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Westpac propelled to $4bn profit with rate hike tailwind
Jonathan Barrett
Westpac has posted a 22% rise in six-month net profit to $4bn, and increased its margins, in a result backed by rising interest rates.
The Westpac chief executive, Peter King, said most mortgage customers were ahead on repayments, although he said the bank was preparing for more difficult times ahead.
Interest rates are now closer to their forecast peak, but we are focused on how long they stay high and what this means for household budgets and discretionary spending.
We expect to see more stress in the period ahead, particularly in small business.
Westpac’s half-year results, for the six months to the end of March, resembled those recorded by National Australia Bank and ANZ last week, which have all profited from a string of Reserve Bank rate hikes by increasing borrowing costs at a faster pace than deposits.
Westpac’s net interest margin, the main gauge of profitability, was up 5 basis points to 1.96% compared to the previous corresponding period.
Key events
Anthony Albanese says the move to up the age single parents come off the single parent payment will boost productivity.
My government has focused on productivity focused on measures that improve the economy providing that cost of living relief in the short term, but making sure we’re always looking towards the medium and long term.
Single parents ‘deserving of more support’, says Albanese
It is going to cost $1.9bn over the next couple of years. And Anthony Albanese then also rehashes his origin story:
I know first-hand what it’s like to grow up with a single mum doing it tough and we want to make sure that the children of single-parent families have the best opportunities in life, to go on and to fulfil, to aspire to, a good life with good jobs, with security. And we want to look after single parents because we know that the role that they play in raising their children is such a priority for them and they’re deserving of more support.
Not sure children get cheaper at 14, or that they don’t need you as much when they start high school, but here we are.
PM confirms single parent payment to be extended until youngest child is 14
It looks like it is dawn in Perth where Anthony Albanese is speaking – he is confirming that the single parent payment will continue until their youngest child turns 14.
It was originally 16. But the Howard government changed it to 8 and the Gillard government compounded it by ending the grandfathering which had been attached to the scheme.
It will mean an extra $176.90 every fortnight for single parents who had been taken off the payment.
The prime minister will be stepping up very soon in Perth – he then has the final leg of the journey back to Canberra. Parliament sits officially from tomorrow, but today is all about setting up the budget. So there are a lot of MPs in town and all of them seem cranky about something.
Fun!
More needed to address child poverty and wellbeing, says Save the Children CEO
Meanwhile, Save the Children CEO, Mat Tinkler, said the government needed to do more in this budget to lift children out of poverty and address their wellbeing issues:
In just the past few years, children and young people across Australia have faced multiple crises including the ongoing mental health fallout from the pandemic, the increase in climate-fuelled disasters, and now a worsening cost-of-living crisis.
As the budget is handed down, we urge the government to take stock of the measures they have put in place and assess whether they are going far enough to address the deep wellbeing needs of young Australians.
$20-a-week jobseeker increase will leave millions ‘on payments below the poverty line’, says anti-poverty advocate
The Antipoverty Centre has responded to the speculation there will be a $40 a fortnight increase to the working age welfare payments.
Spokesperson and DSP recipient Kristin O’Connell said the $20 a week increase falls well short of any meaningful help:
Every working-age Centrelink payment is below the poverty line. There is not a single rental property anywhere in the country that is affordable for a person on jobseeker or youth allowance, and only a handful for other welfare recipients.
We know that whatever is in the budget tomorrow, there will still be millions of people left behind on payments below the poverty line, and there is absolutely no good reason that any person on this continent should be in poverty. We saw in 2020 the government has the power and the money to fix this overnight, it is simply choosing not to in favour of helping themselves and their wealthy mates.
Westpac propelled to $4bn profit with rate hike tailwind
Jonathan Barrett
Westpac has posted a 22% rise in six-month net profit to $4bn, and increased its margins, in a result backed by rising interest rates.
The Westpac chief executive, Peter King, said most mortgage customers were ahead on repayments, although he said the bank was preparing for more difficult times ahead.
Interest rates are now closer to their forecast peak, but we are focused on how long they stay high and what this means for household budgets and discretionary spending.
We expect to see more stress in the period ahead, particularly in small business.
Westpac’s half-year results, for the six months to the end of March, resembled those recorded by National Australia Bank and ANZ last week, which have all profited from a string of Reserve Bank rate hikes by increasing borrowing costs at a faster pace than deposits.
Westpac’s net interest margin, the main gauge of profitability, was up 5 basis points to 1.96% compared to the previous corresponding period.
Jane Hume: Coalition government would offer ‘real savings’ and not ‘offsets’ in budget
The Liberal senator and shadow finance minister, Jane Hume, is now speaking to Patricia Karvelas on ABC RN Breakfast, rebutting everything Jim Chalmers just said.
(Don’t you just love budget week?)
What would the Liberals do if they were in government?
The most important thing we would do is rein in expenditure … And I’m not saying that we would make cuts. I think that that is far too simplistic a term. But when something gets tight, for instance, we probably wouldn’t put on an additional 8,000 public servants which is what we’ve seen from this government just in the last 12 months …
We would make sure that the guardrails were on the budget so that we had a tax to GDP ratio, so that not only do we have offsets for your expenditure – which is of course, what this government is talking about when it says savings – we would have genuine savings and bank those savings to make sure that you don’t just deliver a surplus in one year, but you deliver it sustainably in future years.
And that will be the real test of this government, is whether it can restrain itself from its innate instincts to spend more, to tax more and instead bring the budget back into balance.
Soooooooo what about this report, then?
As Stephanie Convery reports:
The previous Coalition government spent $20.8bn outsourcing more than a third of public service operations, an audit has found.
The federal government released the findings of the Australian public service audit of employment on Saturday, which examined the hiring practices and associated costs of 112 public service agencies, excluding the CSIRO, Australian Broadcasting Corporation, and parliamentary departments.
It found the equivalent of nearly 54,000 full-time staff were employed as consultants or service providers for the federal government during the 2021-2022 financial year – the equivalent of 37% of the 144,300-employee public service.
Hume seems annoyed when Patricia Karvelas brings this up:
“I think this is partisan … it isn’t grounded in fact,” she says.
Except it is an audit.
Hume:
It’s nonsense to say that consultants aren’t needed to assist with public service responsibilities. All governments need external expert support and advice and often it’s a more efficient means of having access to that expertise.
She then moves on to say that the Victorian Labor government has increased its use of consultants by “200%”.
Chalmers nods to PRRT for $2.4bn ‘which wouldn’t be there’ if not for tax changes
Jim Chalmers also spoke about the change to the petroleum resource rent tax (the PRRT):
This is $2.4 billion, which wouldn’t be there.
As Paul Karp reported:
Under the changes to the PRRT, which have been under consideration since 2019, the Albanese government will accept a recommendation from Treasury to limit the proportion of PRRT assessable income that can be offset by deductions to 90%.
But it could have been higher. And the industry isn’t entirely upset about it. So take from that what you will.
Chalmers hopes budget will be seen as ‘responsible’
And there will most likely be a surplus in the budget tomorrow. Which is not a win when you consider how many people need help.
Jim Chalmers says:
The budget will be about seeing people through a difficult period but also setting Australia up for success into the future.
He hopes that people will describe it as “responsible”.
Cost-of-living support will not be limited by age: Chalmers
Jim Chalmers is asked about raising payments on ABC radio RN and says:
I’ve been saying for some days really, since the story about people over 55 first appeared, that the cost-of-living support will be broader than that, and it won’t be limited by age.
And I think when people see the package in its entirety, they will see what we’ve tried to do here is recognised the genuine pressures that people are under, and to do what we can, beginning with the most vulnerable people.
A very tired-sounding Jim Chalmers is on ABC radio RN Breakfast talking the budget.
He says there will be cost-of-living relief – but it won’t be in the form of cash payments.
What you’ll see in the budget … is we have found ways to take pressure off bills, rather than add to these cost-of-living, inflationary pressures in the economy.
If you are looking for what we know is in the budget so far, we have put together this list for you:
Zoe Daniel reveals hopes for tomorrow’s budget
Independent Goldstein MP, Zoe Daniel, has released her wishlist for the budget. She hopes to see a focus on restoring gender equality:
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The single parent payment restored (95.5% of recipients are women).
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The rate of Commonwealth Rent Assistance improved to address the housing insecurity that affects a disproportionate number of women.
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Superannuation on Paid Parental Leave.
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Abolition of the Parents Next program.
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Abolition of the Childcare Subsidy Activity Test.
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An interim 10% pay-rise for all early childhood educators to address the urgent need to retain and attract workers to the sector.
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Immediate funding of at least $1bn a year for the National Plan to Eliminate Violence Against Women and Children.
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More treatment options and prevention programs for eating disorders.
PM to give press conference at 8.45am AEST
Anthony Albanese is starting the morning in Perth (he’s on his way back from the UK where he went to the coronation). He has called a press conference for 8.45am Canberra time.
We expect him to announce the single parent payment changes moving the cut off date (when a parent moves from the single parent payment to jobseeker) from 8 to 14.
Inquiry into Lehrmann trial to resume today
Ben Smee
An inquiry into the criminal justice system’s handling of Brittany Higgins’s allegations of rape against Bruce Lehrmann will resume in Canberra today.
The ACT’s director of public prosecutions, Shane Drumgold SC, is listed as the first witness at the inquiry, which was called following his bombshell letter, revealed by the Guardian, which alleged police had attempted to pressure him against running the case and later sided with the defence during the high-profile trial.
Drumgold was the chief prosecutor at Lehrmann’s trial, into allegations he raped former political staffer Higgins at Parliament House.
Lehrmann denies the allegations and pleaded not guilty.
The trial collapsed after a lengthy period of jury deliberations due to juror misconduct. A retrial did not proceed due to prosecutors’ concerns about Higgins’ mental health.
The counsel assisting the inquiry, Eric Longbottom, told a preliminary hearing last month that decisions made to investigate and prosecute Lehrmann were “seemingly affected” by external factors, including the #MeToo movement, and intense public discussions about low rates of convictions.
The inquiry will be split into four “modules” of hearings. The first, scheduled to run from today until 16 May, lists only two witnesses – Drumgold and Lehrmann’s defence barrister, Steven Whybrow SC.
Guardian Australia will bring you coverage of the public hearing later today.
Good morning
Amy Remeikis
Welcome to Monday and to budget week!
It’s been a long four weeks between politics live blogs – and there has been a lot of speculation about what is in and out of the budget. And there has also been a bit of shifting sands there too – particularly when it comes to the working age welfare payments.
The budget has been printed so it is all set in stone now, and we know, because the government told us that there is a $14.6bn cost of living package.
Here is what Paul Karp reported:
The centrepiece of the Albanese government’s budget will be a $14.6bn package of cost-of-living relief, paid for in part by savings of $17.8bn.
The treasurer, Jim Chalmers, has confirmed there will be new measures in the cost-of-living package in Tuesday’s budget, adding to anti-poverty advocates’ hopes that the government will implement a broad rise to the jobseeker base rate, not just a limited increase for those aged over 55.
While the government has not supplied a breakdown of the measures, Chalmers has previously hinted at “additional measures” for renters such as a rent assistance increase. The package includes the previously announced energy relief for households and small businesses, investments in energy efficiency and cheaper medicines.
When the Morrison government raised the rate by $50 a fortnight, it was costed at $9bn over four years. So it looks like $40 a fortnight is this budget’s number. And not just for over-55s – after the massive backlash, it looks like the government made it a little more universal.
That’s still not going to even take the edge off poverty for the million or so people living below the poverty line.
It’s not the only cost-of-living measure in the budget, but it is the one which has the most attention, at least so far.
Meanwhile, parliament continues around the budget.
Stuart Robert has announced he will retire from politics in the next few weeks. He hasn’t put a date on it as yet, just that it is coming soon.
We will cover all the days events as they happen. You have Mike Bowers out and about and Amy Remeikis on the blog. Paul Karp will be leading the coverage along with Josh Butler and Daniel Hurst.
Is there enough coffee today? We will soon find out.
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