As it happened: RBA holds interest rates steady; PM urges Australians in Lebanon to leave

Thanks for reading the national news blog. This is where we’ll end today’s coverage.

To conclude, here’s a look back at the day’s major stories:

• Reserve Bank governor Michele Bullock has warned mortgage holders that interest rate cuts are unlikely in the near term after leaving rates steady for the seventh meeting in a row today.

• Foreign Minister Penny Wong has warned thousands of Australian citizens in Lebanon that the federal government will not be able to help them all escape if a full-blown war breaks out between Israel andHezbollah.

• ABC television presenter Tony Armstrong today announced his departure from News Breakfast.

• In NSW, a popular television presenter and endurance swimmer has set her sights on being the Liberal Party’s candidate to take on Zali Steggall in Warringah at the next federal election.

• In Victoria, Opposition Leader John Pesutto today testified in a high-stakes defamation trial that his former MP Moira Deeming launched against him.

• In Queensland, the LNP today announced young offenders before a court could be judged on their full criminal history, with their offences to carry into adulthood, if the party wins government at the upcoming state election.

• In Western Australia, Prime Minister Anthony Albanese made a flying single-day visit to Perth to announce a milestone in a major public transport project.

• In business news, the ASX closed slightly lower today, but big miners rallied thanks to the announcement of a Chinese stimulus package.

• In international news, he US is sending additional troops to the Middle East in response to a sharp spike in violence between Israel and Hezbollah forces in Lebanon that has raised the risk of a greater regional war.

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The Australian sharemarket has closed slightly lower, but big miners rallied thanks to the announcement of a Chinese stimulus package.

The ASX fell 10.9 points, or 0.1 per cent to 8142 points, as the Reserve Bank announced it would leave the cash rate unchanged.

The Australian dollar rose to 68.69 US cents during the day, its highest level in 2024, after the RBA said it remained “resolute” in its determination to get inflation back into its target band.

Rio Tinto (up 3.7 per cent), BHP (up 3.3 per cent) and Fortescue (up 1.8 per cent) all rose.

Portfolio manager at Tribeca Investment Partners, Jun Bei Liu, said the Chinese announcement had sparked hopes that commodity prices had bottomed, buoying mining shares. The stimulus measures – which Liu described as “massive” – included cuts to banks’ reserve requirements and moves to support the property market.

Read the full market wrap here.

Jerusalem/Beirut: The US is sending additional troops to the Middle East in response to a sharp spike in violence between Israel and Hezbollah forces in Lebanon that has raised the risk of a greater regional war, the Pentagon said.

A Pentagon spokesman would not say how many more forces would be deployed or what they would be tasked to do. The US now has about 40,000 troops in the region.

The aircraft carrier USS Harry S. Truman, two Navy destroyers and a cruiser set sail from Norfolk, Virginia, have now departed to the Sixth Fleet area in Europe on a regularly scheduled deployment, opening up the possibility the US could keep both the Truman and the aircraft carrier USS Abraham Lincoln, which is in the Arabian Gulf, in the region in case more violence breaks out.

“In light of increased tension in the Middle East, and out of an abundance of caution, we are sending a small number of additional US military personnel forward to augment our forces that are already in the region,” Major General Pat Ryder said today.

“But for operational security reasons, I’m not going to comment on or provide specifics.”

It comes after Israeli forces struck multiple targets inside Lebanon, killing 492 people, according to the Lebanese Health Ministry, including 35 children and 58 women, and wounding 1645, and as Israel prepares for “further operations”.

AP, Reuters

Keep updated with the unfolding situation in the Middle East here.

Federal parliamentary committee hearings continued on Tuesday even as the House of Representatives and Senate take a break.

Earlier today, an inquiry into economic self-determination and opportunity for Indigenous Australians heard “black cladding” was exacerbating difficulties for First Nations people trying to start businesses.

Black cladding occurs when a non-Indigenous business entity or individual takes unfair advantage of an Indigenous organisation to unfairly gain access to opportunities they would otherwise not be entitled to, according to Indigenous business verifier Supply Nation.

The non-profit organisation’s chief executive Kate Russell told the Joint Standing Committee on Aboriginal and Torres Strait Islander Affairs it was a serious issue.

“But I also believe that it receives an unfair amount of attention,” she said. “The great majority of Indigenous businesses are doing the right thing and I do not want to create a situation where a few bad apples spoil the whole bunch.”

Both houses of federal parliament will return on Tuesday, October 8.

AAP with Lachlan Abbott

Shadow treasurer Angus Taylor says today’s cash rate decision shows Australia is “at the back of the pack” in getting inflation under control and easing the burden of higher interest repayments.

Speaking shortly before RBA governor Michele Bullock’s press conference, Taylor said keeping Australia’s interest rates at 4.35 per cent meant “the high interest rate pain that’s being felt by Australian households and businesses continues on”.

Shadow treasurer Angus Taylor at the National Press Club in Canberra in May.Credit: Alex Ellinghausen

“And that pain is made all the worse by the virtue of the fact that we’re seeing interest rates coming down in countries across the world, but not here,” Taylor said.

“We are clearly at the back of the pack. In the United States and Canada, in the UK, in Europe, in New Zealand, we’re seeing interest rates coming down – not in Australia. The Reserve Bank has highlighted today that it is a long road back to a sustainable, low-inflation economy.”

Earlier, Treasurer Jim Chalmers said the government’s policies were “helping, not hurting” the fight against inflation and were stemming growth in net overseas migration.

“Our changes kicked in from the middle of this year,” Chalmers said. “And the data doesn’t yet capture that.”

But Taylor said Labor was “attempting to manipulate headline inflation” and pointed to the RBA’s statement today that said “underlying inflation is more indicative of inflation momentum, and it remains too high”.

“The government needs to focus on doing the real job, which is to bring core inflation down so that interest rates can come down,” Taylor said.

RBA governor Michele Bullock says she cannot guarantee the Australian economy will not enter recession.

“Certainly we are aiming not to end up in recession,” she said. “That’s not what we’re aiming for. Could I guarantee it? No.”

RBA governor Michele Bullock.Credit: Aresna Villanueva

Bullock said the bank’s forecasts did not have the economy entering recession at the moment, but that there were “very wide bands” further out in the forecasts which indicated a wider margin for error.

“You only have to look at the forecast errors to see [that] I can’t guarantee anything,” she said.

Asked about alleged Coles and Woolworths pricing misconduct, RBA governor Michele Bullock has said individual firms may have taken advantage of strong demand to pass on cost increases.

While Bullock said she would not comment on the case brought by the competition watchdog on Monday, she said some firms had increased their profit margins amid a high-inflation environment.

“It’s quite possible that some individual firms might have used opportunities of strong demand to more than pass on any increases in costs and increase their profit margins,” she said.

“But at an aggregate level, it wasn’t showing up as something that was widespread across the whole economy.”

Australian Competition and Consumer Commission chair Gina Cass-Gottlieb said on Monday she was seeking significant penalties against Woolworths and Coles for offering “illusory discounts” when many consumers were struggling to make ends meet.

The RBA has previously said companies, broadly speaking, have not increased their profit margins amid high inflation.

“As costs were going up, on average, businesses were just passing on the cost, but they weren’t any more than passing on the costs,” Bullock said today.

“I don’t think we see any evidence that conclusion has changed, but we keep an eye on that.”

Reserve Bank governor Michele Bullock says she would like some help to run the institution as the federal parliament remains deadlocked over key reforms to the bank.

The Coalition has walked away from proposed changes to the board that include a committee to set interest rates and a separate governance board to oversee other operations of the RBA. The Greens have said they will pass the government’s planned changes only if Treasurer Jim Chalmers forces the bank to cut interest rates, or the RBA cuts them. He has ruled out interfering in the bank’s operations.

RBA governor Michele Bullock speaks in Sydney today.Credit: Louie Douvis

Moments ago, Bullock said while interest rates were an important part of the bank’s operation, there were other aspects of the bank that were vital to the economy.

“We operate the cash distribution, the wholesale cash distribution system. We have a massive IT operation. All of these things are really important functions of the bank,” she said.

“And at the moment I’m the sole accountable authority for those. So I think that it would be good for us to get some [new] structure.”

Bullock said while the existing bank board had some people who were “experienced non-executives”, there were plenty of challenges for the bank.

“I think we can – even if we don’t end up with this new dual board structure – [get] some assistance for me in managing that, because I think there’s lots of good opportunities to bring experienced non-executives in,” she said.

“We have some of those on the Reserve Bank board currently actually, who can assist with thinking about some of these big operational risks and challenges that the Reserve Bank has on its plate.”

Michele Bullock has said the Reserve Bank did not explicitly consider a rate hike at its meeting this week.

Despite saying data since its August meeting had not “materially altered” the bank’s view, Bullock said an interest rate rise was not put on the table, as it had been at its last meeting.

“So we didn’t explicitly consider an interest rate rise at this meeting,” she said.

“The format of the meeting was slightly different. The way we framed the discussion really was around what has changed since August, and what would we need to see to do either a raise in interest rates or lowering interest rates.”

RBA governor Michele Bullock says information since the bank’s August meeting has “not materially altered” its view.

Speaking at the RBA’s press conference on Tuesday after the bank kept rates on hold at 4.35 per cent, Bullock said rates looked likely remain on hold for some time.

Reserve Bank governor Michele Bullock at Parliament House earlier this year.Credit: Alex Ellinghausen

“We’ve seen the June quarter national accounts, two sets of labour force figures and one monthly CPI indicator,” she said.

“We’ve considered in detail whether our current settings are sufficiently restrictive, and judged that based on what we know at the moment, rates will remain on hold for the time being.”