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Key events
The Senate inquiry into consultants continues today. Gallagher says the government must fundamentally change the public sector’s reliance on consultants:
I think we can and I think we should and I think we have to.
Gallagher says the choice to find savings in the budget was informed by the responsibility the government has to consider how it will affect the Central Bank’s decisions.
Our decision to find $40bn worth of savings in the last two budget has been informed by that responsibility as has returning over 82% of the upward revisions to revenue to the budget for budget repair.
Those are critical decisions in terms of how we can support the work that the Reserve Bank does and that the decisions we take don’t add to inflation, but set our budget up to be in a stronger position in the future.
Katy Gallagher says interest rates ‘a matter for the independent Reserve Bank’
Meanwhile, the finance minister, Katy Gallagher is doing the rounds of the breakfast news programs following yesterday’s decision from the central bank which took the cash rate to its highest level in 11 years.
Speaking with ABC Radio, Gallagher does not want to say the government is partially responsible for the rate rise.
Hamish Macdonald:
Labor has been in charge of the economy for more than 12 months now. You’ve handed down two budgets. Do you take any responsibility for this interest rate hike?
Gallagher:
The decision around interest rates and setting of interest rates is a matter for the independent Reserve Bank. We’ve got a very clear job to do that is to deal with the inflation challenge and how we manage the budget and other investments in the economy.
She points to the fact that the RBA governor and treasury secretary both confirmed the budget was not inflationary.
Severe weather warnings for Victoria and South Australia
Parts of Victoria and South Australia are being warned to expect heavy rainfall today.
The heavy rain that’s already hit Western Australia is sweeping across the country, with South Australia’s Riverland and Murraylands warned to brace for heavy rainfall to last until Friday.
There are also warnings across most of western Victoria for heavy rainfall and damaging winds.
SEVERE WEATHER WARNING for HEAVY RAINFALL and DAMAGING WINDS.
For people in Mallee, North Central, Wimmera and parts of Central, East Gippsland, South West, Northern Country, North East and West and South Gippsland Forecast Districts.
Stay informed: https://t.co/T05ONtwAm3 pic.twitter.com/1oIdhJ4qkS— VicEmergency (@vicemergency) June 6, 2023
Severe Weather Warning for HEAVY RAINFALL
For Upper South East, Lower South East and parts of Riverland and Murraylands districts.
Issued at 6:00 am Wednesday, 7 June 2023.The next Severe Weather Warning will be issued by 11:00 am ACST Wednesday. refer https://t.co/Ygyw7lT8WZ pic.twitter.com/RSZEi6xGy9
— Country Fire Service (@CFSAlerts) June 6, 2023
Productivity is now in the focus after the central bank has made clear its wants productivity gains to match wage rises.
The government received the five-yearly Productivity Commission’s report back in March. Gallagher says the government is “actively pursuing” implementing the report’s recommendations in the areas of skills and training, technology, and the energy transition.
We want to see productivity get going. We have had the worst decade, I think, in productivity growth in the last 60 years in the previous decade so there’s a lot of work to do. We can’t turn that around in one year.
Katy Gallagher says she isn’t worried RBA decision will cause recession
The finance minister, Katy Gallagher, says she is not worried the Central Bank’s decision is hurtling Australia towards recession.
She’s told ABC News that the treasury is not forecasting a recession, only a slowing of the economy.
The RBA has a clear job to do and their job is to get through monetary policy to get inflation back to the target range.
Read our economics correspondent Peter Hannam’s analysis on that rate rise:
Murray Watt to announce disaster funding
The emergency management minister, Murray Watt, will today announce the first round of projects which will be funded through the government’s $400m Disaster Ready Fund.
Watt says:
Every dollar spent on disaster resilience delivers a big return in avoided disaster repair costs. This is the next step in the Albanese government’s plan to make us better prepared for future natural disasters. And we’re just getting started.
Today I’ll announce 1st round of projects under the @AlboMP Govt’s Disaster Ready Fund:
✅ Nearly $400M in Fed-State funding
✅ 187 projects across the country
✅ flood levees, sea walls, evac centres
✅ Keeping us safer
✅ Reducing damage bill
✅ Taking pressure off insurance pic.twitter.com/uvzUNQRQ3D— Senator Murray Watt (@MurrayWatt) June 6, 2023
Good morning! Natasha May reporting for blog duty.
Woman stabbed while walking home after visiting family
An elderly woman has died after being stabbed while walking home alone in Victoria, AAP reports.
The 73-year-old was walking from a family member’s house to her own home in South Geelong around 7pm on Tuesday when she was attacked.
Victoria police say she was approached from behind and stabbed several times.
A 32-year-old man has been arrested and is being questioned by police.
Growth figures likely to reveal slowing economy
Economic activity is expected to slacken further as higher interest rates and gloomy global conditions persist, AAP reports.
The national accounts for the March quarter are due today, following another interest rate hike yesterday.
Based on the string of clues left by the Australian Bureau of Statistics in the lead-up to the growth report, ANZ economists are anticipating a 0.4% lift over the quarter and a 2.5% annual rise.
A 0.4% gain for the quarter would be a touch lower than the 0.5% recorded in the December quarter and suggest economic momentum continues to slow, senior economist Felicity Emmett said.
Wages and productivity indicators contained in the growth report would also be watched carefully to test the need for future moves in monetary policy.
KPMG to be questioned on integrity at Senate committee
In the wake of the PwC scandal, Australian Associated Press reports that consultancy firms will be grilled on integrity at a Senate committee today.
The inquiry was sparked after the discovery of a potential breach of treasury confidentiality by former PwC partner Peter Collins, who has been referred to federal police to investigate the allegations.
The integrity of other consultancy firms who secure government contracts worth billions every year is being investigated by the committee.
Consultants from audit, tax and advisory firm KPMG will be questioned.
In a submission to the inquiry, KPMG said it had commissioned a review of its confidentiality processes which found policies and procedures were consistent with best practice.
Representatives from the tax office, treasury, finance department and the Tax Practitioners Board will front the inquiry’s second hearing on Wednesday.
The Greens senator Barbara Pocock said she hoped witnesses would shed more light on how the government manages conflicts of interest and confidentiality issues when outsourcing work to the big four consulting firms PwC, Deloitte, KPMG and EY.
“As we’ve seen with the PwC tax scandal, many of these firms attempt to work both sides of the street as they carry out policy work for the government while providing services to corporate entities working in the same field,” Pocock said.
Linda Burney to announce support for improved justice solutions
Linda Burney, the minister for Indigenous Australians, will today announce the government’s support for improved justice solutions at the Joint Council on Closing the Gap meeting in Darwin.
As part of its landmark $81.5m First Nations Justice package, the Albanese government will assist 15 communities that have expressed interest in designing and developing early stage justice reinvestment strategies – ahead of a national grant round opening later this year.
The communities include Townsville, Minjerribah (North Stradbroke Island), Mornington Island and Cherbourg in Queensland; Katherine and Darwin in the Northern Territory; Circular Head in Tasmania; Fadden in the ACT; Newman in Western Australia; and Port Augusta in South Australia.
Justice reinvestment involves community-led approaches to keeping at-risk individuals out of the criminal justice system. It also includes investment in early intervention and prevention programs and initiatives for at-risk adults and young people.
Welcome
Good morning and welcome to our live coverage of the Australian news. I’m Martin Farrer and I’ve got several stories for you before my colleague Natasha May takes over.
Our top story overnight is an exclusive report on a prediction by defence chief Gen Angus Campbell that the military will emerge stronger as it acts on the “very confronting” findings of the Brereton inquiry into alleged war crimes. With the defence establishment rocked by the implications of Ben Roberts-Smith’s defamation case, it emerged that Campbell said recently that said the inquiry would, in time, have a “very positive effect on the institution and its people”.
The aged care minister, Anika Wells, will announce today a new taskforce to solve the “unanswered question” of how to make the care system “equitable and sustainable”. She will use a speech to the National Press Club in Canberra later today to set out the options for how to fund care for the elderly – possible with more self-funding – with the warning that demand will increase because “within a decade, our nation will have, for the first time in history, more people aged over 65 than under 18”.
The head of Unesco has praised Anthony Albanese’s government for making new commitments to protect the Great Barrier Reef, signalling Australia could avoid seeing it being placed on a list of world heritage sites in danger. Unesco’s director-general, Audrey Azoulay, was commenting on a letter from the environment minister, Tanya Plibersek – seen by the Guardian – that outlined new commitments to improve water quality and reduce the stress from commercial fishing over the reef.
And this morning Philip Lowe, the governor of the Reserve Bank of Australia, is due to speak at a summit in Sydney in a speech titled A Narrow Path – on his strategy for taming inflation that led yesterday to yet another interest rates rise. Here is Peter Hannam’s analysis of that decision, which says Lowe’s speech will serve to “adjudicate the blame game”.
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