As it happened: RBA lifts interest rates to 11-year high; BOM issues warning for El Nino event this year

That’s all for our live coverage for today. Thanks for following along.

Here are a few of the big stories from today’s coverage:

• The Australian economy is slowing faster than expected, with the national accounts revealing it expanded by a subdued 0.2 per cent through the first three months of the year.
• Aged Care Minister Anika Wells said a new taskforce set up today should consider a levy and other funding proposals, suggesting the government would expect more contributions from Australians in return for an improvement in the quality of care.
• The chief executive of Westpac – Australia’s second-largest mortgage lender — said the bank has seen a rise in missed payments and hardship calls as interest rates rise to an 11-year-high.
• Facebook owner Meta confirmed it was one of the tech giants that was using PwC for tax advice, but denies it knew the firm’s scheme was based on illegally obtained information.
• Jenny Craig Australia will close its doors, and all employees will lose their jobs, after administrators failed to find a buyer for the weight loss business.

Caroline Schelle will be back tomorrow to take you through the morning’s news. Until then, goodnight.

Australians could be asked to pay more for aged care under a federal move to consider taxpayer levies and consumer contributions to lift quality in a system already costing more than $30 billion a year.

Aged Care Minister Anika Wells said a new taskforce set up on Wednesday should consider a levy and other funding proposals when it begins work in the coming weeks on reforms to be set out in a new Aged Care Act next year.

Minister for Aged Care Anika Wells during an address to the National Press Club.Credit: Alex Ellinghausen

The minister sent a strong signal the government would expect more contributions from Australians in return for an improvement in the quality of care to replace older facilities with more basic standards and several residents in every room.

“You have to say that if we’re not prepared to accept that cinder-block, linoleum-floor, four-bed room anymore, then we need to work out how we’re going to pay for it,” she told the National Press Club.

Read more from David Crowe here.

Staying with Treasurer Jim Chalmers, who has been doing the media rounds today after new economic data revealed the economy expanded by a subdued 0.2 per cent through the first three months of the year.

The Treasurer was asked about comments radio this morning from Australian Chamber of Commerce and Industry Chief Executive Andrew McKellar, who accused the government and the Fair Work commissioned of “believing their own propaganda” when it came to raising the minimum wage, which he said put pressure on the Reserve Bank to continue to lift interest rates.

Treasurer Jim Chalmers speaking about the latest national accounts data released today.Credit: Louise Kennerley

Chalmers said it was unfortunate that people on low and middle incomes – who were already bearing the brunt of inflation – were being blamed “for their legitimate aspirations to earn more when they work”.

“From time to time, business groups will look for any opportunity to say that wages should be lower, and for the best part of a decade, we have had wage stagnation and deliberate wage suppression,” he said. “I think our time is better spent, rather than taking shots at each other ... working out how do we get that responsible, sustainable wages growth and a more productive economy, and that’s the government’s focus.”

On interest rates, he said no longer being able to make mortgage repayments was a “relatively common” story.

Australia’s banking regulator will push banks, insurers and superannuation funds to properly account for climate risks under an updated charter.

For the first time, the Australian Prudential Regulation Authority (APRA) will be explicitly required to consider risks related to climate change as part of its work, Treasurer Jim Chalmers said.

“Our priority is to ensure Australia’s financial system remains stable and robust and that the regulator is responsive to changing economic conditions,” Dr Chalmers said. “This includes promoting transparency in relation to financial risks and the adoption of climate reporting standards.”

The banking regulator will be required to assess climate risks as part of its work for the first time.Credit: Sasha Woolley

The statement released on Wednesday focuses on APRA’s role in ensuring a safe, resilient and competitive financial system.

In addition, the promotion of “prudent practices and transparency” on climate-related financial risks will be adopted as a priority.

Other jurisdictions, such as the European Commission, have implemented similar requirements, including so-called “double materiality” that brings environmental impacts into traditional financial accounting.

AAP

Jenny Craig Australia stores will close, and all employees terminated, after administrators were unable to find a buyer for the weight-management and nutrition business. The decision affects 73 stores and 306 employees in Australia, as well as 18 stores and 71 employees in New Zealand.

Jenny Craig’s Australian will be liquidated.Credit: Steven Siewert

Jenny Craig Australia officially folded in early May when its US parent declared bankruptcy, though at the time it continued to operate as voluntary administrators Vaughan Strawbridge, Kate Warwick and Joseph Hansell of FTI Consulting sought offers. In an update today, FTI recommended the business be liquidated, and said that all employees had been informed.

“The Administrators sought to sell the Australian and New Zealand operations of the Jenny Craig Group as a going concern, with the intent of preserving as many jobs as possible and limiting the losses for creditors and sought offers from interested bidders,” FTI said. “Despite best efforts, the Administrators were unable to find a buyer.”

Woolworths-backed healthcare tech Eucalyptus has agreed to buy Jenny Craig Australia’s online capability. The startup operates several brands taking in men and women’s health, fertility and skincare, all based around getting medications prescribed by doctors online. This includes the website Juniper, which focuses on weight loss.

Read more from Tim Biggs here.

Defence failed to effectively manage millions of items which include ration packs and clothing for Australian troops, with a critical audit finding the department held $1.7 billion worth of items that weren’t needed.

The Auditor-General report released on Wednesday found Defence couldn’t demonstrate effective management of its general stores inventories including ration packs for military personnel, toiletries, light globes and parts for specialist military equipment.

A report from the Auditor-General found $1.7 billion worth of items where a need or activity could not be identified.Credit:

The report found the value of items, where a need or activity could not be identified, was placed at $1.7 billion, out of a total amount worth $2.6 billion.

The Auditor-General made four recommendations for Defence, all of which were agreed to by the department.

In response to the report, Defence said it was “committed to strengthening processes and controls”.

“The Defence Enterprise Resource Planning system currently being implemented will deliver enhanced capability to track labour, storage and distribution costs to a greater level of granularity,” the department said.

AAP

The Australian Bureau of Statistics reports that the total household interest paid on mortgages in Australia doubled in the last year from $10.7 billion to $22.2 billion.

It says the economy grew 0.2 per cent during the March quarter 2023, and 2.3 per cent compared to the same time last year. This was the sixth straight quarter of economic growth, though it was the weakest quarterly growth since the COVID-19 Delta lockdowns in September quarter 2021. GDP per capita fell 0.2 per cent.

Facebook owner Meta confirmed an Australian Financial Review report that it was one of the tech giants that was using PwC for tax advice, but denies it knew the firm’s scheme was based on illegally obtained information.

“Facebook had no knowledge that any of the advice provided by PwC in regard to the Multinational Anti-Avoidance Law (MAAL) was based upon improperly obtained information,” a Meta spokesperson said.

PwCCredit: Aresna Villanueva

“Facebook did not seek advice from PwC on how to comply with the MAAL until after Treasury issued the draft legislation, which is why we were surprised to learn of PwC’s alleged conduct.”

“Facebook cooperated with the TPB (Tax Practitioners Board) investigation and our external legal advisors responded directly, as we would for any regulatory inquiry.”

Microsoft said PwC did not advise it on MAAL-related tax issues.

The tax was labelled the “Google tax” highlighting the tech giant’s reputation as an aggressive tax avoider. Google was approached for comment.

Incoming WA premier Roger Cook will shake up the trouble-plagued corrective services sector by transferring ministerial duties from Bill Johnston to current Police Minister Paul Papalia in a new-look cabinet unveiled on Wednesday.

The change was the most significant in a reshuffle that will also see incoming deputy premier Rita Saffioti’s workload balloon with the addition of treasury and tourism to her existing transport responsibilities.

WA’s incoming premier, Roger Cook.Credit: Colin Murty

The reshuffle comes 10 days after retiring Premier Mark McGowan announced his shock departure from politics last week.

Cook said the new-look cabinet, which included Balcatta MP David Michael as Minister for Ports, Local Government and Road Safety, was the team he intended to take to the next election.

“It is a team that is united, experienced, hungry and hardworking, a team that has the energy to deliver on our ambitious plan to ensure Western Australia continues to be the best place to live in our nation,” he said.

“This is the team we’re taking to the grand final, pending, obviously, extraordinary circumstances.”

A third over-height truck in two days has delayed motorists entering the Sydney Harbour Tunnel, after Premier Chris Minns vowed to crack down on drivers and operators causing “intolerable” disruption to commuters.

Live Traffic reported the southbound entrance to the tunnel closed about 1pm and reopened about 1.20pm, while traffic was diverted to the Harbour Bridge. A Trojan Transport truck had to stop at the mouth of the tunnel because it was too tall.

The truck that blocked the Sydney Harbour Tunnel on Wednesday afternoon.Credit:

It followed two similar incidents on Tuesday, one during the morning peak and one in the evening, that caused traffic chaos and prompted the government to set up an urgent call with the National Heavy Vehicle Regulator to find solutions.

Minns said he would reclaim the power to deregister over-height trucks that cause incidents unless the national regulator gets tougher, after 56 over-height incidents in the city’s tunnels this year.

Minns said the government was also looking at moving the warning systems further back from the Harbour Tunnel so that truck drivers would be notified earlier if they were above the height limit. Signs could also flash up the truck’s registration rather than a generic warning.

Read the full story here.