Key events
Peter Hannam
Some more on that predicted rate freeze today – the Reserve Bank will conclude its penultimate board meeting this afternoon, and all indicators point to it leaving the cash rate unchanged at 4.35%.
A year ago, Michelle Bullock used her second board meeting as RBA governor to hoist the key interest rate, making it the 13th increase since the central bank had started turning the monetary screw.
Today’s rates verdict will pop up at 2.30pm Aedt, half an hour before the Melbourne Cup is run. The likelihood of the RBA staying put is virtually a certainty.
Financial markets yesterday were rating the odds of a rate cut today at just one-in-twenty, and the RBA officials have given no hints of a cut (or raise) in their public outings since its previous board meeting in late September.
Still, Bullock will hold her now customary media conference at 3.30pm to explain the board’s thinking. Interest, so to speak, may focus on whether the board had considered a rate cut at all – something it won’t have done since the Covid disruption era.
We’ll also have the RBA’s latest quarterly forecast update to mull over. How are GDP growth, unemployment, wages and other key economic indicators likely to evolve in the couple years. (Note these also use market expectations for interest rates – which may or may not be what RBA thinks will happen and do the setting.)
But we’ve noted previously, predictions have only so much value. Bullock and her board will no doubt be keen to see how the US elections go – much like the rest of us. A lot might change in a short time,
Freebies frowned on
As mentioned at the start, our main story this morning is our Guardian Essential poll which this month asks voters what they think of the question of politicians receiving free concert tickets and flight upgrades.
It might make uncomfortable reading for some denizens of Parliament House. A majority of voters disapproved of politicians attending major concerts (63% to 23%), receiving complimentary flight upgrades (61% to 26%), attending major sporting events such as the Melbourne Cup and grand finals (59% to 27%), and accessing VIP airline lounges (58% to 28%).
About one in seven respondents (14%) were “unsure” whether politicians should accept these.
Here’s the full story:
RBA tipped to keep rates on hold
The Reserve Bank of Australia is widely tipped to keep rates on hold but a dovish turn in its post-meeting statement could lay the foundations for a pre-Christmas cut, Australian Associated Press reports.
The clear consensus of economists and the market is that the RBA board will keep the cash rate at 4.35% at Tuesday’s meeting, given underlying inflation persists higher than they would like.
But price growth has steadily declined, with headline inflation back within the RBA’s 2% to 3% target range, aided by government energy bill rebates.
AMP chief economist Shane Oliver still believes the central bank’s first cut will most likely come in February, though a December cut remains possible if monthly underlying inflation in October falls sharply and unemployment rises:
While inflation fell again in the September quarter, the RBA will likely regard underlying inflation at 3.5% year on year as still too high, with services inflation remaining sticky and will see still low unemployment as meaning that there is no urgency to cut.
But the continuing progress in getting inflation down may see it become a little less hawkish in its commentary and it may make small downwards revisions to its inflation and growth forecasts for next year.
Government to expand military cash bonus scheme to aid retention
A cash bonus scheme to keep people in the military will be expanded as part of a $600m workforce strategy.
The Albanese government is due to announce a recruitment and retention package, in addition to releasing the 2024 defence workforce plan.
In an attempt to reduce the thousands of people leaving the Australian defence force, the government in 2023 launched a trial of $50,000 bonus payments for permanent personnel near the end of their initial mandatory period of service if they committed to the military for another three years.
The scheme has been a success, with an uptake rate of almost 80% and more than 3,100 junior rank personnel choosing to stay.
So the government has decided to extend the bonus to the 2027-28 financial year.
It will be reduced to $40,000 from July 2025 but expand to permanent ADF members around the seven- to nine-year service mark, to encourage career progression to middle ranks. The plan says:
These retention bonuses are short-term initiatives to alleviate pressure on the ADF’s junior and middle ranks, and address hollowness in the force.
Defence will aim to achieve “realistic growth” of a permanent ADF workforce of 69,000 by the early 2030s, with an overall workforce – including public servants – of about 100,000 by 2040.
The defence minister, Richard Marles, said the plan would help retain and grow a highly skilled workforce.
Welcome
Good morning and welcome to our live politics blog. I’m Martin Farrer with the top overnight news stories and then it’ll be Tory Shepherd with the main action.
A majority of voters think politicians should not accept perks of office including free tickets for concerts and sporting events, flight upgrades and VIP airline lounge access. As the political fallout of the perks row continues, our latest Guardian Essential poll of 1,131 voters could spell trouble for politicians.
Anthony Albanese and his ministers will surely be hoping that the Reserve Bank cuts the cash rate after its monthly monetary policy meeting today to ease pressure on households. But the bank is forecast to hold the rate steady at 4.35% with inflation remaining – in the view of the board – still too high. More coming up.
Also today, the Albanese government is due to announce a recruitment and retention package, in addition to releasing the 2024 defence workforce plan. It includes the extension and expansion of a scheme that pays hefty bonuses to personnel who stick with the military. More on that soon.
Much of Australia is bracing for a heatwave that could make some northern areas “the hottest place in the world” this week, according to the BoM. Temperatures across some parts of Queensland and the NT are expected to exceed 40C today, while Brisbane will be into the 30s, with Sydney getting there tomorrow. Cup day looks like being a good one with a high of 26C in Melbourne, before the mercury hits the high 30s later in the week. More coming up.
