Australia news as it happened: RBA raises interest rates for the first time since 2023; Cory Bernardi recruited by One Nation as Ley and Littleproud fail to reach Coalition resolution
What we covered today
By Isabel McMillan
Thanks for reading the national news blog. This is where we’ll end today’s coverage. We will be back tomorrow with the latest news.
To conclude, here’s a look back at some of the day’s major stories:
- The RBA has increased interest rates, with the Commonwealth Bank the first to raise mortgage rates
- The Australian dollar rose above US$0.70 after the Reserve Bank raised the cash rate to 3.85 per cent, while the sharemarket gave up some of its earlier gains.
- Reserve Bank governor Michele Bullock has admitted the bank’s rate rise is bad news for mortgage holders, but that it is needed to get inflation back under control over the next few years.
- In politics, question time returned for the first full sitting fortnight of the year, with a split Coalition and a Liberal-only front bench.
- Qantas will sell its share in Jetstar Japan, as the flagship Australian carrier directs its attention and capital on core businesses and routes.
- Federal authorities have charged a man who allegedly performed a Nazi salute in front of Jewish children at Melbourne Airport
- And overseas, US President Donald Trump said his administration was pursuing $1 billion in damages from Harvard University, rejecting a report by The New York Times that said the White House had dropped its demand for a $200 million payment to settle its dispute with the educational institution.
Thanks again for joining us. This is Isabel McMillan signing off.
Trump sues Harvard University for $1.4 billion
By
US President Donald Trump said his administration was pursuing $1 billion in damages from Harvard University, and rejected a report by The New York Times that said the White House had dropped its demand for a $200 million payment to settle its dispute with the educational institution.
In a Truth Social post, Trump accused Harvard of “spreading misinformation” to the newspaper and called the university “Strongly Antisemitic”.
“We are now seeking $1 billion in damages, and want nothing further to do, into the future, with Harvard University,” Trump wrote, without specifying what harms the school had caused. He later said the Times report was “completely wrong” and demanded a correction.
Harvard did not immediately respond to a Reuters request for comment.
The Trump administration has pursued a broader effort to use federal funding to push changes at Harvard and other universities, arguing they are affected by antisemitism and “radical left” ideology.
Reuters
Man charged with performing Nazi salute in front of Jewish children
By Isabel McMillan
A Melbourne man will appear in court after allegedly performing a Nazi salute directed at a group of Jewish school children.
The Australian Federal Police said the man, 23, and from Greenvale in the city’s north, allegedly performed the act in front of the children in a terminal at Melbourne Airport on Monday.
He then allegedly left the terminal before the matter was reported to the AFP. Officers reviewed CCTV footage and spoke to witnesses to identify the man, and attended a home in Greenvale later on Monday.
The AFP said the man was identified as an airport employee. He has been summonsed to appear in Melbourne Magistrates’ Court next month, charged with one count of making a public display of a prohibited Nazi symbol or giving a Nazi salute.
If found guilty, the man faces a maximum penalty of five years in prison.
CBA to raise mortgage rates
By Clancy Yeates
Commonwealth Bank is the first major bank to raise interest rates for home loan customers in response to the Reserve Bank’s hike today, raising variable home loan rates by 0.25 of a percentage point from February 13.
CBA’s group executive for retail banking, Angus Sullivan, said: “We know that interest rate changes can create additional pressure for our home loan customers, which is why we’re focused on providing support and helping them stay in control of their finances.”
Qantas to sell share in Jetstar Japan
By Chris Zappone
Qantas will sell its share in Jetstar Japan, as the flagship Australian carrier directs its attention and capital on core businesses and routes.
In an update to the ASX, Qantas announced its intention to sell its stake in Jetstar Japan to a Japanese buyer in order to “focus on ongoing capital investment” for both Qantas and Jetstar.
The plan to dispose of its share in Jetstar Japan comes half a year after Qantas sold its holding in Singapore-based Jetstar Japan.
Qantas said the deal would mean selling its 33.32 per cent shareholding to the Japanese-government-owned Development Bank of Japan.
Qantas chief executive Vanessa Hudson said: “We’re confident the new ownership structure will deliver greater value to customers, benefiting from the Development Bank of Japan’s domestic and international aviation knowledge and industry expertise.”
The announcement comes as Qantas prepares to undertake its Project Sunrise strategy, under which the airline will use specially designed Airbus A350s to connect Sydney to New York and London directly non-stop, on flights of more than 20 hours.
Jetstar Japan operates 27 aircraft in the A320 family. It flies to major hubs Tokyo, Osaka and Nagoya, and connects to Sapporo, Fukuoka, Kagoshima, Nagasaki, Kochi, Matsuyama, Takamatsu and Okinawa.
The disposal of the stake – for an undisclosed sum – will not have an impact on any Qantas or Jetstar international services between Australia and Japan, and nor will it affect JAL code share arrangements.
Japan has grown into a popular destination for Australians in recent years, helped by a weaker yen and a proliferation of skiing destinations.
Chalmers defends spending, says RBA concerns driven by ‘private demand’
By Nick Newling
Shadow treasurer Ted O’Brien has again risen to question Treasurer Jim Chalmers, this time asking him to rule out future rate rises.
Chalmers replied: “The shadow treasurer would know that the Reserve Bank takes its decisions independent of government.
“We need to get on top of this inflation challenge in our economy. We need to do that in a way that doesn’t sacrifice too many jobs, Mr Speaker, and that’s the task that the Reserve Bank, independently and the government separately, are engaged in now.”
In his question, O’Brien referenced a statement from the Reserve Bank that indicated inflation would remain higher than desirable for some time.
But Chalmers said: “If the shadow treasurer wants to refer to the statement put out by the Reserve Bank a little while ago, he should concede that this whole campaign that they’ve [the opposition] been running up to today – and they’ve been desperately hoping for a rate rise today – in saying that the Reserve Bank was terribly concerned about public spending, they [the opposition] need to admit now that that was rubbish.
“If you look at the Reserve Bank statement today, it doesn’t mention government spending. It’s not a factor in the decision that they took today. In fact, they’ve gone out of their way to say that the upside surprise in inflation and the pressure on the outlook is coming from private demand.”
Energy minister puts heat on Nats with home battery numbers
By Nick Newling
During question time, which finished just before 4 pm, we saw a return to the regular updates by Climate Change Minister Chris Bowen on the number of home batteries installed in each electorate.
Bowen often uses these updates as a moment to sledge the opposition, and he continued that pattern today.
He referenced the failed challenge for the Nationals leadership by Colin Boyce against incumbent David Littleproud: “I’m pleased to report the member for Flynn [Boyce] has beaten the member for Maranoa [Littleproud] for the first time this week, on 1128 batteries compared to the member for Maranoa’s 922 batteries.
“But perhaps reports of a comeback by the member for Riverina [former Nationals leader Michael McCormack] have something in them because he’s blitzing it, Mr Speaker, 2390 batteries in the Riverina.”
Bowen also ribbed opposition communications spokeswoman Melissa McIntosh: “The member for Lindsay has expressed an aspiration to lead, but she’s got some catching up to do. She’s installed 1592 batteries in Lindsay. Which I read is about 1591 more leadership votes than she has in any proposed ballot.”
Bullock: Productivity ‘the issue’, but fiscal policy is the government’s job
By Michelle Griffin
Reserve Bank governor Michele Bullock has lamented Australia’s sluggish productivity.
“Productivity is the issue. And I’m not the productivity tsar. [Productivity Commission chair] Danielle Wood has plenty of good ideas about what we can be doing about productivity, but it’s hard,” she said at her press conference.
Bullock reiterated she would not tell the government what to do on fiscal policy because the RBA and the government do not work hand in glove.
“I’m not going to tell the government what to do with fiscal policy. That’s not my business. As I said earlier, we work with aggregate demand and basically, we aggregate demand, public and private, push up against the limits of growth, and that is what we’re seeing in terms of inflation at the moment,” she said.
“I actually would say that I think – at least what I heard the treasurer say – is that he is focused on inflation. It’s his No.1 thing he’s focusing on at the moment. So I think he’s conscious [to] it. But I think we can work, I think the idea that somehow we work hand in glove is not the way … these things work. We are independent. They are independent. We work with what we have got.”
Bullock asked why RBA ‘keeps getting it so wrong’
By Michelle Griffin
This masthead’s economics correspondent, Shane Wright (https://www.theage.com.au/politics/federal/reserve-bank-lifts-interest-rates-for-first-time-since-2023-20260203-p5nz1m.html), has asked Reserve Bank governor Michele Bullock why the RBA keeps getting it so wrong, as inflation has only been within the mandated band in eight out of 40 quarters in a decade.
Bullock responded: “I have no particular response other than to say we are determined, and the board is determined, to bring it back down into the band.
“But it’s not a science. It’s a bit of an art, really. And there’s so many things that can push you off course. There were things that pushed us off course before COVID, and then there was COVID, which completely pushed us off course. So we’ve just got to respond as best we can.”
Interest rates the tool to get inflation under control: Bullock
By Michelle Griffin
Reserve Bank governor Michele Bullock says she does understand that for mortgage holders, today’s interest rate rise is not a great outcome.
“What’s also not great for them, or for anyone else, is if inflation remains elevated because every time they go to the shop, every time they go to buy their groceries, every time they go to get personal services, medical [treatment], if inflation is high, that’s going to keep going up,” Bullock said.
“Ultimately, it is best if we get inflation under control, and our instrument is the interest rate, and I understand that people with mortgages find that hard. But the alternative is potentially even harder, so I empathise with them.”
Asked if the board considered a rise of 0.5 per cent, she said no.
But Bullock was a little exasperated when repeatedly asked if mortgagees could expect further rate rises this year.
“More versions on the same question? I’m not sure what I can add, other than say that the board has taken a cautious approach, they’ve made one rate rise this time. And we’ll observe now what happens to financial conditions,” she said.
She went on to say: “I’m not predicting there will be more rate rises, but I’m also not saying that if inflation does remain too high, that there might [not] be, so I’m going back to that never ruling anything in or out phrase, I suppose. But at this stage, just one.”
