🗞️ Modern slavery

Good morning. The US has proposed a 12.5% tariff on Australian imports, accusing Australia of failing to adequately stop goods made through forced labour from entering its markets.

Australia sits in the higher penalty bracket right above Canada, the EU and Mexico, despite the government insisting it has a strong framework to address modern slavery.

Apparently the country that gave the world fair go culture now needs America to explain supply chain ethics to it.

All the headlines and more below...

AMAZON, TEMU AND ALIEXPRESS ARE SELLING BANNED TOYS. THEY ONLY REMOVE THEM WHEN ASKED.

Products already illegal in Australia such as fake cigarettes that puff smoke, toy-shaped lighters, and magnetic chess sets with small high-powered magnets that can cause life-threatening injuries if swallowed are being sold openly on Amazon, Temu, AliExpress and eBay. The platforms don't proactively remove them. The ACCC has to send individual take-down requests.

The issue is a legal loophole around online marketplace liability. The platforms aren't treated as sellers, so they face no automatic requirement to vet what's listed. CHOICE says items banned under Australian safety standards such as flammable kids' clothing and products with exposed button batteries are routinely available.

Each platform says safety is a "top priority." Amazon uses AI to monitor listings. Temu added flagged items to a block-list. AliExpress is "reviewing sellers." Whilst, eBay has a regulator hotline that removes listings within 2 days. All but eBay offered refunds.

The onus is still on regulators to catch the problem after it's already listed.

AUSTRALIAN NEWS

• Electric vehicle demand in Australia has surged as EVs made up 20% of new cars in May, while low-emissions vehicles reached 46% and petrol and diesel SUV sales slumped. LINK

• Australia’s economy has slowed as March quarter GDP growth eased to 0.3% and 2.5% annually, with rising oil prices, higher interest rates and weaker trade dampening activity. LINK

• CBA and NAB have slashed Australian GDP forecasts to about 0% quarterly and 2.1% to 2.4% annually as higher oil prices and weaker net exports hit growth. LINK

• The Australian sheepskin market has rebounded from being worthless and dumped in landfill 12 months ago as tighter supply and Chinese demand lift prices to multi-year highs. LINK

• NSW Treasury secretary Michael Coutts-Trotter has demanded KPMG assure that staff linked to its recent audit scandal are removed from government contracts and provide a full ethical-accountability report. LINK

AUSTRALIA GETS THE AI MODEL TOO DANGEROUS TO RELEASE

Anthropic has given 150 organisations across 15 countries access to Claude Mythos Preview, an AI model it won't release publicly because it's as good at cyber warfare as it is at defence. Australia is included. The company won't say which organisations, but the most likely candidates are the big four banks, critical infrastructure operators in energy and telecoms, and the Australian Signals Directorate.

The model is distributed through Project Glasswing, a staged program that lets select groups scan their own code before attackers get hold of similarly powerful tools. The initial 50 included Apple, Microsoft, Nvidia and JPMorgan Chase. The new batch extends to power, water, healthcare and communications sectors across Five Eyes, NATO and the EU's cybersecurity agency.

Anthropic's president said a successful attack on one of the target codebases could affect more than 100M people. Competitors are expected to build similar models within a year.

The announcement came a day after Anthropic confidentially filed for a $1.4T IPO.

COMPANY NEWS

• ASIC has launched an investigation into David Jones Group over filing its FY25 accounts about 6 months late, after fining Canva US$792,000 and Mecca nearly US$600,000. LINK

• Ampol has secured ACCC approval for its proposed US$1B acquisition of EG Australia as it agrees to divest 41 sites and rapidly expand its budget U-Go network. LINK

• Ingenia Communities reaffirmed that it is on track to achieve the top end of its FY26 guidance, expecting EBIT of $188.7M, 560 to 575 home settlements and 32.5c to 34c EPS. LINK

• The Lottery Corp cut its FY26 operating expense guidance to US$300M–US$310M from US$310M–US$320M as US$10M in labour savings funds AI and digital investment. LINK

• Superloop lifted FY26 underlying EBITDA guidance to $118M-$122M from $112M-$120M and raised capex guidance to $34M-$37M as it prepares its SuperCharge29 strategy. LINK

• KPMG Australia has seen chief operating officer Eileen Hoggett step down while remaining an audit partner as NSW and Victorian governments review multimillion-dollar contracts over client data misuse allegations. LINK

• Airbus has completed the first test flight of a specially built A350-1000ULR for Qantas’ Project Sunrise in France as delivery slips to April 2027 for 22-hour non-stop flights. LINK

TOGETHER WITH KRAKEN

Your savings account has been doing the same thing it always does while everything else around it moves. You don't need to go all in on crypto. You just need to stop pretending it's not worth understanding.

Kraken has been around since 2011, never been hacked, and lets you start with AUD from any amount. If you've been waiting for someone to explain it without the hype, start here.

CHART OF THE DAY

Supply chain disruptions are back at 2022 levels

ONE MORE SCROLL

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TRIVIA

We'll give you the national dish and you have to give the country:

1. Paella

2. Moussaka

3. Tagine

4. Doner Kebab

5. Nasi Lemak

Answers below

OUR SOCIALS

ANSWERS

1. Spain
2. Greece
3. Morocco
4. Turkey
5. Malaysia

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