What happened today, Wednesday 15 February
With that, we’ll wrap up our coverage of the day’s news.
Here’s a summary of the main developments:
The Reserve Bank governor, Philip Lowe, flagged further rate rises will be needed to tame inflation when he appeared before a parliamentary committee on Wednesday in his first public address of 2023.
Commonwealth Bank has reported a record half-year cash profit of $5.15bn, up 9%, after profiting from a series of rapid-fire interest rate rises that have inflated its profit margins.
Large parts of Australia are set to swelter through another heatwave in the coming days with hot weather warnings in place across the country.
The New South Wales government has ramped up pressure on Anthony Albanese to block a controversial gas exploration licence off the state’s coast, calling on Labor to pass legislation banning offshore drilling.
The NSW premier, Dominic Perrottet, has stood by under-siege Liberal party MP Peter Poulos after it was revealed he leaked explicit photos of a female rival.
The neurosurgeon Charlie Teo says he does not regret performing two brain surgeries that led to him being investigated by health authorities.
Property prices are dropping from Byron Bay to Geelong as rising interest rates and the end of Covid curbs sap the urge of city folk to shift to the beach or the bush.
Thanks for tuning in. We’ll be back tomorrow to do it all over again.
Updated
Boy dies after being hit by bus outside Sydney school
A 10-year-old boy has died after being hit by a school bus in Sydney’s south-west.
The accident occurred about 3pm on Wednesday outside Macarthur Anglican school in Cobbitty and left the boy with critical injuries, police said.
He was treated by paramedics at the scene and taken to Liverpool hospital but died soon after.
The bus driver, a 60-year-old woman, has been taken for mandatory testing and is assisting police with their inquiries.
Specialist crash investigators have examined the crash scene.
–AAP
Updated
Heatwaves on the way for much of Australia
Large parts of Australia are set to swelter through another heatwave in the coming days with hot weather warnings in place across the country.
The Bureau of Meteorology is forecasting heatwaves around Australia from Thursday, with warnings already in place in New South Wales, Victoria, Queensland, Western Australia, South Australia and Tasmania.
Melbourne is projected to hit 40C over the weekend and extreme fire warnings are expected to be put in place for SA, NSW and the NT amid the hot conditions.
Read more:
Updated
Review into government agency stopped after allegations referred to police
An independent investigation into the workplace culture of the Australian Pesticides and Veterinary Medicines Authority (APVMA) was stopped by the agriculture minister, Murray Watt, after serious allegations were referred to the police and the public service commissioner, a Senate committee has heard.
The inquiry was instituted in November last year after allegations regarding a “private urination matter” by an APVMA staff member were raised at previous Senate estimates hearings. An interim report showed additional allegations had come to light.
On Tuesday night Watt told the Senate’s rural and regional affairs committee he made the decision to “wind up” the review based on legal advice. Watt said:
It was clear to me that there were more appropriate authorities to then properly investigate them.
The other reason was that [the police and public service commissioner] would have more extensive powers to investigate, ask questions, require documents, than the reviewer who I appointed.
Watt privately briefed the Senate committee on the matter last week and said he did not intend to release the interim report or to make any further comments about it.
The APVMA is the federal government agency responsible for approving registration of pesticides and other agricultural and veterinary chemicals.
The APVMA chair, Dr Carmel Hillyard, confirmed reports in the New England Times that the agency’s chief executive, Lisa Croft, had taken a period of leave while the review was carried out and that Nicola Hinder has been appointed an interim chief executive.
Hillyard acknowledged the additional serious allegations of misconduct included “potential breaches of public service code of conduct and potential breaches of law”.
“The board takes these issues extremely seriously,” Hillyard said.
The board is also committed to supporting all of the processes that allow the allegations to be examined, including actions already taken by minister Watt and to refer them to the appropriate authorities.
Hinder said she had every confidence that the regulatory operations of the APVMA will be able to continue.
Updated
Large python removed from Sydney home
A 2-metre diamond python has been removed from a home in Sydney’s south after residents spotted it slithering on their balcony.
The Bundeena residents had suspected something was wrong when they noticed their local ringtail possums had gone missing.
“We used to have ringies in the roof, but something’s been flushing them out,” the homeowner said in a video of the serpent’s capture.
On Wednesday morning, they saw the large snake on their terrace and immediately called local firefighters.
By the time the reptile retrieval unit arrived, the snake had wriggled into the front garden.
A slippery situation has unfolded at a home in Sydney's south, where Fire and Rescue crews found a two-metre diamond python.
— 9News Sydney (@9NewsSyd) February 15, 2023
The snake was safely removed from the Bundeena property, before it was relocated to the Royal National Park. #9News pic.twitter.com/kNykKe1oXX
Armed with a pair of snake tongs, specially trained firefighters plucked the python from the grass and placed it into a catching bag before releasing it at the nearby Royal national park.
Diamond pythons live in coastal areas of New South Wales and are frequently spotted in the rafters of Sydney homes that border on bush.
At two to three metres long, they can look imposing, but diamond pythons are non-venomous and generally prey on small mammals and lizards.
– AAP
Updated
Government's whistleblower bill passes lower house
The government’s bill amending the Public Interest Disclosure Act has passed the House of Representatives, with Coalition support.
The bill was introduced in November in a bid to improve whistleblower protections before the national anti-corruption commission opens its doors in June.
The Greens had said they have some concerns with the bill that the exclusion of personal work-related conduct was too broad, signalling they might seek amendments.
It was sent to a Senate committee, to report in late March. But on Tuesday the Coalition resolved to support it, easing its passage considerably.
On Tuesday the shadow attorney general, Julian Leeser, explained the problem with the current act.
He told the House:
The kinds of disclosable conduct are too broad, rather than being targeted at the most serious integrity risks, such as fraud, serious misconduct or corrupt conduct. The [Moss] review found that while the PID Act is helping to bring to light allegations of serious wrongdoing, these disclosures are in the minority. Most PIDs concern matters that are better understood as personal employment-related grievances, for which the PID Act framework is not well suited.
In short, the act is being used for the wrong purposes, and it is doing so badly. It needs to be tightened and focused in order to achieve its purpose.
This bill is an attempt to correct some of the act’s shortcomings. In particular, it will remove ‘personal work related conduct’ from the PID scheme unless it relates to systemic wrongdoing or reprisal action. It will provide increased flexibility around the handling of disclosures and provide clearer time frames. It will extend protection from reprisals to witnesses and those who may have made, propose to or could make a disclosure, and it will improve information sharing between agencies.
Updated
NAB joins Westpac in measures to reduce spoofing scams
NAB has announced it will work with telcos to help reduce spoofing scams that impersonate phone calls from the bank and messages that appear in legitimate NAB text message threads.
NAB is now placing bank phone numbers on the “Do Not Originate” list that prevents numbers being duplicated to help reduce scam calls impersonating NAB numbers. It will also add protections to reduce scam messages appearing in legitimate bank text message threads.
The bank is the second out of the Big Four to announce it will put its phone numbers on the “Do Not Originate” list, with Westpac adding more than 94,000 phone numbers last September.
Australians are expected to lose billions of dollars to scams this year, with a reported $53,470,587 already stolen in January. Scamwatch estimates that’s just 13% of the total loss.
NAB executive for group investigations and fraud, Chris Sheehan:
Scams impersonating NAB and other recognised brands have continued to rise, and it’s clear we need more collaboration across business sectors to stop this occurring.
This is not just a problem for banks and telcos, this is an issue for every public and private organisation, and we urgently need a more coordinated national response to the issue.
It comes as there is building pressure on the banks to implement blanket protections across the industry to help keep Australians safe from scams.
Updated
Two missing after mine collapse
Two mining contractors are missing after a collapse at an underground zinc mine in northern Queensland.
Paramedics say they’re assisting other emergency services after the “ground collapse” at the Dugald River Mine near Cloncurry just after 1pm on Wednesday.
The mine’s operator MMG has suspended work while they search for two Barminco contractors who are “unaccounted for” after the incident.
“Two Barminco employees working at MMG’s Dugald River mine in Queensland were this morning involved in an incident and currently remain unaccounted for,” the ASX-listed company said in a statement on Wednesday afternoon.
“The site’s emergency response has been activated and is working closely with Barminco and authorities to assist in search and rescue efforts. Operations at Dugald River have been halted while the search is underway.
“MMG has extended all available resources and support to Barminco and the Dugald River mine.”
Local state MP Robbie Katter said the event was “obviously the worst nightmare” for a mining community and there was a lot of anxiety about the situation.
“We know emergency services are on the ground and we are praying for a good outcome,” he said in a statement.
“My major concern is the wellbeing of these two employees and the task at hand to get them back safely to their families.”
– AAP
Updated
NDIS $500m above forecast
The national disability insurance scheme is approximately $500m above forecasts for the 2022-23 financial year, Senate estimates has heard.
Coalition senator Linda Reynolds has been probing officials at the national disability insurance agency. Reynolds was previously the NDIS minister, and had a torrid time in the portfolio has she faced sustained pressure from disability advocates and Labor over the Coalition’s handling of the scheme.
In a long exchange with the acting scheme actuary, David Gifford, Reynolds adduced that the scheme was about $500m above its forecast for the 2022-23 financial year, as at 31 January 2023.
Compared to the October budget, the real figures were above those forecasts by $300m for the first six months of 2022-23, and $200m above for the month of January alone. In total, estimates heard spending on NDIS supports hit $19.7bn to the end of January.
She said:
It’s already 300m over budget for the first six months. But now we’ve got an extra 200 million over for January alone.”
Gifford said that the figures could fluctuate month by month He said he couldn’t provide the latest forecasts for 2022-23 as they hadn’t been finalised.
The projection in the October budget for the scheme was $34bn.
The Labor government has ordered a wide-ranging review into the NDIS which is expected to consider scheme sustainability among a range of other issues. The government, and disability advocates, have noted, however, that scheme costs should be viewed in their broader context, including the economic and social benefits provided by the scheme. One report estimates for every $1 spent on the scheme, $2.25 in economic activity was generated.
For example, the NDIS minister, Bill Shorten, told question time on Wednesday the government had slashed the hospital “bed block” waiting time from 160 to 33 days, which the AMA calculated had already saved the health system between $205m and $584m.
Updated
Michaelia Cash targets Fair Work president for Labor run in 1990
In employment estimates, Liberal senator Michaelia Cash has been probing the appointment of Adam Hatcher to the position of president of the Fair Work Commission.
While nobody doubts Hatcher’s qualifications (he was vice president before the appointment), Cash noted he is a “former Labor party candidate”. He contested Mackellar in 1990.
The employment department secretary, Natalie James, said that the minister, Tony Burke, wanted an appointment of someone from within the commission, a field of candidates that was “quite small and well known”.
Labor’s Murray Watt, representing the minister, brushed off the implied criticism of the appointment by noting even employer groups like the Australian Industry Group had praised his credentials.
Cash defended the line of questioning, noting that Labor had criticised her appointments to the Administrative Appeals Tribunal on the implicit premise that “any link to political party means [the appointment] must not be merit based”.
Cash also said that Hatcher’s brother used to work for Burke.
Watt said:
I’ve been advised, and minister Burke has previously put some of this information on the public record about Mr Hatcher. Since senator Cash has queried it and suggested there might be some kind of conflict of interest here, I’m advised he’s the brother of a former staff member of Burke. That staff member no longer works for Burke. [Burke and Hatcher] hadn’t had a conversation prior to him becoming minister, although they could’ve met at some point.
[If the Coalition had been re-elected] the vacancy would’ve gone to the employer side given the were they only people the Coalition ever appointed. When Burke consulted employer groups, they said if the new appointee were to come from an employee background then Hatcher was the pre-eminent candidate.”
Updated
Australian government to boost aid to Turkey and Syria
The Albanese government has just announced it will contribute an additional $8m to Australia’s response to the earthquakes that devastated Turkey and Syria last week.
The extra funding brings Australia’s total aid contribution for the tragedy to $18m.
The announcement was made as Anthony Albanese visited the Turkish embassy in Canberra to sign a condolence book on Wednesday afternoon.
In a statement from foreign minister Penny Wong and international development minister Pat Conroy, the government has said:
This funding will provide lifesaving assistance, with a focus on protecting those made most vulnerable by the earthquakes in Türkiye and Syria. It will also support ongoing search and rescue efforts.
In Türkiye, we will contribute an additional $4.5 million. This includes $2 million to Australian NGOs through the Australian Humanitarian Partnership to deliver lifesaving assistance, with a focus on protecting those made most vulnerable by the earthquakes. Remaining funds will support ongoing search and rescue efforts and other emerging needs arising from this crisis.
In Syria, $3.5 million will be provided to the United Nations Population Fund to deliver maternal and child health services and protect women and girls without safe housing. This is in addition to the $3 million that Australia has committed to the United Nations Children’s Fund (Unicef).
We extend Australia’s deepest sympathies to families and communities that have lost loved ones in the earthquakes, including families here in Australia.”
Updated
Aston Liberal preselection update
Nicole Ta-Ei Werner, who recently ran for the Liberal party in the Victorian seat of Box Hill, has confirmed she will not be contesting the preselection for the seat of Aston.
Werner told Guardian Australia while she had been encouraged to stand for the federal seat in Melbourne’s eastern suburbs, her focus was on state issues.
Amy Bach, a healthcare executive and physiotherapist, is also unlikely to run, after some consideration.
With nominations closing on Thursday evening, Roshena Campbell has emerged as a frontrunner.
The barrister and Melbourne city councillor is being backed by former treasurer Josh Frydenberg, who will provide a character reference for Campbell, as well as key powerbrokers from the moderate and conservative wings of the party.
Alan Tudge, the outgoing MP for Aston, announced his retirement last week, just nine months after he retained the eastern Melbourne seat despite a 7.3% swing to Labor at the 2022 election, reducing his margin in the seat to a slender 2.8%.
The byelection is considered a crucial early test for the Liberals – after the party’s election review called on it to boost women’s participation – and the leader, Peter Dutton, who claimed in January that the opposition was at a “low watermark” in Victoria.
Dutton has “strongly” encouraged members of the Liberal party’s Victorian division to preselect a woman to replace Tudge.
Migration agent and former state upper house MP Cathrine Burnett-Wake has announced she will contest the preselection, while oncologist, Fulbright scholar and Guardian Australia columnist Ranjana Srivastava is considering a tilt.
Updated
Elias Visontay is stepping up to the blog plate to take you through what is left in today – a very big thank you to him.
Murph and the team have lots more coming for you, so make sure you check back in for those stories as well.
I will be back with you for one last sitting day (this month) early tomorrow morning – until then, take care of you.
I think Bob Katter was trying to make the point that some of the Coalition senators who are now fighting against regional bank closures were part of the government which sacked former Australia Post boss Christine Holgate (she technically resigned, but after the then prime minister Scott Morrison all but ordered her to go on the floor of parliament) who had fought to allow Australia Post outlets to also act as the community bank.
AAP has a little more on what Bob Katter was talking about in question time today:
Major banks have been labelled “bloody-minded” and “lazy” for shutting regional branches as a Senate committee ramps up pressure to halt closures for the rest of the year.
A Senate inquiry into why banks are increasingly shutting shop in regional towns was launched last week after the closure of almost 100 branches since September.
Nationals Senator Matt Canavan, chair of the Rural and Regional Affairs and Transport References Committee, wrote to banks on Friday urging them to halt closures in an act of good faith to the inquiry.
The Commonwealth Bank said it would not shut any branches during the inquiry, which is due to report by December, and postponed planned closures in Junee, NSW, and Bright, Victoria.
National Australia Bank retail executive Krissie Jones said 93 per cent of transactions occurred online and reshaping the branch network required difficult decisions, including closures.
“We will be continuing our branch reshaping process during the committee’s deliberations in 2023, which will include closures, consolidations and new investments to meet our customers’ needs,” Ms Jones said in a statement.
Westpac Group will shut 20 regional and suburban branches across Queensland, Victoria, NSW and South Australia but has not said whether it will pause further closures.
A spokesman for ANZ said it was considering the inquiry’s terms of reference.
During a press conference with eight other Nationals MPs and senators on Wednesday, Senator Canavan again urged the banks to halt closures.
“I welcome the news that the Commonwealth Bank has heeded that call ... now the challenge is for those other banks to come up to the plate and listen to regional Australia,” he told reporters in Canberra.
“Don’t close these branches before those people get a chance to have their voice heard.”
The inquiry follows the Coalition government’s Regional Banking Taskforce, which recommended the Australian Banking Association strengthen community consultation and banks introduce closure impact assessments by mid-2023.
Victorian MP Darren Chester accused banks of fast-tracking closures before that deadline, including in his electorate which is due to lose a Westpac branch in Sale.
“Enough is enough. Stop being so bloody-minded, stop being so bloody lazy and start working with regional communities on solutions that will allow face-to-face banking to continue in our communities,” he said.
Mr Chester said while banking was changing and more people were moving online, rural people continued to rely on face-to-face transactions and access to cash.
The inquiry will hold its first hearing in Sale on March 2 and accept submissions until March 31.
Updated
‘Shared sense of pride’: Queensland takes steps towards treaty
The Queensland premier, Annastacia Palaszczuk is speaking at the Path to Treaty lunch in Brisbane, where she has made a fairly major announcement – her government will introduce legislation to establish a Truth Telling and Hearing inquiry and a First Nations Treaty Institute, next week.
Treaties have been established over centuries and provide people of those nations, like New Zealand, a shared sense of identity and pride that we should have too.
But all efforts to establish one in this country have died in a desert of ignorance and indifference where they have stayed for more than 200 years.
Well I am here to tell you, friends – that ends now.
The inquiry will have similar powers to a commission of inquiry, although cultural sensitivities will be observed, while the Treaty Institute will help guide form that the treaty will take.
Updated
This is what Allegra Spender wants to see happen:
The government’s budget package:
Must include direct incentives for households to electrify – either in the form of concessionary finance or tax incentives;
It must broaden the remit of its existing Solar Banks programme – so that strata managers and owners’ corporations can access zero-interest loans to install shared solar on apartment rooftops;
And it must kick-off a process of regulatory reform to break the barriers facing renters who can’t access rooftop solar – including by developing a national framework to share power bill savings between landlords and renters.
Updated
Renters and apartment dwellers most exposed to fossil fuel price crisis, crossbench MP says
Independent Wentworth MP, Allegra Spender, is speaking on the matter of public importance debate (That the house recognise that faster action on climate change is one of the most effective way of insulating households against rising costs of living) and makes this point about renters:
Supporting household electrification, we need more than a one-size-fits-all policy that works for detached houses in the suburbs – but doesn’t provide support for those living in high-density urban areas.
Because it’s people living in apartments; people who are renting; often young people – who are most exposed to this fossil fuel price crisis.
Finder’s latest consumer sentiment tracker shows that those in Gen Z and Gen Y face electricity bills that are up to 26% higher than those aged 60 plus. That’s partly because if you’re a young person in an apartment, you probably don’t have access to cheap rooftop solar.
If you’re renting, you’re reliant on your landlord to install it for you.
If you’re fortunate enough to own your flat, perhaps you can’t afford it.
And if you can, you’re faced with a dizzying array of regulations when you try and get together with the strata committee to make the change.
That’s a situation facing many people in Wentworth – where over 60% of homes are apartments; 45% are rented; and nearly 40% are adults under 40.9
And that same situation is facing nearly 3m Australian households across the country who live in rental properties.
So the government needs to be ambitious in pursuing the electrification opportunity – and it needs to ensure this is an opportunity available for all.
Updated
Tony Burke also claims to have been misrepresented on arts funding, but it is mostly a chance for him to troll the member for Flinders, Zoe McKenzie, who he says claimed Labor’s art funding policy, Revive, “is lower than the record funding of the previous government of $1m”.
Now, I thought while yesterday’s figure where it was stated that I had delivered $60bn a year was untrue, I can assure the house the number is larger than what they claimed was their record of $1m.
Updated
Question time ends, but Angus Taylor claims to be have been misrepresented:
In question time today the prime minister incorrectly stated when I was Energy Minister, we took four gigawatts out of the system.
And only put one back. He’s made similar claims in the past. This is plainly false. According to the Clean Energy Regulator, from 2019- 2021, more than 18 gigawatts of new capacity was installed in each of those years, is a stronger outcome than the entirety of the last Labor government.
Updated
Iranian embassy hits back over foreign interference claims
The Iranian embassy in Canberra has hit back at the home affairs minister, Clare O’Neil, over foreign interference claims.
In a speech yesterday, O’Neil said Asio late last year had “disrupted the activities of individuals who had conducted surveillance of the home of an Iranian-Australian, as well as extensive research of this individual and their family”.
The Iranian embassy did not respond yesterday, but issued a press release today that said it “strongly rejects the claims”. The embassy said:
Regrettably, these accusations, which have been made without providing evidence, show the effect of the baseless claims of some foreign countries regarding Iran’s interference in other countries …
Making such claims without the least consultation is not a sign of honesty and goodwill. Accusing without examining the valid answer is against the axioms of law, logic and good faith.
Updated
Barnaby Joyce is back! Twice in one day. What a treat.
Joyce:
My question is to the prime minister. Will the prime minister overturn his government’s recent decision which now allows public servants to boycott the Anzac Day public holiday and substituted for another day of leave out of protest?
Tony Burke takes this one:
Mr Speaker, the question goes to workplace relations issues and if I can go through that. First of all, in terms of Anzac Day, we are in a room of 151 representatives all of whom take Anzac Day incredibly seriously, all of whom on both sides, all of whom on both sides have direct relationships with veterans and as a government, we share the view that every other member in this place shares about the significance and importance of Anzac Day.
For the entire nine years of the last government, the flexibility of provision applied that applies to a series of workplaces around the country. A provision for almost the entire nine years …
Provisions around the country where individual workers can choose to work on a different day and to switch day with public holidays. Not as an issue of protest but, employers and employees.
But if those opposite believe those rules asked for by employers to be a grievance all around the country … they may well want to go down the path but the nine years, the same provisions applied.
Looks like there was going to be a point of order, but Burke has concluded his answer.
Updated
Independent MP Andrew Wilkie has the next crossbench question:
Sportsbet donated to the shadow minister about to become the minister responsible for online gambling and the gambling industry has extended hospitality to the minister ever since. Sure disclosures have been met. But it is one that morally breaches 3.21 and 3.22 of the ministerial code of conduct. What is to be done about it? Was the government and opposition’s silence a return on millions of dollars of gambling donations?
Anthony Albanese:
It’s hard to argue in silence when you’re asking a question in question time. My government is committed to donations reform. We are committed to increasing transparency, lowering disclosure thresholds, increasing the timeliness of disclosures and the member will have the opportunity to vote on that during this term.
The special minister status asked the Joint Standing Committee on Electoral Matters for an interim report on the 2022 federal election and that is one of the measures that they’ve been asked to look it. My government, including the minister for communications, is committed to harm minimisation. We are delivering a national self exclusion.
Wilkie:
On relevance, the question clearly goes to section 3.21 and 3.22 of the ministerial code of conduct.
Dick rules the prime minister is in order.
Albanese:
Thanks, Mr Speaker. I note that in the members question, in the members question, he referred to matters prior to the election. But we are delivering, we are delivering, and progressing work around the classification of video games with gambling-like features. In the parliamentary inquiry into the use of credit cards and on line gambling, holding a parliamentary inquiry into online gambling including impacts of gambling advertising on children and implementing the national consumer protection framework including the change guidelines that we have introduced or messaging advertising.
Updated
Madeleine King had a dixer so she could mention 2009 and the Greens and the CPRS and nothing ever dies in this place.
Barnaby Joyce is on his feet – it has been a while since Joyce has had a question.
My question is to the minister for veterans’ affairs. I refer to the Labor government’s recent decision which now allow the public service to boycott the Anzac Day public holiday and substitute it for another day of leave out of protest. As a minister do you agree with this decision and were veterans organisations consulted about it?
Matt Keogh takes this one:
Thank you, Mr Speaker, and I thank the member for his question because as I am sure the member very well knows, to be able to facilitate the many commemorative events that happen here in Canberra, at the Australian War Memorial as well as the events that occur on the Western Front and those events that occurred in Anzac Cove every year except when disturbed by Covid, many public servants are engaged to have to work on those days so that we as a country can properly commemorate those that have served our country in uniform on those very important days. Public servants more broadly, you would have to direct the question to the minister representing the minister for the public service.
Updated
Bob Katter has a question on bank closures in regional communities. I think. As always it is a bit of a journey through the looking-glass, and you end up facing the hookah-smoking caterpillar who speaks to you in riddles, but it’s wearing a hat and all the riddles are about crocodiles.
Anthony Albanese:
I thank the member for Kennedy, not just for the question, but his genuine commitment on these issues of services for people in his electorate.
Bank closures in regional communities is a very real issue out there, and I can inform the member that the treasurer met the chair of the ACCC just today on this issue, and indeed, as well, we look forward to the findings of the report from the Senate committee on Rural and Regional Affairs and Transport into bank closures outside of metropolitan areas.
The member raises the issue of Australia Post, and that is certainly one of the options which is there. Aussie post already pays a big role – in the 2022 financial year, they processed around 14.5m transactions with over 3,500 post offices currently providing banking services across the country.
I know that this was an issue that Christine Holgate has mentioned, a fine person, [who] was advancing before the former government took action on the floor of this chamber to remove her, in part, of course, challenged by the inconsistency of the members that you raise.
In one of the things about the member for Kennedy, whether you agree with all of his views or not, and on some of his views, I agree, some I do not, as he is fair dinkum, unlike the great pretenders who he refers to, the LNP senators out there who have discovered this issue after 10 years of government and doing nothing about it, have discovered it.
One of them of course is famous for wearing hi-vis in his back yard for media conferences and who does one thing coalminers would never do and that is smear coal dust on his face for the photo op.
The member for Kennedy is fair dinkum, unlike the pretenders over in the Senate who pretend they care about regional Australia, but never actually stand up for it.
Updated
The Nationals MP for Mallee, Dr Anne Webster is up next and asks Anthony Albanese:
The prime minister has failed to deliver his promised $275 cut to electricity prices. The prime minister has also failed to deliver the financial support he promised families last year. Can the prime minister advise the House how many more Australians will be forced on to hardship programs with their electricity retailer as a result of the government’s delay in providing any financial support? Why do Australian families always pay more under Labor?
(The promise was for 2025, but anyways)
Albanese:
I thank the member for Mallee for her question which goes to – can be summed up as essentially – why aren’t you doing what I voted against earlier?
That is basically what I’m being asked here: ‘I voted against $1.5bn of relief and now you’re complaining that it’s not being delivered early enough’.
That’s the suggestion of the question. Those opposite voted against the $1.5bn in direct bill relief, voted against price caps. The member for Hume hid the price rises before the election and misled Australians about it. They took four gigawatts out of the system and only put one gigawatt back. They had 22 energy policies and didn’t land one and then come in here and say, ‘Why hasn’t it all been fixed?’
It reminds me of someone who comes home as a dog lover and you come home and you find bits of the cushion everywhere.
There’s bits of – bits have been torn out, they’re all over the loungeroom. They’re all over the kitchen. Down the corridor. And you look at your pooch and you go, ‘What’s gone on here?’ And he looks at you back and says with those eyes saying, ‘Look at the mess you have made’, ‘Look at the mess you have made’, I mean fair dinkum, you did nothing for 10 years, voted against when we had a plan and then you come in here and say, ‘Why don’t you do it earlier?!’
This is the third question time in a row Albanese has mentioned Toto, his dog (although this was more of an indirect reference). For those who do not know, the prime minister has a dog, his name is Toto and he loves him very, very much.
Updated
Back in defence estimates – following confirmation the nuclear-powered submarine taskforce had already handed its recommendations tot he government – the foreign affairs minister, Penny Wong, says:
The government will be making announcements about the optimal pathway but the intention to build in Adelaide remains the government’s view. (But she doesn’t confirm the number – because decisions/announcements are pending.)
Updated
Angus Taylor gets another groan for not asking Jim Chalmers a question, but it seems lacking in any real enthusiasm. Seems even Labor is bored with its little joke.
Taylor:
Under this prime minister, interest rates have increased at the fastest rate since the Reserve Bank began targeting inflation. By how much does the current inflation rate exceed the RBA’s target?
Albanese:
I’ll begin and then I’ll get the treasurer to answer because he deserves a go.
He deserves a go because I lead a Cabinet-level government.
In the best traditions of the great Bob Hawke. And that’s why we have ministers …
… so they can do their job.
But the member for Hume has asked this question to deal with the inflation challenge within the economy is relief, repair, restraint.
Providing responsible cost-of-living relief, repairing our broken supply chain which has been made worse by their actions opposite, but also … oh, come on.
(Angus Taylor has a point of order, which Dick rules is not a point of order.
Albanese:
Thanks, Mr Speaker. And, of course, showing spending restraint in the economy. I pay tribute to the treasurer and the finance minister in the other place who do such a fantastic job of making sure that we put together a responsible budget last October and there’ll be another one in May and I ask the treasurer to add to my answer.
Jim Chalmers:
I think the if the shadow treasurer needs to tell us what the inflation rate at 7.8% and the target rate of 2.3% [the target range is actually2-3%] then we got everyone bigger problems than we thought.
Old mate over here needs the most simple concepts explained to him very slowly and that’s what we’re happy to do over and over again.
The reason, Mr Speaker, why the member for Hume didn’t ask me this question is because he knows that last week I was tuning in as I always do watching Kieran Gilbert on Sky interviewing the shadow treasurer and he was asked by Kieran Gilbert on Sky last Tuesday, Kieran pointed out to him as we have from time to time that interest rates started going up on their watch.
He also pointed out that interest rates were more than twice what they are now when the leader of the opposition was the assistant treasurer.
I was talking to Kieran talking to the member for Hume last Tuesday and Kieran said, look, but you did see interest rates go up on your watch, and the member for Hume said, “Well, you saw a 0.1% increase in May.”
Now the only problem with that is that it’s completely and absolutely wrong. The only problem – apart from that fact that he got wrong the rest of it was right, Mr Speaker. He was asked about May and in May when those opposite were in office, interest rates went up by 25 basis points.
I think everybody on this side of the House understands that, the shadow treasurer does not have a clue.
He does not have a clue and that’s why he doesn’t ask me the question because he knows I’m watching Kieran Gilbert talking to the member for Hume and he knows that the member for Hume dropped an absolute clanger on Kieran’s show last week.
The shadow treasurer of this country, the guy that wants to be the treasurer of this country doesn’t even know how much …
Chalmers is out of time.
Updated
Chris Bowen then takes a dixer on the safeguard mechanism, just so he can say this on his shadow, Ted O’Brien:
The Shadow Minister issued a press release on certainty on 1 February. And he accused us and he said our energy intervention was disastrous. Then complained it was too late. He said we should have acted sooner.
So it was disastrous and too late and then said it was rushed.
So in one press release, Mr Speaker, it was bad, too soon, and too late.
I mean, they can’t get it – they can’t get certainty in one press release, Mr Speaker.
He made more since in Hiroshima where he said, Hiroshima, what can we learn from nuclear. It was the World’s worst Contiki tour promoting nuclear in Hiroshima …
Defending their policy certainty which is completely nonexistent.
Updated
Sussan Ley is up next:
My question is to the prime minister: a Canstar consumer survey has found 59% of people cite the cost of grocery, rent, electricity, gas, interest rates, or petrol, as their number one concern for 2023. And after nine months in office, the prime minister doesn’t have a single policy to put downward pressure on interest rates. Why do Australian families always pay more under Labor?
Jim Chalmers is yelling something, but then again it would be more notable if he wasn’t yelling something.
Anthony Albanese:
I thank the member for her question. I’d say to her go and have a look at the evidence of the Reserve Bank Governor today or the head of Treasury who spoke about the fact that our plans are actually making a difference.
To name just one …
(Angus Taylor is now yelling something.)
Senator Canavan very helpfully asked the RBA governor the following question today: Just on the energy side of things, how much is the disruption in energy flows resulting from the war in Ukraine contributed to inflation over the past year now? Almost. And the governor said this – substantially. At one point, the price of petrol I think the annual rate was up 30%. It makes a big difference. And the skyhigh prices of gas and coal in Europe flowed through back into our domestic market. That’s been a first-order issue but hasn’t just been energy, it’s been food and a lot of the supply chains. It’s worked its way through. The more positive story here is we’re through the worst of that.
And for those opposite who are opposing positive plans like the National Reconstruction Fund where the governor has also spoken about how supply chain issues were contributing to inflation, that they’re standing in the way of solutions to these issues is just extraordinary.
The same opposition came when we brought forward our energy price relief plan to this parliament in December. Those opposite … voted against $1.5bn of relief that was designed in a way in partnership with the advice …
Ley has a point of order:
On relevance, Mr Speaker. The core part of the question went to interest rates and the prime minister hasn’t mentioned the core part of the question.
Milton Dick tells her there were many parts to the question.
Albanese:
Thanks, Mr Speaker. Because we know that there are inflationary pressures in the economy and that is what interest rates are related to inflation. There’s a relationship between the two. I would have thought that was pretty obvious and that is what the evidence today was there, that’s why we have put in place our three-part plan of relief, repair and restrain, making sure that we provide relief, that we provide repair through issues like supply chains and the skills crisis, and also that we have restraint when it comes to fiscal policy so that fiscal policies work in concert with monetary policy as well. That is the plan that we are putting forward, a plan that’s constructive, a plan that is positive, and those opposite have nothing to say except one word – no – to everything that is put forward.
Updated
Anthony Albanese once again refers to the Coalition as the “No-alition” which once again upsets Paul Fletcher.
Milton Dick:
I’ll just ask the prime minister to continue with his answer and not to refer to the Coalition [as anything] except the “Coalition.”
Albanese:
They’re certainly not the Yes-alition. They’re certainly not that.
Updated
Nuclear-powered submarines taskforce has delivered report to government
Meanwhile, the head of the nuclear-powered submarine taskforce says they have already provided a report to the government recommending how to proceed with the planned nuclear-powered submarines.
In Defence estimates, the Coalition’s Simon Birmingham asked about the tasforce and whether it had reported in relation to the future nuclear-powered submarine capability.
Vice admiral Jonathan Mead replied at first:
The taskforce has worked with our partners and we have provided continual updates to government on the nuclear-powered submarine program, including the optimal pathway.
Birmingham:
So you have provided a recommendation or report regarding the optimal pathway?
Mead:
We have.
Birmingham:
When was that provided to government?
Mead:
Earlier this year.
(He doesn’t clarify the date, so that could mean any time after 1 January.)
Updated
Industry minister Ed Husic takes a dixer on the national reconstruction fund and takes the opportunity to include:
We listened to the shadow minister’s [Sussan Ley] response to the legislation, the shadow minister apparently took umbrage I wore black ties. I mean I bust out the black tie twice a year and a Kardashian. Apparently, I was also accused of being ambitious! I was accused of being ambitious.
Have you looked around? This is not exactly Australia’s pre-eminent greenhouse for shrinking violets. There’s a few ambitious people around.
I am begging all Australian politicians to please update their popular culture references. For the good of the nation.
Andrew Hastie then has the next question and he doesn’t seem particularly thrilled:
At 4.01pm, there was [photos on social media of the prime minister and defence minister receiving the defence strategic review]. At 9.42pm last night, reports emerged in the media outlining recommendations contained in the DSR. Can the minister explain how highly classified information about Australia’s national security ended up in the Australian within a matter of hours?
Richard Marles seems genuinely annoyed:
Well, I thank the member for his question. It is not going to surprise members of this House that there is speculation around the defence strategic review. The only thing that you have read in the newspaper is that speculation.
Now the facts which are on the public record are the facts as I presented them in the answer to the previous question. And genuinely surprised me that on a matter as significant as this, the opposition would be sharing in the speculation of the press.
Updated
Defence minister Richard Marles takes a dixer on the defence strategic review, which the government received late on Tuesday, but will not release until it has been worked through (and classified things taken out, that sort of thing).
But Marles is laying the groundwork for the need for change, because the government was pretty sure of what was going to be in the review. I don’t think anyone is going to be shocked if it ends up recommending the need for nuclear powered submarines, for example.
Updated
Question time begins in earnest now.
It always gives me a little bit of whiplash when they move from bipartisan “we are united on this issue” to politics, but I guess that goes to the (amateur) theatre of it all.
Peter Dutton to Anthony Albanese:
My question is to the prime minister. I refer to the fact that over the last 30 years to 2022, the cash rate has been 1.3% points higher under Labor than under the Coalition.
Interest rates are always higher under Labor.
Under this prime minister there have been eight rate rises in eight consecutive meetings of the Reserve Bank of Australia board. (“No wonder there is such pressure on the Reserve Bank governor” is the interjection) When will the prime minister announce a plan to deal with the rising inflation problem in this country which is fuelling higher interest rates? Why do Australian families always pay more under Labor?
Albanese:
Well, I’m asked a very broad-ranging question by the leader of the opposition about the history of the interest rates. I can inform the leader of the opposition that I have done a bit of research about the history of interest rates.
So I can inform him … notwithstanding the leader of the opposition’s interest in my university essays I can provide more for him later today.
But I remember back in …
I remember back in 2004 when the Howard government slogan at the election was, “Keeping interest rates low.”
I remember that.
I remember that well.
But then, of course, they made the fatal mistake of appointing the member opposite as the assistant treasurer in 2006. Now, at that time, the cash rate was 5.5% when he was appointed. But then the Reserve Bank met, 3 May 2006, up 0.25%. 2 August 2006 – up 0. 25%.
8 November 2006 – you guessed it – up 0. 25%. 8 August 2007 – do you think it went up or down? Hands up who think it went up. Hands up who think it went down? You’re right!
And then there’s more. On 7 November 2007 …
Up or down. Hands up who think it went up. Anyone think it went down? Nah! Nah!
6.75%. Today the rate is 3.35%
Is 6.75 higher or lower than 3.75. Sounds higher to me. Sounds higher to me.
There were plenty of interjections during all of that, but honestly, none of us have time for that today.
Updated
Liberal MP Bridget Archer may back government’s affordable housing bill
Liberal MP Bridget Archer has signalled she may break ranks and vote for the government’s $10bn Housing Australia Future Fund, potentially going against the Coalition’s stance once again.
In a speech to the House of Representatives this afternoon, Archer said there was a “social and affordable housing crisis in Tasmania” and her electorate of Bass, recounting stories of families living in tents and pregnant women having to couch surf with friends due to a lack of accommodation. She said a lack of affordable housing was having a wider impact on businesses, claiming some were struggling to find workers due to people moving away from urban centres.
The future fund would plan to build 30,000 affordable and social homes over the next five years.
“There is an acute need for [housing] to be built,” she said.
“How can I in good conscience say to them I commit to doing what I can to help them, then turn around and vote against a policy that, though flawed, may help.”
Archer didn’t say definitively that she would vote in favour of the bill, but gestured heavily to her openness to the proposal.
The Coalition opposition resolved to oppose the $10bn future fund this week, with shadow housing minister Michael Sukkar raising concerns about its impact on the budget.
Archer said she wanted to be “part of the solution” and believed that the government’s plan would actually build on housing reforms from the previous Coalition government.
“I can’t stand here as an elected representative and ignore their needs,” she said of needy people in her electorate.
Archer said she still had “many questions” and hoped the bill would be improved in the Senate, but that she didn’t want to “let the perfect be the enemy of the good”.
“I will act in good faith but I will be holding you to account,” she said of the bill.
Updated
Just on those opening comments Amy has reported, Anthony Albanese was referring to the security agreement signed during Penny Wong’s visit to Vanuatu in December.
The agreement is expected to deepen cooperation between the two countries on a range of security areas, including humanitarian assistance and disaster relief, maritime and aviation safety and security, policing, defence and border security. It puts climate at the centre of security issues in the region.
The Australian government says the deal “recognises that our security cooperation must continue to adapt, including to better address the implications of climate change, to help manage the human security effects of Covid-19, and to meet shared challenges”.
You can read about that here:
Peter Dutton also wants to make sure Ishmael Kalsakau feels welcome:
I want to say thank you to the prime minister for those words and join with the prime minister in welcoming you, prime minister, and your delegation. We had the opportunity of meeting earlier today and it was wonderful to see you in person after having met last time across the video screen as was the case in many of our interactions over the course of the last couple of years. The dedication, the leadership that you have shown to your country, and the capacity that you have to steer your country through good times and bad is something we acknowledge and that we applaud today. As the prime minister rightly points out, we hope that you and your delegation, in particular minister for commerce, and minister for agriculture, the other distinguished guests in your party, can take back a message that there is a bipartisan position of support for Vanuatu.
Absolutely determined to make sure we can continue the friendship and the strength and I had a great deal of pride to stand and to meet with you and your delegation this morning at the forecourt of Parliament House. It’s an honour afforded our most special friends and guests and it was extended to you by way of decision by the prime minister and that demonstrates I think the level of respect that we have for you personally. I want to say thank you very much for your work as deputy prime minister and the way in which you were able to work with us during my time as defence minister. We signed an agreement, we had a very important business to conduct in a contested region.
Last night, many of us here attended a fine speech given by ambassador Yamagami, at the Japanese residence, and followed by a fine speech by the deputy prime minister and the minister for trade and others who were there, former prime ministers Morrison, Abbott, and it demonstrated the links in our region and the desire for closer cooperation and relationships and that was on display last night as it has been today.
So I want to extend every welcome to you and we look forward very much to strengthening and deepening of the relationship in many bilateral ways but our work during the course of Covid, I pay tribute to the former prime minister Morrison and you were kind enough to raise this issue in our bilateral meeting today, the vaccines that Australia was able to provide to your country provided support in a very difficult period for your country and for the world, of course, and it was instinctive we would provide that support and we were determined to see that support delivered in a timely way. That transpired.
Thank you again for making the effort to travel to our country and all Australians look forward to any opportunity to visiting you in Vanuatu and I give a shoutout on behalf of the commerce minister for all of those Australians booking a holiday, make sure you start Googling Vanuatu straight away.
Updated
Anthony Albanese:
Sir, you and your delegation, your ministers, are very welcome visitors here today and you greeted us and other dignitaries here this morning.
This is the first time a prime minister of Vanuatu has made an official visit since 2018. And today, we’re able to make great progress on some of our shared priorities including progressing sectors such as infrastructure, cybersecurity and trade, and agriculture.
Australia and Vanuatu are longstanding friends. We are partners, equal partners, guided by mutual respect and a shared commitment to a prosperous, peaceful and resilient Pacific. On Vanuatu’s independence in 1980, Australia was proud to gift the Vanuatu parliament with its Speaker’s chair, an enduring symbol of the democratic values that we share.
Last December, Senator Wong led a bipartisan delegation to visit Vanuatu where they were warmly welcomed by you, prime minister. On that visit, Minister Wong and prime minister of Vanuatu signed our landmark bilateral security agreement. One of the things that we have agreed in the Pacific Island Forum is that we in the Pacific need to secure our own region, our own region here in the Pacific. And the Pacific family needs to look after each other.
The agreement recognises that Australian and Vanuatu security interests are deeply intertwined and lays out a framework for strengthening our partnership even further. Today we committed to ratifying that agreement and I look forward to buy-now-pay-later support in this parliament, to ratify that security agreement.
I would like to recognise and commend the prime minister for his longstanding leadership in pushing for increased global action on climate change that we spoke about again here this morning. Once again thank you prime minister for joining us here today and a very, very warm Australian welcome
Updated
Question time begins
It starts off with a welcome to the prime minister of Vanuatu and his delegation, who are sitting on the side of the parliamentary chamber.
Ishmael Kalsakau’s visit is the first time a Vanuatu prime minister has visited Australia in an official capacity, since 2018.
A niche but important question about the referendum is still to be answered, regarding the official information pamphlet and what it might include. One interesting meeting is going on right now, in plain sight in Parliament House, with special minister of state Don Farrell catching up with Senate lynchpin David Pocock.
We love a bit of palace intrigue, and the two senators are meeting in a very prominent courtyard inside Parliament House – outside in the sun, shirt sleeves rolled up, with a few staff members in tow. We understand the meeting is about the pamphlet and the referendum.
We’ve reached out to Farrell and Pocock’s offices for comment.
It’s an open question of how the pamphlet (which the government wanted to scrap, but is now planning to retain, in a bid to foster bipartisanship with Liberals who wanted the brochure maintained) will look, who will write it and what form it takes. In previous referendums, essays of 2,000 words were written by politicians campaigning for the yes and no sides, then mailed to every household.
The government has flagged plans to update or modernise the referendum act, so that pamphlet might change shape. Pocock is of course a crucial Senate vote, and he had previous ideas about having donations reported in a more transparent way.
More to come!
Updated
Albanese meets Vanuatu prime minister, Ishmael Kalsakau
In the midst of all of that, Anthony Albanese met with the prime minister of Vanuatu, Ishmael Kalsakau for bilateral talks.
From the joint statement:
The Prime Ministers warmly welcomed the signing of the Bilateral Security Agreement in December 2022 and noted work in progress towards ratification of the Agreement. The Agreement formalises Vanuatu and Australia’s deep security partnership, giving effect to the 2018 Boe Declaration on Regional Security and building on more than forty years of practical cooperation. The Agreement also reflects Vanuatu and Australia’s commitment to working together as members of the Pacific family to address our shared security challenges. Prime Minister Albanese and Prime Minister Kalsakau agreed that as the first measure under the Agreement, Australia would fund the construction of a new home for Vanuatu’s Council of Ministers and National Security Council Secretariats.
The Prime Ministers discussed Australia’s financial assistance in support of Vanuatu’s economic recovery following the COVID-19 pandemic and recent natural disasters. Prime Minister Kalsakau welcomed Prime Minister Albanese’s advice that Australia would provide a new tranche of economic support to boost priority sectors of Vanuatu’s economy, including aviation, trade and PACER Plus implementation, agriculture, infrastructure, cyber security and banking.
The leaders welcomed progress towards new infrastructure projects supporting connectivity in Vanuatu with an initial focus on aviation under the Australian Infrastructure Financing Facility for the Pacific (AIFFP). This work builds on Australia’s longstanding support to climate resilient infrastructure development in Vanuatu including in the security and transport sectors and within communities.
The leaders discussed plans and achievements under the Pacific Australia Labour Mobility (PALM) scheme, under which more ni-Vanuatu workers are in Australia than from any other nation. Prime Minister Albanese acknowledged the contribution of ni-Vanuatu workers to the Australian economy and community and reaffirmed Australia’s continued strong commitment to ensuring worker welfare. Recognising skills development is a priority for Vanuatu, leaders committed to explore new sectors and increase opportunities for skills training in Australia.
In recognition of the benefits to both countries through the connections we share across our communities, our families and our cultures, the Prime Ministers welcomed the commencement of consultations on Vanuatu’s inclusion in the Pacific Engagement Visa, which will boost our people-to-people links.
The leaders discussed the urgency of international action to drive greater global action and deeper emissions reductions and the importance of working together to advance real and significant climate action. Prime Minister Albanese acknowledged Vanuatu’s long standing leadership and climate advocacy and reaffirmed Australia’s support for Vanuatu’s initiative for a United Nations resolution seeking an International Court of Justice Advisory Opinion on climate change. Prime Minister Kalsakau endorsed Australia’s bid to host COP31 in 2026 in partnership with the Pacific. The leaders committed to continuing to work together to secure ambitious climate change outcomes in our region, strengthen climate resilience and advance Pacific priorities in international climate forums.
The Prime Ministers looked forward to working closely together to further deepen the strong partnership between Vanuatu and Australia and the deep bonds between the people of both countries.
Updated
The Greens senator, David Shoebridge, has been probing how many former Australian military personnel might be working for foreign militaries.
The defence deputy secretary, Celia Perkins, said the department had worked with the countering foreign interference taskforce on a “prominent case of a former marine” helping to train the Chinese airforce, but “how we then work with the intelligence community and treatment of other risks emerging, we treat in a classified way”.
Perkins said the review commissioned by Richard Marles was not about that particular case but “how we are positioned to respond” to cases of former members of the ADF working for “countries whose interests are inimical to Australia”.
Shoebridge made the point that if defence don’t know which personnel are working for other militaries contrary then there “hasn’t been any investigation of the scale of the problem”. Perkins assured him defence works “closely with the intelligence community” but “how we look at that problem would be classified”.
Shoebridge seems to have concluded that this means defence don’t know:
Just in: Defence has admitted in estimates that they are not checking to see if former Australian military officers are serving in foreign defence forces. If you don’t want the answers don’t ask the questions I suppose.
— David Shoebridge (@DavidShoebridge) February 15, 2023
Back in the hearing, Shoebridge noted the UK has said 30 of its former pilots were helping China. The department secretary, Greg Moriarty, said it is a “matter for government if it wishes to say”.
Labor’s energy price caps will help reduce inflation: Lowe
The government will be relieved with some of Philip Lowe’s answers in that committee today, not least his view on the energy interventions:
The government’s energy package, our estimate is that the price caps there will reduce inflation in about 2024 by 0.5%. That’s meaningful. So that’s helpful. So the government can take measures in specific parts of the economy that have an effect on prices.
The other thing it can do is to free up the supply side of the economy. If there’s greater competition, more investment, more freedom on the supply side of the economy, then the price pressures for any given area offing a demand is going to be less. Specific measures in particular flexibility on the supply side and aggregate demand are the three tools that government has to affect inflation outcomes and it’s really up to the government and the parliament to decide what combination of those tools they use.
Updated
Well, that was a fun time.
We are just over half an hour out from question time, so grab yourself something to eat and a strong cup of *something* before we launch into the many interpretations of that committee hearing
Who’s on the RBA board?
For the record, Philip Lowe referred to their being nine people on the reserve bank board making decisions five times and “it’s not just me” four times during that committee hearing, so I think the RBA governor really, really, really wants you to know that it is not just him making these decisions to raise interest rates and there are nine people on the reserve bank board who are coming to these conclusions.
So who is on the board?
Philip Lowe, Michele Bullock and Treasury secretary Steven Kennedy.
Plus:
Mark Barnaba:
Chair – Reserve Bank Board Audit Committee
Deputy Chair and Lead Independent Director – Fortescue Metals Group Ltd
Chair – Audit and Risk Management Committee, Fortescue Metals Group Ltd
Chair – GLX
Chair – Investment Committee, HBF Health Limited
Emeritus Board Member – The University of Western Australia Business School Board
Board Member – The Centre for Independent Studies
Adjunct Professor – Investment Banking and Finance, The University of Western Australia
Senior Fellow – EY Oceania
Senior Advisory Board Member – Appian Capital Advisory
Wendy Craik:
Member – Reserve Bank Board Remuneration Committee
Chair – CSIRO Oceans and Atmosphere Advisory Board
Chair – ONE Basin CRC
Chair – Steering Committee, National Red Imported Fire Ant Eradication Program – South East Queensland
Member – Advisory Board, The Centre for Strategy and Governance
Member – Advisory Board, Public Leadership Research Group – Howard Library of the University of New South Wales
Member – Consultative Committee, Future Drought Fund
Ian Harper:
Member – Reserve Bank Board Remuneration Committee
Dean and Director – Melbourne Business School Limited
Chair – Australian Statistics Advisory Council
Chair – Stipends Committee, Anglican Diocese of Melbourne
Director – Harper Associates Australia
Director – Robert Menzies Institute
Carolyn Hewson:
Non-executive Director – CSL Limited
Non-executive Director – Infrastructure SA
Carol Schwartz:
Chair – Reserve Bank Board Remuneration Committee
Founding Chair – Women’s Leadership Institute Australia
Chair – Equity Trustees
Chair – Our Community
Director – Trawalla Group
Alison Watkins:
Member – Reserve Bank Board Audit Committee
Chancellor – University of Tasmania
Non-executive Director – CSL Limited
Non-executive Director – The Centre for Independent Studies
Non-executive Director – Wesfarmers Limited
You know who is not there? A representative for workers. Or the unemployed. Or those living on or under the poverty line. Or renters. Or … (you get the picture)
Updated
Employment secretary on decision to reappoint registered organisations commissioner
Labor senator Fatima Payman is targeting the Coalition’s decision to reappoint the registered organisations commissioner, Mark Bielecki, for a new term that commenced on 1 May 2022, during the caretaker period.
Employment department officials accept that Labor “foreshadowed in advance” that it intended to abolish the body, but said it was a decision of the Morrison government.
Payman said Bielecki’s early termination cost $130,416 and asked officials to justify this payment.
Employment department secretary, Natalie James, said:
I was not in this role at that point in time. Appointments are matters for government. Having made the appointment, the matters that determine [what they are paid] when [their position is] abolished are set out by a remuneration tribunal determination ... [it] sets out the benefits payable. Neither of those two matters are within the control of officers, or decisions made by officers at this table.”
Updated
And that is it – the RBA governor’s time in front of today’s committee has come to an end.
He will be back on Friday to answer more questions, which I am sure he is just thrilled about.
Does the RBA have plans to increase communication with ordinary Australians?
Labor senator Deb O’Neill then gets the last few minutes – Labor senators have not asked questions for the most part because of the independence between the bank and government, which is why there are no ministers in the room (during senate estimates, there is usually a minister or a minister representing the minister at the table, who can direct traffic or pick up political questions).
O’Neill:
Senator McKim asked you about the sources of information that you have and there’s been implications about an imbalance in that. My request is how closely are you listening to people? You mentioned people, livelihoods, jobs and businesses and the economy as core concerns for you, you and the board – you making your decisions. You also mentioned letters that are arriving. What comfort can Australians take from your assurances here today that you really do listen and understand what’s happening to ordinary people whose job it is for tows represent whether in the government, in the opposition or on the crossbench?
Philip Lowe:
Ultimately, all our policies are to help people. That’s what the Reserve Bank is about. To help people. We want people to have jobs. We want their savings protected. We want them to face low rates of inflation. That can sometimes seem abstract but it’s all about people, having people with good jobs, rising real wages, keeping their savings safe. That’s what we talk about every single board meeting. We have to make complex decisions and we rely on a range of information, data, what we’re hearing from businesses, but also what we’re hearing from the community sector.
It’s all about people. I’m glad you asked the question because that’s what we do. We’re here to help people, keep their savings safe, low inflation, get them jobs.
O’Neill:
You’ve talked a little bit about the understand about inflation and its impact and we have a generational divide of people who might understand that and people who might not. You’ve also mentioned Acoss, the financial council, who talk to people all the time, who speak to people who need advice. You also mentioned your diary. How actively at this point of time, given the concern amongst the community and the raising awareness about the importance of managing inflation, how actively are you seeking to understand in addition to the letter-writers, what is going on for ordinary Australians? Have you changed your practice. Do you have any proposals to increase that communication with people out on the ground, so to speak?
Lowe:
Again, the Reserve Bank is not just me. The frustration I have is we have a fantastic team and they’re out there.
We’ve got a community and business liaison team and their job is to talk to business and community representatives and they share with me what they’re hearing and then sometimes they’ll have the opportunity to directly engage with the community sector as well. And I welcome opportunities to do that and I’ve been to the financial council service in Surry Hills.
You and I went there together. We heard harrowing stories. When I’ve been in Perth, I’ve visited a few community groups. I’ve got an appetite to do it. I’ve got a busy diary but, you know, where I can, I can do it. But the Reserve Bank is more than just me.
O’Neill:
I think that’s become very clear in the course of today.
Updated
'I don’t think we’re at the peak yet': RBA governor on interest rates
On the cash rate, and high it will go, Philip Lowe says:
We’ve got an open mind.
I don’t think we’re at the peak yet but how far we have to go up I don’t know.
It will depend upon inflation data, resilience, spending, and what’s happening with wages.
I don’t think we’re at the peak yet but how far they need to go, we’re still unsure.
Updated
What do the treasurer and RBA governor talk about if not interest rates?
Liberal senator Andrew Bragg then uses one of his last questions to ask what the treasurer and RBA governor talk about, if not interest rates.
Lowe:
We talk about the economy. There are other issues the Reserve Bank deals with. There are payment system issues, as you know. We’re the government’s banker. We print the banknotes. We didn’t talk about that today, the decision to change the $5 note. There are a lot of reasons for us to talk. We’re both going to India next week to the G20 meeting so I’ll spend a lot of time with the treasurer this week and that’s always been the case with treasurers.
Bragg: I want to check that point with you. So you don’t talk to the treasurer about interest rates but the treasury secretary sits on the board of the bank. Is that how that communication occurs?
Lowe:
I don’t know what takes place between the treasury secretary and the treasurer but the treasury secretary sits on the board in his own right and I don’t know what he says to the treasurer after the board meeting but I do not speak to the treasurer between the board meeting and the announcement. And that’s always been the way. There’s nothing unusual here. This is just the way the system is operated.
Updated
Philip Lowe on ‘safeguard mechanism’ that allows government to overrule RBA
Jane Hume then seemingly discovers that there is a clause in the RBA Act which allows the government to overrule the RBA’s decisions:
Did you realise that if the treasurer doesn’t agree with your policy position that, after a certain amount of to-ing and fro-ing with the board and swapping of papers, that he can submit a recommendation to the governor general and then the governor general, acting with the advice of the Federal Executive Council determine the policy adopted by the bank. The treasurer can override the Reserve Bank’s policy?
Philip Lowe:
That’s been the case since 1959. That position has never been used and in my view it would be a retrograde step to use it.
It’s a set up so Hume can land the punch line “let’s hope we don’t see Stephen Jones marching up to Admiralty House anytime soon!”
Lowe makes sure to bring it back to seriousland though:
Ultimately the government can overrule the central bank. It would be unwise to do it unless we went crazy. I view it as a safeguard mechanism. It’s never been used and let’s hope it never will be.
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How do people view and use their savings?
Jane Hume gets another five minutes:
Q: You’ve spoken in the past about the buffers in people’s household budgets or their mortgages more importantly. Can you talk me through how that has played out or how it’s playing out in what you’re seeing? In your decision-making, what it is that households have in their savings or mortgages?
Philip Lowe:
It’s a critical issue because the pool of excess savings in Australia is as large as anywhere in the world, the pool that was built up during the pandemic. It’s more than 20% of one year’s household disposable income.
There’s a huge pool of excess savings. It’s not evenly distributed across the population. Lower-income people, obviously, haven’t got the same savings as higher-income people.
And one of the analytical issues we’re grappling with here is how do people view these savings? Do they see them as just an increment to their wealth that they can spend over coming years?
Do they view it as a piggy bank that they can go and use over the next little while? So we don’t know the answer to that and it’s one reason we’re watching the spending data very, very carefully.
We’ve spoken to the banks about the people with fixed-rate loans. Some of these people have a split loan with a fixed-rate and variable-rate component and have an offset account against the variable-rate component and they’ve built up substantial buffers in those and other people who just have a fix rate loan have a deposit account where they’ve built up substantial buffers. Banks tell us that people with fixed-rate loans, most of them, have been pretty cautious. They knew interest rates weren’t going to stay low forever.
They’ve taken a low interest rates for two, three or four years as a bonus and saved some. That’s good.
Not everyone is in that case, though. Some people have taken the lower interest and it’s to allow them to spend more and those people are going to face a lot more difficulty when interest rates go up by 3%.
Repayments have to go up by three percentage points. So it’s a huge diversity across the population that the banks tell us they’re work being their customers. They’re contacting them in advance and a large number of people in fixed-rate loans have built up substantial buffers.
Q: Do you get data about mortgage stress?
Lowe:
We do. We get frequent data on the share of the population that’s behind on its mortgage. It’s almost a record low. We also get data on the share that’s behind 30 days. That’s ticked up a bit but it’s still low and the banks say people are still paying their mortgages. This increase in interest rates, while it’s come quickly, people can see it coming and they’re adjusting their behaviour. I want to acknowledge it’s really, really hard for some people. Some people are going to find a very big increase in their mortgage payments. Other people are better prepared.
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Questioning of RBA governor continues
Here is how Malcolm Roberts’ questions are going:
So inflation has gone from not a problem to a 30-year high, 7.8% in the December quarter. On 2 February 2022, Dr Lowe, you said inflation had surprised on the upside and in March ‘22, you predicted inflation would peak at 4.2%. That was at the ABA Australian banking association conference that we both attended. Why were you surprised, Dr Lowe, when many, including myself, had spent 2020 and 2021 warning the Reserve Bank and the government, including its own investments, that sheer volume of the money would eventually cause significant inflation.
(Must be hard being the Cassandra of the parliament, fated to never to be listened to.)
Philip Lowe is unfailing polite:
Certainly people – and you were one of those people who were making the argument that money supply expansion was going to be inflationary – and that has played a role, but as we were talking about before, at least half and maybe three-quarters of the increase in inflation is due to what went on in Europe and the supply side disruptions.
The expansion of money supply, low interest rates and government support during the pandemic has driven inflation, but it’s not the full story.
Roberts: Is 7.8% inflation the price the public is paying for the Reserve Bank supporting the Government’s wasteful, mismanagement of Covid using lockdowns and other restrictions, leading to jobseeker, jobkeeper, mismanagement that the government caused wishes is what necessitated the money creation? Did you even consider saying to the government, no, I’m not going to print this massive amount of money? So perhaps reconsider your Covid strategy?
Lowe seems to get a bit exasperated here:
No, we did not do this – and I want to be clear about this – we did not do money creation on the request of the government. The nine people who sit on the board of the Reserve Bank decided to do this and we had meetings with the government...
Roberts:
Understood, but was it because the government had put in place so many onerous restrictions.
Lowe:
No. It was because – and it’s easy to forget this now – in early 30 we were being told by the health people that tens of thousands of Australians would be dead within months. Remember? There were preparations for temporary morgues in our cities. Our borders were closed. We were told the vaccine was maybe three years, maybe longer away. So this was going to be something that would take the society a long time to get over. That’s what we were being told.
…We saw what was going on in New York and Italy. It was really, really terrible and scary. People were locked in their homes. And, you know, t it turns out that scientists developed a vaccine more quickly and the economy was more resilient and we did too much. But we didn’t do too much because the government told us to or we wanted to. We thought this was the right thing to do given the information we had at the time.
Roberts has more ‘truth’ but he is out of time.
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Defence asked about rotations of American B-52 bombers through Australia
The head of the Department of Defence, Greg Moriarty, has given a very carefully worded response to a question from the Greens senator Jordon Steele-John about rotations of American B-52 bombers through Australia. The potential for these to be nuclear-armed was the key point of the question.
The context is that there is expected to be space for up to six American B-52s once an upgrade to a parking apron at RAAF Base Tindal, 320km south-east of Darwin, is completed.
Moriarty said:
Stationing of nuclear weapons in Australia is prohibited by the South Pacific Nuclear-Free Zone Treaty to which Australia is fully committed.
There is no impediment under this treaty or the Nuclear Non-Proliferation Treaty to the visit of foreign aircraft to Australia [or] the transit of Australia’s airspace, including in the context of our training and exercise programmes, and the Australian force posture cooperation with the United States. Australia’s long-standing arrangements to support visits by US strategic assets are consistent with our obligations under the South Pacific Nuclear-Free Zone Treaty.
US bomber aircraft have been visiting Australia since the early 1980s and have conducted training in Australia since 2005. Successive Australian governments have understood and respected the longstanding US policy of neither confirming nor denying the presence of nuclear weapons on particular platforms. Australia will continue to fully comply with our international obligations. And the United States understands and respects Australia’s international obligations with respect to nuclear weapons.
The Greens senator David Shoebridge followed up by trying to get confirmation that Defence did not believe there is a was restraint to Australia permitting nuclear-armed B-52 bombers to be present in Australia provided it was not a permanent presence.
There was no direct answer provided. The foreign affairs minister, Penny Wong, said the government was “not in a position to go further than what Mr Moriarty has just gone”. She accused Shoebridge of “trying to drum up concern” and she did not believe that was responsible. Shoebridge replied that it was not fear mongering; he was just seeking clarity.
Updated
LNP senator Gerard Rennick and One Nation senator Malcolm Roberts are now asking questions, so we will just catch up on some of the other committees for a moment.
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Banking company that ran cashless debit card handed $12m ‘limited tender’ contract
The banking company that ran the cashless debit card, Indue, has been handed a $12m “limited tender” contract for the new income management card to be used in the Northern Territory and other areas.
A tender published on 13 February indicated Services Australia had awarded an $11.89m “confidential” contract to Indue under a “limited tender” due “extreme urgency or events unforeseen”.
Under questioning from the Greens senator Janet Rice, Services Australia acting deputy chief executive Jonathon Thorpe confirmed the contract was for the new income management card that will replace the cashless debit card.
He confirmed no other companies were approached or able to vie for the contract due to the “short time frame for the transition of customers off the cashless debit card to other arrangements”.
Thorpe said the agency also wanted to make sure customers weren’t affected and had a “seamless transition from the cashless debit card to enhanced income management”.
He said:
Part of doing that was to understand how the account currently works on the CDC, the bank account, the card itself and the service arrangements, and [participants] are able to make a smooth transition across.
Thorpe said Indue would provide the banking services, such as the bank account, the physical card, and the “connection in the financial system”. “In other words the ability for customers to use that card in various scenarios being online, retail environments or face-to-face retail.”
Thorpe said the tender was consistent with the procurement rules and the agency sought advice, including an assessment on “value for money”.
Indue has previously been awarded contracts for the basics card, as well as the cashless debit card.
The Albanese government vowed to scrap the Coalition’s “privatised” controversial cashless debit card – which operated as a trial in several sites – if it won the 2022 election, a promise it followed through on in October.
However, it also said that while it conducted further consultation it would maintain the income management policies that existed in the Northern Territory, which date back to the Intervention and are carried out with the basics card.
The replacement to the cashless debit card, known as the “smart card”, will be rolled out on 6 March for those in the Northern Territory and Cape York, and others who wished to opt-in in Ceduna, East Kimberley, Goldfields, Bundaberg and Hervey Bay regions.
The government said it would have additional restrictions on card spending, including blocking tobacco purchases, but no changes to the quarantined amount of welfare payments, which remain at 50% of an individual’s payments.
It also noted Services Australia would support customers directly through a dedicated phone line for day-to-day queries. In the past, cashless debit cardholders were required to contact Indue with some queries.
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Lowe on what can be done to address supply-side issues
Nick McKim’s final question is on what can be done to address the supply side issues of inflation:
How do you think monetary policy addresses supply-side issues? And whether you accept that there are other ways to reduce inflation – levers that the government has rather than the RBA? For example, tax policy, that would reduce inflation but would be able to be better targeted towards those who have the capacity to pay?
Philip Lowe:
We’ve talked about the various measures the government could do. It could manage aggregate demand, or do things like it’s done in the energy market. There are options there, and I’ll leave it to others to make judgements about what the right combination is there.
On monetary policy and supply shocks, there’s very little that monetary policy can do to offset supply shocks. Sometimes you’ll want to respond to the higher inflation that comes from a supply shock to stop inflation expectations rising and staying high. But if that doesn’t happen, you can let the supply shocks wash through the system. But the other point I want to make here is probably half - a quarter to half, maybe roughly – is from demand.
And we really saw that in the December quarter. This was really quite important for us. In the December quarter, the price of clothing and footwear went up 2.2% – that’s 5% in the year. In other countries, it was starting to slow. The price of non-durable household goods, stuff you buy at Kmart or a department store, up 2.3%. 12% over the year.
That’s not because of global supply problems. They’ve been fixed up.
McKim: It could be profiteering, couldn’t it?
Lowe:
And strong demand. Retailers tell us demand has been strong. The price of meals out at restaurants up 2.1% in the quarter – 7% over the year. That’s strong demand. People are going out. They were celebrating with their families for the first time in three years. Strong demand. Prices go up.
And the strongest example was the cost of domestic travel and accommodation. 7% up in the quarter. We’re all travelling again and wanted to go on holidays. Strong demand. Prices go up. So a lot of the inflation we saw in the December quarter was because there is strong demand in the quarter.
There is increasingly a demand element to the inflation. We’re hoping that – we’re starting to see some evidence of this – that demand is moderating and the rate of increases in these areas will come back at the same time the supply-side problems will fix up as well. So that’s the basis – inflation comes back down.
But demand is driving part of the inflation most recently.
Updated
Likelihood of wage-price spiral is ‘relatively low’: Lowe
Nick McKim moves on to bank profits:
You’ve spoken again today, as you often do, about wages. And yet you’ve not said anything today – and you rarely do – about corporate profits. So the CBA has just announced a 9% profit, do you accept that when you put interest rates up, that increases the profits of big banks? And would you agree with Dr Kennedy’s statement this morning that the likelihood of a wage price spiral is low?
Philip Lowe:
When we put up interest rates, the immediate effect, I think, is a boost to bank profits, particularly if they’re slow in raising deposit rates, which they have been. And I know the government is concerned about that – rightly. But over time, higher interest rates leave the economy – it’s kind of a “better now, maybe not so good later on”. That’s how it works out.
On the risk of a wage-price spiral?
I think it’s relatively low.
But if we’re wrong on that, the costs are very high. This is the kind of thing. It is low, but I don’t want to give the impression that we’re not worried about it, because we are.
Not because the probability’s high, but because the cost of that happening is very high.
…This is why I draw attention to it. Not because I’m overly worried about that at the moment. The wage outcomes are still consistent with inflation returning to target, and businesses telling us that next year they’re expecting to give smaller increases than this year. That’s all positive, and we welcome that. And I only talk about the wage price barrier to remind people that, if that were to change, it’s going to be difficult for us all.
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Is the plight of homeowners and renters being factored into RBA decisions?
Nick McKim then wants to know when Philip Lowe gets input from people who aren’t motivated by profits – homeowners, renters, people who are not attending lunch with bankers.
Dr Lowe, you say you can’t live in a bubble, and I think that’s right. And you hear directly from bankers at lunches like the one at Barrenjoey. You hear directly from big business through your business liaison program. But how are you ensuring that the pain that renters and mortgage-holders are feeling is adequately factored in to the decisions that the RBA is making? How are you hearing directly from the people that are bearing the brunt of decisions? In other words, you’re hearing directly from people who have a desire for profit. Big business, the banks. Understand that they want to make money. That’s their job. How do you make sure you’re factoring in the pain that is being felt by the people that are bearing the brunt of the pain from interest rate rises? How do you make sure that you factor those matters into your decision-making at the appropriate level compared to big business and big banks who are just interested in making more money?
Philip Lowe:
Yeah. It’s a very good question. Recently, I met with the head of Acoss, who stressed the mortgage stress people are under. I get many letters from people in stress. I hear that with a heavy heart. Our financial team also talks with financial counsellors.
There’s some of that in the recent statement on monetary policy. We reach out as best we can to these various groups.
It’s harder to get together people who have got a ... we talk to Acoss, we get direct feedback from individuals, and we talk to the service providers who are helping people who are in difficulty, and we hear the message loud and clearly, and we factor that and we talk about it every board meeting, how this is really, really hurting some households.
But we also talk about if we don’t get on top of this, the pain will be worse. It’s not a nice message, but that’s the reality we face. And we have to face into that reality.
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RBA governor pressed on timing of bond market jump and his lunch with bankers
Nick McKim picks up on that last answer:
It’s the timing of it, Dr Lowe.
Lowe:
It’s the timing of it, I accept the timing, people find that difficult. If I’d had my time again, I’d do things differently.
But we have changed our policy now. But it’s the timing. And I addressed the issue about the market moves, because when I saw that, I was concerned about something untoward that could have happened. But these are the facts as I know them, and I want to share those with you.
I arrived at the lunch at 12.30, after the executive committee at the bank. And I had a brief discussion with the CEO and the chief economist at Barrenjoey about their business model and how things were going and the competition they were bringing to the marketplace.
And then went into the room with maybe 15-20 guests, sat down, and I started speaking probably around 12.50, after the CEO of Barrenjoey told the room about the things they were doing.
So I would have started speaking at around 12.50, and the lunch finished at 2.00. So we’ve looked at the bond yields.
They’d been rising earlier in the morning, and for an hour or two they’d been flat, then they started rising at 12.00.
McKim:
So you don’t think there’s a correlation?
Lowe:
They rose kind of fairly steadily between 12.00 and 2.00.
…Exactly the same movements were happening in the New Zealand market at the same time. And over the couple of days, the movements in the Australian yields were almost exactly the same as the movement in US Treasury’s.
So they’re the facts as I know it.
The movements in bond yields started before and a lot of it was already done before I started speaking.
They’re the facts as I know it.
I can’t say any more.
We’ve investigated it thoroughly, and that’s what we’ve found.
Updated
Philip Lowe asked about lunch with bankers and bond market jump
Greens senator Nick McKim gets the question stick again:
I just wanted to make it clear that my statements around vacancy rates in Melbourne and Sydney being about the long-term-run average levels were based on the Statement on Monetary Policy that was issued by the Reserve Bank on last Friday. Dr Lowe, you’ve addressed to a degree your BarrenJoey lunch. Thank you to your commitment to make more public statements before you do events like that in the future. I think that’s a good thing. But can I ask you what did you share with a bunch of bankers that are at the Barrenjoey banquet that you can’t share with mortgage-holders and renters? And why did the bond market jump so markedly actually during that lunch that you had? What did you say to them that pumped up the bond market so markedly while you were actually at that lunch?
Philip Lowe:
What did I share with them? I shared the messages in the statement that was released on Tuesday afternoon. And those messages included that we’re serious about getting inflation under control. We’re on a narrow path. And we want to preserve the gains in unemployment we’ve made. They’re the main messages. I’ve talked about those much more expansively today than I did at that lunch. And I sought views from the people at that lunch on a range of issues, including how resilient is household spending, how the labour market’s likely to evolve, as the wage outcomes we’re seeing at the moment - are they likely to be sustained? Also, how our message has landed. Got mixed feedback on that.
We talked about the potential for supply shocks in the future to make inflation more variable. That was an issue I raised in a speech last year, and how we should be thinking about monetary policy about about that. And also talked about the level of interest rates in Australia being lower than elsewhere in the world. And I got their views on that. It was interactive. And I pushed back on the proposition that I shared things with them that I’m not sharing here or with the Australian people.
Updated
Matt Canavan then has his last question:
We just seem to have an unhealthy focus on international developments here, and not enough focus on what we’re doing to our own energy markets right here and how that impacts on inflation. Is there anything you can encourage us to look at in this microeconomic reform space? I know you’ve commented on it in general terms before. Is there anything that we should focus on in energy, in labour, capital markets, that would make your job easier?
Philip Lowe:
Over time, expansion of capital stock that produces cheap, reliable energy will help. How you do that, I don’t know. But it must be true, again - the principle of cheap, reliable energy. We need the capital stock to be put in place in the country to deliver that. So whatever you can do in this place to help, I’d welcome that.
Updated
Lowe on the impact of Ukraine war on Australia’s inflation
The LNP senator then moves on to energy. In particular, people blaming Russia’s invasion of Ukraine.
Matt Canavan:
Just on the energy side of things – how much has the disruption in energy flows resulting from the war in Ukraine contributed to inflation over the past year now, almost?
Philip Lowe:
Well, substantially. At one point, the price of petrol – I think the annual rate was up 30%. That makes a big difference. And the sky-high prices of gas and coal in Europe flowed through back into our domestic market. That’s been a first-order issue. But it hasn’t just been energy. It’s been food and a lot of the supply chains. It’s worked its way through. The more positive story here is we’re through the worst of that.
Canavan:
I mean, if the removal of energy flows from Russia can have such an impact on Australian inflation, how much impact will come from the government’s decisions causing investments in gas in Australia to be deferred? How much impact will that have?
We’ve seen over the past month major investments in Queensland, in Victoria, deferred as a result of the government’s changes to – or interventions in – energy markets. I’m not going to ask you to comment on those interventions. I’m just saying, given that that’s happened – it’s a fact that those investments are not proceeding – how much of an impact on lower energy flows in Australia will that have on inflation?
Lowe:
It’s not my area of expertise, and I think it’s really a medium-term issue. If there’s less investment there, hopefully there’s more investment somewhere else.
Canavan: You mean in Australia?
Lowe:
Australia, or elsewhere around. This is one of the issues I highlighted in a speech last year – the existing capital stock to produce energy is depreciating. And we’re not kind of reinvesting in existing capital stock. We’re investing in new capital stock. I don’t know how that’s all going to balance out, but...
Canavan:
I’m just a little confused. There has been a lot of commentary on the Russian situation, and you’ve referred to it here and before, and so has the Treasury secretary, referring to it endlessly. So much focus on what Vladimir Putin’s doing. But then – how has it played out into interest rates and money policy settings. But almost no interest on how it would impact in Australia – wouldn’t it have more impact on Australia’s inflationary environment? This is a perfectly reasonably question.
Lowe:
These investment decisions are multi-year things, and so will play out over multiple years, and it will depend upon how much other investment takes place in other forms of energy. Next year, in 2024, the government’s recent initiative will reduce inflation by around 0.5%. That’s within our kind of normal forecasting horizon. I think the issues you’re talking about are important. But they’re really beyond the next 18-24 months.
Updated
Matt Canavan continues:
How important, then, in that context – there’s obviously a risk, as you’ve recognised. There’s a risk that at least some businesses fail, and people lose their jobs, as we seek to have a landing, soft or otherwise. How important is it, then, to have flexible labour markets in that environment, such that businesses can respond to the changes that are caused by a higher interest rate environment?
Philip Lowe:
Businesses need to be able to respond both in headcount and hours worked. Hours worked has become an increasingly important flexibility that businesses have. It’s beneficial to retain that. But the general principle has to be right, doesn’t it? If the business environment’s uncertain, businesses should have flexibility.
…And I’m not going to comment on whether the changes that have been made impair or enhance that.
Updated
Has the RBA looked at what will impact on bankruptcies on interest rates?
Matt Canavan:
Just drilling down to the labour situation there – and, look, I have been critical of some of your commentary in the past, but I understand that you have a tough job to do right now. One of the potential consequences of these tough decisions you’re making is that it may force some businesses to the wall. We’ve spoken about mortgages and households. And that will, of course, lead people to lose their jobs. Has the Reserve Bank, at this stage, looked at what will potentially impact on bankruptcies on interest rates?
Lowe:
We don’t forecast the bankruptcy rate. It has been very, very low. During the Covid period. And it’s risen a little bit, but it’s still, in historical terms, low. How many business failures we see will ultimately depend on how the economy grows. Our central forecast for growth is 1.5% for this year and next. If we can get that, then some businesses will find things difficult, but I don’t think it’s going to be a major problem.
…If the economy contracts, then businesses are going to find things more difficult. But that’s...
Canavan:
And people will lose their jobs too.
Lowe:
And people will lose their jobs. And it’s possible – we’re aware that that’s a risk, and some people criticise the bank board for meeting every month. But at the moment, I’m glad we meet every month, because we can assess the data, we can look at a very high frequency at what’s going on.
At turning points, it’s really valuable to meet frequently, and we can be responsive.
Updated
LNP senator Matt Canavan is up now, and despite his penchant for photo shoots with coal dust smeared on his face, the good senator is actually an economist. (First class honours in fact He worked at the Productivity Commission and KPMG before he became a senator and retconned his image as a Working Class Man (TM)).
Canavan:
I noted your comment earlier about investments that can help increase the productive side of the economy. Just as a general point of view, are policies that help expand productivity disinflationary, if you like? Do they help moderate inflationary pressures?
Philip Lowe:
Obviously it depends upon the specifics. But in general, yes. If you can expand supply, then it helps. If we can increase competition, that would put downward pressure on prices. If there are more workers available and you increase labour supply, that helps. Expanding the supply side in the short run puts downward pressure on inflation. And in the long run, makes the pie bigger. If you’ve got a bigger pie, your job’s going to be easier too.
Canavan:
That’s exactly right. And getting more specific, we’ve had a period of relatively low inflation – decades of it. To what extent do you think the microeconomic reforms of the past have contributed to that relatively subdued inflationary environment?
Lowe:
I think they were incredibly important and they were also important to expanding the pie. One of the reasons the Australian economy did so well over many decades was that we had a series of reforms that made us more competitive, made the economy more dynamic, and that delivered stronger growth. So the pie was bigger and developments on the supply side – not just in Australia, but globally – China was obviously an important part here – supply-side developments made the job of central banks much And they also expanded the pie. So this is a call that I’ve often made, we need to focus, refocus, on expanding the supply side.
Canavan:
With that in mind, in the past year, we’ve seen the government re-regulate labour, and now energy markets. If removing restrictions on the economy helps subdue inflation, wouldn’t reintroducing restrictions in these very important markets add to inflationary pressures?
Lowe:
Again, it depends upon the specifics. I don’t want to be drawn into the specifics of the IR legislation. But I know the treasurer has said that he’s got the 5-yearly review of the Productivity Commission, by the Productivity Commission, on his desk. It’s got more than 1,000 pages, and he plans to release that in March or April. And I hope that’s going to give us some new ideas on how to expand the supplied side and make the economy more flexible. I expect we’ll talk about the need to invest in people, in technology, in energy. And better delivery of government services. So I think, I’m hoping that that 5-yearly review re-energises the discussion about productivity and enhancing supply. We’ll see.
Updated
Philip Lowe on government fiscal policy
Dean Smith has his final question:
Governor, I think I should ask you the same question they asked the Treasury secretary, but I asked the secretary whether or not fiscal policy was playing a subsidiary role to monetary policy at the moment, provided an answer, you might have seen that. But what is your response to that question?
Philip Lowe:
We covered some of this material before. I think fiscal policy is broadly neutral from a demand management side. The government is saving most of the terms of trade is a revenue boost, so that’s positive. It would be problematic if that were not the case and that money was being recycled back into aggregate demand but it’s not and I welcome that. The other two parts of fiscal policy affecting the prices in some specific sectors and adding to the supply side and the government has an issue in both those areas. And it’s up to others to comment on whether the balance is right, but it’s positive they’re not recycling the terms of trade revenue. And they do have some measures in the energy market and adding to some flexibility on the supply side in some areas. So always can do more, but from where I sit at the moment, it’s not problematic.
Smith: If fiscal policy is neutral, doesn’t that mean that there are opportunities not being realised?
Lowe:
Senator, again, at a very high level, you could have a more restrictive fiscal policy. And that would take some pressure off aggregate demand. But...
Smith:
And take pressure off the inflationary?
Lowe:
Perhaps. But one of the difficulties here – and governments right around the world have dealt with this – is the flexibility of fiscal policy to tighten up and loosen up.
You know, it’s pretty hard, you know, for the government to go through and use fiscal policy in a counter-cyclical way.
During the Covid crisis, it was easy. It was clear that there was a national emergency. Things happened very quickly. But most of the time, if we’re talking about trying to reduce aggregate demand by 1%, it’s a pretty surgical thing that has to be done.
And getting that through the parliament and making all the decisions – that’s tough for any government. So that has led to the position we’re in where monetary policy is used mainly to manage aggregate demand and fiscal policy looks to the structural issues. You could have a different set-up, but it’s hard. The government’s fiscal policies are different.
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RBA governor asked about the decision-making process of the board
Dean Smith:
Governor, in your earlier remarks talked about the collective and collaborative nature of board discussions and board decisions. Am I right to assume that board decisions are unanimous?
Philip Lowe:
Well, we go around the table each time and each board member expresses their views and the experience that I have had as governor is that we all come to the same conclusion. We explore the issues from every angle, maybe Michelle [Bullock] you can reflect on it as well. I’m chairing the meetings but you’re a member.
Deputy governor Michelle Bullock:
Yep. Yes, I would – it’s very open discussion. I mean, I have only been involved in it regularly for the last nine to 10 months, but we go around the room but before we do that, we have an active discussion about possible options and I think we have expressed those in some of our press releases as well, post-meeting, that we have mentioned the options we have discussed.
I have observed discussions where some people have come in sort of with a particular view and then heard alternative arguments and changed their mind, but my experience personally is that in the end, when we go around the room and everyone is specifically asked, there is a unanimous coming-together on what is the best thing to do.
Lowe:
Sometimes the meetings – I’ll say we’re really unsure what the right outcome is, we should do A or B, what do you think? And then we go around and collectively work it out and other times, I have a stronger view about the answer should be A, and I’ll say that, but I always present to the board the arguments for B as well.
Smith: So perhaps we should invite the entire board to appear and not just the chair and the deputy chair of the board.
Lowe:
That would be up to you.
Updated
No evidence of wage-price spiral, but there are risks: Lowe
We then get to the risk of a “wage-price spiral” which is what happens when wages keep pace with inflation, causing inflation to increase, causing wages to increase and so on and so on. For those who lived through the 70s (which I did not) it is a very real fear, because it was one of the major issues then. But since then, it has not been a problem, because a) union power is a tiny fraction of what it was in its heyday of the 70s and b) fiscal policy has been designed to suppress wages. So now we have the other problem – no real wage rises in more than a decade.
Dean Smith:
What are the risks in regards to that wage dimension that you have just talked about?
Philip Lowe:
Well, one risk would obviously be that people say, “Inflation is 7. 8%, I need a 7.8% pay rise.” If that happens, inflation is going to be high next year and then we have another high pay rise in the year after that inflation is higher … in this nasty world I talked about.
[The wage-price spiral]
That’s one risk. But I think we got to keep it in perspective at the moment. At the moment, we don’t really see evidence of that occurring. We think that growth in the wage price index will get up to 4%, maybe a bit higher, and probably not go much higher than that. But there are risks here.
If we end up in the world I was describing before where people link wage increases one for one with inflation, then inflation will persist and it will be more difficult but at the moment, that’s not happening.
The enterprise agreements that have been signed over the past four or five months have bigger wage increases this year, but then next year, they’re a bit lower again. And we hear this from firms in our liaison as well. They’re giving workers a bigger increase this year, but they’re saying to their workforce, well, next year, we got to go back to something more modest. I hope that’s how it works out. But if it doesn’t, we’ll have problems.
Updated
‘We don’t really know’ how high unemployment needs to rise to get inflation in check: Lowe
Dean Smith then moves on to unemployment:
How high would unemployment have to rise to get inflation in check?
Philip Lowe:
That’s a very good question. We really don’t know the answer to that at the moment. Our central forecast having the unemployment rate going to 4.5% next year and this being enough broadly to get the unemployment rate down to 3% over the next couple of years.
If we can do that, if that central forecast comes to fruition, it will be a good outcome for the country, won’t it?
Because we would have got to 4.5% unemployment which before the pandemic, the lowest we got to was a bit above 5. But there’s a lot of uncertainty around this and it partly depends upon how wage outcomes develop. If wage outcomes kind of stay in a reasonable ballpark, then I think we can manage this – what I see is a fairly soft landing.
We’re keeping unemployment rate below where it was before the pandemic.
Updated
Dean Smith: One of our national papers described the rate rise as an “inflation SOS”. Do you think that the electorate is starting to appreciate the urgency and the emergency around the inflation impact on the economy?
Philip Lowe:
I hope that people understand that inflation is damaging and corrosive and perhaps the media coverage of our decision last week has re-enforced that.
I also want people to understand that we’re really serious about this. It’s not something that we’re going to say, “Well, we’ll run the risk and having inflation stay high.”
It’s too costly and damaging and corrosive. I hope that message is getting across to the community and if inflation expectations can stay well anchored and at the moment they are, then firms will reflect that in their pricing decisions and we’ll see the same in wage outcomes as well.
So if inflation expectation can stay anchored, we can stay on that narrow path. And our communication is partly aimed at re-enforcing the need for inflation expectations and stay anchored and convince people to this period of high inflation is only going to be temporary.
If we can do that, then we can stay on the narrow path.
But if people are going to think inflation is going to be 7/8% the year after that, we’re going to be in all sorts of trouble. I think people understand that.
Updated
The deputy governor, Michelle Bullock adds to that answer:
I would just add that in a world where we have been in where inflation has been quite low and stable, people didn’t worry about it. It was in the background. It’s not something that affects their decisions, not part of their thinking. You can see how that’s changed now. It’s basically on everyone’s lips. They’re worried about it. That’s the difference and what we want to go back to is a world where it’s just in the background and people aren’t worrying about it.
'We have forgotten' how inflation makes inequality worse, says Lowe
Liberal senator Dean Smith then brings it back to inflation.
Going back to your opening remarks, am I correct in assuming that there’s a level of - there’s a poor understanding in the Australian electorate about the corrosiveness of high inflation because we have been spared it for many decades?
Philip Lowe:
Whether there’s a poor understanding, I don’t know about that, but I think people have forgotten. For many years inflation varied, you know, between maybe 1.5 and 3.5% and we all got very exercised if inflation was half a percentage point away from 2 or 2.5. People really forgot about how corrosive inflation was and how it eroded your savings. How it made income inequality worse, how it really hurt the poor. So I think we have forgotten about that because it’s 30 year since we lived in that world.
Our job as the country’s Central Bank is to make sure that doesn’t happen and part of the way we do that is to remind people of the dangers of it. And say, look, if we return to that world, you’ll have all these nasties again.
I know it’s really hard for people to - to pay more on their mortgages, but it will be harder still if inflation gets too high and stays too high. It will mean higher interest rates and more unemployment. It’s hard for people to kind of understand that because we haven’t been in that world for 30 years.
Updated
‘I don’t feel like the independence of the institution is under attack’: Lowe
Andrew Bragg has one last question:
I’m more concerned about the attack on you personally and from members of the government’s backbench and the executive in part and whether that would erode the independence of the central banks, so again I just ask – are there any steps you’re taking to protect and preserve the independence of the bank from these political attacks?
Philip Lowe:
I don’t feel like the independence of the institution is under attack. It’s not affecting our decision-making, let me assure you that.
The decisions are based around the data of the analysis and the facts and that’s not the noise around and we will continue to operate that way.
The treasurer and I haven’t really spoken about interest rates.
That’s the way we operate and there’s no pressure from the treasurer Chalmers. It’s noisy, but raising interest rates is always unpopular and it affects the whole community and the representatives of the community understandably will sometimes want to talk about that, but we keep doing our job and our job is to make sure inflation comes down and hopefully preserve the gains in unemployment that we have made.
Updated
The RBA governor really seemed to want to deliver that statement and seems relieved it is out.
Philip Lowe continues:
I hear that many people have concerned about the timing, the timing between the Reserve Bank board meeting and the release of the statement on monetary policy which is on the Friday.
I thought that was manageable but I hear many people are concerned about that.
So we’re responding to that and we’ll no longer do those type of lunches before the release of the statement on monetary policy.
There’s nothing untoward here. It’s appropriate. I can’t live in a bubble. I need to talk to people. I need to hear what financial markets say and I like asking people questions.
You asked me questions today, at these lunches I ask people questions about what they think.
That’s the world we’re in and in general and for many, many years have been able to have these and other meetings with the understanding with the participants that people in the meeting don’t run to the press straight afterwards.
If you’re meeting with me you want to have confidence I won’t go to the press and tell other people what you said. I expect the same courtesy. And that’s what happens 99.9% of the time. That did not happen here.
There’s nothing untoward here but the simple courtesy that we all - we presume is we meet with people and you don’t expect them to run to the press straight after. So that didn’t happen on this case, on this occasion, but there’s nothing untoward here, I am wanting to talk to people and we will change our practice.
RBA governor addresses attending lunch with bankers instead of press club speech
Philip Lowe:
As you would know, it’s a longstanding practice of the Reserve Bank to talk to market participants, to businesses, to journalists, to politicians, to civil society.
We do that all the time and if you go on the bank’s internet sites you can see all the people, institutions, I meet with. It’s really important we do that. We don’t want to live in a bubble, we want to hear what people have to say, and what their questions are.
And I did that last week with this lunch which you have all read about.
A number of people questioned why I did that rather than a public speech. In previous years, I have generally started the year with an address at the National Press Club and the 3-hour hearing at the House Economics Committee and I have done in the first three weeks of February.
My perspective that worked quite well but I had feedback about that.
One piece of feedback was maybe you’re talking too much. And it is possible to talk too much.
So I have been conscious of that. The other piece of feedback that I had was that to start the year is better to address the questions of the Parliament rather than the media.
Having in the same week an address to the National Press Club and then a 3-hour appearance before the House Economics Committee, some people suggested the order should be reversed, it should be the Parliament’s answers I answer in a 3-hour session rather than 15 minutes questions to address at the National Press Club.
I said there’s something to that.
And normally I would have addressed the House Economics Committee last Friday but that got pushed back to this Friday.
So I listen to that feedback and I decided that this year I would first address the questions issue – asked of me of the parliament which – and that got pushed back a week.
So there was a gap in my diary and I wanted to – because the parliamentary hearing got pushed back a week and I wanted to hear what people in the market had been saying about our recent decision.
So I accepted an invitation to that lunch.
Updated
‘Not going to affect the decision-making process’: Lowe on criticism of RBA’s independence
Andrew Bragg:
Look, governor, the reason I’m asking you about this is because you alluded in your questions or your answers I should say to senator Hume that there was an expectation that the government of the day wouldn’t comment on monetary policy and you, as the central bank, wouldn’t give extensive statements about fiscal policy. In this case, this assistant treasury minister has decided to make detailed statements about monetary policy. So would you hope for more restraint?
Philip Lowe:
No, as I said it’s a free country and people are able to express their views as they see fit. I think the model that we have had for many decades, which has been supported by both sides of government where the treasurer of the day doesn’t comment on monetary policy. That served the country well. I would observe that treasurer Chalmers has not discussed monetary policy in public at all. So different models can work and we’re just focused on doing our job.
Bragg: OK. So the statements of the assistant treasurer have no bearing in what you will do?
Lowe:
Well, we listen to people’s views. I listen to many people’s views, but, no, we take our decisions independently every single month and based on the facts and the analysis. So, no, the commentary out there, it’s kind of interesting to listen to and we value hearing people’s perspectives, but, no, we don’t...
Bragg:
We’ll take it as a “no”.
Lowe:
No, it will not affect - no, there’s a lot of criticism of the bank at the moment, we understand that. We talk about that at the board meeting.
And we evaluate the arguments so we rely on the evidence, the data and the arguments. That’s what influences us.
Bragg:
OK. Thank you for clarifying that. I just want to ask you briefly about what I think is an attack on the independence of the bank. You might be aware there’s been a coordinated attempt by members of the government, backbench members of the government, to attack you and the fact I have one of the quotes here from Mr Laxale the member of Bennelong. He’s mentioned that you seemingly made a choice between speaking to the Australian public and attending a cosy lunch and he suggested that he encourages you to address that proactively in your opening address today, I think you noted you’ll be here today and again on Friday. I mean, what do you make of this coordinated attack on the bank’s independence?
Lowe:
I’m not aware of any coordinated attack or any attack at all on the bank’s independence. But when we’re raising interest rates it’s unpopular in large parts of the community, particularly given the history of the lower interest rates over the years, it is unpopular.
And it’s the job of the central bank to do sometimes what’s unpopular in the national interest.
And that’s what we’re doing.
Some people won’t – don’t like it and they’re free to comment on that, but it’s not going to affect the decision-making process. We have nine people who sit down every month and say, “What’s the right thing to do here by the country?” Even if it’s unpopular, we do it, we know it’s hard, we’re balancing various risks. I don’t feel like there’s an attack on the bank or its independence. But it’s noisy.
Updated
No discussion with assistant treasurer on interest rates: Lowe
The committee moves on to Liberal senator Andrew Bragg, who wants to talk about the assistant treasurer, Stephen Jones and comments he has made which walked right up to the line of criticising the central bank.
Q: I wanted to ask you about some comments made by the assistant treasurer which is slightly different from the ones that Senator Hume referred to. The assistant treasurer said recently in relation to interest rate increases, “I’m hoping that if this is not the last, it’s near the last of the rate increases.” Is this a statement that the assistant treasurer has made to you directly in a meeting or something similar?
Philip Lowe:
No, we have not discussed interest rates and governments have a long period of time to not discuss these interest rates with the central bank.
Q: OK. So this is a statement made by treasurer or a minister which hasn’t been made to the bank directly?
Lowe:
No.
Bragg:
OK. Have you met with the assistant treasurer at all?
Lowe:
Not recently. I have I met him on a number of occasions particularly in relation to the payment system and the stock exchange and so there are a number of issues that I have discussed with him in the past, but we have not discussed interest rates.
Bragg:
OK. I mean, is this a normal thing that a treasury minister would be making these sort of public statements about monetary policy?
Lowe:
It has happened in the past, but, you know, as I said before, it’s a free country and people are free toll be able to express their views on issues. It’s up to each of us how we choose to exercise the freedom we have. So people – if members of the government want to exercise that – the right to talk about that, certainly, you know, certainly possible and I’m not objecting to it.
Updated
Vacancy rate driving rent increases, not interest rates: Lowe
Nick McKim stays on that:
Dr Kennedy [treasury secretary] said this morning and I wrote down his exact words. “Rents are rising too to match the interest rate increases.” That’s what Dr Kennedy told this committee this morning. You told the House commission last year that the impact of interest rates on rents, are not particularly large and not a first-order effect. Do you understand the tension between those two statements? And are you asserting in your answer that many landlords are just deciding to absorb their increased costs and not pass them on?
Philip Lowe:
No, many landlords, not every landlord, has borrowings but many do obviously. And when their interest costs go up, it’s understandable they will try to pass that on to the person paying the rent. So I don’t dispute that and Steven Kennedy would probably make the same point. But the additional point I’m making, I think it’s an important one, they can only successfully do that if the supply-demand balance is in the market. It’s a complicated story, but you need both and ultimately all the evidence that we have is that it’s the vacancy rate that drives rents, not interest rates.
Updated
Philip Lowe asked about impact of interest rates on renters
Nick McKim is now moving on to the plight of renters.
McKim: At the House Economics Committee in September last year, you were asked about the impact of interest rates on renters. And I have just got your quote here, you said, “It’s not particularly large and it’s not a first order effect.” Do you - I mean, rents are going up at record rates now. Do you stand by those statements?
Philip Lowe:
Perhaps I can unpack that a bit.
It’s clear that when the interest cost goes up, that some landlords want to pass that on in terms of a higher rent. I hear landlords tell me this. But I also know that they can only do that successfully if the supply/demand balance in the market is such that people will pay the higher rents and at the moment, the vacancy rate for rental is very, very low.
And all the evidence is that it’s the vacancy rate that ultimately determines how fast rents rise. So the vacancy rates is – summarises the balance between supply and demand and you can only put your rent up if the balance of supply and demand in the market allows you to do that. So that’s, I think, the fundamental issue here. It’s the balance of supply and demand in the market and with population growth picking up again, we need more construction of dwellings. Otherwise we’re going to be in the situation of strong rental growth for a long period of time and it isn’t because interest rates are going up, it’s because the supply of rental accommodation in short relative to the demand with stronger population growth.
Over recent years it was partly ameliorated by a change in household size and may well happen again that household size starts rising again. So it’s the supply and demand balance that ultimately affects rents.
Updated
‘We want strong, resilient banks’: Lowe on banks pulling in record profits
Nick McKim: What do you say to the renters and the mortgage-holders of Australia who are getting smashed by interest rate increases while the major banks are pulling in mega profits?
Philip Lowe:
What do I say to the renters and mortgage holders?
I say, we recognise it’s really difficult if you got a mortgage and interest rate has gone up. I mean, I get a lot of people writing to me at the moment telling me about their personal circumstances and it’s really, really tough, I understand that.
You know, I read those letters and hear those stories with a very heavy heart. I find it, you know, personally I find it disturbing.
People are really hurting, I understand that, but I also understand that if we don’t get on top of inflation it means even higher interest rates and more unemployment.
So the banks are profitable it’s true. We want strong resilient banks. I know it’s hard for people to accept when they’re suffering problems with their personal finances but the country is better off having strong, resilient banks that can provide the financial services that we need. It’s tough, I know.
Updated
‘There’s a lot of accountability’: Lowe
Nick McKim stays on that topic:
Dr Lowe. Those matters I raised in my first question, that’s a litany of errors. You have admitted to some of those. You have apologised for others. Do you accept that independence should not be a lack of accountability?
Lowe:
No, of course not. I mean, I’m accountable through this process, I’m accountable through the media commentary which you might have observed is non-stop and around-the-clock.
There’s a lot of accountability, I explain myself here and I’ll be here for another three hours in this building on Friday answering questions from members of the House of Representatives. So I feel there’s a lot of accountability and it’s very important that there is.
Updated
Not our intention to send Australia into recession: Lowe
Greens senator Nick McKim, who has called for Philip Lowe to be sacked, is up next.
McKim:
Dr Lowe, you induced people into taking on record levels of debt by saying that interest rates were unlikely to increase until 2024. Then you later apologised if people had listened to you. Since you made that statement, you’ve put up interest rates nine times in a row and flagged there are more to come when the preconditions you set at that time for even a single rate rise have not yet been met.
You’ve admitted overdoing monetary stimulus during the pandemic. You said that opportunity weren’t likely to be significantly by interest rate increases.
But opportunity are currently going up at the fastest rate on record. You seem prepared to smash all into a recession by trying to squash demand in response to inflation that has, on the RBA’s own analysis, been predominantly a result of supply-side factors.
Can you explain to the renters and mortgage holders of Australia why you still deserve to hold your job?
Lowe:
I have a seven-year term as the governor of the bank and I intend to serve out that term. It’s an important job, it comes with public accountability and this is part of the process, but I intend to serve out that term and I return to the point that I made in response to one of Senator Hume’s questions - the decisions that the Reserve Bank make are made by a board of nine people. Not just me.
We make them collectively and collaboratively and the board has made these decisions and I think it would be a very bad outcome for the board to have to resign. It’s a collective responsibility.
Can I just pick up on one other issue that you raised. You said that I seem intent on smashing Australia into a recession.
Can I assure you, that’s not our intention. We are trying to navigate a narrow path here.
We want to get inflation down because it’s dangerous. It’s corrosive, it hurts people, it damages income inequality and it if stays high it leads to higher interest rates and more unemployment.
So we want to get inflation down. But we also want to preserve the gains in employment that we have made.
The unemployment rate today is the lowest in 50 years. That’s a huge national benefit. People have jobs in the past wouldn’t have had jobs. Kids get opportunities, they get on the ladder of opportunity of success, people are getting the hours they want, and the employment-to-population ratio has never been higher. Higher share of Australians have jobs today than ever before.
We really think that’s good news. It doesn’t get reported very much, but it’s good news and we want to preserve as much of that good news, that progress that we made on the labour market as much as possible.
So there’s a narrow path here and there are risks in both directions. Our objective is to travel that narrow path as best we can. No doubt we’ll get buffeted around and maybe we’ll get hit off it, but we want to bring inflation down and we want to preserve those really-won gains in the labour market that we have made.
There’s a chance we can do this. It’s not guaranteed but there’s a chance we can do it. We want to see inflation down and keep the gains in the labour market.
Updated
‘Not just me making these decisions’: Philip Lowe on taking blame for high interest rates
Jane Hume has one last question (each senator gets just 10 minutes to ask questions because there is so much interest in this session).
Final question – do you think it is unfair that, A, the blame for the high interest rates and high inflation has been sheeted back to you? And that, B, the Reserve Bank has been left to do all the heavy lifting?
Philip Lowe:
I wouldn’t say it’s unfair. It’s the job of the central bank to control inflation, to make sure that inflation expectations don’t adjust and we avoid all those terrible things.
That’s the job of the board of the Reserve Bank. It’s not just me. I find sometimes that it’s all sheeted down to me and that’s a bit unfair because it’s the board, there are nine of us, including Michelle [Bullock], who make these decisions. And we take them collectively. It’s not just me making these decisions.
There are nine people based on the advice of a large staff. So that’s the world we operate in. I’m not complaining about it. That’s our job. I’ve got to contain inflation. I’ve got to convince the community that we’re is serious about that. That’s our job and it’s unpopular and I accept that. And that’s why the central blank is independent from its role in the decision-making process.
It’s easier for me to do unpopular things than maybe for you.
I’m not complaining. It’s agile.
Updated
Jane Hume is pulling out all the stops here.
Hume:
You said - and as I said I thought it was a generous comment that you weren’t going to direct the government how it should run its fiscal policy - sadly I don’t think the government has been quite so generous towards you.
We know that the Assistant Treasurer, Stephen Jones, commented to reporters on Tuesday, saying that he thinks, we think, the government, are doing our bit, which is putting downward pressure on interest rates. “We also think there’s plenty of evidence that the stuff that’s already in the system, the interest rate rises in the system, are pulling money out of the economy and dampening down demand. We are concerned that further increases will put further pressure on households and businesses. This is the comments of the Assistant Treasurer.
I would imagine that considering they are quite contrary to those that you have expressed, that that would not be particularly helpful for you or for members of the board in doing the difficult job that they are tasked with doing, which is to bring down inflation. Am I right?
Lowe:
I mean the minister has kind of identified one of the risks and the risks at the moment are two-sided. There is a risk that the tightening of policy that’s taken place does dampen spending more than we think. We don’t have a perfectly clear crystal ball. There is a risk there and I understand why people have focused on the risk. But there is a risk on the other side. There is a risk that we have not yet done enough with interest rates and spending is more resilient and that inflation stays high.
If inflation stays high, it’s very damaging for the economy. It worsens income inequality. It makes it harder for businesses to plan. It erodes the value of people’s savings. It’s corrosive for the economy. And all the evidence is if inflation stays high for too long, expectations adjust and that leads to higher interest rates and more unemployment.
To the risks are two-sided and we’re trying to navigate our way through a narrow path. I understand why some people focus on the risks on the one side but we’ve got to be attentive to the risk from higher inflation. It’s 30 years since we have had higher inflation and many people have really forgotten the really serious damage that does to people, to livelihoods, the funking of the economy. If it persists and leads to higher interest rates and more unemployment and we really want to avoid that. People are free to express their opinion. It’s a free country. Freedom of speech. We welcome debate. But we’re very cognisant that the risks are two-sided.
Updated
The Liberal senator tries again.
Jane Hume:
First of all, you mentioned before - which I thought was very generous of you - that you don’t comment on government decisions as part of its fiscal policy and what the government should do. First of all, may I ask is there anything specifically around that structural desit that you would like to see the government doing?
Phil Lowe:
Nothing specifically at the moment. But we’ve talked before in these hearings about the importance of having a strong budget position in the medium term. Because at some point in the future, we’ll have another downturn and we want the government to be able to respond. And you can only do that if the budget has a strong structural position.
And my observation and the observation of others is that there are a lot of demands on the public purse coming from health, ageing, defence, disability, education.
Society wants the public sector to provide these things. If governments want to do it, they need to find a way of paying for it and that way is not debt. So the best outcome, as we’ve talked in previous hearings about, is to make the pie bigger through addressing the supply side.
So that’s what I would, in broad terms, like to see over time - efforts to make the pie bigger so demands on the public purse can be more effectively met. That’s not affecting right now but I’d like that in the medium term.
Hume: I get a sense that your views are aligned those of the IMF that the large off-balance-sheet funds can potentially be inflationary, can potentially cause debt to rise, and that that would make your job that bit harder.
Lowe:
They can add to aggregate demand and we take that into account in our forecasts. They can increase the supply side of the economy over time. I think that’s part of the government’s intention that these funds are used to address supply side issues. In the medium term, that can, if those policies are wisely conducted make the pie bigger and that helps us all.
Updated
‘It’s helpful if monetary policy and fiscal policy aren’t working in opposite directions’: Lowe
Jane Hume is trying to get the RBA governor to say that the government’s fiscal policy is making the RBA’s job harder.
Phil Lowe is not biting (this is not his first rodeo).
Hume: So as a rule of thumb, do you believe that fiscal policy and monetary policy should be aligned?
Lowe:
In general, yes. I mean - but, as I said, fiscal policy doesn’t need to worry just about management of cycles, there are structural issues that we need to pay attention to. I think in previous hearings in this building, I’ve talked about the importance of maintaining medium-term structural budget integrity.
There are huge demands on the public purse, as you know, and we need to find a way to meet those demands if we want to and the answer is not borrowing. So that’s the kind of first-order issue for fiscal policy and over and above and beyond that, it’s helpful if monetary policy and fiscal policy aren’t working in opposite directions, and they’re not at the moment.
Updated
Dr Phil Lowe does expand a little further at Jane Hume’s prodding:
I can make perhaps one general observation, is that at the moment, aggregate demand growth has been too strong and interest rates are part of the way that we bring that back down again.
Interest rates are a nimble policy tool.
They’re a blunt policy tool but they’re nimble.
The Reserve Bank Board meets every month and we can take decisions every month based on the flow of information.
The received wisdom over recent time is that fiscal policy, most of the time, is not as effective at managing the cycle.
Because if you’re going have fiscal measures introduced it, it has to go to the House of Representatives and the Senate, and that takes time.
So I broadly ascribe to this view that fiscal policy [most] of the time should be dealing with the structural issues and the structural budget position, and except for in extraordinary times, it’s not the best tool to managing aggregate demands. Interest rates, for all its faults and problems, is the more nimble tool.
Hume: Can I clarify, when you say that fiscal policy is neutral in your opinion, does that mean that it’s not assisting to bring inflation down?
Lowe:
I wouldn’t characterise it that way. Really again it depends on the counter-factual. The government has a lot of extra revenue because of high commodity prices. If it decided to spend that now, that would have been problematic.
We welcome the fact that the government has decided save most of the extra revenue there.
There are other elements of fiscal policy that can help as well. The government’s energy package - our estimate is that the price caps there will reduce inflation about in 2024 by 0.5%.
That’s meaningful. So that’s helpful. So the government can take measures in specific parts of the economy that have an effect on prices. T
he other thing it can do is to free up the supply side of the economy. If there’s greater competition, more investment, more freedom on the supply side of the economy, then the price pressures for any given area offing a demand is going to be less.
Specific measures in particular flexibility on the supply side and aggregate demand are the three tools that government has to affect inflation outcomes and it’s really up to the government and the Parliament to decide what combination of those tools they use.
Philip Lowe says current fiscal policy is ‘neutral’
Jane Hume then moves on to government policy (monetary).
Q: In the Reserve Bank’s opinion, is the current fiscal policy expansionary, restrictive or neutral?
Phil Lowe:
Our assessment is that it’s broadly neutral. If you take the federal and state governments together – which I think is the best place to think about it – the budget deficit at share of GDP is around 3% and it’s likely to stay there for the next few years.
The best way to think about the whether fiscal policy is contractionary or expansionary is to look at the change in thing a budget deficit and over the forecast period there’s little change in the budget deficit as share of GDP. I would describe it as neutral.
Hume:
Shouldn’t it be contractionary if inflation is at the level that it is today?
Lowe:
I’m not going to comment on what the government should or shouldn’t do. The treasurer doesn’t comment on what I should or shouldn’t do and so I’m not going to comment on the direction of fiscal policy.
Updated
'Inflation is way too high', RBA governor says
Liberal senator Jane Hume opens the questions:
Can I first ask whether you believe current monetary policy settings are expansionary, contractionary, or neutral?
Dr Phil Lowe:
As things currently stand, it’s restrictive.
Hume: Is that the same as contractionary?
Lowe:
Yes. You see that in the fact that housing prices are falling, the rate of home-building has slowed down and people are having to pay a lot more on their mortgages. Those things are all contracting or restricting growth in the economy.
Hume:
When you make your decision, when the board makes its decision on interest rates, whether to raise them, whether to lower them, whether to keep them the same, what are the things that it takes into consideration?
Lowe:
The decision making is really around – the centre point is the inflation target and inflation outcomes. Inflation at the moment, 7.8%, is way too high. It needs to come down. That’s our primary consideration.
When we take our decisions each month, we’re looking at the data on inflation, the data on the labour market, how household spending is evolving and how the global economy is evolving.
All those things are important and the Reserve Bank Board meets every single month and we look at each of those things each month and make an evaluation on the outlook for inflation.
As I’ve said, it’s way too high and it needs to come down.
Updated
RBA governor Philip Lowe takes questions from Senate estimates
After what sounded like the economics committee hold music had borrowed from Dracula’s Sunday sesh playlist, the RBA governor has sat down and it about to start answering the committee’s questions.
Dr Philip Lowe does not have an opening statement – he is just here to answer questions.
There are no government ministers in here – that’s because the RBA is a statutory body, so there is no government involvement here.
Let’s get into it.
Parliamentary broadcasting is blasting Toccata and Fugue in D Minor at 9am to start the week's Senate #estimates hearings. Classy and foreboding.
— Paul Karp (@Paul_Karp) February 12, 2023
Updated
Centrelink staff reductions under Coalition increased call wait times: Labor
Returning to the increase Centrelink call waiting times, Labor is emphasising the impact of large cuts to Services Australia staff numbers under the Coalition.
Don Farrell, representing the government services minister Bill Shorten, told estimates the Coalition had reduced the average staffing level by 3,515 between 2016-17 and 2019-20 – equivalent to 13% of the workforce. The former government had a heavy focus on the use of labour hire staff, which it claimed had brought down call waiting times.
Farrell also noted demand has been higher than usual in recent times, with the agency taking 2.3m disaster related calls, and a significant increase in claims for child care subsidy (49%), PBS (35%) and Commonwealth Seniors Health Card (127%).
Farrell said:
It is little surprise, when you reduce the workforce as the former government chose to do, and requirements increase at the same time, extreme pressure on telephony will occur.
Updated
Defence on the review and removal of Chinese equipment across its properties
Celia Perkins, a Department of Defence deputy security, has told Senate estimates about the removal of equipment – such as CCTV devices – manufactured by Chinese companies Hikvision and Dahua across defence properties. Defence first looked at the issue in 2018, when it responded to questions from the ABC. Perkins said:
Back in 2018 we were made aware of some issues the cameras and equipment you referred to and some advice was issued across government on proceeding with caution when considering use of those of those cameras and equipment…
As we understand at the time there was advice provided through the intelligence community around devices with certain capabilities manufactured from certain companies, that in use across government we should – we would have to go back to the specific 2018 advice but we should proceed with caution.
Perkins said that led defence to review its systems and remove systems where a security risk may be identified. She said that in 2018 Defence “removed a number of systems”. Perkins said she did not have a precise number.
Perkins went on to reveal the following about a flurry of activity in the past few months:
Following some updating advice and guidance in the US and the UK and media reporting on that late last year, we undertook a refresh of our review of our estate through November and December and we identified 41 systems on 17 sites. About half of those had been decommissioned in the work we commenced in 2018 - they were no longer operational - and we’ve been working through December and January to make sure that we have decommissioned and removed those remaining systems.
Perkins said those had since been removed.
Updated
Treasury boss says government spending is ‘neutral’ for interest rates
Coalition MPs are using senate estimates to prod treasury officials, in particular secretary Steven Kennedy.
One line of questions, from Victoria’s Jane Hume and Queensland’s Matt Cannavan and others, is whether the federal government’s spending is making it harder for the Reserve Bank to contain inflation. In other words, giving the RBA more work to do by lifting interest rates.
Kennedy sticks to his line that “fiscal policy is neutral across the forward estimates”, in other words over the next four years. In other words, the budget is neither adding demand to the economy nor taking it away, compared with previous budgets.
Finance minister Katy Gallagher chips in to say that the government had banked 99% of the extra revenue from higher-than-forecast commodity prices. Last Sunday treasurer Jim Chalmers said the government would bank “most” of the trailing revenue spike in the May budget.
“Most”, of course, will be worth watching because that ratio might be well less than 99%, and depending on what happens to the sum of those extra commodity royalties, there may be some extra demand coming from the economy. We’ll know by 9 May when the budget lands.
We’ll have RBA governor Philip Lowe up shortly. In the meantime, here’s the outlook for the cash rate according to investors. They’re betting on three more rate rise to come, assuming each is 25 basis points in size, by about the middle of 2023.
Ahead of RBA Governor Philip Lowe's appearance before senate estimates today, investors were predicting the cash rate to peak at about 4.1%. They are also pencilling in a 75% chance of another 25bp rise on March 7th to 3.6%. pic.twitter.com/6W9NHdMcDW
— @phannam@mastodon.green (@p_hannam) February 14, 2023
Chris Bowen says Labor will stick to its election mandate
Good morning everyone. If you were up early you will have seen our news report that the Greens want Labor to stop new coal and gas projects as part of the negotiations around the safeguard mechanism. The safeguard mechanism is the regulation the Albanese government will use to drive down pollution from heavy emitters. If you missed the story, catch up here.
The climate change minister Chris Bowen has responded to that positioning this morning. He says the government will engage in “good faith” negotiations. He pointed to a constructive dialogue with the Greens, unlike the Coalition in this instance, because Peter Dutton has declared opposition to Labor’s legislation.
You can sense the “but” coming though. Here it is.
Chris Bowen:
But I make this point equally clear. What we do will be consistent with our election mandate. We went to the people with a clear policy, we will implement that policy. Nothing more, nothing less.”
A journalist asked whether Bowen feared this would be 2009 all over again (a reference to the Greens voting with the Liberals back then to sink a carbon trading scheme).
Chris Bowen:
Look, that’s a matter for the parliament. Ultimately, I’ll be putting a package before the parliament entirely in keeping with this government’s values, the Labor Party values. And in keeping with our election mandate, just as we did with the climate bill, just as we’ve done with everything else we’ve got through.”
Are interest rates driving rent increases too?
Treasury head Dr Steven Kennedy says that indirectly, yes they do.
So the interest rating increases have the number of channels through which they work. In this country, they do work strongly through the housing channel because of the predominance of variable interest rates.
The really sort of getting into Phil’s [Lowe’s] country, but the central bank has an instrument that it uses to control aggregate demand and it will flow through various channels.
That’s its job – the distributional implications of how the central bank is working is a job for the fiscal authorities or the government to consider.
The central bank does its job by thinking about what is the balance between aggregate demand and supply, ensuring inflation remains low and stable at the lowest possible unemployment rate.
And I’ll leave it with Phil to talk further but that’s what the board is firmly focused on.
So is it right or not that interest rate rises are a significant driver in the rent increases?
“They are certainly one of the drivers,” Dr Kennedy says, saying he will leave it to Phil Lowe to distinguish more carefully.
Updated
Defence pressed on how transparent strategic review report will be
Back in defence estimates, the Coalition’s Simon Birmingham has been unable to get a clear commitment from the government about the level of detail that will be released publicly about the defence strategic review (DSR). The Coalition’s Senate leader is particularly keen for the recommendations around the required funding for defence to be released publicly in the interests of transparency.
Penny Wong, representing the defence minister at the table, says the government will consider all aspects of the DSR. She says the government’s commitment is “to make the best decisions possible” and to explain the decisions to the Australian people.
The head of the Department of Defence, Greg Moriarty, says:
We will provide, should the government require, a version of the report that can be made public. I’m sure the government may wish to further involve the co-leads in that process. That’s a matter for government.
The hearing goes around in circles:
Wong:
I would again say that the test of, I think, a government on national security is whether it makes the best decisions possible to deliver the capability needs in order to keep Australians safe. Now we intend to do that. We are applying ourselves diligently to that task. It is frankly, made more difficult – and I don’t want to play a lot of politics with this – by a period in defence where frankly the previous government was very focused on announcement and politics but not capability. But we are determined to deal with that. The DSR is a key part of ensuring that we meet that task.
Birmingham:
I don’t want to play politics either but the recommendations of the DSR would be impossible to consider if it weren’t for the restoration of the defence budget undertaken by the previous government.
Updated
And for the record, Treasury thinks that the chances of a wage price spiral (wages increasing so much that inflation becomes impossible to control, meaning wages go up to meet inflation, thereby increasing inflation etc) is “low”.
Updated
Labor pressed on stage-three tax cuts
Back in Senate estimates, Nick McKim wants to know if Katy Gallagher is “seriously saying” the stage-three tax cuts are a cost-of-living measure.
Gallagher says the tax cuts was a package and she was referring to the package as a whole and her comments need to be seen in that light.
The pair then get into a back and forth over McKim’s question “do billionaires need cost-of-living relief”.
Gallagher says she has answered. McKim says she has not.
McKim:
What is your answer to the question that billionaires need cost-of-living relief?
Gallagher:
The government has not changed its position on stage three, that is my answer.
McKim says it is not an answer.
“You can not control my answers, you can control your questions, you can’t control my answers,” Gallagher says.
McKim tries again:
Do you agree that your statement that the government supports the stage-three tax cuts is not a response to my question, which is do billionaires need cost-of-living relief? My question is do billionaires need cost-of-living relief?
Gallagher:
The government’s position on stage three hasn’t changed.
Updated
Centrelink staff shortages responsible for increase in call wait times
The Greens senator Janet Rice has responded to those Centrelink call times revealed at Senate estimates.
She said:
There’s been a huge increase in demand for Centrelink services over the last couple of years, but there’s been no action by the government to assist people on income support navigate the system. The department told me they’re 500 staff short to help people on Centrelink phone lines, and I’ve now secured new data showing just how inadequate the telephone system has become.
Congestion messages on Centrelink calls have gone from 1.2m in 2020 to a whopping 5.8m this year, and I’ve heard from so many of my constituents that they can’t get through to speak to someone at all. People are reporting being hung up on after spending hours on the phone, and the new data shows the proportion of people being able to get another human on the phone has gone down 10% in the last couple of years.
Labor’s Don Farrell blamed the increase call waiting times on reductions to staff that occurred under the previous government, while Services Australia said it was also facing staff shortages due to the tight labour market.
Updated
Economics estimates update
Over in economics estimates, Liberal senator Jane Hume is very exercised over whether or not the “three Rs” – relief, repair and restraint – appeared in the budget, were worked on with Treasury, or went to cabinet.
Finance minister Katy Gallagher says all of the measures which sit under those subheads were in the budget, and did go through consultation and the cabinet.
But Hume wants to know about those three words in particular and after a pointless back and forth, asks if those three words will be in the May budget.
Gallagher says if she wants them in the budget, then Gallagher will do her best to see that they are. Hume says that until five days ago, no one had heard them.
“It is good you are listening to us, we appreciate it,” Gallagher says.
“Well, it’s a shame the rest of the world isn’t,” Hume returns, which I don’t think is the burn she thinks it is?
Updated
Report on China’s attempt to recruit ex-ADF personnel given to deputy PM in December
Defence officials have confirmed that they provided a report to the deputy prime minister, Richard Marles, on 14 December about managing the issue of China’s attempted recruitment of former Australian defence force personnel.
Guardian Australia asked about this on 28 December and 9 January but the government declined, at that time, to say whether it was going to update legislation or any other policies to clarify post-employment obligations. Marles revealed in an interview with 2GB early this morning that the government was working on legislative changes “to remove any doubt around the full breadth of the secrets that need to be maintained”.
Celia Perkins, from the Department of Defence, told Senate estimates the report was delivered on 14 December but it was classified.
Perkins said the review looked at issues such as internal defence training, how to expand outreach to veterans, how to establish channels for former personnel to seek support about employment arrangements, and work with other arms of government about whether further strengthening of legislation might be necessary. She said all recommendations were accepted.
The Labor chair of the committee, Raff Ciccone, then asked a series of questions about the revelation that Australian government officials were first warned a year and a half ago. This warning took the form of a security report to Defence on 29 June 2021.
Perkins said:
Whenever we receive security reports they are of concern …
We work very closely with our colleagues who run the countering foreign interference taskforce and the officers of agencies like Asio and AFP and take direction from them on how we deal and respond with particular cases.
That initial security report in 2021 I would characterise as being an intelligence report that we worked closely with them on to contextualise within our departmental response.
Asked about action taken in response, Perkins said she “couldn’t speak to that in this hearing” but agreed when asked if she believed the response was proportionate to the risk identified.
Pressed on whether advice provided was provided to the then-minister’s office at that time, Perkins said:
I’m not in a position to respond to that, but we could take that on notice. I was not in a responsible role in this part of the portfolio in 2021.
Ciccone:
Just remind me: who was that minister at that time?
Perkins:
I would assume that was minister Dutton.
Ciccone:
Did the then-minister direct defence to take any actions to address the problem?
Perkins:
I couldn’t answer that question but I’ll take that on notice.
Updated
Australian government spent $7.6m prosecuting Witness K case
The government has spent $7.6m prosecuting whistleblowers David McBride, Richard Boyle, Witness K and Bernard Collaery, new figures show.
The Guardian revealed in November that the legal bill for the prosecution of Collaery and Witness K had reached $5.148m by 7 July last year, the date the Collaery prosecution ended. Legal costs have continued to increase in the months since, partly due to an ongoing push to suppress a key judgement in the Collaery proceedings.
Senate estimates heard on Tuesday that the cost rose to $5.5m by the end of January.
The attorney general’s department also told estimates that the prosecution of McBride, a military lawyer facing prosecution for the leaking of confidential material to the ABC, has now cost taxpayers $1.8m.
The prosecution of Boyle, who blew the whistle on the Australian Taxation Office’s aggressive pursuit of debts, has cost taxpayers $233,171.
Greens senator David Shoebridge described the expenditure as “lavish”, a description rejected by department secretary Katherine Jones.
She said:
I’m not sure I would agree with your characterisation of lavish, it’s a significant amount of money.
Updated
‘Huge’ increase in Centrelink call waiting times
Senate estimates has been told of a “huge” increase in Centrelink call waiting times as Services Australia warns it is facing staff shortages.
Data tabled in estimates on Wednesday showed the average waiting time between July 2022 and 31 January 2023 across all Centrelink phone lines was 18.04 minutes, up from 14.14 minutes in 2021-22 and 4.06 minutes in 2020-21, when agency staff numbers were boosted for the pandemic.
There were 25m calls handled up to 31 January 2023. Of those, 8.3m were answered, 2.1m were terminated by the customer, and callers received a “congestion message” on 5.8m occasions. By comparison, there were 5.6m congestion messages across the entire 2021-22 financial year.
Average waiting times were longest on the families and parenting line (27.18 minutes) and the employment services line (24.48 minutes).
Under questioning from the Greens senator, Janet Rice, the Services Australia chief executive, Rebecca Skinner, said the call times were “less than ... optimal”.
Skinner said the agency was currently 500 staff below the average staffing level within the customer service delivery.
She said the agency was facing similar labour shortages to “other large businesses” and it had been a challenge to maintain its workforce.
We currently find ourselves in our service delivery space several hundred people short of where we could be … We have had larger demand partially coming out of changed economic circumstances.
Rice said the call wait figures showed a “huge increase”.
Don Farrell, representing government services minister Bill Shorten at estimates, said the waiting times were an “unfortunate reality of the former government’s carving out of staff numbers” at Services Australia.
The agency is currently embarking on a recruitment drive.
Updated
Judgement given in Unions NSW’s challenge against third-party campaigner spending caps
The high court has given judgment in Unions NSW’s challenge against NSW’s third party campaigner spending caps.
The main part of the case concerned a provision making it an offence for third party campaigners to act in concert and exceed the spending cap. The NSW government repealed this section before the case was heard. As a result the court decided it had no jurisdiction to rule on its legality.
In the second part of the case, Unions NSW argued that the cap of $20,000 of spending for third party campaigners in byelections breached the implied freedom of political communication.
After a joint standing committee on electoral matters report recommended the cap be raised to $198,750 the NSW government conceded this part of the case.
A majority of the high court (chief justice Susan Kiefel, justices Stephen Gageler, Michelle Gordon, Jacqueline Gleeson, and Jayne Jagot) ruled that the $20,000 spending cap was invalid, because NSW had not justified the burden on political communication.
All in all, it seems like a bit of a waste of the court’s time: one section was repealed and one ruled invalid, but is going to be amended anyway.
Updated
Labor’s energy market caps will lower prices: Treasury
Labor senator Deb O’Neill is asking Treasury to explain what the government intervention in the energy market will mean for inflation and consumers.
O’Neill wants the ‘this is helping’ grab from Treasury, to help the government combat the opposition’s attacks on the cost of living.
Treasury head Dr Steven Kennedy says the caps are “anti-inflationary” and will lower prices.
It is lowering inflation and it is lowering the loops of inflation.
What are those loops?
Well, when inflation increases, then so to do things like social security payments, which are indexed to CPI. So if inflation decreases, then the “cost to government” in increased welfare drops too.
Which is a very Treasury way of looking at things, but doesn’t help people on social security payments who are living below the poverty line, even with the indexation increase.
In terms of energy, Dr Kennedy says:
In the longer term for the energy market, to have low and stable prices, we need stable generation of a variety of forms, we need stable policy settings, both from a climate and energy perspective, that give investors the confidence … to invest.
…Focusing on that energy transition to ensure that we have low stable prices in the future is in our view, absolutely crucial.
Not just for households, but a global competitiveness point of view Dr Kennedy says.
Which is Treasury speak for ‘this is why we need an energy plan’.
Updated
Employment department asked why Morrison government entered $7bn contracts to support Workforce Australia before election
In employment Senate estimates Labor’s Karen Grogan is probing why the Morrison government entered $7bn contracts to support Workforce Australia’s employment services in March 2022, just before the May election.
Employment department official Nathan Smyth confirmed that they entered new contracts 10 days before the caretaker period, explaining there is no “pre-caretaker period” and they were entitled to take direction from the then Morrison government.
Smyth said the previous jobactive system had been active for seven years and a “new system was required”. The new employment services system had already gone through extensive consultation and trialling, he said. If the contracts had not been entered into, the jobactive system would have to have been rolled over for a further 12 months at “substantial cost” to taxpayers.
Labor’s Murray Watt, representing the new employment services minister Tony Burke, said the decision has “got a bit of a smell about it” and he’s glad the audit office is looking into it.
Smyth said the Anao report is expected by June this year.
Departmental official Robyn Shannon is explaining there were comprehensive probity processes involved, including open approaches to market.
Updated
Energy prices continue to rise but price relief package will ‘make a material difference’
And as reported, energy prices will continue to increase, but not by as much as they might have:
In December, the government announced a package of measures to moderate the sharp rise in household energy bills. The announcement included a mandatory code of conduct for gas producers, temporary price caps for wholesale coal and gas, and energy bill rebates for households to be jointly funded with the states.
Following the December announcement, National Electricity Market futures prices have declined significantly. This is consistent with the price caps on gas and coal helping to ease price pressures in the generation market.
If sustained, lower futures prices will be reflected in the Default Market Offer announced by the regulator around the middle of the year.
For gas, at budget we expected consumer prices would rise by 20 per cent in 2022–23 and another 20 per cent in 2023–24, but now expect prices to rise 18 per cent and 4 per cent over the two years. Following the temporary intervention, we have observed a moderation in prices in the wholesale gas market.
The average east coast wholesale gas price is now sitting around the temporary 12-month price cap of $12/GJ, down from around $20/GJ in November. Over the year to June 2024, Treasury expects the coal and gas caps to reduce inflation by ½ point.
Consumer and small business energy rebates will further reduce inflation over the same period.
Households and businesses will still face substantial increases in energy bills, but the package will make a material difference to reducing cost-of-living pressures.
Updated
Inflation in rental prices expected to increase: Treasury
You may have noticed he mentioned rental increases there.
It is not great news for that already tight market, according to Treasury:
Rising housing costs remain a source of cost-of-living pressures for many households.
Inflation in newly advertised rental prices has been rising sharply for around a year, reaching 10 per cent nationally in January.
The national vacancy rate has reached a near-record low of around 1%. Despite the slowdown in population growth during the pandemic, underlying demand for housing picked up owing to a fall in the average size of households. This reflects changes in household formation as the community adjusted to rapidly changing circumstances through the pandemic.
More recently strong underlying demand for housing has been driven by a recovery in population growth amid constraints in new housing supply.
We expect inflation in CPI rental prices to pick up considerably as the stock of rental agreements turns over, peaking in June of this year.
The ABS’ latest Selected Living Cost Indexes, which measure the price change of goods and services and its effect on living expenses for different household types, show increasing interest rates are flowing through living costs.
Updated
Price pressures in new dwellings and fuel easing while energy and housing rents to increase: Treasury
Over in the economics estimates hearing, the treasury secretary, Steven Kennedy has delivered his opening statement.
It has been handily tabled, which you can find here.
But for a cliff’s note version – things aren’t great, but they aren’t a disaster. yet.
Here is part of the domestic outlook:
Inflation rose to 7.8 per cent through the year, the highest annual rate since 1990. This was consistent with the forecast at budget for 7¾ per cent and for inflation to peak in the quarter. The peak in domestic inflation has primarily been driven by the direct effects of a series of global and domestic cost shocks.
Global shocks raised the price of imported goods and added to the cost of materials used in domestic manufacturing and construction. International freight prices peaked eight times higher than prior to Covid-19 and the surge in global oil prices raised local transport costs.
When cost increases are small and sparse, businesses might not immediately or fully pass through such increases to consumer prices.
But the breadth and magnitude of the input price shocks necessitated a more fundamental change.
This explains part of the broadening of inflation in the latest data, where around 85 per cent of the consumption basket experienced annual price increases above 3 per cent.
Price pressures in new dwellings and automotive fuel are easing and we expect this to deliver additional indirect benefits.
However, working in the opposite direction, we expect increasing price pressures in some areas, including from energy and housing rents.
Updated
Questioning of defence secretary continues at Senate estimates
At Senate estimates, the Coalition’s Simon Birmingham is going back through the greatest hits – including defence funding cuts towards the end of the previous Labor government a decade ago.
Penny Wong, who is representing the defence minister during the hearing, suggests Birmingham “should make a speech about that” rather than attempt to get officials to “give a dissertation on budgets over the last decade”.
Birmingham takes exception to the statement in parliamentary question time yesterday that the previous Coalition government was the worst government for national security in Australian history.
He notes that Labor had retained the secretary of the department, Greg Moriarty, and extended the term of the chief of the ADF, Angus Campbell. Birmingham says he welcomes those extensions, but notes the pair had “served consecutive governments” in a period of time where the Coalition had “restored” defence spending.
Birmingham:
Mr Moriarty or CDF: is there any basis in fact you would use to defend the defence minister’s statement yesterday about who was the worst government in Australia’s national security history?
Moriarty:
That would be a political judgment and I wouldn’t wish to get drawn into commenting, senator Birmingham.
Birmingham:
I didn’t think that you would, and wise for you not to.
Birmingham wants to know more about the defence strategic review handover yesterday (and whether there was a briefing of if it was just a “photo op handing over ceremony”). Wong says she will restrain herself from commenting given the practices of the former government.
Updated
PM’s reassurance to allow religious schools to hire staff based on faith welcomed
Yesterday we reported on Anthony Albanese reassuring religious groups that Labor will respect schools’ right to select staff based on faith, after widespread backlash from religious groups to a proposal to limit their hiring and firing powers.
Labor senator Deborah O’Neill, a big supporter of Catholic education and the right for schools to set their own ethos, has welcomed that reassurance.
O’Neill told Guardian Australia:
The attorney general commissioned this ALRC inquiry as the first step towards implementing the Albanese government’s commitment to extending anti-discrimination protections to more Australians, including to people of faith and to staff and students in religious schools.
The ALRC is an independent agency. It is now conducting its inquiry and has not finalised its advice to Government.This ALRC inquiry is only the first step towards implementing the Albanese government’s commitment. I fully endorse the PM’s comments [on Tuesday] that federal Labor had made its position clear ‘a long time ago that faith-based schools can employ people of their own faith’.”
Updated
Peak university bodies welcome government’s response to foreign interference report in higher education
Peak university bodies have welcomed the federal government’s response to a parliamentary report on foreign interference risks to the higher education and research sector.
Of 27 recommendations made in the Parliamentary Joint Committee on Intelligence and Security’s (PJCIS) report, the government supported 12, supported in principle nine and noted five.
Only one committee recommendation was not supported – a recommendation that Asio’s annual report include information on threats to higher education and research.
Universities Australia’s chief executive Catriona Jackson said universities were facing “very real” national security challenges and had been targets for foreign interference.
We have forged a close partnership with the government to combat these threats … the work of the Universities Foreign Interference Taskforce (UFIT) created in partnership with the government is world-leading and increasingly guiding other nations as they respond to the very real national security challenges facing universities.
It is vitally important that we strike the right balance between the openness that is fundamental to the kind of collaborative international research that gave us a fighting chance during the Covid-19 pandemic, and strong security safeguards.
The Australian Technologies Network, representing Curtin University, Deakin University, RMIT University, The University of Newcastle, University of South Australia and University of Technology Sydney said it was “pleased” education minister Jason Clare acknowledged the work underway by universities to protect against foreign interference.
ATN Executive director Luke Sheehy:
The government’s response is measured and proportionate and in line with ATN’s recommendation that the government should use UFIT as the focal point for tackling foreign interference.”
The Group of Eight said it supported the various “compliance, reporting and transparency measures to ensure we protect that which must be protected”.
Updated
Defence budget is under pressure, secretary says
The Coalition’s Senate leader, Simon Birmingham, is pursuing defence over budget issues at Senate estimates.
The secretary of the Department of Defence, Greg Moriarty, concedes:
The budget is under pressure.
Moriarty says there is a need to accelerate capability development. But he gives a big hint about changes looming out of the defence review:
We’re very realistic about the challenges we face. The budget that we have is fully committed and the defence strategic review will help us further sharpen those priorities and taking hard decisions about what we need to focus on and what needs to be de-prioritised and perhaps even cut.
Moriarty says Richard Marles has said there is a case for growing the overall resources allocated to defence, but Moriarty adds that it is the role of the department to ensure resources “are allocated as efficiently as possible”.
We would prioritise within the envelope that the government gave us.
(There is an exchange about re-prioritising within the pie. The metaphor is wearing thin.)
Government decides and then we will implement those decisions rigorously.
Updated
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Updated
Aukus submarine plans ‘on track for announcement this quarter’: defence secretary
The secretary of the Department of Defence, Greg Moriarty, has told Senate estimates that Australia’s steadfast contribution to Ukraine is “an investment in a future in which military power does not determine international boundaries or a sovereign government’s right to make its own strategic choices”.
Moriarty says if Russia’s invasion succeeds it says belligerent states can make their way by aggression.
In his wide-ranging opening statement, Moriarty says Australia is pursuing engagement with Pacific neighbours. He cites work on security agreements with Vanuatu and Papua New Guinea.
He notes the defence strategic review was handed over to the government yesterday, and says the government will now consider the report and its recommendations.
Moriarty says he and the chief of the ADF, Angus Campbell, are committed to delivering the government’s directions stemming from the review.
He also says Australia is working closely with the UK and the US on the Aukus nuclear-powered submarine plans:
We are on track for an announcement this quarter.
(That means by the end of March.)
Moriarty says the acquisition pathway is more the platform – it will also look at things like safety and industrial base requirements.
He says Aukus partners are working in close cooperation with International Atomic Energy Agency:
We are working to develop a safeguards and verification approach … that will set the highest possible non proliferation standards and strengthen the integrity of the global non-proliferation regime.
Moriarty says Aukus “is maturing as a genuine trilateral partnership where partners engage as equals” respectful of each other’s sovereignty.
He says the government has commissioned Defence to prepare a new defence industry strategy informed by the defence strategic review.
Moriarty says “shrinking strategic warning times and rapidly advancing technology” means Australia must innovate quickly and develop its industrial base. He says Australia is pursuing a strong sovereign defence industrial base which also leverages the industrial base of partners.
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Sussan Ley warns Labor not to trade away future jobs with safeguard legislation
Sussan Ley is trying a new approach in her doorstops (brief, unscheduled press conferences, usually by a door, where the MP has been stopped).
Stating the obvious (TM):
Well, it’s another day in the Australian parliament,” was the opener today.
Yes. Yes it is.
Ley went on:
It’s another day with no plan from this government to address the cost of living crisis. Under Anthony Albanese, everything is going up, except your wages.
(That’s a deliberate call back to Labor’s slogan)
The main point though, was about the safeguard legislation:
I want to issue a clear warning to Labor. Do not trade away future jobs in regions like the Hunter or in resources and mining in Queensland and Western Australia for a sneaky deal with the Greens in order to get this bad legislation through.
Our regional areas matter. They produced the prosperity and wealth of this country. This Labor government must not trade away future jobs in those regions and the welfare and prosperity of those regions with dodgy deals with the Greens about its bad legislation.
(That “bad legislation” is a revamped version of the Coalition’s own legislation, developed under Tony Abbott.)
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Defence is up at estimates today – and the hearing begins with an acknowledgement of the late senator Jim Molan.
Raff Ciccone, the chair of the committee, notes Molan “frequently attended these estimates hearings” and he began questioning at the previous round of estimates a few months ago.
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Ed Husic was quite circumspect when asked about the Greens’ safeguard demands (the Greens have said they will pass the bill, if the government agrees to no new coal or gas projects). Husic told ABC radio RN Breakfast that the government was still going through consultation:
I just make the point and I know this sounds like repetition but we’re not going to necessarily respond publicly or reactively to some of the positions that have been put forward.
We understand where the Greens are coming from, but we’re just gonna work through this process like we’ve had with other legislation. We’ll just working through in the Senate when it gets there.
…Not ruling in or out. It has been registered, interest has been registered. The amendment has been noted. And we’ll just work and work it through.
But we hope that too, that the Greens recognise that this is a moment to make a mighty dent in emissions, that we don’t trap ourselves and aim for perfection at all costs, and that we have the opportunity to do what people really want us to do, which is find a way to reduce emissions.
His colleague, assistant treasurer Stephen Jones, speaking to Sky News was a little less circumspect.
Making demands that can’t be met simply is not going to help anybody who is committed to reducing carbon emissions in this country.
Jones then brought up 2009 (a reference to the CPRS) proving that nothing can ever really die in politics.
For the record, I’m told the Greens do want to negotiate and this isn’t a do-or-die red line situation.
There’s plenty to go in this one.
NT passes liquor law amendments – so bans can now be enforced
The Northern Territory government has passed amendments to liquor laws introduced late yesterday in its first parliamentary sitting for the year. This means NT liquor bans announced this month for remote communities and town camps can now be enforced.
The NT government has been facing pressure over rising crime and antisocial behaviour in Alice Springs since liquor bans lapsed in July but Indigenous people and advocates have warned that restrictions and bans are not the only solution, urging action on drivers of harm including poverty, education, unemployment, housing and family violence.
The laws mean that town camps and remote Indigenous communities will revert to being dry areas and communities will develop community alcohol plans.
Areas that want to have alcohol allowed back in will need to have a community vote, with at least 60% of people aged 18 and over voting in favour.
The vast majority of 96 major communities across the territory are dry zones, which means about a dozen communities will be impacted by the changes.
NT chief minister Natasha Fyles said the bans would be “robust” with clear community consultation and provide a short-term solution while additional funding measures to address underlying issues were worked out:
This is a new approach. It is community led with local decision making at its core and will be coupled with a major investment in the hard work of addressing the cause of crime.
Now we are investing with the Federal Government to break the cycle of crime with major new investments that improve community safety, tackle alcohol-related harm, and provide more opportunities for young people. Together, these measures will go a long way in delivering better services, better opportunities and better outcomes for everyone – especially First Nations Territorians.
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Lowe to front Senate estimates
RBA governor Dr Philip Lowe will face Senate estimates today – it’s the first of two parliamentary committees he will front this week, with another scheduled for Friday.
And he goes into his first appearance with a former RBA governor, Bernie Fraser, telling ABC radio RN Breakfast that the central bank’s credibility has been damaged by the “no interest rate increases until at least 2024” prediction (even if there had been caveats).
Not only that, but Fraser, who was governor when the bank started inflation targeting in the 1990s, thinks that the pointers to future increases is also “unhelpful”.
After raising rates for the ninth time in a row, the bank’s statement included a pointer to future rate increases (plural) being likely, sparking panic from already stretched mortgage holders, and sending politicians into a spin over how to handle it.
Fraser thinks it would be better if the RBA watched for the impact of its existing interest rate increases and said future rate rises were possible, instead of giving such strong predictions. Why? Because now the market thinks that it is all but certain that future rate rises will happen and that’s created its own issues:
That’s unhelpful and doesn’t provide the kind of confidence that the bank should be striving to enlist with the community.
Fraser thinks the RBA’s credibility and the public’s trust in the institution has been damaged over the “miscalculation or misjudgment” over the 2024 forecast because people who had acted on it “have been severely burned”:
That is a worry because the independence of the central bank and the credibility of the central bank is absolutely essential.
Lowe will face estimates from about 11am.
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Anyone for prosecco and feta?
It seems that Australia really wants to be able to call some cheese feta.
Daniel Hurst has an update on where Australia’s free trade negotiations are at with the EU – and it seems the talks are a little stuck.
As Dan reports:
Australian and European Union negotiators believe they are getting closer to clinching a free trade agreement as they race to meet a mid-year deadline, but the Albanese government warns it will “not sign a deal for the sake of it”.
Guardian Australia understands officials finalised three chapters of the agreement – on competition, telecommunications and maritime services – during a round of negotiations in Canberra last week.
The thorny issue of geographical indicators – the EU push to restrict the use of terms such as prosecco and feta by Australian producers – were raised during the talks.
But this is believed to remain a sticking point because there has been no shift in Australia’s position.
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Ex-Defence personnel to be banned from training foreign militaries
The deputy prime minister and defence minister, Richard Marles, has revealed that the government will pass legislation to forbid Australian ex-military personnel from training foreign militaries.
The Australian federal police and Asio have been investigating this since allegations of Australian pilots being approached to train China’s airforce.
Marles told 2GB radio that Australia already has “very robust policies and law in place – when people become in possession of one of our nation’s secrets ... and that includes, for example, how our planes fly”:
There is an obligation to maintain that classified information for as long as it’s classified, irrespective of whether or not you work for Australia any more. So that’s really clear. But, having said that, there were a number of recommendations that the report made and most of them go to tightening up policies within Defence.”
Marles revealed that “one of the recommendations does recommend that we develop some additional legislation which the government will now pursue”:
And that’s important. And that is really to make sure that there is absolutely no doubt whatsoever that not just the secrets that people might come into contact with, but everything that surrounds it, forms part of that. And that if you release any of that information to anybody, and that would include a foreign power, that would be a breach of Australian law and subject to prosecution ...
Everyone who’s part of the Australian defence force right now knows what’s expected of them – so I want that to be really clear. But the report did recommend that we develop legislation to remove any doubt around the full breadth of the secrets that need to be maintained. And, yes, we will be developing that legislation.
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‘You can’t put the fire out while pouring petrol on it’
As Murph and Adam Morton reported this morning, the Greens have given Labor a yes to pass its safeguard legislation IF the government agrees to amend the scheme to stop opening new coal and gas projects.
That means the Greens will put aside some of their other concerns about the scheme, including the use of unlimited offsets (which David Pocock is concerned about) if the government agrees to no new coal or gas products.
That is unlikely to happen. As Murph and Adam have reported, the government says it does not have a mandate to stop opening fossil fuel projects.
Adam Bandt:
You can’t put the fire out while pouring petrol on it. The first step to fixing a problem is to stop making the problem worse.
Coal and gas are driving the climate crisis, but Labor wants more.
The Greens have huge concerns with other parts of the scheme, such as the rampant use of offsets and the low emissions reduction targets, but we’re prepared to put those concerns aside and give Labor’s scheme a chance if Labor agrees to stop opening new coal and gas projects.
Labor needs the Greens to get this through Parliament. If Labor’s scheme falls over, it will be because Labor wants to open new coal and gas mines. Labor has to decide how much it wants new coal and gas mines.
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Husic on the NRF
Back to Ed Husic and the national reconstruction fund.
The ACTU have put in a submission that any business that gets funds/security from the fund should have to be unionised.
Asked about whether the government was considering that, Husic says:
There are a lot of people who make submissions, we’ve asked people for their views on how they see the fund and the things that they really want to do and we’re taking those on board … again I’m not going to go through all of those things, we are working through the volume of submissions that we’ve got.
We’re really grateful for the interest that we’ve received in the NRF.
People will have their things that they’re very keen to do.
Husic is a master at using a lot of words to not really say anything. So when he does say something, you know it is deliberate.
Updated
Around and around we go …
So CBA shareholders are to get a (fully franked) dividend of $2.10 for each of their share – 20% more than the last time dividends were sent out.
Which, as one of my bosses roughly worked out, is about $3.5bn going out to shareholders.
Which is going back into the economy. Which increases inflation. Which causes the bank to raise the cash rate, because spending isn’t going down. And around and around we go.
So money from workers goes to the bank, which goes to shareholders, which in itself is inflationary, causing the RBA to raise rates further to “rein in spending”.
Again, tHe SYsTeM iS wORking gReAT.
Updated
Commonwealth Bank announces $5.15bn profit
Well, we know what impact the RBA’s interest rate hikes are having on people, but what about the banks?
The CBA has just announced its financial position to the ASX – and, surprise, surprise, it has a fairly large profit to talk about.
From its statement:
We reported strong financial and operational performance in our financial results for the six months ended 31 December 2022. Our cash net profit after tax of $5,153 million reflects the Bank’s customer focus and disciplined strategic execution. Our continued balance sheet strength and capital position creates flexibility to support our customers and manage potential economic headwinds, while delivering sustainable returns to shareholders. A fully franked interim dividend of $2.10 per share was determined, an increase of 20% on 1H22, driven by organic capital generation and a reduction in share count from share buy-backs. Despite the current uncertainty, your Board and management feel optimistic for the future and are committed to delivering for our customers and for you, our shareholders
That $5.15bn cash profit is up from $4.75bn a year ago.
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Husic on RN
The industry and science minister Ed Husic is having a chat to Patricia Karvelas on ABC radio RN Breakfast about the national reconstruction fund and some of the Greens demands (including that it not be used to fund any fossil fuel projects).
Husic:
I’m not going to conduct live negotiations via media. We are working these issues through patiently and respectfully and I’ll just continue to do just that.
But he’s not ruling it out, Karvelas says.
Husic:
You caught that, did you? I’m not ruling in, I am not ruling out.
That’s been the government’s way of dealing with all the Senate negotiations – nothing is in or out, until it is.
Updated
Safeguard mechanism update
There has been movement on the government’s safeguard mechanism legislation, as Katharine Murphy and Adam Morton report:
The Greens say they will pass the Albanese government’s planned overhaul of the safeguard mechanism – a climate policy promised to cut industrial emissions – if Labor is prepared to stop new coal and gas projects.
Instead of seeking to limit the number of carbon credits businesses can use to meet their new obligations to reduce pollution, the Greens party room resolved on Tuesday to narrow the focus to securing a ban on new coal and gas either through an amendment to the safeguard legislation, or a new “climate trigger” in environmental law.
The Greens have been signalling for months they want the Albanese government to stop new coal and gas projects. Labor says it has no electoral mandate to do that, and that new developments would be allowed with initial emissions limits set at “international best practice”.
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Lobbying rules and Stuart Robert in spotlight
The Attorney General’s Department is giving “active consideration” to a company connected to former Coalition minister Stuart Robert which was not registered on the federal lobbyists list.
Greens senator Larissa Waters, questioning the department at Senate estimates on Tuesday, slammed what she called “farcical” rules around the lobbying register.
The Nine newspapers reported in November that Robert had given advice to consulting firm Synergy360 and helped them secure corporate clients. Robert denied wrongdoing or any conflict of interest, and the newspapers did not suggest Robert was paid for his advice.
Waters asked the department about its investigation into the company. Deputy secretary Simon Newnham said Synergy360 was not listed on the register but there was “an active consideration of that matter” by the department, which had requested information from the company:
We will continue to analyse and assess that information as it’s received and take that into account before determining what further steps are necessary.
He said the department had written to the company on 25 November 2022, and received a call in response on the hotline that same day; then the department wrote to the company again on 7 February.
Asked by Waters if the department had received a “substantive” response, Newnham responded: “To this point, we have not.” He noted their second approach had been only last week.
Waters went on to ask separate questions about former Labor powerbroker and lobbyist Graham Richardson, querying the department about media reports that he had begun work with a lobbying firm in March 2022 but had only registered as a lobbyist in November 2022.
Parker Reeve, an acting assistant secretary in the department, said he understood there had been a “delay” in that registration process and that the department had engaged with Richardson over his registration obligations but asked to take specific questions on notice.
Waters then asked the department about what she called a “loophole” that in-house lobbyists (or those working directly for a company) did not need to register publicly while those engaged as third-party or external lobbyists did need to. She called this a “farcical” exemption.
Newnham said the department engaged with lobbyists and companies through providing fact sheets, responding to inquiries, taking questions from current or potential lobbyists and monitoring information in the public realm about whether further action was needed.
Reeve said that included regularly cross checking the lobbying code against the foreign interference transparency scheme, plus analysing media activity and reporting that alleges lobbying activities. The department can engage with lobbyists or potential lobbyists proactively, and investigate potential unregistered lobbying.
The department said it had conducted 10 investigations in the 2022 calendar year. These could lead to a request or recommendation that a person register themselves, and potentially other action such as deregistering a lobbyist or barring them from such activity in future.
Updated
Good morning
Thank you to Martin for kicking us off this morning.
You have Amy Remeikis for most of the day as we navigate Politics Live for this Wednesday sitting day – we are almost through the week!
It’s going to be at least a four-coffee day.
Ready?
Let’s get into it.
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Australian War Memorial’s donations from arms manufacturers
The Australian War Memorial accepted more than $830,000 in sponsorship and donations from arms manufacturers over the last three years, including a $28,000 donation for a Remembrance Day dinner last year.
Figures released to the Senate show it has taken $803,785.98 in sponsorship funding from Boeing, Leidos, Lockheed Martin, Northrop Grumman and Thales since 2020-21, usually to fund special exhibitions.
Boeing was by far the biggest funder of the memorial, providing $350,149 for three exhibitions.
Greens senator David Shoebridge, who obtained the information through budget estimates, said the practice was “deeply troubling”.
Christopher Knaus has the full story here:
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Chinese surveillance cameras being removed from MPs' offices
Chinese-made security cameras and intercoms are being removed from the electorate offices of federal politicians, Australian Associated Press reports.
Department of Finance officials told a Senate estimates hearing on Tuesday there were 65 offices which have Chinese-manufactured Hikvision and Dahua security cameras installed.
Liberal senator Claire Chandler asked how many electorate offices had those surveillance systems in place. An official said 45 offices were yet to have the security cameras removed, with the de-installation of intercom systems in “an earlier stage”.
The committee was told it was a “precautionary measure”.
The department notified politicians in July about the program to remove the surveillance systems.
It was revealed that almost 1,000 surveillance cameras and other recording devices, some of which have been banned in the US and UK, had been installed across government buildings.
China’s foreign ministry responded last week to decisions made to remove the security cameras, warning against “over-stretching the concept of national security” to target Chinese companies.
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Australian Sports Commission sued over sex abuse claims
The Australian Sports Commission is being sued for allegedly failing to act against sex abuse claims raised by a high-performance para-athlete and employee of the Australian Institute of Sport.
It is alleged the 24-year-old woman was physically and sexually assaulted at the AIS in Canberra on four separate occasions in 2020. It is further claimed the organisation was made aware of the abuse but did nothing to stop it.
Shine Lawyers’ abuse legal practice manager, Thomas Wallace-Pannell, said the AIS and ASC had failed the athlete:
We allege the institution charged with helping her live her dreams ended up crushing them, and that the ASC, as the governing body of the AIS, failed in its duty of care to protect our client from her abuser.
The claim is said to be one of the first of its kind filed against the organisation and follows the ASC’s formal apology to abuse survivors in May 2021.
The commission also established its own restorative justice program.
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Welcome
Good morning. I’m Martin Farrer and welcome to our blog on the day’s news and politics. I’ll go through some of the main headlines overnight before handing over to my colleague Amy Remeikis.
One of the main stories out of Canberra today is that the Greens say they will pass the Albanese government’s planned overhaul of the safeguard mechanism – a climate policy promised to cut industrial emissions – if Labor is prepared to stop new coal and gas projects. Adam Bandt says Labor must “decide how much it wants new coal and gas” as he challenges the government to somehow square the circle of its progressive rhetoric with its more realpolitik concerns in electorates where mining jobs matter.
Another set-piece in Canberra today will be the appearance of Reserve Bank governor Philip Lowe at Senate estimates. He will be quizzed about why the bank has had to hike the cash rate so aggressively amid concerns about the impact on household finances and the wider economy. It comes as Westpac forecast that he might have to lift borrowing costs another three times to top out with a rate of 4.1% before inflation is under control.
The Australian Sports Commission is being sued for allegedly failing to act against sex abuse claims raised by a high-performance para-athlete and employee of the Australian Institute of Sport. It is alleged the 24-year-old woman was physically and sexually assaulted at the AIS in Canberra on four separate occasions in 2020.
With that, let’s get going.
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