Strategic Insights Update

The Queensland Government recently announced a $570 million Queensland Battery Industry Strategy 2024-2029 to enhance the size and competitiveness of Queensland's battery market. Queensland has vast reserves of critical battery-related minerals, possessing 28% of the global vanadium reserves and 10% of global bauxite production. Queensland's significant competitive advantage in mining vanadium, aluminium and graphite, and its ability to support the production of alternatives to lithium-based batteries, such as flow batteries and graphene aluminium-ion batteries, underpins the strategy.

Data from Tourism Research Australia revealed that Brisbane experienced record-breaking visitor spend in 2023. International visitors contributed $2.9 billion to the city's economy and the average length of stay increased to 21.6 nights. The strength in Brisbane reflects a recovery in international expenditure to 94.4% of pre-COVID levels. The recovery of international tourism has been supported by an increase in flights connecting Queensland to major international markets including China, Japan, Singapore, and the United States though the Queensland Government's $200 million Attracting Aviation Investment Fund.

China's government has officially abolished heavy tariffs on Australian wine, as Beijing gradually unwinds the trade barriers it placed on Australian exports in 2020 and 2021. China has now lifted almost all trade sanctions, although barriers remain on the $700 million rock lobster trade, and several Australian meatworks remain blocked from the market. However, the announcement comes at the same time as China is cancelling or postponing imports of around one million tonnes of Australian wheat due to the global market being flooded with cheaper alternatives. China is the largest buyer of Australian wheat.

The European Parliament will likely implement the Artificial Intelligence (AI) Act in May. These rules will establish standards and practices for ethical and trustworthy AI and will improve transparency and help regulate high-risk AI systems. Companies across the globe need to prepare for the EU AI Act regulations and ensure that they comply with the rules, facing hefty fines if breached. It will be important for Queensland AI companies to adhere to these policies.

Droughts have been impacting numerous countries globally including the United States, Canada, Mexico, Chile, and Vietnam. The droughts threaten agricultural production, prompting some states to implement the first water-sharing negotiations in 20 years. The reduction in output of agricultural products by drought-stricken regions may benefit Queensland producers through elevated export prices. Industry experts suggest there may be further opportunities for Australian exporters in the US later this year when their domestic supply is expected to reduce.

The resurgence of Somali pirates in the Red Sea and Indian Ocean is exacerbating a global shipping crisis. The pirates have capitalised on the security gap left by recent Houthi strikes. The raids threaten to inflate costs for shipping companies due to increased insurance prices and security guard costs. Industry officials forecast an escalation could cost the global economy over $7 billion. The waterways off Somalia include some of the world's busiest shipping lanes. Queensland’s imports and exports which travel through the region could be impacted by the increase in shipping costs.