Fed govt sues 3M for $2b; Ferrari EV launch a flop; Rinehart richest Australian
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Welcome to Fear and Greed, business news you can use today. The federal government launches its biggest ever legal action over the manufacture of forever chemicals. The US and Israel strike in the Middle East, sending the ASX tumbling, and Ferrari launches its first ever electric vehicle, to howls of protest. Plus, business investment surges on the back of data centres and Gina Reinhart once again named Australia's richest person. It is Friday, the 29th of May, 2026. I'm Michael Thompson and good morning, Sean Aylmer. Good morning, Michael. Sean, the main story this morning, the Commonwealth has launched legal action seeking $2 billion in damages from 3M, the global manufacturer, to recover the cost of managing contamination from PFAS, or forever chemicals, really, that have been used in firefighting foam at 28 defence bases.
What legal action is the federal government taking against 3M?
In its largest ever legal action, the Commonwealth alleges that 3M... And I quote, withheld a range of information and misrepresented the effects of this substance. These are very big allegations.
That's exactly right, Michael. Attorney General Michelle Rowland said 3M had withheld the results of testing showing significant adverse environmental effects associated with the foam. Forever chemicals are nasty. They stain water and heat repelling. That's why they're used in compounds and products used by all of us. They're pretty much present in every one of us. In fact, most of the world's population. They're very hard to break down and they have some ill effects on health. They disrupt hormones, immune systems, livers, kidneys, and they build up over time.
You don't get rid of them. Yeah, it's pretty frightening. And Roland claimed yesterday that 3M misrepresented the foam's toxicity and how safely it could be disposed of, and as a result, contributed to substantial costs for Defence and the Australian taxpayer, including over $1 billion to date to investigate, remediate and mitigate PFAS contamination at Defence estate sites.
A 3M spokesperson told Nine Media that the group will defend itself against the claim, saying it had never manufactured PFAS in Australia and had stopped sales of the products at issue 20 years ago. The Australian action comes off the back of a landmark US legal settlement in 2024 in which 3M agreed to pay US$12.5 billion to remove forever chemicals from thousands of water supplies across that country.
The other big story in Canberra yesterday, Sean, was the federal government introducing its budget tax measures to parliament that introduces changes that we've been talking about now to capital gains tax and curbing negative gearing as well. But the legislation is set... to go to a Senate inquiry. Now, it's not going to languish in inquiry land though. It's going to report relatively quickly for an inquiry by 22nd of June, enabling the government to push through the changes by the 2nd of July.
Now, the Greens, who hold the balance of power in the Senate and therefore control the fate of the legislation broadly... say they will press for changes to toughen the budget measures, but they stopped short of saying whether they would insist on any changes as a condition of voting for the bill. The coalition and the business community want a longer, more extensive inquiry, especially into the implications of what it means for business investment. Now, yesterday, opposition leader Angus Taylor called the government's cowards and liars. And the coalition is threatening to delay passing legislation to cut the $38 billion from the NDIS beyond June 30, unless the government agrees to its demand on this issue.
Nationals leader Matt Canavan went further. He called for an election so Labor could earn the mandate to make the changes.
How are global events affecting the ASX and Australian economy?
Question time yesterday was very fiery. This is a big, big issue, a big political and policy issue at the moment.
Parliament yesterday was probably closer to a circus, I would say. And I don't think that tax reform has ever been so entertaining. Yeah. Certainly a way to grab people in and really hold on to them.
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