The treasurer, Jim Chalmers, says the three most important pieces of context before the budget are rising inflation and interest rates, the deteriorating global outlook, and structural pressures on the budget.
As we do finalise the budget, we will put a premium on what is responsible, what is affordable, what is sustainable and what is sufficiently targeted to deal with the economic cards that we have been dealt.
This will be a budget which is about difficult decisions in difficult times. It will be an opportunity for us to ensure that our budget settings are best calibrated to what we’re seeing in the global economy and the consequences for Australia in our own economy as well.
Our commitment to the Australian people is to take the right and responsible path and not just the path of least resistance as we finalise this budget.
We do need to make the budget more responsible, affordable, sustainable and is targeted as possible to deal with cost of living pressures that Australians face, to deal with the deteriorating global situation and to deal with these persistent structural pressures on the budget which had been ignored for too long.
Parts of south-east Australia facing heavy rain and potential flooding
AAP has a weather update from New South Wales:
Three successive weather systems are posing a risk of widespread flooding in NSW, as heavy showers drench already swollen rivers and push dams above capacity.
“We’re looking at around a month or more worth of rain, particularly across inland areas in NSW,” Gabrielle Woodhouse from the Bureau of Meteorology said on Tuesday.
An initial weather system will on Wednesday bring widespread totals of 20mm to 40mm from southern Queensland across inland NSW, then through to northern Victoria, blanketing much of the country’s east.
High totals of 50mm to 100mm are expected in inland parts of the state, heightening the risk across already saturated catchments.
“We’ll start to see more of a flash flood risk as well as riverine flood risk over the coming days,” Woodhouse said.
“There is a lot of rain and … it’s falling on very, very wet catchments.”
Rain and thunderstorms hit inland NSW on Tuesday, with a severe weather warning covering much of the state’s west, from Nyngan in the central north, to Deniliquin near the Victorian border, through to Broken Hill in the central west.
The weather system moved east to the coast from inland NSW on Tuesday afternoon.
Petrol prices rise after return of full fuel excise tax
Petrol prices lifted by almost 10 cents a litre last week, with the national average unleaded sitting at $1.83 a litre, AAP reports.
The rise coincides with the return of the full fuel excise tax on Wednesday, although petrol prices weren’t meant to surge immediately.
The treasurer, Jim Chalmers, said it would take several days for the extra 22 cents a litre to appear at the pump as retailers would need to work through their supplies of discounted fuel.
“As some of the cheaper fuel which has been underground in tanks runs out, and is replaced by the more expensive fuel, but we’ve also got the regular fuel price cycle as well,” he said.
Chalmers also said the Australian Competition and Consumer Commission would be watching retailers carefully for signs of unnecessarily high pricing.
“Indication so far is that the market is behaving more or less appropriately,” he said.
NSW changes laws to protect workers’ mental health
New South Wales has become the first state to protect workers experiencing declining mental health as a result of burnout, traumatic injury and workplace harassment.
New changes to the state’s work health and safety laws came into effect in October, recognising psychosocial hazards in the workplace and requiring employers to manage risks.
The head of SafeWork NSW, Natasha Mann, said businesses were already implementing the new psychosocial hazard laws, designed to provide workplaces with clarity on their obligations and specify control measures.
“Psychosocial risks and hazards can cause a stress response leading to psychological or physical harm,” she said.
“They can stem from the work itself in the way it is designed and managed, from hazardous working environments, equipment use and social factors in the workplace.”
Regulations to improve record keeping and operator training for amusement devices and passenger ropeways have also changed.
The changes to regulations for the amusement industry follow a surge in investigations, including an incident at a Sydney show where a four-year-old boy was not strapped in properly to a ride.
The police officer son of former NSW premier and ex-senator Kristina Keneally has been charged with fabricating false evidence following an investigation by the law enforcement conduct commission (LECC).
The LECC issued a statement on Tuesday acknowledging there had “been considerable discussion in the media” regarding an investigation it had conducted into Const Daniel Keneally.
A NSW police statement said a serving 24-year-old constable has been charged with fabricating false evidence with intent to mislead the judicial tribunal.
The LECC said it had investigated a matter concerning an alleged incident on February 24, 2021 and requested the Office of the Director of Public Prosecutions review their brief of evidence.
The constable attached to the central metropolitan region will appear at Downing Centre local court on 17 November.
Police said the officer’s employment status was under review.
The LECC said when the criminal proceedings were concluded it would provide a report to the NSW parliament and would not make any further comment on the matter.
Westpac has followed NAB and hiked mortgage rates by the full 25 basis points following the RBA decision today.
“Home loan variable interest rates will increase by 0.25% p.a. for new and existing customers,” the bank said in a statement.
Both Westpac and NAB also announced increases to rates for savers – in Westpac’s case, three products are also going up by 25 basis points.
RAAF deploys maritime aircraft to Mediterranean
Australia has deployed a maritime patrol aircraft to the Mediterranean as part of a Nato operation.
The Royal Australian Air Force P-8A Poseidon is to be based in Italy and will operate in the western and central Mediterranean until mid-October 2022, according to a statement issued by defence.
The statement describes Operation Sea Guardian as “an ongoing non-Article 5 Nato maritime security operation aimed at maintaining maritime situational awareness, deterring terrorism, and enhancing capacity building in the Mediterranean region”.
(Article 5 is the principle that an attack on a full member of Nato is an attack on all and triggers collective defence. The statement points out this is NOT in that context.)
In the statement, the chief of joint operations, Lieutenant General Greg Bilton, said Australia’s participation in the operation “reflected Australia’s ongoing partnership in exercising our memorandum of understanding with Nato”.
Australia is a Nato Enhanced Opportunities Partner and an important Asia-Pacific member for the Alliance.
Our partner status recognises Australia’s significant contributions to Nato operations and the value that the Australian Defence Force (ADF) has demonstrated over several decades.
Our participation in Operation Sea Guardian is an opportunity to extend Australia’s interoperability with the alliance to the maritime air surveillance domain.
This represents a natural step-up in our ongoing partnership, focused on responding to today’s global security challenges. Wherever possible, the ADF supports European security initiatives to uphold the rules based international order.
I look forward to seeing the outcomes of the deployment, which will guide our future maritime surveillance cooperation with Nato.
National Australia Bank is the first of the big four banks to hike rates in response to the RBA increase this afternoon.
It will increase its standard variable rate by the full 25 basis points from 14 October, the bank said in a statement.
As predicted, the Reserve Bank’s October surprise shifted sentiment by denting the Australian dollar but stoking stocks.
The question, then, is what might the RBA do next.
Gareth Aird, the chief economist at the Commonwealth Bank, was one of the few economists to make the brave call for a 25 basis point hike rather than the consensus of double that.
Ahead of today’s result, the CBA was tipping the cash rate would peak at 2.85% – or another quarter point increase.
The RBA retains a hiking bias … We expect a further 25bp rate rise at the November board meeting.
Then the RBA will be on hold, he reckons, although there is still some “risk” that it might nudge the cash rate one notch higher to 3.1%.
Other banks, we expect, will be reining in their expectations a bit. Investors who bet the RBA would lift the cash rate above 4% by mid-2023 will also be reassessing their wagers.
The resources minister, Madeleine King, has urged the owner of the tapped-out Ranger uranium mine, in the Kakadu national park, to urgently raise money to rehabilitate the site amid a bruising corporate stoush that has stalled the fundraising process.
Rio Tinto, which owns 86% of Energy Resources Australia, wants to rehabilitate Ranger, at a cost of up to $2.2bn, and has committed to no mining of the Jabiluka deposit, next door, as long as traditional owners the Mirarr people maintain their long-held opposition to the project.
However, minority shareholders in ERA are keen to develop Jabiluka, with one describing it as a “magical” deposit.
Yesterday, the Gundjeihmi Aboriginal Corporation’s chief executive, Justin O’Brien, called on the Albanese government to “step in to secure the integrity of Kakadu national park” given ERA does not currently have the money for rehabilitation.
This public stoush over whether or not ‘magical’ uranium deposits in a world heritage-listed wetland and Indigenous cultural landscape should be mined is a question of national public policy.
Today, a spokesperson for King said the government “has already committed to Ranger’s comprehensive rehabilitation”, pointing to legislation introduced into parliament on 8 September that, if passed, will indefinitely defer a deadline of August 2024 for Ranger to be handed back to the commonwealth:
When passed, it will allow the government to maintain ERA’s legal obligation to rehabilitate Ranger, to the standard required, for as long as it takes for ERA to complete the job.
It is incumbent on ERA – working with Rio Tinto – to ensure it has adequate funding to fulfil its longstanding commitment to the comprehensive rehabilitation of Ranger.
The government expects ERA to conclude its capital-raising process as swiftly as possible to provide the Mirarr traditional owners and the broader community confidence in ERA’s commitment to rehabilitating Ranger.
You can read our previous coverage of the stoush here:
The ASX 200 rose 3.5% to 6,675 by 3pm on Tuesday, after the RBA’s decision to lift the cash rate by 25 basis points to 2.6%.
Victoria’s $580m quarantine hub to close next week
Victoria’s $580m quarantine hub will cease operating from next week, as the nation prepares to end compulsory Covid isolation.
The Victorian government on Tuesday afternoon confirmed the site in Mickleham, in Melbourne’s outer north, would close and could be repurposed ahead of summer. The government has previously flagged the site could be used to house domestic violence survivors of victims of natural disasters.
The hub replaced the use of hotel quarantine in Victoria in February and housed 2,168 residents during this time. The commonwealth funded the creation of the site while the Victorian government was responsible for its operation. But it faced criticism of being a white elephant upon opening due to lack of demand when quarantine was no longer compulsory for returning overseas travellers.
The site will now be returned to the commonwealth, which owns it, in January.
A critical hearing into the case of the tax office whistleblower Richard Boyle has been adjourned as the judge demands lawyers present her with a set of agreed facts.
The hearing is the first test of the Public Interest Disclosure Act, commonly called the PID.
Boyle is facing 24 charges including for using a listening device for private conversations, disclosing protected information and recording someone’s tax file number.
He is arguing for immunity under the PID, after he revealed that the Australian Taxation Office was using heavy-handed tactics to collect taxpayer debt.
The question is whether acts themselves – recording phone calls and other information – can be considered immune, if they were done with the intention of whistleblowing, which in turn could be protected under the PID.
Lawyers for both sides argued in the South Australian district court today for Judge Liesl Kudelka to make a ruling in advance about whether the acts leading up to the “actual disclosure” should all be considered.
Kudelka said she was “having difficulty comprehending the joint approach” and called it an “extraordinary submission”. She asked both sides to take a day to assemble the facts of the charges and come back on Wednesday afternoon.
She said she was “very reluctant” to make a legal decision without all the facts.
The lawyers argued they needed a ruling in order to understand the relevance of any evidence and how to cross-examine witnesses.
Kudelka said she disagreed. “I’ll wait to see how comprehensive or otherwise your facts are,” she said, saying they could “have a crack”.
“[But] do not proceed on the basis that I’m going to necessarily accept that process,” she said.
You can read Christopher Knaus’s reporting here:
With most of the market pricing in a 50 basis point move today but only getting half that from the RBA, there’s a bit of adjustment going on.
The Australian dollar is down against the US dollar as the attractiveness of the greenback just got a bit more so. Stocks, meanwhile, rose about 1 percentage point to extend today’s rally to 3.5%. (Cue headlines of so many tens of billions of dollars added for the day.)
As the treasurer, Jim Chalmers, told us about his “responsible” budget, he must have been chuffed that today’s pain for households wasn’t so high.
The first media question for Chalmers was the stage-three tax cuts, showing you Canberra’s press club had moved on.
Upcoming budget must help alleviate cost of living pressures, Taylor says
That is when the pain is really going to be hitting. So this is a tough time for Australians.
But it also has enormous implications for government and policy. We need to see policies and plans that are going to alleviate those pressures on Australian budgets.
Those pressures on inflation, on interest rates stop with an upcoming budget, we want to see a responsible budget, a budget not adding fuel to the fire and the pressures that Australians are feeling, that is is not creating a price and wage spiral and make products unaffordable for Australians.
And we want to make sure that we are seeing those supply-side pressures alleviated. These things need to be dealt with.
Rate rises are putting pressure on Australians, Taylor says
We are going to jump straight over to the shadow treasurer, Angus Taylor, who is speaking from Cowra in NSW:
Today we have seen another interest rate rise, and while it was less than expected it was still a significant increase and that is putting pressure on the budgets of so many Australians, Australians with a mortgage, on top of the inflationary pressures we are seeing elsewhere.
More than $1,000 a month in extra payments on a $750,000 mortgage. They are enormous pressures. You are having to scramble and work hard, find a way to make those payments.
We will be seeing payments increasing by Christmas and the end of the year at exactly the time when we see people buying their Christmas presents, Christmas meals and going on holidays.
Treasurer ‘will take a difficult decision if it is necessary’ in budget
Chalmers says he wants to finish on one point – he does not see budgets as a vanity exercise.
I do not see them as some kind of opportunity to do something fancy. I see budgets as an opportunity to take the right decisions for the right reasons, and I will always put the right economic outcome above a political outcome.
I will take a difficult decision if it is necessary, working with my colleagues, because these are difficult times and people should expect a solid budget, they should expect a considered budget, one that takes the right decisions for the right reasons, for the future of our economy, but most importantly for the future of our people.
Chalmers has been asked about comments the opposition leader, Peter Dutton, made earlier – saying we will only go into a recession if Labor stuff it up.
It is why they do not have any credibility on the economy. What we have been left to clean up has been a consequence of missed opportunities.
Whether it is that skills shortages, 22 different energy policies which we have left with this chaos of energy policies, $1tn in debt.
These characters were in office for the best part of a decade and it will take more than one budget to clean up the mess we have been left with.
Every time he opens his mouth, or Angus Taylor opens his mouth, it is a reminder this is the dregs of the former government which gave us an energy crisis, the trillion dollar of debt, an energy crisis.
https://www.theguardian.com/australia-news/live/2022/oct/04/australia-news-live-tanya-plibersek-rba-reserve-bank-extinctions-threatened-species-koalas-bushfires-cost-of-living-mortgage-interest-rates-stage-3-tax-cuts Australia news live: Westpac and NAB raise interest rates in response to RBA; NSW changes law to protect workers’ mental health | Australian politics