Donald Trump's speech to the joint session of Congress spoke highly of Australia's immigration rules

Donald Trump's interest in adopting Australia's so-called "merit-based" immigration system and switching away from low-skilled  foreign workers appears to be the culmination of 12 months of private talks between his advisers and Australian officials.

Mr Trump's senior policy adviser, immigration hardliner Stephen Miller, first met Australian diplomats last March at the Washington residence of Ambassador Joe Hockey.

At the time Mr Trump was leading the Republican primary elections and championing a tough stance against Muslims and illegal Mexican immigrants he labelled "rapists" and "murderers".

The ultra-conservative Mr Miller showed interest in better understanding Australia's immigration system - which prioritises higher-skilled workers in demand from business and blocks people who arrive illegally by boat - according to people familiar with the discussions.

Australian officials briefed Mr Miller on Canberra's targeted immigration rules and points system.

Visas are granted predominantly to skilled workers on their likely contribution to society based on factors such as age, education and work experience.

In contrast, the US residency rules are heavily skewed towards family reunions.

A series of exchanges over policy, including immigration, between Australian officials in Washington and Canberra and the Trump team continued over the past year, sources said.

On Tuesday night in Washington in his first speech to a joint sitting of Congress, President Trump hailed Australia's immigration rules and signalled he wanted to adopt a similar approach.

"The current, outdated [US] system depresses wages for our poorest workers, and puts great pressure on taxpayers," Mr Trump said.

"Nations around the world - like Canada, Australia and many others - have a merit-based immigration system.

"It is a basic principle that those seeking to enter a country ought to be able to support themselves financially."

Mr Miller was reportedly a major contributor to Mr Trump's speech.

The President's statement was ironic given that weeks earlier he lashed out on social media at a "dumb" deal he inherited from predecessor Barack Obama to accept 1250 refugees from Australian offshore processing centres in Papua New Guinea and Nauru.

During a late January phone call, Mr Trump told Prime Minister Malcolm Turnbull "this is the worst deal ever", complained that he was "going to get killed" politically and accused Australia of seeking to export the "next Boston bomber", The Washington Post originally reported.

In another twist, Mr Miller is understood to have been one of Mr Trump's advisers most sceptical of honouring the Obama-Turnbull refugee deal.

The referencing of Australia by Mr Trump this week in Congress may be interpreted as a nod to Mr Turnbull; that while the administration loathes the refugee deal, the President respects Australia's targeted immigration laws.

Mr Hockey last month visited the White House to smooth over relations with chief of staff Reince Priebus and chief strategist Stephen Bannon after the fiery phone call. Ambassador Hockey was on the floor of the Congress for the speech yesterday.

In the US, about 70 per cent of the approximate 1 million people granted permanent residency each year are approved on family-based migration.

About 15 per cent are employment-oriented and 15 per cent humanitarian, according to the US Department of Homeland Security.

Australia accepted 262,170 permanent immigrants last year, including many already living in Australia on temporary visas, according to government data. About 57 per cent were skilled, 34 per cent came through the family migration scheme and 9 per cent were part of Australia's humanitarian stream.

Under strict rules, asylum-seekers who attempt to illegally enter Australia by boat are dispatched to foreign detention centres.

Immigration Minister Peter Dutton last October proposed a lifetime ban on adults who attempt to come to Australia illegally by boat.

In the United Kingdom, Australia's points-based immigration system was last year championed by Brexit campaigner Boris Johnson to "take back control of a system that is, at the moment, completely out of control" and to "neutralise the extremists".

A review of past presidential speeches shows that the last time Australia was mentioned in a president's inaugural address to a joint sitting of Congress was in 2001 when George W. Bush thanked Australia "mourning" the September 11 2001 terrorist attacks that killed about 3000 people.

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Australia’s energy mess to spark our own Trump revolt

Global markets last night declared the looming Trump-driven US boom back on track. For Australia to duplicate such a boom would require four elements:

First, there needs to be a willingness to slash government administrative waste. The Washington reductions (“draining the swamp”) are monumental. Our waste is worse than that in the US. The Abbott government was elected in 2013 on a promise to slash the waste but it didn’t go through with it. There is no political will.

Second, we would need to raise tariffs or introduce an import tax, which means a return to protectionism. Australia says ‘no’.

Third, an ability to run up a huge deficit in the expectation that the tax cuts and infrastructure spending will create a boom. We certainly run big US-style deficits but by via government spending and waste not tax cuts. A mindset change is required which is not in our political DNA.

Finally, and most important of all, Trump is fostering massive energy developments in oil, gas and coal to drive his job creation and middle class income increases (Trump talks to the believers, March 1).

Here we can do the same thing and do it in a way that slashes our carbon emissions. But our politicians, particularly in states like NSW and Victoria, have no concept of the link between employment and gas usage, so we are actually facing a domestic gas shortage and skyrocketing energy prices.

Hundreds of thousands of jobs are linked to gas. Worse still, we have invested in renewable electricity generation but have not invested in base load power generation or energy storage systems like pumped hydro, so NSW and Victoria face blackouts in coming summers when the Hazelwood brown coal generator is shut down. You can’t have an investment-led recovery like the US when there are energy shortages.

Of the four US elements, energy goes to the core of why the Australian domestic economy will struggle and requires savings run-downs or borrowing for houses to maintain domestic momentum.

It is becoming clearer and clearer that the Origin and Santos consortiums in the Gladstone LNG projects are seriously short of gas from the Surat basin and surrounding areas in Queensland, so they are going to continue sucking gas out of the Cooper Basin and Bass Strait that supply NSW and Victoria — exactly as the chief of BlueScope, Paul O’Malley warned.

How do we solve this problem? We have the gas but state politics is preventing its development

On the surface the most straight forward way would be to bring in a third political party in New South Wales and/or Victoria (either to the right or to the left) who understands the link between gas and jobs

But that’s hard work and there are no obvious candidates at this stage, although one might emerge.

So we’re really left with only one alternative — the Bowen Basin in Queensland although there is gas in the Northern Territory but that too is being blocked by the Northern Territory administration.

The gas in the Bowen Basin is owned by Shell and Petro China. The Bowen Basin gas was originally owned by BHP and then AGL. Shell and Petro China bought the gas field for $3.5 billion and have since invested large sums in it.

There are huge reserves but they are deeper than the Surat basin further south and much more complex. Shell and Petro China drilled a series of some 20 pilot wells but not all of these flowed as well as Shell had hoped, so more work is required to extract the gas economically.

It will therefore take some years to bring Bowen gas to market and the outlays will be large. Probably the best alternative is to pump the gas 250 kilometres to the Wallumbilla gas hub where it can be piped to Sydney and Melbourne.

Alternatively, it can be pumped 500km to Gladstone to reduce the Santos and Origin shortfalls so that they’ll no longer require gas from the Cooper or Bass Strait.

When Shell purchased British Gas in 2015, it acquired the BG LNG project in Gladstone, which is now owned in a consortium with a different Chinese partner. Shell has sufficient Gladstone gas so it doesn’t need to suck gas from the Cooper and Bass Strait to honour its commitments.

Given the costs and complexity of developing the Bowen Basin, it’s probably not at the top of Shell’s agenda. More importantly, Shell needs to make sure it continues to drill in the old British gas areas in the Surat, so that there continues to be enough gas to supply its LNG requirements.

To develop Bowen gas will not only require more development work but the buyers of gas in Victoria and New South Wales will need to come together and offer an iron clad contract to take the gas.

In the past, because we had abundant gas in the Cooper Basin and Bass Strait, Australian gas buyers have never had to secure their supplies. But now they do and the gas will not be cheap but at least it will be available. Of course, the frustrating part of this is that our governments/oppositions in Victoria and NSW are stopping the development the reserves of gas in their states.

These are the sort policies that in the US created the Trump presidency. If the market is right and the US booms, then watch Trumpism spread to Australia on the back of our energy mess.

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Australia cracks down on visas for fast food industry

Since 2012, more than 500 foreign staff have been granted a visa - known as 457 - to work at businesses including McDonald's, KFC and Hungry Jack's.

The skilled worker visa, designed to fill Australian shortages, also extends to family members. "Australian workers, particularly young Australians, must be given priority," Mr Dutton said in explaining the change. He said visas would still be granted under exceptional circumstances.

Why Australia's temporary workers' scheme is under fire
According to government statistics, 95,758 people were living in Australia on 457 visas in September last year, compared with 103,862 in 2015. The highest proportion came from India (24.6%), the UK (19.5%) and China (5.8%).

What is the 457 visa?

A four-year business visa which allows people to live in Australia with their immediate family. It is designed to staff industries where there are gaps in skilled labour. Employers must sponsor 457 holders, and only if they "cannot find an Australian or permanent resident"

Successful applicants can freely travel in and out of Australia
In 2016, the most 457s were granted to cooks, developers, programmers and medical workers. Foreign workers had been able to apply for fast-food industry jobs since an agreement in 2012, when the opposition Labor Party was in power.

McDonalds employed more than half the people given 457 visas since 2012

But Labor's employment spokesman Brendan O'Connor queried the new decision, saying the visa did not apply to unskilled workers. "The notion that 457s can take jobs of flipping burgers means either Peter Dutton is lying or they are misapplying the 457 visa," he said.

Mr Dutton conceded the change mostly affected managerial staff, but said the current arrangement did not put Australian workers first. "Genuine business needs for overseas workers which contribute to economic growth will still be considered," he said.

Mr Dutton in December ordered a review of Australia's Consolidated Sponsored Occupational List, which lists more than 650 professions, to ensure that overseas workers "supplement rather than provide a substitute" for Australians.

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GDP: Australian economy rebounds 1.1 per cent, beating expectations

Australia has avoided a second consecutive quarter of negative economic growth, rising by 1.1 per cent in the December quarter and beating market expectations.

Overall, the economy grew by 2.4 per cent in the 12 months to December, according to the Australian Bureau of Statistics.

All states and territories grow as the latest GDP figures show Australia has avoided a technical recession.

In the September quarter it had shrunk 0.5 per cent, posting the second-worst result in 25 years as both private and government investment contracted and bad weather disrupted construction.

Ahead of the release of the December quarter figures, Treasury secretary John Fraser told a Senate hearing there was "no denying" the September quarter had been very weak.

A second consecutive quarter of negative growth would have raised the prospect of a so-called technical recession of the kind Australia hadn't experienced since the early 1990s.

Market economists were expecting growth of 0.8 per cent in the December quarter and 2 per cent over the year.

Strong increases in export prices pushed up nominal gross domestic product 3 per cent in the quarter and 6.1 per cent over the year.

The Bureau believes the terms of trade surged 9.1 per cent in the quarter, the most since 2010.

"The decent rebound in doesn't just dash any lingering fears that Australia was in a recession, but it also boosts hopes that the surge in commodity prices will trigger a rapid recovery," said Capital Economics chief economist Paul Dales. "The income recession of 2015 has given way to a mini income boom."

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