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Hume says the RBA would raise rates again
By Caroline Schelle
Earlier, the opposition’s finance spokeswoman Jane Hume said the Reserve Bank would raise rates again.
“It’s an indicator ... that [the government has] one foot on the accelerator with [the] budget and one foot on the break with the RBA and interest rates,” the senator told Seven’s Sunrise program this morning.
Senator Jane Hume believes the RBA will raise interest rates again. Credit: Alex Ellinghausen
“Of course, they will be forced to raise rates again,” Hume said of the central bank.
She said while governor Philip Lowe said the budget was neutral, that’s not what was needed, and minimum wage increases could impact on inflation.
“The RBA governor said that without corresponding productivity gains those wage rises will simply be more inflationary, and we can expect further interest rate rises.”
She said the government needed to do everything to tackle inflation, and not just turn over responsibility to the central bank who has “one tool in the shed” to tackle the issue.
“They’ve only got interest rates so what is it that the government can do to lower inflation, to actively lower inflation, to actively low inflation,” Hume asked.
Labor ministers insist wages aren’t driving inflation
By Caroline Schelle
Circling back to the interview with Finance Minister Katy Gallagher, who said yesterday’s rate hike wasn’t due to the federal budget or the minimum wage increase.
“We’re in a very difficult environment, we’re not pretending otherwise, we know this is really hitting households hard,” she told RN Breakfast this morning.
“Our job as managing the budget as the government is to make sure that the decisions we take don’t make that job of the Reserve Bank’s harder.”
Home Affairs Minister Clare O’Neil says increases to wages aren’t driving up inflation. Credit: AFR
She said wages were not creating the “inflation problem” in Australia, and there had been a decade of wage stagnation.
“Minimum wage earners and low wage earners have paid the price for that over a decade, and we are seeing modest and sustainable wage growth starting ... but we accept that to have sustainable wages growth into the future we have to deal with the productivity challenge,” she said.
Home Affairs Minister Clare O’Neil was also asked about wages this morning, when she appeared on Seven’s Sunrise program.
She said Australians faced a decade of their standard of living going backwards because of decreases in wage rises.
Instead, high inflation was being driven by the war in Ukraine.
“That’s why we have highi nterest rates right across the developed world,” she said.
Home Affairs Minister Clare O’Neil said this morning the rate decision was not made by the government, and said the government was working to provide cost-of-living relief.
“What I want them to know is that the Albanese government is doing everything within our power to make sure we can provide as much cost-of-living relief as we can.”
New WA premier expected to unveil cabinet today
By Hamish Hastie
In WA, Roger Cook has been endorsed as the state’s new premier and is set to unveil his new cabinet today.
Current cabinet secretary Balcatta MP David Michael is expected to be elevated to minister while Yawuru, Nimanburr and Bardi woman and Kimberley MP Divina D’Anna to take on a parliamentary secretary role.
New WA Premier Roger Cook with his deputy Rita Saffioti after Labor’s caucus rubber-stamped his elevation to leader.Credit: Hamish Hastie
New deputy premier Rita Saffioti has also been tipped to take the Treasury portfolio that was held by former premier Mark McGowan, while keeping her transport portfolio.
Cook was tight-lipped about what the makeup of his new cabinet would be but did not dismiss suggestions that Saffioti would keep transport.
Regional towns lobby state for $80m to prepare for 2026 Games
By Benjamin Preiss
Parks and sports grounds would be upgraded across regional Victoria and ticket holders for the 2026 Commonwealth Games offered accommodation and tourism deals under an $80 million proposal to spread the economic benefits of the event across the state.
The group representing regional cities is urging the state government to pour $80 million into its plan to reap widespread dividends from the Games, arguing the event should leave a legacy for all regional Victorians – not just those in the host cities.
Bendigo netballer Charlotte Sexton is hoping the Commonwealth Games sees upgrades to sports facilities across regional Victoria.Credit: Justin McManus
Regional Cities Victoria wants $2 million for each of its 10 member councils, so they can upgrade and repair sports facilities, in addition to a $30 million tourism campaign promoting the regions.
NSW premier breaks promise to end secret rent bidding
By Michael McGowan and Angus Thomson
Turning to state news, the NSW government has been forced to drop a key plank of its election promise to tackle rental affordability.
Experts warned it would instead drive up prices and lock tenants into leases they could not afford.
In a major concession, NSW Premier Chris Minns has decided to pull the much-maligned plan to end secret rent bidding, after it became clear the minority government would not be able to pass the bill through parliament.
NSW Premier Chris Minns.Credit: Edwina Pickles
The bill was referred to a parliamentary committee last month after crossbenchers raised concerns with new rules that would have required real estate agents to tell applicants when they received a higher bid for a rental property.
Rudd speaks out on the ‘ugly truth’ of Ben Roberts-Smith’s war crimes
By Farrah Tomazin
Former prime minister Kevin Rudd says he is “shocked and dismayed” by the actions of Australia’s most decorated living soldier, Ben Roberts-Smith, who was last week proven to be a war criminal who unlawfully murdered unarmed Afghan prisoners.
The new ambassador to the US – who was prime minister when some incidents took place – also praised Australia’s democratic system for confronting what he described as “hard and ugly truths,” when many other countries would have “swept them under the rug”.
Ben Roberts-Smith in front of his portrait at the Australian War Memorial in 2014.Credit: Jay Cronan
But he added that, based on his own experience working with members of the Defence Force – as a prime minister, as a foreign minister, and now as the Albanese Government’s top diplomat in Washington – the kind of conduct revealed in this case is “not symptomatic of the Australian Defence Force more broadly”.
Gallagher says government should shift reliance on consultants
By Caroline Schelle
The Senate inquiry into consultants is set to resume, and the finance minister was asked whether it was possible to reduce the public sector’s reliance on consultants.
It comes after PwC tax leak scandal, which saw the firm attempt to use confidential government tax plans to cultivate fresh business.
Speaking on RN Breakfast this morning, Katy Gallagher said she believed the government can fundamentally change the reliance on external consultants.
The finance minister has spoken about the need to move away from using consultants, and said PwC was an ‘extreme’ example. Credit: Luis Enrique Ascui
“I think we can, and I think we should, and I think we have to ... this is something I’ve been talking about for years from opposition,” Gallagher said.
She said over the years there was a shift towards outsourcing public service jobs into the private sector.
“Obviously, the issues with PwC have highlighted that at an extreme end, but then we’ve got a lot more to do to rebalance the public service to make sure that it’s there as the important institution that it was already always intended to be to work in the interest of the Australian people.”
She said there was a lot more to be done to shift away from the reliance on external labour.
Government inherited a ‘significant productivity challenge’: Gallagher
By Caroline Schelle
Staying with the finance minister, who has spoken about addressing concerns around productivity after the Reserve Bank lifted interest rates yesterday.
The RBA indicated concern about the gap between wages and productivity levels following the latest interest rate rise.
Katy Gallagher said the government wanted to get wages moving, but said there was an issue with productivity.
“We want wages to get moving, but we also acknowledge that we have a significant productivity challenge that we’ve inherited,” she said on the ABC’s RN Breakfast.
Finance Minister Katy Gallagher says the government inherited a productivity challenge. Credit: Alex Ellinghausen
She said productivity growth over the last decade was the slowest in 60 years.
The government received the productivity commission’s report in March, and the finance minister said it wanted to implement the recommendations.
In particular the government wanted to focus on technology and the energy transition, Gallagher told the program.
“We are putting in place concrete plans to deal with those ... there are real opportunities for this country to actually set ourselves up for the future,” she said.
“Make sure our people have the skills and opportunities that they deserve and that we seize the natural strengths of our country, particularly through the energy transition, to put ourselves in the best shape possible.”
Finance minister says the government isn’t forecasting a recession
By Caroline Schelle
Finance Minister Katy Gallagher says the Treasury department is not forecasting a recession.
Speaking on ABC TV, Gallagher said the rate increase is going to really hit millions of households and the government was looking at what it could do to ease cost-of-living pressures.
The minister said the government expected the next 18 months were going to be “pretty hard” but wasn’t expecting Australia to enter a recession.
Finance Minister Katy Gallagher says the next 18 months would be ‘pretty hard’ for Australians. Credit: Alex Ellinghausen
“That’s not the Treasury forecast. And that’s not the forecast of the independent Reserve Bank. They talk about a narrow path, obviously, and that’s a matter for them, but that’s not Treasury’s advice to us,” Gallagher said about a potential recession this morning.
She said the government had forecast the economy to slow down, since the October budget.
“We had always predicted that the next 18 months were going to be pretty hard and, you know, I don’t think that view has changed.”
Risk of hard landing grows after RBA lifts rates to 4.1 per cent
By Rachel Clun and Shane Wright
Reserve Bank governor Philip Lowe warned Australians to expect even more interest rate rises as Treasurer Jim Chalmers distanced himself from the bank’s decision to take the cash rate to an 11-year-high amid growing risks of a recession.
After the 12th interest rate rise in just over a year, Lowe said on Tuesday further rate increases could be necessary to tame inflation, but economists now believe the bank’s approach risks an economic hard landing that would drive up unemployment.
Treasurer Jim Chalmers says the interest rate rise will make life harder for Australians. Credit: Alex Ellinghausen
The bank is tightening monetary policy at the fastest pace since the late 1980s.
The rate increase to 4.1 per cent will add nearly $100 to monthly repayments on the average $600,000 mortgage.
Commonwealth Bank’s head of Australian economics, Gareth Aird, said the interest rate tightening cycle had been “incredibly aggressive”.
Finance Minister Katy Gallagher will speak about the rate rise shortly. Stay tuned.
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2023-06-06 23:16:34Z
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