I am self employed with some income from US and some from Australian clients. I have lived in Australia as a permanent resident now for two years and file tax in both countries on global income. There is a totalization agreement in place between Australia and USA to avoid double payment of medicare and social security in both countries. I can find documentation that supports this for employers, multi-national companies, etc. But am wondering if this is an opportunity for me to reduce my US tax payments? Any thoughts would be appreciated.
Thanks!

Do you pay the equivalent of self-employment tax to the Australian government?

From IRS publication 54, Chapter 3; Who Must Pay Self-Employment Tax?
If you are a self-employed U.S. citizen or resident, the rules for paying self-employment tax are generally the same whether you are living in the United States or abroad.
The self-employment tax is a social security and Medicare tax on net earnings from self-employment. You must pay self-employment tax if your net earnings from self-employment are at least $400.
For 2010, the maximum amount of net earnings from self-employment that is subject to the social security portion of the tax is $106,800. All net earnings are subject to the Medicare portion of the tax.

MukatA has it correct. However, the totalization agreement between Australia and the United States prevents the payment of self-employment taxes to BOTH countries.

If the SEinSydney is paying the Australian equivalent of self-employment tax, then he needs to get a statement from the Australian agency attesting to that fact. This statement is then attached to his U.S. tax return in place of the Schedule SE. The word EXEMPT is printed on Line #54 of the Form 1040.