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The Guardian - AU
The Guardian - AU
National
Jordyn Beazley and Natasha May (earlier)

Interest rates blame game continues – as it happened

Peter Dutton has pointed the finger at the Albanese government over the RBA’s latest cash rate hike.
Peter Dutton has pointed the finger at the Albanese government over the RBA’s latest cash rate hike. Photograph: Mick Tsikas/AAP

What we learned today, Wednesday 7 June

That’s where we’ll leave the blog for today – thanks so much for joining us. Here is a wrap of the day’s biggest stories:

  • Philip Lowe has said struggling Australians can cut back spending or pick up more work to reduce financial stress after the Reserve Bank of Australia raised interest rates for the 12th time in just over a year.

  • The ACT veterans minister, Emma Davidson, has called for the commonwealth to intervene and end the prosecution of defence whistleblower David McBride, saying his looming trial is “not in the public interest”.

  • Aged care minister Anika Wells says the federal government needs to work with the states to deal with issues around dementia, in light of the death of aged care resident Clare Nowland.

  • Opposition leader Peter Dutton has downplayed the revelations made by the Australian National Audit Office (ANAO) report which found that at least 11 projects approved by the former government as part of their $2bn community health and hospital program had no lawful authority for the expenditure.

  • The Queensland government has reinstated the name of the iconic island to K’gari (pronounced gurri), which translates to “paradise” in the local Butchulla language.

  • in a Senate inquiry into consultants that continued today, Greens Senator Barbara Pocock said all 72 names of PwC employees involved in the tax avoidance scandal should be made public after the list was provided to the Aenate.

  • A firearms licence was reinstated to a man just months before he shot dead his teenage son and himself, in another horrific domestic violence incident that has left a small community in New South Wales reeling.

  • NSW had a record demand for emergency health services during, according to the Bureau of Health Information’s latest quarterly report.

Updated

Severe weather warning for north-east Victoria

Coalition critical of minister’s refusal to rule out aged care tax

The Coalition opposition has leapt on Anika WellsNational Press Club speech about better funding options for aged care, critical that the minister didn’t rule out raising new taxes to pay for care.

Shadow health minister, Anne Ruston, called Wells’ comments “deeply concerning”:

The minister’s refusal to rule out a new aged care tax today, despite being given two opportunities to do so, is particularly disappointing.

The Coalition stands ready to work constructively with the government for the future sustainability of our critical aged care sector, but that doesn’t mean a new tax is the answer.

Wells announced a new taskforce to examine aged care funding, flagging an interim report in October and final report in December. Asked several times what the possibilities could include, and whether it would include tax changes, Wells said she wouldn’t pre-empt the taskforce.

She went on to say that suggestions from the aged care royal commission to consider tax increases was “something for the taskforce to consider. I think we should keep as many options open and the taskforce should work through them”.

Ruston also again called on the government to provide more exemptions to the 24/7 nursing rules for regional and rural aged care homes, some of which are struggling for staff and may not meet the guidelines.

Aged care minister, Anika Wells, addresses the National Press Club on Wednesday.
Aged care minister, Anika Wells, addresses the National Press Club on Wednesday. Photograph: Lukas Coch/AAP

Updated

Climate change risk added to banking watchdog’s beat

Australia’s banking regulator will push banks, insurers and superannuation funds to properly account for climate risks under an updated charter.

The Albanese government has released an updated Statement of Expectations for the Australian Prudential Regulation Authority (Apra).

For the first time, the regulator is explicitly required to consider risks related to climate change as part of its work,

Here’s the treasurer, Jim Chalmers:

Our priority is to ensure Australia’s financial system remains stable and robust and that the regulator is responsive to changing economic conditions.

Updated

States need to be involved in dementia care, minister says

Aged care minister Anika Wells says the federal government needs to work with the states to deal with issues around dementia, in light of the death of aged care resident Clare Nowland.

Speaking at the National Press Club, Wells said the investigation into Nowland’s death – following her Tasering by police after she was found armed with a steak knife at a facility in Cooma last month – was still “on foot”.

The minister said she was receiving regular updates about the aged care regulator’s investigation, and noted police investigations into the incident, but said she couldn’t speak before those were finalised.

The age discrimination commissioner last month raised concerns about police being called in to respond to dementia patients, suggesting a different sort of response.

Asked by Guardian Australia about that idea, Wells said the government wanted all aged care workers trained in “the core business of aged care” – which included working with people with dementia.

We’ve got the opportunity for the national dementia action strategy, or action plan, that we are developing this year to fold in whatever learnings and agreements can be done out of an awful, an awful thing that happened.

She earlier spoke about “the need to greater understand and support people with dementia”. Wells went on to say that she and health minister Mark Butler were working together with state counterparts on such issues.

This is something that we need to be a lot more proactive about and I think that training all workers who interact with people with dementia ... is a good place to start.

Updated

Coalition lays blame for interest rate rises at government’s feet

The Coalition has criticised the Albanese government for not “doing enough” on productivity growth to balance wage increases and to stave off interest rate rises.

Speaking on ABC, Liberal MP Zoe McKenzie said:

The problem we have is no plan for productivity as well. It is wage increases with no productivity. What does that equal? More inflation. What is more inflation equal? Higher mortgage rates.

It is a perfect storm and I don’t see the government are doing anywhere near enough to address it.

Labor MP Sally Sitou said the government is working on critical reforms to boost productivity after the previous government “failed to invest in those key areas”.

It is us giving our workers the training they need to be able to become more productive workers as well as getting more women in the workforce through making childcare more affordable. These are some of the critical reforms that need to happen this year, which is what we are doing.

Updated

Jenny Craig to cease trading, employees made redundant

Weight loss company Jenny Craig will immediately cease trading from stores across Australia with employees to be made redundant after the company failed to sell its Australian and New Zealand operations of the brand, AAP reports.

FTI Consulting took the reins of the weight management service’s Australian and New Zealand operations last month after they slipped into voluntary administration.

Days before, the Melbourne-founded business filed for bankruptcy in the US.

Administrators Vaughan Strawbridge, Kate Warwick and Joseph Hansell sought to sell the operations “with the intent of preserving as many jobs as possible” and limiting losses for creditors by seeking offers from interested bidders.

In a statement issued by FTI Consulting on Wednesday, they said:

Despite best efforts, the administrators were unable to find a buyer for the physical stores and employees of the Australian and New Zealand business.

This has resulted in a decision to immediately cease trading from stores and employees being made redundant.

Jenny Craig signage in Melbourne
FTI Consulting took the reins of the weight management service’s ANZ operations after they slipped into voluntary administration. Photograph: Diego Fedele/AAP

Updated

Mortgage interest doubles and savings down, according to latest ABS figures

Total household interest paid on mortgages in Australia doubled in the last year from $10.7bn to $22.2bn, according to the Australia Bureau of Statistics.

The ABS today released its wrap of what happened in the Australian economy during the March quarter. Here are some notable points:

  • Fewer new houses were built, with construction of new dwellings falling by 1.3%.

  • Taxes rose. Income taxes paid by individuals rose 3.3% due to the strong labour market, while company tax rose 4.6%.

  • Australians saved less. Even though consumers held back on discretionary spending, households only saved 3.7% of their income during the March quarter 2023, the lowest proportion since 2008.

  • Inflation curbed our enthusiasm for shopping. Spending on discretionary items fell by 1%.

  • Our pay packets continued to grow in response to tight labour market conditions, though real wages continued to fall due to cost of living pressures.

Updated

We can and we must do better:’ government funds justice reinvestment programs

The federal government has committed more than $80m to fund community-led initiatives in the hope of stopping people from entering the criminal justice system.

The communities that will be supported by the initiatives include Darwin, North Stradbroke Island near Brisbane and Circular Head in Tasmania.

Here’s minister for Indigenous Australians, Linda Burney, on the announcement:

More than 30 years after the royal commission into Aboriginal deaths in custody, rates of incarceration of Aboriginal and Torres Strait Islander people … are a national shame. We can and we must do better.

Justice reinvestment is a very large step in doing better. We can’t stand by and see our young people robbed of their futures by a justice system that too often lets them down.

Updated

Defence department mismanaging inventory of items worth $2.6b

The Department of Defence has faced criticism for the way it manages its storage of items such as ration packs, clothing, screws, washers, light globes, toiletries and replacement parts for military equipment.

In a report tabled in parliament today, the Australian National Audit Office said Defence was managing general stores inventories (GSI) of more than 70 million items across 547 geographically dispersed locations as of June last year.

But the report said Defence “cannot demonstrate that it is achieving efficiency and economy in its management” of those inventories. The report said the framework in place was “not operating as intended to achieve the proper use and management of public resources”.

The ANAO found that of the $2.6bn in value of general stores inventories as at June last year, $1.7bn “could not be identified against a need or activity”.

The ANAO report said:

Defence is not able to demonstrate that it has fully implemented its framework requirements regarding cost-effective and efficient inventory management, and a ‘balanced inventory’ that avoids both understocking and overstocking.

Defence was also unable to demonstrate, until late in this audit, an active focus or response by Defence senior leaders on known issues contributing to inefficiency and overstocking in the management of general stores inventory.

Defence agreed to the four recommendations made by the ANAO.

Updated

Dutton calls on government to do more to help struggling families

Opposition leader Peter Dutton has downplayed the revelations made by the Australian National Audit Office (ANAO) report which found that at least 11 projects approved by the former government as part of their $2bn community health and hospital program had no lawful authority for the expenditure.

He told reporters in Townsville:

I understand the same program is operated by the current government.

We put more money into health every year, more money into worthy projects. When I was health minister, we created the $20bn medical research future fund, which is plowing literally billions of dollars into medical research projects across the country, and will go into perpetuity for as long as Labor doesn’t attack that fund.

Dutton also used the press conference – which was held outside the RFS base in Townsville, for “Thank a First Responder Day” – to call on the government to do more to help struggling Australian families amid another rate hike by the RBA.

“The treasurer promised that there wouldn’t be any more interest rate rises before his budget, and he thought it was all done and dusted. But of course now we know because of the decisions, the government’s interest rates have gone up again,” he said.

Updated

Thanks Natasha for leading us through today’s news. I’ll be with you for the rest of the day.

Thanks for your attention today, that’s it from me – you’re in the excellent hands of Jordyn Beazley.

New minister to oversee troubled youth detention centre

The troubled Banksia Hill detention centre will be overseen by a new minister as incoming West Australian premier Roger Cook pledges renewed focus from the Labor government, AAP reports.

Police minister, Paul Papalia, will add the corrective services portfolio to his responsibilities, replacing Bill Johnston after a tumultuous period of riots and claims of human rights violations in youth detention.

Papalia spent eight years as opposition spokesman for corrective services before Labor came to power in 2017 and is set to be tasked with balancing community safety with a renewed focus on rehabilitation for youths in detention.

Johnston is to remain minister for energy, adding the hydrogen industry portfolio.

In an otherwise minor reshuffle, Cook confirmed his deputy Rita Saffioti will become treasurer in addition to retaining the high-spending transport portfolio.

She will shed planning and ports, the latter to be overseen by sole newcomer David Michael who also takes on local government and road safety.

The new-look cabinet will be sworn in tomorrow, following Mark McGowan’s shock retirement, with the next election in 2025.

Updated

19 NSW projects receive more than $70m in funding from Disaster Ready Fund

NSW will benefit from more than $70m in combined investment into disaster prevention, after 19 projects received funding from the first round of the Albanese government’s new Disaster Ready Fund.

According to a joint statement from the federal and state ministers for emergency management, Murray Watt and Jihad Dib, successful projects in NSW include:

  • Delivery of risk reduction equipment, a critical evacuation centre and early warning systems at Cabonne in western NSW.

  • The design and construction of four high-priority coastal protection projects including upgrades to road protection structures, rock walls and levees as part of Eurobodalla Council’s Batemans Bay Coastal Protection Works on the south coast.

  • Construction works to future-proof Moulamein against damage caused by large flood events in the south-west region.

  • Works to reduce flood and erosion risks in the Lismore River catchment on the north coast.

  • A suite of research and development projects to enhance disaster planning, preparations and response capabilities in the northern rivers.

  • Construction of new stormwater drains in Orange in the central western region.

  • The establishment of strategic partnerships with Aboriginal communities and organisations to reduce the risk and impact of disasters through Forestry Corporation’s Fire, Country and People.

  • Youth-informed mental health resources in preparation and response to disaster-associated trauma through Bushfire Kids’ Connect School Community Disaster Risk Ready.

Updated

Protest group occupy Wentworth public housing estate in Glebe

A group of people have occupied and are refusing to leave the Wentworth public housing estate in Sydney’s Glebe in protest against the NSW government relocating tenants to make way for the estate’s redevelopment.

Rachel Evans, a spokesperson for Action for Public Housing and a member of the group who are occupying the building, say they are refusing to leave until the state government agrees to refurbish rather than redevelop the estate.

We are occupying these homes because all tiers of government are putting profit before people and exacerbating the housing crisis.

The redevelopment was first slated under the previous government in its plan to build a new site on the land with an increased proportion of social housing stock and a mix of private residences.

Wiradjuri person and 60-year-old Caroline lenna is the third-last tenant to be relocated from the estate and will move to another public housing unit in Glebe next week for the duration of the redevelopment.

It wouldn’t take much for the government to fix up our homes. Many apartments have new floors and paint, and there were fire safety upgrades two years ago. Structurally the building is sound.

Carolyn lenna, a Wiradjuri person, is being relocated from Wentworth Park Road public housing estate after it was slated for redevelopment
Carolyn lenna is being relocated from Wentworth Park Road public housing estate after it was slated for redevelopment. Photograph: Jordyn Beazley/The Guardian

Updated

Newcastle, Wollongong should share Sydney’s density burden

The chief of greater Sydney’s strategic planning body says regional areas should share in the city’s housing development burden, declaring density should be increased in suburbs with train stations on the fringes of Newcastle and Wollongong.

Anticipating that some key infrastructure projects will be axed by the state and federal governments, Chris Hanger, the CEO of the Greater Cities Commission, said planners had to capitalise on opportunities for density surrounding all existing train stations, not just Sydney’s new metro lines.

Hanger said during an industry Q and A event hosted by the Committee For Sydney today:

Anywhere you can get on whatever form of transport, we should be looking at what are the opportunities for densification.

Hanger said opportunities for densification should not be limited to inner Sydney, but across all six of the regions – the Hunter, Illawarra, Central Coast as well as western, central and eastern Sydney – that constitute the mega-region the GCCC (formerly the Greater Sydney Commission) is tasked with developing strategic planning for.

I was down in the Illawarra and the stations as you head into Wollongong, there is absolutely opportunity there as well. And definitely up in the Hunter, when I was in Newcastle, three weeks ago I would say now, the opportunity around a location like Broadmeadow.

(Densification) is more than just the metro stations.

Residential housing estate in Newcastle.
Residential housing estate in Newcastle. Photograph: Dean Lewins/AAP

Updated

Flash floods as front crosses into Victoria

Flash floods have hit parts of western Victoria and authorities are warning other regions to stay informed as a low-pressure trough makes its way across the state, AAP reports.

Emergency Victoria issued a watch and act warning at Halls Gap in western Victoria, following localised flash floods this morning.

Emergency Victoria said residents should stay indoors and not enter flood waters.

Victoria’s State Emergency Service received nine calls for help.

Updated

McBride said the prosecution had cost $1.8m as of February this year.

It hasn’t even gone to trial. I’d really like to see that money spent on mental health programs to support veterans.

McBride is likely to face trial before any alleged perpetrator of war crimes. He said the case was taking a significant toll on him and his family:

I look at photos of myself 10 years ago and I look like a different person, my marriage disintegrated … we have a huge legal bill.

I live with stress. It’s quite possible every time I spend with my kids, going to the beach or going to see a movie, will be the last time I do so for the rest of my life.

Updated

Prosecution of David McBride ‘not in the public interest’, says ACT minister

ACT justice health and veterans minister Emma Davidson has called for the commonwealth to intervene and end the prosecution of David McBride, saying it was “not in the public interest”.

McBride, a military lawyer who served in Afghanistan, is facing trial in the ACT supreme court in November over his alleged leaking of a cache of confidential documents to the Australian Broadcasting Corporation.

Those documents were later used for a series on Australian war crimes, dubbed the “Afghan Files”, which included allegations of troops killing unarmed men and children.

David McBride.
David McBride. Photograph: Mick Tsikas/AAP

Standing beside McBride and lawyer Bernard Collaery on Wednesday, Davidson, a local Greens MLA, said the prosecution must end.

She said it was not in Australia’s interests or the interests of veterans.

This prosecution is not in the public interest and it’s time for this prosecution to be dropped.

I know from having worked with a lot of veterans myself that honour and justice are really important to them, so are the rules of engagement.

Updated

Treasury ‘sleeping at the wheel’ on PwC tax scandal

Treasury officials have been accused of being asleep at the wheel on breaches of confidential government information.

AAP reports officials were grilled on their knowledge of potential breaches of confidential Treasury data by former PwC partner Peter Collins, who has been referred to federal police to investigate the allegations.

Greens senator Barbara Pocock hit out at Treasury’s decision to sign new confidentiality agreements with Mr Collins after they became aware of a possible breach.

While Treasury officials told the committee they had “very little information” at the time, and they passed on knowledge to the ATO for their investigation, Pocock said it wasn’t enough.

A possible breach of something with a criminal consequence comes to you, and you don’t have alarm bells go off? I am shocked.

That is inappropriate. That is sleeping at the wheel in my view, this is a very important matter with millions and millions of dollars.

Greens senator Barbara Pocock.
Greens senator Barbara Pocock. Photograph: Lukas Coch/AAP

Updated

Anika Wells addresses issue of sportswashing

Wells says she will continue to have “difficult meetings” on the issue of sportswashing where it is called for.

However she said the merger of PGA Tour and the Saudi-backed rival LIV golf was a matter for them to resolve.

On the issue of sportswashing more broadly, she said will take a similar approach to the one exercised during the World Cup held in Qatar.

I went to Qatar and I had difficult meetings with Qatari ministers about where we wanted to see further improvement. And I will continue to do that as my practice as sports minister where it’s called for.

Read more on the PGA Tour and LIV Golf merger, which has been condemned as a “gigantic victory for sportswashing”, here:

Updated

Wells responds to a question about athletes who are transgender competing in sport

Wells says it’s not helpful for her to draw conclusions on whether sport codes should ban athletes who are transgender, adding it “comes down to the nuances of each individual sport”.

I would point to in terms of my ethos and how I approach this as the Australian sports minister is that our new high-performance strategy we launched at the end of last year is called Winning Well and there have been incidents and scandals in Australian sport over recent years where the win-at-all costs mentality has trumped a sense of fair play or equality or inclusion or fairness.

Anika Wells addresses the National Press Club in Canberra.
Anika Wells addresses the National Press Club in Canberra. Photograph: Lukas Coch/AAP

Updated

Aged care minister responds to question about Cooma aged care tragedy

Our reporter Josh Butler asked Wells more about the tragedy in Cooma and whether – in a general sense – police should be one of the first responders when there are cases like that of Nowland.

At a recent Senate estimates hearing, the commissioner raised concerns about whether police should be the fallback option.

Wells said:

I’m looking at everything that I can control.

… We’ve got the opportunity for the national dementia action plan that we are developing this year to fold in whatever sort of learnings and agreements can be done out of an awful, an awful thing that happened.

I think it also falls for Mark Butler and I who worked together on dementia to work with our state counterparts about what can be done.

Wells said the aged care commissioner (in attendance at the press club) has been keeping her up to date with the investigation into the Cooma incident.

Updated

Government’s aged care reforms will see better training in dementia, minister says

During her speech Wells acknowledged the tragedy in Cooma last month where the 95-year-old great grandmother suffering from dementia Clare Nowland died after being allegedly Tasered by police.

Wells said the reforms would see better training in dementia:

Now we must always seek to deliver better care and the recent tragedy in Cooma has re-enforced the need to greater understand and support people with dementia.

Dementia care needs to be core business in aged care. Over half of aged care residents, 54%, have dementia. And over two-thirds of aged care residents have some form of cognitive impairment.

And this is why we are introducing new Aged Care Quality Standards as recommended by the royal commission.

Outcome 2.9.6 under the second standard requires an aged care provider to ensure all workers are regularly trained in relation to core matters such as caring for people living with dementia. We are also drafting Australia’s new 10-year national dementia action plan.

Updated

More people applying for aged and disability care roles, Wells says

Wells says she has numbers “hot off the presses” from employment marketplace Seek that interest is growing in aged care nursing roles.

Seek has given me numbers that there has been a 30% increase in job ads for aged care nursing this year and 35% increase of applications per job ad for age and disability support worker roles this year. That speaks to more people listening to what we’re saying, trusting us that we’re trying to lift the standard in come into the sector.

Updated

Minister responds to questions about aged care closures

Wells is now taking questions at the press club. Asked about recent aged care closures, she says aged care is a “dynamic environment” where facilities have always opened and closed based on the needs of the market:

The facts of the matter is that we have had 76 facilities close in the past two years. Forty under the last year of the Morrison government and 36 under our first year in government.

I would suggest that the 40 that closed under the last year of the Morrison government were not closing because they had a crystal ball and could foresee the reforms that the Albanese government have brought in.

It is a fact that this has always been a dynamic environment where facilities open and close depending on the needs of the market.

Aged Care minister Anika Wells.
Aged care minister Anika Wells. Photograph: Lukas Coch/AAP

Updated

Anika Wells addresses National Press Club

The minister for aged care, Anika Wells, is addressing the National Press Club this lunchtime.

Among the guests in attendance is Wells’ mother Deb Wells.

David Crowe, the chief political correspondent at the Sydney Morning Herald and the Age, shares the family story that they expected Wells to enter politics ever since she joined the Rostrum public speaking contest in year 3.

Crowe also shared that this address will be the first speech ever to the National Press Club by a minister for aged care.

In this address, Wells will be laying out her plans to reform the sector, including setting up a taskforce to investigate the unanswered questions of the aged care royal commission. You can read about these changes from our chief political correspondent Paul Karp:

Wells tells the room:

I don’t want Australians to be scared about the care that they will be provided in later life. Right now, many are. I don’t want daughters and sons worried about the treatment that their parents will receive and right now many are. And like so many things, neglected for so long, this will take time to deliver a system of care that we all deserve.

Aged care minister Anika Wells.
Aged care minister Anika Wells. Photograph: Lukas Coch/AAP

Updated

Minimum wage increase not to blame for rate hike, Chalmers says

Taking questions, Chalmers says he is pleased the RBA governor Philip Lowe this morning acknowledged it wasn’t the minimum wage rise which influenced yesterday’s rate rise decision:

Ordinary working people in this country are already bearing the brunt of these rate rises. They shouldn’t also bear the blame for them.

And I was pleased to see, frankly, the Reserve Bank governor acknowledged today that the important increase to the minimum wage is not what is pushing up interest rates in his estimation, nor is it in my estimation.

We don’t have an inflation problem in our economy because people on the minimum wage are getting paid too much.

Updated

Chalmers and Bowen to meet with New Zealand counterparts

Chalmers also says he and the energy minister, Chris Bowen, will be heading to New Zealand for talks which will focus on climate change.

Tonight, I will be leaving for Wellington for two days across Wellington and Auckland. I’ll be meeting with my wonderful counterpart, the New Zealand finance minister Grant Robertson.

A big focus of the meetings will be climate change and for part of the engagements I will be there with Chris Bowen and his counterpart.

I will be meeting with the Central Bank of New Zealand, the Reserve Bank of New Zealand, I’ll be meeting with economists and experts, the Chamber of Commerce, and giving a speech in Auckland as well.

This is really important opportunity to make sure the next 40 years closer economic relations are even more productive than the first 40 years we mark and celebrate today.

New Zealand finance minister Grant Robertson poses with the front cover of his 2023 budget on the steps of parliament in Wellington on 17 May.
New Zealand finance minister Grant Robertson poses with the front cover of his 2023 budget on the steps of parliament in Wellington on 17 May. Photograph: Mark Mitchell/AP

Updated

Inflation to blame for interest rate rise, Chalmers says

Chalmers says it’s inflation, not government decisions, which is causing the cash rate to go up:

Rates went up yesterday not because of the budget, not because people on the minimum wage are getting paid too much, but because these inflationary pressures in our economy are more persistent than we would like. We see that again in the national accounts figures and in all of the ways, particularly that households are responding to the price pressures, that they are under.

Updated

‘People are under pressure,’ says Chalmers

Chalmers sums up the economic situation like this:

So we knew that this was going to be a difficult year, given the challenges coming at us from abroad. Here at home as well. And today’s results really confirms those two things, the people are under pressure and the global economic conditions are not helping either.

Updated

Business investment picking up, treasurer says

Chalmers says there are also “welcome signs” business investment is picking up as the impacts of global supply shocks recede.

New business investment grew 2.9% in the quarter, partly a consequence of the easing of some of these supply chain pressures. It’s meant more businesses have been able to get more capital in place and their businesses.

We also saw some significant activity in renewable and electricity projects on the coast, something that we support and we welcome.

And while we are seeing commodity prices [dip] a little bit, we are still getting really good prices for the things that we sell.

Updated

‘Inflation is moderating’

Today’s numbers confirm inflation is moderating, Chalmers says:

The data also confirms the view that we’ve had for some time which is inflation is moderating from its peak.

Not as fast as we would like. But it will hang around for higher than we’d like for longer than we like but there is more evidence in this data today that inflation is moderating from its peak of around Christmas time.

The national accounts measure of consumer prices rose by 6.5% over the year to March. That is down from 6.9% over the year to December.

Treasurer Jim Chalmers.
Treasurer Jim Chalmers. Photograph: Lukas Coch/AAP

Updated

Disposable incomes on the rise, says treasurer

A silver lining is that household incomes are going up, the treasurer says:

One of the pleasing aspects of these numbers is that household incomes grew solidly in the quarter at the same time as price pressures in the economy were moderating.

If you look at the wages and salaries number, it rose by 2.4% in the quarter and 10.8% over the year and that’s because more Australians are in jobs and earning more.

This is the fastest growth since the June quarter of 2007. Disposable incomes also rose, which helped to offset some of the pressure on household budgets which are still nonetheless considerable.

Updated

“The rising interest rates is clearly biting,” Chalmers says:

We see that in numbers because households are pulling back on spending, they are saving less and paying more in interest.

Household consumption eased for the third quarter in a row, it grew by just 0.2% in the quarter and that’s because households pulled back on discretionary spending to make room or the essentials in their household budget.

The saving ratio fell to 3.7%, and that’s the lowest since 2008. Mortgage interest expenses have doubled over the course of the last year. Dwelling investment and activity in the housing market declined in the quarter as well.

Those are all the indicators which show the impact of higher interest rates as well as these cost-of-living pressures more broadly, squeezing household budgets and weighing on economic growth in the economy more broadly.

Updated

Slowing GDP figures ‘unsurprising’, says Chalmers

The treasurer, Jim Chalmers, says the latest slowing GDP figures are “unsurprising”.

Higher interest rates and cost-of-living pressures are squeezing household budgets and slowing our economy at the same time. These numbers today are unsurprising and consistent with our expectation for a moderation in growth in our economy.

Because of what’s happening around the world and because of what’s happening around the kitchen tables of this country, we have expected and we see in these numbers today that growth momentum in the Australian economy is moderating as we expected and you see that in the GDP figures.

The economy grew 0.2% in the three months to March and 2.3% through the year. Again, they are not surprising numbers … it’s what we anticipated when it came to our budget forecasts. Because of that combination of global uncertainty, higher interest rates and cost-of-living pressures as well.

Updated

Weather warning cancelled for SA, but severe storms possible in south-west NSW

Meanwhile an update on those severe weather warnings in parts of South Australia, Victoria and NSW.

The bureau has cancelled the warning for South Australia, while severe thunderstorms are possible in south-west NSW and heavy rainfall continues in inland Victoria.

The highest falls recorded in Victoria in the 24 hours to 9am this morning were in the west with 49mm at Goroke and 35mm at Kanagulk.

Updated

Treasurer to speak soon

The treasurer, Jim Chalmers, is expected to speak at quarter past in response to those GDP figures which show the slowest growth since the Covid-19 lockdowns of the September quarter of 2021. Stay tuned.

Savings rate sank to 15-year low to fund household spending in the March quarter

Australia’s weak growth in the March quarter would have been worse if households hadn’t managed to keep hitting the shopping centres and supermarket aisles.

Half of the 0.2% quarter on quarter GDP growth came from household spending (which itself rose 0.2%).

Katherine Keenan, ABS head of national accounts, said:

Spending on essential goods and services were the main contributors to the rise in household spending, while discretionary categories such as furnishing and household equipment, purchase of vehicles and other goods and services all detracted from growth.

Households did see their total income rose 1.7% as wages picked up, but their total payables rose 4.4% with higher interest repayments no doubt a big part of the outgoings.

To fund the gap, consumers dipped into their savings, sending the household saving-to-income ratio down to 3.7%, its lowest level since June quarter 2008, the ABS said.

Presumably we can’t keep cutting their savings before we just cut our spending. And then maintaining any overall GDP growth will get harder still.

Updated

Victorian treasurer rejects possibility of stamp duty reform

Pallas, however, rejected the possibility of stamp duty reform, beyond the changes to commercial properties he announced in May’s budget. The main reason, he said, was because it is a revenue raiser for the government:

I get about $10bn a year in stamp duty, I can defray off my balance sheet $2bn a year, which is the commercial and industrial side of it, but if I were to forgo [that] in a very quick period, I’d have $8bn off my balance sheet and that’s close to about a third of all revenue from the state that disappears overnight.

He also pointed to the electoral unpopularity of the former NSW government’s stamp duty reforms, which were recently overturned by the new Labor government:

The practical problem also is there is a concern, we saw that played out in NSW, where the community can believe that the government is out there to put a tax on the family home. So from our perspective, we understand that business will see this as a rational way of amortising input costs of running a business, a lot of households could well be scared and I wouldn’t want to see an adverse impact on the market that’s already not in a great shape.

Updated

Victorian treasurer says government not meeting building target in inner Melbourne

Victoria’s treasurer, Tim Pallas, has conceded the government is failing to meet its target to build 70% of new homes in Melbourne’s existing suburbs, which is causing growing pains in the outer suburbs.

Speaking at the Property Council annual budget breakfast today, he said the state would be releasing a housing plan in September, which will seek to “rebalance” where new developments are built. He said:

We are seeing a disproportionate share of housing growth in the outer suburbs and nobody’s suggesting we should wind that back but we do need to get that balance back. Plan Melbourne [states] 70% middle ring and inner ring Melbourne being the area where the housing occurs and that 30% on the outer ring. What we are seeing … is a distortion of that number and that’s much closer to 50% on the outer ring of Melbourne and there’s an implied cost to that you’ve really got to acknowledge. While people are being able to sell property into the market. They’re leaving an embedded infrastructure deficit that the state has to fix up and pay for.

Victorian treasurer Tim Pallas.
Victorian treasurer Tim Pallas. Photograph: Joel Carrett/AAP

In March, Infrastructure Victoria released a report that found the lack of housing in inner Melbourne was contributing to the overdevelopment in growth areas with lagging infrastructure.

They said 1.3m new homes needed to be built in Melbourne to meet projections that the city’s population will grow to more than 8 million over the next 30 years.

It made 10 recommendations to the state government to help reach that goal, including developing better standards for low-rise apartments, streamlining the planning process and abolishing stamp duty and the first-home owner grant, which distort purchasing decisions.

Updated

Import surge, spending slowdown leave economic growth weakest in six quarters

Australia’s economy slowed in the March quarter as households dipped into savings to keep spending amid a record run of interest rate rises, and imports rose faster than exports.

The country’s gross domestic product expanded at a quarterly rate of 0.2% in the first three months of the year, and by an annual rate of 2.3%. Economists had expected GDP growth of 0.3% for the quarter and 2.4% for the year.

The quarterly pace of growth was the slowest since the economy contracted in the September quarter of 2021 during widespread Covid lockdowns.

The national accounts data, released by the Australian Bureau of Statistics on Wednesday, come a day after the Reserve Bank hiked its key interest to 4.1%, the 12th increase in 13 months. Today’s GDP figures provide details of the momentum of the economy at the start of 2023 and may influence future RBA rate decisions.

So far the dollar hasn’t budged much from its 66.8 US level this morning but we’ll keep an eye on it.

Updated

CORRECTION

Correction: This post was edited on 7 June 2023, to remove an inaccurate headline that stated Treasury signed a new confidentiality agreement after becoming aware of a possible PwC breach, and to clarify the timeline of events. Treasury signed a new confidentiality agreement in February 2018, and was not made aware of the possible breach until September 2018.

In the consultancy inquiry, Greens senator Barbara Pocock is probing whether Treasury thinks the secrecy laws – which the ATO has said prevented them alerting the Treasury to the PwC confidentiality breach – need to change.

Dianne Brown, the deputy secretary, revenue, small business and housing group, said that the ATO is an independent body. There are times to assess if legislative requirements are appropriate and “we’re probably at one of those times”, she said.

Pocock asked about the fact former PwC head of international tax Peter Collins signed a new confidentiality agreement with Treasury in February 2018, after the ATO was looking into the tax advice issue.

Treasury officials reveal they were aware of a possible breach of confidentiality by September 2018, because the ATO had asked for details of Collins’ previous confidentiality agreements.

Collins was reminded of confidentiality obligations before the February 2018 agreement, but no extra precautionary steps were taken in September.

Pocock accused Treasury of “sleeping at the wheel”, and said their response to the risk was “very unsatisfactory”.

Updated

Economy expanded a surprisingly weak 0.2% in the March quarter, ABS says

The 0.2% quarterly GDP increase was the slowest since the Covid lock-down contraction in the September quarter 2021.

Updated

GDP data to land shortly, will reveal momentum in the economy at the start of 2023

It’s fair to say Philip Lowe’s speech and comments didn’t move the dials much this morning. As it happens we have another data deluge about to land that may have a bigger impact.

At 11.30 AEST, the ABS will release national accounts for the March quarter, AKA GDP.

Economists on average reckon the economy expanded by 0.3% in the quarter from the final three months of 2022. And from a year ago, the economy will be 2.4% larger.

We know pundits are fallible, but that’s the yardstick the numbers will initially be assessed against. However, within the many components, there may be surprises, such a bigger drop in household spending than previously identified or government outlays being larger than predicted.

There will also be discussion of the “R” word if the numbers dive and people start wondering about recession. We’re well into the June quarter of course and we’ve had two more RBA rate hikes to chill demand since 31 March.

Stay tuned.

Updated

Senate committee receives list of PwC employees but won't release publicly: Pocock

Greens Senator Barbara Pocock says all 72 names of PwC employees involved in the tax avoidance scandal should be made public after the list was provided to the Aenate.

The Senate finance and public administration committee met briefly this morning, prior to commencement of the second day of public hearings of its inquiry into consultants, to consider releasing the names provided by PwC in response to questions on notice from Pocock.

Pocock says during that meeting she argued for the release of the names provided by PwC of all staff implicated in the tax avoidance scandal but “unfortunately the committee has decided not to release them despite the strong public interest in this issue”.

Anyone involved in this breach, or failing to blow the whistle on a broken culture should be identified and face the consequences of their actions.

I’m not saying everyone on the list supplied by PwC has behaved wrongly as we do not know. However, it is vitally important that we are able to identify the architects of this scheme and all those who promoted it, profited from it or turned a blind eye to serious ethical failure. PwC have had five years to determine who was at fault here. It’s time to come clean.

Australian Greens senator Barbara Pocock speaks during a Senate inquiry at Parliament House in Canberra on Wednesday.
Australian Greens senator Barbara Pocock speaks during a Senate inquiry at Parliament House in Canberra on Wednesday. Photograph: Lukas Coch/AAP

Updated

Buildings bathed in red to raise awareness of the iron overload condition haemochromatosis

Buildings across the country have been lit up red this week to raise awareness for a little known but very common inherited iron overload disorder.

Haemochromatosis is the most common genetic disorder in Australia, according to Haemochromatosis Australia.

People with the condition absorb too much iron from their diet, which if undetected can cause organ or tissue damage and can potentially result in premature death.

However, Haemochromatosis Australia says “the good news is that if haemochromatosis is detected before damage occurs, it can be easily treated.”

Updated

Senate inquiry into the use of consultancies continues

The department of finance has appeared at a Senate inquiry into the use of consultancies, in the wake of the PwC tax advice scandal.

Andrew Danks, acting deputy secretary of the commercial group, told the inquiry he is “confident” that the new ongoing “significant event” disclosure requirement in contracts will pick up bad behaviour, as suppliers are now required to alert them to findings by courts, tribunals or professional bodies about their performance or conduct.

He said:

The government does not want to be engaging entities with significant performance issues and that includes [consideration of] ethical behaviour.

Greens senator Barbara Pocock queried a more recent contract finance had signed with PwC, asking why the department hadn’t taken the RBA’s approach of giving the firm no further work.

Danks replied that the significant event clause wasn’t in place yet when it was signed, it was an 11-day contract for a “very targeted piece of work” and PwC had provided assurances that none of the 52 partners involved in the tax advice issue were performing the work.

Andrew Danks speaks during a Senate inquiry at Parliament House in Canberra on Wednesday.
Andrew Danks speaks during a Senate inquiry at Parliament House in Canberra on Wednesday. Photograph: Lukas Coch/AAP

Updated

‘Our patience has a limit and the risks are testing that limit,’ Lowe says on reason for June rate rise

Lowe also gave us what might be the most succinct reason why the RBA lifted rates with his summation of the “upside surprises” the board saw:

We want to get inflation back to target within a couple of years and that hasn’t changed. What has changed over the past couple of months is our assessment of the risks.

It is not just the wages data, inflation for April was higher than expected. We have seen housing prices rise again and we thought they would still be falling. When we look overseas we see a lot of persistence in services price inflation because unit labour costs are rising quickly. There has been a lot of strong correlation between inflation developments and what happens in Australia and abroad.

Upside surprises on inflation, upside surprises on wages, upside surprises on housing prices, upside surprises on inflation overseas.

We felt like we couldn’t just sit idly and say this is all accidental and it is all just noise. The conclusion we reached was that this represents upside risk to the inflation outlook in Australia.

We have been prepared to be patient in getting inflation back to target but our patience has a limit and the risks are testing that limit and so we thought we needed to respond after holding steady in April.

Reserve Bank of Australia governor, Philip Lowe, delivers an address at the Morgan Stanley Australia Summit in Sydney on Wednesday.
Reserve Bank of Australia governor, Philip Lowe, delivers an address at the Morgan Stanley Australia Summit in Sydney on Wednesday. Photograph: Dan Himbrechts/AAP

Updated

RBA confident in 2-3% inflation target

Lowe indicated he’s still confident in the 2-3% inflation target:

[The] 2-3% target is the right target for Australia. We have long had a flexible inflation target and that has served the country well.

Inflation moves up and down but we want people to be confident that when it is away from the target range it will come back.

We are not specific about it needs to come back to an exact number but we want the community to be confident that it will come back to average 2 point something and that is the right framework for Australia.

Updated

Lowe acknowledges financial strain on households

And circling back to the RBA governor taking questions in Sydney, Lowe is asked how much further he thinks interest rates can rise before we see a serious rise in mortgage arrears and defaults, given:

The Reserve Bank undertook modelling that showed around 50% of mortgage borrowers face negative cash flows at a cash rate of 3.75%, we are now at 4.1%.

Lowe acknowledged the financial strain on households:

Those calculations that you referred to were based on the assumption that people made no adjustments. If people can cut back spending or, in some cases, find additional hours of work, that would put them back into a positive cashflow position.

That is not to say that there’s not very significant stress out there in households at the moment … Arrears rates remain low. People are affording to pay their mortgages, even as they roll off from the fixed rate loans to variable rate loans. The arrears rates remain low but the banks are telling us, and this is understandable, that people are cutting back in spending.

I think that is going to be the environment we’re operating in for a while yet. People will make their mortgage payments but they will be cutting back spending in other areas.

Updated

Lowe says inflation persistent in services, with expectations remaining elevated

Unusually, the RBA’s 9.20am embargo for his speech did not coincide with him actually speaking. That’s now being live streamed here.

Frankly, the area being covered so far won’t send bond markets into a frenzy. His answers to questions might do that.

Anyway, Lowe said inflation had passed its peak, particularly for goods such as oil and food. However, demand in the economy remained high, particularly for the services sector.

Productivity gains – or rather the lack of them since 2019 – means increases in unit labour costs beyond the 2%-3% inflation target range will translate into interest rates remaining high for longer, and perhaps going higher yet. Lowe said:

In recent times, unit labour costs have been increasing quite strongly. Over 2022, they increased by around 7.5%, which is one the largest annual increases during the inflation targeting period.

(Unit labour costs for those wondering are how much it costs in wages per unit of output. If workers become more productive, they can be paid more without adding to inflation)

The central bank was also looking at how much people expected prices to rise in the future as a guide to whether higher rates might be needed to quell inflation. Unfortunately, measures beyond the near-term of inflation expectations are difficult to obtain.

One of those the RBA does check is how union officials view inflation over the next five to 10 years and that gauge has shifted higher of late.

Long-term inflation expectations. Chart from Reserve Bank of Australia - June 7 2023.
Long-term inflation expectations. Photograph: Reserve Bank of Australia

Other uncertainties include the state of the global economy, particularly how China will fare.

The economic indicators for China were weak in April, after a strong initial bounce-back following the easing of the Covid restrictions late last year.

This has implications for Australia, not just in terms of the prices of goods in world markets but also for the prices of our resource exports, which have declined recently.

The federal budget, which benefitted from higher royalties, will also be affected by any slower than expected growth in China.

Updated

South Australia’s State Emergency Service said it had responded to about 30 calls for assistance with incidents ranging from trees down to minor flooding.

It said more calls were likely as people discovered further damage during the day.

The Bureau of Meteorology said rain would become less likely over Adelaide during the course of today.

The city was forecast to receive another 10mm of rain on Thursday.

- AAP

Lightning, rain leave thousands in SA without power

A lightning storm that brought heavy rain across South Australia has left thousands without power and caused widespread but minor damage, AAP reports.

The worst of the weather hit Adelaide about 3am on Wednesday with falls of close to 30mm drenching some suburbs in about an hour.

About 83,000 lightning strikes were also recorded across the state.

SA Power Networks said about 8500 customers remained without electricity with outages spread from the Eyre Peninsula, through the mid-north, across Adelaide and the Adelaide Hills and down to the southeast.

Reserve Bank governor warns against ‘higher wage outcomes for everybody’

Next, Lowe is asked about what effect he expects from the rise to the minimum wage the Fair Work Commission announced last week.

He is warning against accepting the premise that all workers need to be compensated for inflation:

It merely depends upon how widespread the larger pay rises are. It is perfectly understandable for the lowest paid workers in the country to be compensated for inflation. It is tough and we know it is tough. That is perfectly understandable.

We will get ourselves into trouble if we accept the premise that all workers need to be compensated for inflation.

If we accept that premise, inflation at 7% and wage rises match that, what do you think inflation will be next year? It will be higher again and then we will have to have higher wage increases again.

We are in a difficult position where society wants to protect the lowest paid workers but we have got to make sure that the higher inflation doesn’t translate into higher wage outcomes for everybody because if that happens, the inflation persists and we will be in the world that I spoke about before that we’re trying to avoid. It is a tricky balancing act we are trying to manage at the moment.

Updated

Philip Lowe says budget improving inflation outlook in short term

Mike Hawkins asks Lowe if he’s fighting an uphill battle with the Australian government’s spending.

Lowe says he already addressed the issue at Senate estimates:

My summary of the budget was that it was broadly neutral. In terms of the inflation outlook in the short-term, it was helping.

The interventions in the energy markets, the price caps and the rebates that the governments are giving some households on their bills will bring inflation down by roughly three-quarters of a per cent next financial year. That is helping.

Broadly, fiscal policy is neutral at the moment and monetary policy is restrictive.

Updated

The RBA governor, Philip Lowe, is now taking questions at that Morgan Stanley summit in Sydney. We’ll bring you what answers he has.

The clothing Australians send to landfill releases harmful chemicals and microplastics into the environment as it rots. Plibersek said:

Global textile production releases more carbon dioxide than the international flight and maritime shipping industries combined.

She said the scheme would be focused on three main things: designing products that produce less waste, using materials ripe for recycling, and encouraging repair, remodelling and re-manufacturing.

The scheme is being pushed by the Australian Fashion Council.

– AAP

Updated

Clothing industry put on notice over new waste levy

Australia’s fashion industry must back a voluntary levy to clean up its act or the government will impose a mandatory one, the environment minister has warned.

Tanya Plibersek has detailed a new voluntary scheme to slash the mountain of clothing that winds up in landfill each year – about 10kg per person, on average.

The environment minister, Tanya Plibersek.
The environment minister, Tanya Plibersek. Photograph: Jono Searle/AAP

Fashion companies will be asked to apply a 4c per item levy, with that money to go into solutions to reduce the environmental burden of that waste.

But if the industry fails to back the new waste levy, the minister will step in.

Plibersek said at the launch of the scheme in Sydney today:

If the voluntary scheme is not viable – if we don’t believe it’s sufficient, or if it’s not raising enough money to cover its costs – then I will regulate. I will impose the system and I will set the levy.

She said the scheme would have a year to establish itself.

- AAP

Updated

The New South Wales government’s decision to scrap an election promise to end “secret rent bidding” has been welcomed by members of the crossbench who are claiming it as a victory.

The Greens’ housing spokeswoman, Jenny Leong, said:

We’ve worked to expose, and put a stop, to rental auctions.

We’ve heard clearly that no one was asking for rental auctions to be entrenched in NSW – not tenants advocates, peak bodies or the real estate industry.

Now that we have dealt with this distraction, we can get onto the job of desperately needed rental reforms.

The independent Sydney MP, Alex Greenwich, said:

This is a sign of good and consultative government and in-line with their mandate to improve transparency and fairness in the rental market.

Updated

Cheques to be phased out by the end of the decade, Chalmers says

Chalmers is now going into a bit more detail about those changes.

Here’s what he had to say about that plan to phase out cheques:

We know that the usage of cheques has been declining with a 90% decline in volumes of cheques over the past decade alone and this is largely because digital transactions are cheaper and more accessible.

In fact, currently 98% of retail chips would be service through internet or mobile banking, and 100% of those used in institutional and commercial settings that all of this means that leaving cheques in the system is an increasingly costly way of servicing a tiny and declining fraction of payments.

So today, we’re signalling our intention to wind down the cheque system by no later than 2030, leading the way by moving commonwealth government departments to new forms of payments by 2028.

Updated

Treasurer outlines strategic plan to improve payment system

The treasurer, Jim Chalmers, has just outlined five pillars of the government’s strategic plan to improve Australia’s payment system at the Australian Banking Association’s conference in Sydney.

Our vision is to create a modern, world class and efficient payment system that is safe, trusted and accessible, and enables greater competition innovation and productivity across our and our five points strategic plan to release to realise this ambition is as follows:

First, promoting a safe and resilient system by reducing scams, strengthening cybersecurity and updating the RBA supervision frameworks.

Second, making changes to the payments legislation, a new licensing framework, more competition and transparency across systems, more collaboration amongst regulators plus steps to reduce small business transaction costs.

Third, modernising payments infrastructure by phasing out cheques and supporting the industry’s transition from the old clearing system to the new payments platform.

Fourth, uplifting competition innovation and productivity by aligning payments reform with other parts of our agenda for the digital economy putting the consumer data right digital IDs skills and agendas.

Fifth, leading in global payments including through our work in the G20 and in the Pacific to improve the availability of fast low cost low cost, international transfers and piloting a central bank digital currency at the same time.

RBA’s Philip Lowe says path to economic soft landing likely to be bumpy

The Reserve Bank governor, Philip Lowe, has just begun addressing an investment bank conference in Sydney with his speech entitled A Narrow Path.

In it, he says Australia can still achieve a soft economic landing with inflation down and an economy that keeps growing but “significant risks” threaten that outcome.

Speaking just a day after the RBA lifted the official interest rate for a 12th time in 13 months, Lowe said that path was narrow and “likely to be a bumpy one, with risks on both sides”.

Lowe reinforced the central bank’s intention to keep lifting rates if needed to ensure inflation returned to its 2%-3% target range even if it stretched households and firms and pushed the jobless rate higher from its current near 50-year lows.

He told the conference, according to a copy of his speech:

[The] desire to preserve the gains in the labour market does not mean that the board will tolerate higher inflation persisting.

There is a limit to how long inflation can stay above the target band.

The effects of the rate rises – reaching 400 basis points since last May as of yesterday – were “felt unevenly across the community”, including “causing significant financial pressure for some households”.

But this unevenness is not a reason to avoid using the tool that we have.

Lowe singled out wage pressures and inflation expectations in the economy as among the key areas the board will be watching, as well as indications that people were falling behind on loan payment.

Mortgage arrears “remain very low, although they have increased a little of late”, he said. “Banks report that their customers are managing to make their mortgage payments, although many have had to cut back on other spending. So, it is a complicated picture.”

Updated

The RBA governor, Philip Lowe, is about to speak at the Morgan Stanley Australia Summit.

Updated

Record demand in NSW emergency departments

The Bureau of Health Information (BHI) released its latest Healthcare Quarterly report this morning, which gives insight into the performance of the NSW public health system between January and March. It shows record demand in emergency departments.

There were 347,720 ambulance responses – the highest of any quarter since BHI began reporting in 2010.

The BHI chief executive, Dr Diane Watson, said ambulance services and emergency departments “experienced record demand as the upward trend in activity that began before the pandemic continued”.

Watson said:

Despite the increasing demand, ambulance response performance has continued to improve following record long response times in mid-2022.

The data shows 44.1% of “emergency – priority 1” ambulance cases were reached within 15 minutes, and 64.6% of the highest priority (P1A) responses arrived within 10 minutes.

There were 770,089 emergency department attendances – the highest of any January to March quarter since BHI began reporting.

Ambulance at the Liverpool hospital emergency department in Sydney.
Ambulance at the Liverpool hospital emergency department in Sydney. Photograph: Bianca de Marchi/AAP

The Australian Medical Association NSW president, Dr Michael Bonning, said:

We need a vision for our health system.

There is pressure on hospitals. There is pressure on ambulance services. There is pressure on public health services. And our GPs are working hard to meet patient demand for quality primary care.

The report also shows there were 54,820 elective (planned) surgeries in the quarter, of which one in 10 patients waited longer than 523 days.

Updated

Ley has accepted the recommendations from the National Audit office’s scathing report of the Morrison government’s Community Health and Hospitals Program need to be accepted.

Asked about the report, she initially defended the audit findings by flagging the same grants mentioned by Michaelia Cash yesterday – that the Peter McCallum National Centre for immunotherapy was awarded $70m and the Sydney Comprehensive Children’s Cancer Centre $100m from this program.

Pressed further, she says:

The grants were approved through the budget process, and the projects were proposed by the states and the primary health networks.

If you look at the projects you will see good initiatives that come from them.

But back back to my first point, happy to accept it’s been an audit report, and the recommendations do need to be accepted.

Updated

Ley is shying away from acknowledging any responsibility for slowing productivity, when the Productivity Commission found that the last decade’s decline occurred during the previous Coalition government’s time in office.

It’s not about the responsibility that governments do and don’t take. I mean, every government doesn’t get everything right.

She goes back to the Coalition’s lines of attack along migration and energy prices:

I tell you what … we wouldn’t have announced 1.5 million more migrants over the next five years without a plan on housing.

We wouldn’t have the government’s policy on energy, which is really, really hurting already. I mean, you’ve seen the announcements – 25% to 29% increase in energy costs kicking off on the first of July.

And I don’t think we would have had a budget speech where the word infrastructure was not even mentioned once.

Updated

Sussan Ley blames rate rises on government

The deputy Liberal leader, Sussan Ley, says the problem of rate rises “lies squarely at the feet of this government”.

Ley says not enough is being done to increase productivity across the economy, but has accused the government of standing back on the issue. She’s told ABC Radio this morning:

I was listening to the commentary yesterday from the treasurer. It almost felt as if he’d given up. I’m not saying he was pointing the finger at other people, but it feels as if the government is saying ‘we’ve done enough’.

But no one now feels better than they did a year ago. The economic indicators are worse and, with this rate rise, you know, someone with a $750,000 mortgage is having to find around $22,000 extra a year.

And back to the treasurer and his budget papers. He actually had the cash rate in those budget papers at 3.85% until 2024. And unfortunately, you know, that’s already not the case. So we do need that proper plan for inflation.

Updated

Katy Gallagher says she knew David Sharaz from role as ACT chief minister

Circling back to the finance minister, Katy Gallagher’s interview with ABC Radio. Gallagher says she has nothing more to add when it comes to her name being mentioned in reports relating to the Brittany Higgins allegations.

A recording aired during Bruce Lehrmann’s interview with the Seven Network on Sunday heard Higgins’ partner, David Sharaz, mention his apparent friendship with Gallagher.

Macdonald:

I want to give you the opportunity to respond on the record. Are you comfortable with that association, that description?

Gallagher:

Look, I have nothing further to add to this. I’ve been very clear with those that are reporting this story about my responsibilities. And you know, and how they relate – particularly it’s been raised in relation to a settlement or a compensation package in relation to Miss Higgins and that I had absolutely no role in that at all. And you know, I think that’s all I need to say.

Macdonald:

But not a friend?

Gallagher:

Look, I knew, I knew Mr Sharaz as from my previous role. He was a journalist here in Canberra when I was chief minister, so I knew him. But I have nothing further to add. My statements are all on the record, and I’m comfortable with those.

Lehrmann has vehemently denied raping Higgins. His first criminal trial was aborted due to juror misconduct and a second was not pursued due to fears for Higgins’ mental health.

Updated

Clare O’Neil says wage rises not driving inflation

The home affairs minister, Clare O’Neil, says it’s absolutely not the case that the RBA delivered the rate increase because the government-backed wage rises risked driving high inflation.

She told Seven’s Sunrise:

It’s [the rate decision] not a government decision.

She says she knows families are doing it tough:

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.

– with AAP

Updated

Gallagher says government needs to ‘rebalance the public service’ over consultants

The Senate inquiry into consultants continues today. Gallagher says the government must fundamentally change the public sector’s reliance on consultants:

I think we can and I think we should and I think we have to.

… 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 always intended to be to work in the interests of the Australian people.

You’ve seen in this budget, we’ve converted about 3300 labour hire jobs into public service jobs because they are permanent jobs that always need to be done.

And that’s the beginning of the shift away from this reliance on external labor. There’s a lot more to be done. We’re very focused on it. We think it can save money, and we think it will deliver better public policy outcomes.

Updated

Gallagher says the choice to find savings in the budget was informed by the responsibility the government has to consider how it will affect the central bank’s decisions.

Our decision to find $40bn worth of savings in the last two budget has been informed by that responsibility as has returning over 82% of the upward revisions to revenue to the budget for budget repair.

Those are critical decisions in terms of how we can support the work that the Reserve Bank does and that the decisions we take don’t add to inflation, but set our budget up to be in a stronger position in the future.

Updated

Katy Gallagher says interest rates ‘a matter for the independent Reserve Bank’

Meanwhile, the finance minister, Katy Gallagher is doing the rounds of the breakfast news programs following yesterday’s decision from the central bank which took the cash rate to its highest level in 11 years.

Speaking with ABC Radio, Gallagher does not want to say the government is partially responsible for the rate rise.

Hamish Macdonald:

Labor has been in charge of the economy for more than 12 months now. You’ve handed down two budgets. Do you take any responsibility for this interest rate hike?

Gallagher:

The decision around interest rates and setting of interest rates is a matter for the independent Reserve Bank. We’ve got a very clear job to do that is to deal with the inflation challenge and how we manage the budget and other investments in the economy.

She points to the fact that the RBA governor and treasury secretary both confirmed the budget was not inflationary.

Gallagher said it was not the government-backed wage rise which was driving inflation:

What the experts are saying – they are not saying that wages are the the reason why we have an inflation challenge. We have an inflation challenge, primarily from global factors relating to an illegal war in in Ukraine.

Updated

Severe weather warnings for Victoria and South Australia

Parts of Victoria and South Australia are being warned to expect heavy rainfall today.

The heavy rain that’s already hit Western Australia is sweeping across the country, with South Australia’s Riverland and Murraylands warned to brace for heavy rainfall to last until Friday.

There are also warnings across most of western Victoria for heavy rainfall and damaging winds.

Productivity is now in the focus after the central bank has made clear its wants productivity gains to match wage rises.

The government received the five-yearly Productivity Commission’s report back in March. Gallagher says the government is “actively pursuing” implementing the report’s recommendations in the areas of skills and training, technology, and the energy transition.

We want to see productivity get going. We have had the worst decade, I think, in productivity growth in the last 60 years in the previous decade so there’s a lot of work to do. We can’t turn that around in one year.

Katy Gallagher, pictured with the treasurer, Jim Chalmers, says ‘we want to see productivity get going’.
Katy Gallagher, pictured with the treasurer, Jim Chalmers, says ‘we want to see productivity get going’. Photograph: Mike Bowers/The Guardian

Updated

Katy Gallagher says she isn’t worried RBA decision will cause recession

The finance minister, Katy Gallagher, says she is not worried the Central Bank’s decision is hurtling Australia towards recession.

She’s told ABC News that the treasury is not forecasting a recession, only a slowing of the economy.

The RBA has a clear job to do and their job is to get through monetary policy to get inflation back to the target range.

Read our economics correspondent Peter Hannam’s analysis on that rate rise:

Updated

Murray Watt to announce disaster funding

The emergency management minister, Murray Watt, will today announce the first round of projects which will be funded through the government’s $400m Disaster Ready Fund.

Watt says:

Every dollar spent on disaster resilience delivers a big return in avoided disaster repair costs. This is the next step in the Albanese government’s plan to make us better prepared for future natural disasters. And we’re just getting started.

Updated

Good morning! Natasha May reporting for blog duty.

Woman stabbed while walking home after visiting family

An elderly woman has died after being stabbed while walking home alone in Victoria, AAP reports.

The 73-year-old was walking from a family member’s house to her own home in South Geelong around 7pm on Tuesday when she was attacked.

Victoria police say she was approached from behind and stabbed several times.

A 32-year-old man has been arrested and is being questioned by police.

Updated

Growth figures likely to reveal slowing economy

Economic activity is expected to slacken further as higher interest rates and gloomy global conditions persist, AAP reports.

The national accounts for the March quarter are due today, following another interest rate hike yesterday.

Based on the string of clues left by the Australian Bureau of Statistics in the lead-up to the growth report, ANZ economists are anticipating a 0.4% lift over the quarter and a 2.5% annual rise.

A 0.4% gain for the quarter would be a touch lower than the 0.5% recorded in the December quarter and suggest economic momentum continues to slow, senior economist Felicity Emmett said.

Wages and productivity indicators contained in the growth report would also be watched carefully to test the need for future moves in monetary policy.

Updated

KPMG to be questioned on integrity at Senate committee

In the wake of the PwC scandal, Australian Associated Press reports that consultancy firms will be grilled on integrity at a Senate committee today.

The inquiry was sparked after the discovery of a potential breach of treasury confidentiality by former PwC partner Peter Collins, who has been referred to federal police to investigate the allegations.

The integrity of other consultancy firms who secure government contracts worth billions every year is being investigated by the committee.

Consultants from audit, tax and advisory firm KPMG will be questioned.

In a submission to the inquiry, KPMG said it had commissioned a review of its confidentiality processes which found policies and procedures were consistent with best practice.

Representatives from the tax office, treasury, finance department and the Tax Practitioners Board will front the inquiry’s second hearing on Wednesday.

The Greens senator Barbara Pocock said she hoped witnesses would shed more light on how the government manages conflicts of interest and confidentiality issues when outsourcing work to the big four consulting firms PwC, Deloitte, KPMG and EY.

“As we’ve seen with the PwC tax scandal, many of these firms attempt to work both sides of the street as they carry out policy work for the government while providing services to corporate entities working in the same field,” Pocock said.

Updated

Linda Burney to announce support for improved justice solutions

Linda Burney, the minister for Indigenous Australians, will today announce the government’s support for improved justice solutions at the Joint Council on Closing the Gap meeting in Darwin.

As part of its landmark $81.5m First Nations Justice package, the Albanese government will assist 15 communities that have expressed interest in designing and developing early stage justice reinvestment strategies – ahead of a national grant round opening later this year.

The communities include Townsville, Minjerribah (North Stradbroke Island), Mornington Island and Cherbourg in Queensland; Katherine and Darwin in the Northern Territory; Circular Head in Tasmania; Fadden in the ACT; Newman in Western Australia; and Port Augusta in South Australia.

Justice reinvestment involves community-led approaches to keeping at-risk individuals out of the criminal justice system. It also includes investment in early intervention and prevention programs and initiatives for at-risk adults and young people.

Updated

Welcome

Good morning and welcome to our live coverage of the Australian news. I’m Martin Farrer and I’ve got several stories for you before my colleague Natasha May takes over.

Our top story overnight is an exclusive report on a prediction by defence chief Gen Angus Campbell that the military will emerge stronger as it acts on the “very confronting” findings of the Brereton inquiry into alleged war crimes. With the defence establishment rocked by the implications of Ben Roberts-Smith’s defamation case, it emerged that Campbell said recently that said the inquiry would, in time, have a “very positive effect on the institution and its people”.

The aged care minister, Anika Wells, will announce today a new taskforce to solve the “unanswered question” of how to make the care system “equitable and sustainable”. She will use a speech to the National Press Club in Canberra later today to set out the options for how to fund care for the elderly – possible with more self-funding – with the warning that demand will increase because “within a decade, our nation will have, for the first time in history, more people aged over 65 than under 18”.

The head of Unesco has praised Anthony Albanese’s government for making new commitments to protect the Great Barrier Reef, signalling Australia could avoid seeing it being placed on a list of world heritage sites in danger. Unesco’s director-general, Audrey Azoulay, was commenting on a letter from the environment minister, Tanya Plibersek – seen by the Guardian – that outlined new commitments to improve water quality and reduce the stress from commercial fishing over the reef.

And this morning Philip Lowe, the governor of the Reserve Bank of Australia, is due to speak at a summit in Sydney in a speech titled A Narrow Path – on his strategy for taming inflation that led yesterday to yet another interest rates rise. Here is Peter Hannam’s analysis of that decision, which says Lowe’s speech will serve to “adjudicate the blame game”.

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