Australia politics live: ballooning rental prices to fuel inflation, Treasury says

From 31m ago

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 at 18.17 EST

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You may have noticed he mentioned rental increases there.

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It is not great news for that already tight market, according to Treasury:

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\n

Rising housing costs remain a source of cost-of-living pressures for many households.

\n

Inflation in newly advertised rental prices has been rising sharply for around a year, reaching 10 per cent nationally in January.

\n

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.

\n

More recently strong underlying demand for housing has been driven by a recovery in population growth amid constraints in new housing supply.

\n

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.

\n

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.

\n

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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.

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The Australian federal police and Asio have been investigating this since allegations of Australian pilots being approached to train China’s airforce.

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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”:

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\n

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.”

\n

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Marles revealed that “one of the recommendations does recommend that we develop some additional legislation which the government will now pursue”:

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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 …

\n

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.

\n

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Well, we know what impact the RBA’s interest rate hikes are having on people, but what about the banks?

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The CBA has just announced its financial position to the ASX – and, surprise, surprise, it has a fairly large profit to talk about.

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From its statement:

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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

\n

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That $5.15bn cash profit is up from $4.75bn a year ago.

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Thank you to Martin for kicking us off this morning.

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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!

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It’s going to be at least a four-coffee day.

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Ready?

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Let’s get into it.

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Chinese-made security cameras and intercoms are being removed from the electorate offices of federal politicians, Australian Associated Press reports.

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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.

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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”.

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The committee was told it was a “precautionary measure”.

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The department notified politicians in July about the program to remove the surveillance systems.

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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.

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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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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.

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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.

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Shine Lawyers’ abuse legal practice manager, Thomas Wallace-Pannell, said the AIS and ASC had failed the athlete:

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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.

\n

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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.

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The commission also established its own restorative justice program.

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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.

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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.

","elementId":"925c6658-6161-42fb-a95b-f00c204741e1"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

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.

","elementId":"720bac0a-83cb-4d1b-8cd6-94d7b91ef3c1"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

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.

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With that, let’s get going.

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Key events

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You may have noticed he mentioned rental increases there.

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It is not great news for that already tight market, according to Treasury:

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\n

Rising housing costs remain a source of cost-of-living pressures for many households.

\n

Inflation in newly advertised rental prices has been rising sharply for around a year, reaching 10 per cent nationally in January.

\n

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.

\n

More recently strong underlying demand for housing has been driven by a recovery in population growth amid constraints in new housing supply.

\n

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.

\n

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.

\n

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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.

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The Australian federal police and Asio have been investigating this since allegations of Australian pilots being approached to train China’s airforce.

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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”:

","elementId":"e5ce94c2-8eff-4c3f-805b-bd2e14f982f0"},{"_type":"model.dotcomrendering.pageElements.BlockquoteBlockElement","html":"

\n

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.”

\n

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Marles revealed that “one of the recommendations does recommend that we develop some additional legislation which the government will now pursue”:

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\n

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 …

\n

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.

\n

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Well, we know what impact the RBA’s interest rate hikes are having on people, but what about the banks?

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The CBA has just announced its financial position to the ASX – and, surprise, surprise, it has a fairly large profit to talk about.

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From its statement:

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\n

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

\n

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That $5.15bn cash profit is up from $4.75bn a year ago.

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Thank you to Martin for kicking us off this morning.

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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!

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It’s going to be at least a four-coffee day.

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Ready?

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Let’s get into it.

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Chinese-made security cameras and intercoms are being removed from the electorate offices of federal politicians, Australian Associated Press reports.

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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.

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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”.

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The committee was told it was a “precautionary measure”.

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The department notified politicians in July about the program to remove the surveillance systems.

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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.

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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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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.

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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.

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Shine Lawyers’ abuse legal practice manager, Thomas Wallace-Pannell, said the AIS and ASC had failed the athlete:

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\n

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.

\n

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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.

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The commission also established its own restorative justice program.

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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.

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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.

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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.

","elementId":"720bac0a-83cb-4d1b-8cd6-94d7b91ef3c1"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

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.

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With that, let’s get going.

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Filters BETA

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?

Daniel Hurst

Daniel Hurst

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.

Christopher Knaus

Christopher Knaus

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.

Luke Henriques-Gomes

Luke Henriques-Gomes

‘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 at 18.21 EST

Paul Karp

Paul Karp

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 at 18.23 EST

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 at 18.27 EST

Paul Karp

Paul Karp

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 at 18.07 EST

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 at 18.10 EST

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 at 18.17 EST

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 at 18.04 EST

Daniel Hurst

Daniel Hurst

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 at 17.47 EST

Paul Karp

Paul Karp

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 at 17.49 EST

Caitlin Cassidy

Caitlin Cassidy

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 at 17.53 EST

Daniel Hurst

Daniel Hurst

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 at 17.33 EST

The ABC’s social media team is closing its Insiders account.

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Hi everyone. This Twitter account is closing this Sunday. Please follow @abcnews for the latest news and information.

You can find Insiders here: https://t.co/CFvqD7wblH,
on ABC iview here: https://t.co/sOafI37Yy0 and we’re still on Facebook here: https://t.co/5R1xOm04ct

&mdash; Insiders ABC (@InsidersABC) February 14, 2023

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Updated at 17.33 EST

The Guardian

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