Australia news live: Bullock says Trump tariffs fallout a ‘complete rollercoaster’ after RBA cuts cash rate | Australia news

Sussan Ley says the Liberal Party must “respect modern Australia, reflect modern Australia and represent modern Australia”, as she seeks to assure Australians that the party is listening to the “clear message” sent to it at the election.

Ley continues:

We will take the time to get this right. We’ll listen, we’ll step up, we’ll modernise and we will rebuild. And it is with that undertaking from my party room and with my conviction and determination to get it right with respect to policies that I had front and centre with my conversations with David [Littleproud]. And while I have enormous respect for David and his team, it is disappointing that the National Party has decided today to leave the Coalition.

But the most important thing I want to say is this the Nationals door remains open, and our door remains open, and we look forward with optimism to rejoining at some point in the future.

And as David and I left today, we agreed that he and I would continue to meet regularly and to talk because we have much in common. We both have a big job to do to take the fight up to Labor.

Opposition leader Sussan Ley is speaking now in the wake of the National Party splitting off from its coalition with the Liberal Party.

RBA’s Bullock: Doesn’t expect Australian recession but ‘alert’ to the possibility

Governor Michele Bullock says the RBA is “on alert” for cataclysmic events on global financial markets, even though the financial markets have recovered since the US tariffs announcement. However, “the situation we’re in is not just uncertain, it’s actually unpredictable” Bullock says.

Asked if there was an increased risk of recession in Australia over the next two years, Bullock says that there is a scenario analysis for “a really bad outcome” in which a recession is possible. But she stresses:

That’s in the very extreme circumstance. And again, it was to try and give ourselves some sort of spectrum of outcomes that we might be looking at at the moment. We’re not looking at that, but we need to be alert.

Bullock: Australia’s main trading partners’ growth expected to slow

One of the biggest issues since the last meeting of the RBA board has been the “complete rollercoaster” of global economic and policy uncertainty after the US tariffs announcement, Bullock says.

Bullock says the effect of the tariffs on the global economy will depend on negotiations between the US and their trading partners.

She continues:

Our baseline forecasts that we released today for the global economy reflect the potential economic impacts of higher tariffs and impacts on consumption and investment of policy uncertainty. We see growth in our major trading partners slowing over the remainder of this year and next year.

In terms of the forecasts for the domestic economy, we see growth in demand picking up, but a little more slowly than previously. This sees inflation declining a little more than previously forecast, and the unemployment rate a little higher. Some of this reflects the downgrade to world growth. But some of it also reflects the effect of uncertainty on domestic demand.

If the trade outcomes are much worse for the global economy, though, we could be facing a much larger downturn in Australia, with implications for inflation and unemployment.

Michele Bullock: RBA forecasts inflation to fall to about 2.5% over the next year

Reserve Bank governor Michele Bullock says she recognises the recent period of high interest rates has been “challenging” for many, but it could have been worse.

Bullock is speaking to the media about today’s cash rate cut. She says underlying inflation is now under 3% and the RBA’s forecast is to see it around 2.5% over the next year. The board’s strategy has been to bring inflation down while avoiding a sharp rise in unemployment.

This is consistent with our dual mandate of price stability and full employment. I know this period of relatively high interest rates has been, and continues to be challenging for many households and businesses, but it was essential we brought inflation down because inflation hurts everyone.

The strategy that we took to achieve this was different to that of some other central banks, who took rates much higher than we did. The board accepted the trade off that, leaving the cash rate where it was would bring inflation down more gradually, but without a big increase in unemployment. A sharp rise in unemployment would have been very costly for families and for the Australian economy.

Sussan Ley says the Liberal party’s door ‘remains open’ after Coalition split

Tom McIlroy

Opposition leader Sussan Ley says the Nationals blew up the Coalition in part because it wanted its frontbenchers to be allowed to speak out against opposition policy.

In her first statement after the shock announcement that the two parties would split, Ley confirmed the Nationals wanted frontbenchers be allowed to cross the floor in parliament and vote against Coalition policy.

Ley issued a joint statement with her deputy, Ted O’Brien, and the Liberal senate leadership:

Whilst we have enormous respect for David Littleproud and his team, it is disappointing that the National party has taken the decision to leave the Coalition today.

As Liberals, we respect their decision and commit to continue working collaboratively with them.

The Liberal party’s door remains open to the Nationals’ should they wish to rejoin the Coalition before the next election. The coalition agreement has conventionally been focused on the makeup of our executive anchored in our principled commitment to our shared values.

The Nationals’ sought commitments on specific policies. As was explained to The Nationals, the Liberal Party’s review of election policies was not an indication that any one of them would be abandoned, nor that every single one would be adopted.

We offered to work constructively with the Nationals, respecting the party’s deeply held views on these issues.

We asked The National Party to work constructively with us, respecting our internal processes. In good faith, the Liberals proposed appointing a joint Coalition shadow ministry now, with separate policy development in each party room and subsequent joint policy positions determined in the usual way.

Unfortunately, the Nationals determined this was not possible. The Liberal party also insisted that shadow cabinet solidarity be maintained in any coalition agreement. This was not explicitly agreed to by the Nationals. As the largest non-government political party, the Liberal party is the official opposition.

Ley confirmed a new shadow ministry, drawn exclusively from the Liberals, will be announced in coming days.

ACOSS calls for increase in social security payments now that inflation is under control

The Australian Council of Social Service (ACOSS) has welcomed the RBA’s interest rate cut and called for more in the coming months to ease financial pressure on struggling households.

In a statement this afternoon, ACOSS chief executive Cassandra Goldie said the cut was “hugely important” for people on lower incomes, and that there was “no justifiable reason to keep interest rates at high levels” with inflation easing.

Goldie continued:

The priority now should be to grow jobs and the incomes of people struggling after a decade of stagnation in living standards. Low unemployment is an opportunity, not a risk. Reducing it further will not spark a fresh outbreak of inflation as some have wrongly suggested …

We are calling for an urgent increase to social security payments to lift the incomes of those with the least, as well as further investment in social housing and home energy upgrades for low-income homes to improve housing affordability and lower energy bills.”

Brittany Higgins criticises Queensland anti-discrimination law pause

A state government will not be swayed into reintroducing landmark anti-discrimination laws despite a sexual assault survivor accusing it of failing to take women’s concerns seriously.

Former Liberal staffer Brittany Higgins criticised the Queensland government for pausing changes to its anti-discrimination laws that would have taken effect on 1 July.

Before the 2024 election, the former Labor government legislated that employers would have a positive obligation to prevent discrimination of employees rather than acting retrospectively.

It also added more attributes to be protected from discrimination, including domestic violence, homelessness and irrelevant criminal or medical records.

But Attorney-General Deb Frecklington indefinitely halted the rollout of the changes in March after the justice department raised concerns about the protected attributes, particularly the irrelevant criminal record. She said there were concerns it could undermine decisions relating to weapons, police protection notices or licensing.

Higgins has argued that there has been extensive consultation over nearly four years for the implementation of the laws.

“By pausing this legislation indefinitely, without any clear explanation, [the government] further proves that [it] isn’t taking the concerns of the women in the state seriously,” she posted on X.

This shouldn’t be a partisan issue.

Every day the Crisafulli government delays taking action more Queenslanders face risk at work.

Premier David Crisafulli welcomed Higgins’ comments on sexual harassment but said the legislation was rushed.

– Australian Associated Press

Luca Ittimani

RBA board: Trump’s tariffs will probably slow economic activity, predicts low inflation to persist

The Reserve Bank’s interest rate cut is a sign it believes inflation will now stay on target, the bank’s board has said, predicting there’s now more chance Trump tariff chaos will slow activity and push down prices.

The RBA until April had been focused on “returning” to low inflation, but the board said today that it was now focusing on “maintaining” low inflation – which it predicts will persists for the next few years. The board said in a statement:

Inflation is in the target band and upside risks appear to have diminished …

With inflation expected to remain around target, the Board therefore judged that an easing in monetary policy at this meeting was appropriate.

Heightened global uncertainty stemming from Donald Trump’s tariffs was one of the factors likely to keep inflation low, the board said.

The new cash rate of 3.85% will continue to keep the brakes on Australia’s economic activity but the RBA was “well placed to respond decisively” and cut again if overseas disruption increased, with the board using slightly stronger language than it did a month ago.

A quick note that, as usual on interest rate days, we’re expecting the governor of the Reserve Bank, Michele Bullock, to speak to the media soon.

Chalmers: Coalition learned ‘nothing’ from its election loss

The treasurer has had another crack at the Liberal and National parties.

The Coalition has proven itself not just incapable of sticking together, but of providing that kind of representation in every corner of Australia, which the prime minister prides himself on providing.

Asked if he thinks the fracture between the Liberal and National parties will be short- or long-term, he says it remains to be seen but says, nevertheless, it is “a seismic event in our political history”.

I think that’s really clear. And I think it shows that the most basic elementary test here has been failed and failed and fallen at the first hurdle …

As I said before, it’s consequential because the divisions in the Coalition were unable to be reconciled. And I think it does show that the former coalition parties learned nothing from the election result. They’ve learned nothing from the last three years. They’re focused inwardly on themselves. While the Albanese government is focused on governing.

Chalmers: Australia not immune to ‘dark shadow’ hanging over global economy

Speaking at the press conference, Jim Chalmers says the Reserve Bank’s statement reflects that there is “a lot of unpredictability and uncertainty in the global economy” which is “casting a dark shadow over the whole global economy.”

And we are not immune from that. We’re better placed and better prepared but we’re not immune from those developments and you can see that in the way that the Reserve Bank has grappled with and explained that decision today. No doubt, Governor [Michele] Bullock will be asked about that shortly.

Rafqa Touma

Thank you for tuning in to a busy day on our live blog. I’m handing over now to the great Stephanie Convery, who will keep you updated into the evening.

Treasurer Jim Chalmers says today’s Coalition break up was a “nuclear meltdown”. He is speaking live:

The Coalition now is nothing more than a smoking ruin. They are hopelessly divided on personalities and on policy. It shows that the new leadership has failed its first test. It shows that they’ve learned absolutely nothing from the last few weeks or indeed, the last few years. This is a nuclear meltdown in the Coalition. And it’s hard to see how Australians can take them seriously when they don’t even take each other seriously.

Jim Chalmers ‘really pleased’ RBA rate cut will provide relief for homeowners

Treasurer Jim Chalmers is speaking after the Reserve Bank’s cash rate cut.

This is the second interest rate cut in the last three months. This is very welcome relief for millions of Australians. We are really pleased to see more help is on the way. And that’s what this decision today is all about. It reflects what we’ve made in the economy and recognises the uncertain global environment as well.

When it comes to inflation, both headlining and underlying inflation are now both in the Reserve Bank’s target band for the first time in almost four years. And this is the first time since records began that we’ve got the unemployment rate in the low 4s at the same time as we’ve got both measures of inflation in the target ban at the same time.

Jonathan Barrett

RBA rate cut partly designed to protect indebted households from Trump’s tariffs

More on the RBA cutting the cash rate by a quarter of a percentage point to 3.85%.

The cut, representing the second reduction this year, is partly designed to protect indebted households from Donald Trump’s tariffs, which is spooking consumers and businesses, and creating the potential for a protracted trade war.

The RBA has even modelled an escalating “trade war” scenario that leads to a global confidence shock and sends unemployment soaring in Australia. In that scenario, the RBA would need to cut the cash rate heavily to stimulate the economy.