Australian news and politics live: RBA Governor defends rate hike as ‘right for the economy’

Opposition defence spokesman Angus Taylor has avoided addressing how removing the Liberal Party’s first female leader might alienate women voters, instead highlighting widespread Australian discontent.

“You know, I think we can break down Australians by gender and by race and by all sorts of other things, but what I hear and see when I’m getting around my neck of the woods and around Australia more generally, is Australians saying that they care deeply about whether or not their kids can own a home,” he told 2GB on Friday morning.

“They care deeply about an energy system that’s been driven by ideology, not by reality... and all of that needs a response from the Liberal Party. And that’s what we’re going to focus on.”

Pressed on what message ousting Opposition Leader Sussan Ley would send to women wary of the Liberal Party, Mr Taylor replied: “We’ve got to do better with women across Australia, but we’ve got to do better with lots of people across Australia – including women, of course.”

More than 500 police officers will patrol Sydney’s CBD and surrounding areas on Monday as thousands prepare to rally against Israeli President Isaac Herzog’s visit to Australia.

NSW Police confirmed a Public Assembly Restriction Declaration would be in effect across designated parts of the city, limiting where protesters can move.

Israel President Isaac Herzog is due to arrive in Australia on Sunday.

Speaking at a press conference in Sydney on Friday morning, NSW Police Acting Assistant Commissioner Paul Dunstan said protesters were permitted to gather, but anyone moving beyond approved zones could face arrest.

“If the group starts to spill out on to pedestrian areas, onto roadways, we will have no choice but to issue move-on directions, ask the group to disperse, and if those directions are not complied with, potentially arrest those people not complying,” He said.

He confirmed there would be “in excess of 500 police officers” stationed throughout the CBD on Monday.

The Palestine Action Group plans to march peacefully from Sydney’s Town Hall to NSW Parliament in the afternoon.

Australia’s chief central banker Michele Bullock has told a parliamentary hearing government spending is driving up inflation in the wake of the first rate hike in more than two years and warned of another increase if demand didn’t slow - putting her on a collision course with her Labor bosses.

Treasurer Jim Chalmers has been arguing that private sector activity is fuelling inflation and not public sector spending, with both headline and underlying inflation now well above the Reserve Bank of Australia’s 2-3 per cent target.

“If we need to put up interest rates to slow the growth in demand, in aggregate demand, then that’s what we will do,” Ms Bullock said.

“I don’t have a view on the Treasurer’s words.”

Ms Bullock made the acknowledgement about government spending on Friday, after refusing on Tuesday “to comment on fiscal policy” when asked by journalists in Sydney about the link between government spending and inflation.

Federal Government spending is forecast by Treasury to hit 26.9 per cent of gross domestic product in 2025-26, which outside of COVID would the highest since 1986.

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RBA Governor Michele Bullock has warned Australians that if she needs to hike interest rates further “to slow growth in demand”, she will.

“If we need to put up interest rates to slow the growth in demand, in aggregate demand, then that’s what we will do,” the RBA boss said on Friday in Canberra.

Aussies were hit with a .25 basis point rate hike on Tuesday, with the Governor’s latest words offering little comfort on where we are heading.

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Liberal MP Simon Kennedy asked Reserve Bank Governor Michele Bullock if high Government spending had pushed up inflation by increasing demand for goods and services.

“Yes, it does, because as you say there’s some public demand and then there’s transfers and taxes which also flow into that,” Ms Bullock said.

“Aggregate demand, we think, is currently in excess of the ability of the economy to supply those goods and services which are being demanded.

“Total demand is too high and that’s what’s giving inflationary pressures.”

Australia’s chief central banker Michele Bullock has told a parliamentary hearing the latest rate rise will be tough for those paying off a mortgage but argued doing nothing would have hurt the poor.

She made the acknowledgement on Friday, three days after the Reserve Bank of Australia increased the cash rate by 25 basis points to 3.85 per cent, undoing the August cut and marking the first tightening since November 2023.

“I recognise the challenges a cash rate increase brings for Australians with mortgages but it’s the right thing for the economy as a whole because we need to ensure inflation is low and stable so that households and businesses can plan, invest and create jobs,” she told the House of Representatives economics committee in Canberra.

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RBA Governor Michele Bullock says the latest rate hike is the “right thing for the economy”, while speaking at the House of Representatives economics committee in Canberra.

“I recognise the challenges a cash rate increase brings for Australians with mortgages but it’s the right thing for the economy as a whole because we need to ensure inflation is low and stable so that households and businesses can plan, invest and create jobs,” she said.

“I’ve said it before but high inflation hurts all Australians whether you’re paying a mortgage, renting, running a business or just trying to make ends meet.”

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Reserve Bank Governor Michele Bullock, alongside senior RBA officials, is appearing before the House of Representatives economics committee in Canberra, facing renewed scrutiny just days after lifting interest rates.

The appearance comes after the central bank moved to increase rates following an unexpected spike in inflation, a decision that has added further pressure to already stretched households.

On Tuesday, Ms Bullock confirmed mortgage holders would soon feel the impact, with repayments set to rise after the Reserve Bank lifted the cash rate by 25 basis points to 3.85 per cent.

Major banks and lenders have since indicated they will pass the increase on in full.

Alongside the rate decision, the RBA released updated economic forecasts showing inflation is now expected to stay above the bank’s 2–3 per cent target range until 2027, later than its previous projection of mid-2026.

While Ms Bullock declined to directly link inflation to Government spending.

Liberal Senator Jane Hume has declared the Liberal Party is capable of governing without relying on Coalition partners, as uncertaintly surrounds the future of the alliance with the Nationals.

Her comments follow suggestions from One Nation leader Pauline Hanson that she could work with either side of the traditional Coalition, while negotiations between the Liberals and Nationals remain unresolved.

“Pauline might be getting a little bit ahead of herself here – we’re two years out from an election, and at this stage, One Nation has only one member of the House of Representatives. I think the Liberal Party can govern on its own merits too,” Ms Hume told Sunrise on Friday morning.

Ms Hume said voter frustration was helping minor parties gain attention, linking One Nation’s momentum to economic pressures facing households.

She described this as “grievance politics”, saying inflation and cost-of-living pressures had left many Australians feeling overlooked.

“People are rightly aggrieved, and that’s why they’re talking about One Nation. But come the election, I want to make sure that it’s the Liberal Party that are presenting those incredible and genuine alternatives,” she said.

Asked whether governing alone would also mean without the Nationals, Ms Hume acknowledged the value of the long-standing partnership, while maintaining the Liberals could operate independently if required.

“We’re talking to our Coalition partner – our former Coalition partner – because let’s face it, we’re better in Coalition with the National Party, but the Liberal Party can do this on its own. Do not, do not be under any illusions that we can’t.”