross domestic product.

The level of defence spending as a percentage of Australia’s economy would then rise further to three per cent within the decade.

While the coalition said it would use the money to reinstate a fourth joint strike fighter squadron, it did not say where else the funding would go.

Mr Dutton said the extra spending on defence was needed in uncertain times globally.

“The prime minister and the deputy prime minister regularly tell Australians that we live in the most precarious period since the end of the Second World War,” he said.

“Yet, over the last three years, Labor has done nothing about it.

“The coalition will strengthen the Australian Defence Force and support our servicemen and women to keep us safe today and into generations ahead.”

Asked how the coalition would fund the increased spending, opposition defence spokesman Andrew Hastie said costings would be released in due course and refused to say whether cuts would be needed in other areas.

“But we will make the investments as necessary, and we’re going to grow the economy as well,” he told ABC Radio on Wednesday.

Defence Minister Richard Marles said the Liberals couldn’t be trusted on the pledge.

“There’s no explanation of how the money is being raised, there’s no explanation of where the money is being spent,” he told Sky News.

“Plucking a number out of thin air without explaining how you’re going to raise that and what you’re actually going to spend it on – that’s not defence policy.”

Labor’s current spending trajectory is for the defence outlay to rise from two per cent of GDP to 2.4 per cent by 2034.

With just 10 days to go until the May 3 federal election and Australians already casting early votes, time is running out for both parties to detail their plans.

Despite being one of the coalition’s most senior frontbenchers, Mr Hastie has scarcely been seen on the election trail, except for appearing alongside Mr Dutton to announce a plan to bring the Port of Darwin back into Australian hands.

Speculation abounded that the former SAS soldier was intentionally being kept out of the spotlight after a candidate was disendorsed for his comments that women should not be allowed to serve in frontline defence roles.

Mr Hastie has previously shared similar views and was asked if he now believes women should serve in combat roles.

“The coalition has a strong position and that is that all combat roles should be open to men and women,” he said.

Mr Dutton and Prime Minister Anthony Albanese earlier clashed at the third leaders’ debate in Sydney, with the opposition leader declared the narrow winner.

Both leaders accused each other of lying during the hour-long head-to-head, with Mr Albanese emphasising a need for stability amid global uncertainty, while Mr Dutton warned of worsening economic conditions should Labor be re-elected.

Labor on Wednesday pledged $78 million in funding to fast-track training for 6000 tradies to build homes.

The funding will set up an advanced entry trades training program to help those training for work get qualifications they need faster.

Mr Albanese will begin the day campaigning in Sydney, while Mr Dutton will be in Perth.

Donald Trump says he has no plans to fire US Federal Reserve Chair Jerome Powell, but says he wants interest rates to be lower.

The US president’s latest remarks could defuse tensions over the central bank chief’s future that have rattled investors.

“I have no intention of firing him,” Trump told reporters in the Oval Office on Tuesday.

“I would like to see him be a little more active in terms of his idea to lower interest rates.”

Trump’s statement was the first de-escalation after days of withering criticisms he has lobbed at Powell for not further cutting interest rates since Trump resumed office in January.

The broadsides were often accompanied by threatening remarks, such as last week’s social media posting that Powell’s termination as Fed chair “cannot come fast enough,” that spooked financial markets that view the Fed’s independence as underpinning its credibility on the global financial stage.

But while he seems to have set aside those threats for now, his criticisms of Fed rate policy remain just as pointed.

“We think that it’s a perfect time to lower the rate, and we’d like to see our chairman be early or on time, as opposed to late,” Trump said.

Tesla’s first-quarter profits have plunged by more than two-thirds amid a backlash against Elon Musk’s electric car company that has hurt sales and sent its stock plunging.

The Austin, Texas, company on Tuesday said quarterly profits fell by 70 per cent to to $US409 million ($A638 million), or 12 cents a share – far below analyst estimates. Tesla’s revenue fell nine per cent to $US19.3 billion ($A30.1 billion) in the January through March period, below Wall Street’s forecast.

The disappointing results come as the company struggles to sell cars to consumers angry over Musk’s leadership of a federal government jobs-cutting group that has divided the country and sparked protests. Musk also has publicly supported far-right politicians in Europe and alienated potential buyers there also.

Many investors have also complained Musk is too distracted with his Trump administration role to be running Tesla and that he should either relinquish his position as CEO or abandon his advisory role in Washington.

Tesla stock has fallen more than 40 per cent in 2025 but rose slightly in after-hours trading.

Morningstar analyst Seth Goldstein said earlier reports of plunging sales that had tanked the stock made the results almost predictable.

“They’re not particularly surprising given that deliveries were down,” Goldstein said, adding that the company is still generating cash. “It was good to see positive cash flow.”

Tesla will hold a conference call to review the quarterly results and give a company update later Tuesday afternoon.

Tesla investors will be listening closely for updates on several strategic initiatives. The company is expected to roll out a cheaper version of its best-selling vehicle, the Model Y SUV later in the year. Tesla has also said it plans to start a paid driverless robotaxi service in Austin, Texas, in June.

The company that once dominated EVs is also facing fierce competition for the first time.

Earlier in 2025 Chinese EV maker BYD announced it had developed an electric battery charging system that can fully power up a vehicle within minutes. And Tesla’s European rivals have begun offering new models with advanced technology that is making them real alternatives, just as popular opinion in Europe has turned against Musk.

Investors expect Tesla will be hurt less by the Trump administration’s tariffs than most US car companies because it makes most of its US cars domestically. But Tesla won’t be completely unscathed. It sources some materials from abroad that will now face import taxes.

Retaliation from China will also hurt Tesla. The company was forced earlier this month to stop taking orders from mainland customers for two models, its Model S and Model X. It makes the Model Y and Model 3 for the Chinese market at its factory in Shanghai.

US Treasury Secretary Scott Bessent says he believes there will be a de-escalation in US-China trade tensions but negotiations between the two governments have not yet started and will be a “slog,” according to a person who heard his closed-door presentation to investors at a JP Morgan conference.

Bessent described the current bilateral trade situation as a two-way embargo, and neither side sees the status quo as sustainable, the person said. 

Bessent added that the goal of US President Donald Trump’s administration was not to decouple the world’s two largest economies.

Instead, Bessent said that he was hoping for a “big, beautiful rebalancing” of China’s economy towards more consumption and the U.S. economy towards more manufacturing but it was unclear whether officials in Beijing were ready to do that, the source said.

Bessent spoke to a private investment conference in Washington DC held by JP Morgan Chase on the sidelines of the International Monetary Fund and World Bank Spring Meetings. 

Bloomberg first reported some of his remarks from sources in the room.

Bessent said that the current situation, with 145 per cent US tariffs on Chinese goods and 125 per cent Chinese tariffs on US goods, was unsustainable, saying that a de-escalation would happen over the “very near future” that would provide “a sigh of relief” for markets, the person said.

Bessent’s remarks added to positive corporate earnings momentum on Wall Street, which recovered from Monday’s sell-off sparked by Trump’s criticism of Federal Reserve chair Jerome Powell.

White House press secretary Karoline Leavitt told reporters on Tuesday that the United States is doing well in its discussions about a potential trade deal with China.

“I asked the president about this before coming out here, and he wanted me to share with all of you that we’re doing very well in respect to a potential trade deal with China,” she told a briefing.

Drug makers have been warned that US President Donald Trump’s administration is considering linking United States medicine prices to lower amounts paid by other developed countries, according to two company sources who called the option the pharmaceutical industry’s top concern.

Both sources, who were not authorised to speak publicly, said they expected the policy to come from the US agency that oversees Medicare and Medicaid health programs.

The first source said he had been told directly by government health officials that they were exploring such a policy, which he described as a mid-level priority for Trump’s administration as it tries to lower drug prices.

The two sources said any such policy was more concerning to the industry than other government moves under discussion, which include tariffs on imported medicines.

The first source said it is the biggest “existential threat to the industry and US biosciences innovation”.

Industry trade group PhRMA earlier this year lobbied Congress on the issue, sometimes referred to as international reference pricing, according to government records.

The US pays the most for drugs in the world, often nearly three times that of other developed countries.

Trump has said he wants to close that spread but has not publicly specified how.

In his first term, Trump’s proposed international reference pricing program was blocked by a court.

Trump’s wide-ranging proposal five years ago was projected by his administration to save taxpayers more than $US85 billion ($A133 billion) over seven years, cutting into US annual spending of more than $US400 billion on drugs.

“I don’t think the administration fully understands the impact that policy could have on innovation in the US,” said the first source.

It will “be disruptive for the entire healthcare market, not just pharmaceuticals”.

He said he expected the Medicare agency to launch a pilot of the program, after health officials said they were looking to test some drug pricing proposals.

The White House, the US Department of Health and Human Services, which oversees Medicare, and PhRMA did not respond to requests for comment.

Drug pricing and other pilots are typically run within the Centers for Medicare and Medicaid Services’ innovation centre, known as CMMI, and can extend for years to either Medicare, Medicaid or both.

Former president Joe Biden’s Inflation Reduction Act allows the US government to negotiate the price of its costliest drugs.

The prices for the first 10 prescription drugs it negotiated were still on average more than double, and in some cases five times, what drug makers had agreed to in four other high-income countries, Reuters previously reported.

Top-selling blood thinner Eliquis from Bristol Myers Squibb carries a US list price of $US606 for a month’s supply.

Biden’s government negotiated that down to $US295 for Medicare, which will apply from 2026, but the drug costs $US114 in Sweden and just $US20 in Japan.

There are thousands of approved drugs in the US, some of which are not covered by or have not been launched in different reference countries, said Rena Conti, an associate professor at Boston University.

Those countries can sometimes take years to negotiate drug prices, she added.

A 2022 JAMA study of nearly 600 new medicines approved in either the US or Germany concluded that 92 per cent were available in the US while 80 per cent were available in Germany.

Some countries do not publish what they pay for drugs.

Conti said the administration could estimate what they pay based on publicly available data but without accounting for further discounts those governments negotiated.

Drug makers could also respond by re-negotiating contracts with reference countries to increase prices, raising the bar for prices in the US and generating higher revenue abroad, Conti suggested.

Police are solving a higher proportion of crimes than ever before, but victim advocates say it’s nothing to celebrate.

Legal actions for reported car thefts, burglaries and robberies have doubled in NSW since 2009, a Bureau of Crime Statistics and Research report found.

Improvements were also seen for assaults, including those related to domestic violence, though closure rates for sexual assault cases have declined.

The report, released on Wednesday, follows concerns about crime rates in several states including anti-Semitic attacks, gangland wars and violent youth crime.

Growing anger about crime prompted Opposition Leader Peter Dutton this week to pledge a $750 million crime package, targeting knife and tobacco offences.

But police closing more cases was nothing to celebrate, according to victims’ advocate Howard Brown.

Improvements could be attributed to more access to technology such as CCTV since 2009, he said.

“You talk to the 450 families of unsolved homicides and you talk to the thousand families of missing persons where there’s been no resolution,” he told AAP.

“Then a report comes and says we’re doing a much better job.

“Tell that to the people who are still waiting and who have been waiting 20 years for results in the death of their loved one.

“This type of thing is insulting.”

Fellow homicide victims advocate Peter Rolfe congratulated the police on the historic high rates, but questioned why murder didn’t see an increase.

The report found the rate of solving murder cases was stable at about 65 per cent.

“I’m sick and tired of waking up and seeing so many people shot – drugs are the cause of these actions,” Mr Rolfe told AAP.

“I’ve got friends whose son disappeared 20 years ago and police haven’t solved what happened to him.”

The bureau’s executive director said the reason for the stable rate was likely not in police control.

“I suspect the characteristics of individual cases are most influential in whether a murder is solved, rather than factors that are at the discretion of police,” Jackie Fitzgerald told AAP.

She said it should be of comfort to victims and the community that the risk of arrest for criminals was “undoubtedly higher than ever before”.

“The increased risk of being caught may also have contributed to the large decline in property crime over the past 15 years by deterring offending,” Dr Fitzgerald said.

Of the 11 offences examined, nine showed a significantly higher legal action rate in 2023 compared with 2009, the report found.

About one in eight motor vehicle thefts are solved, up from one in 20.

Rates for solving domestic violence-related assault have risen from 60 per cent to 67 per cent.

Sexual assault was the only offence with a significant decline in the legal action rate, dropping from 10 per cent in 2009 to seven per cent in 2023.

It follows a surge in people reporting sexual assaults over the past 15 years, including through an online reporting tool launched by police in 2016.

1800 RESPECT (1800 737 732)

National Sexual Abuse and Redress Support Service 1800 211 028