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What we know today, Friday May 6

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The Reserve Bank of Australia is forecasting the economy will grow strongly this year, but rising interest rates and consumer prices are expected to weigh on households’ budgets.

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Interest rate hike to hit households: RBA

The Reserve Bank of Australia is forecasting the economy will grow strongly this year, but rising interest rates and consumer prices are expected to weigh on households’ budgets.

In its quarterly statement on monetary policy, and just days after raising the cash rate for the first time in over a decade, the RBA expects the economy to grow by 4.25 per cent this year compared with 4.2 per cent in 2021.

“The domestic outlook is supported by the substantial boost to national income from high commodity prices and growth in private consumption and investment,” the statement released on Friday said.

“Growth is then forecast to moderate in 2023 as extraordinary policy support is withdrawn, rising prices weigh on real income and consumption growth slows to more typical rates.”

The RBA expects growth to slow to two per cent by the end of 2023, below the economy’s long-term trend at just under three per cent.

“Increases in interest rates and consumer prices are anticipated to weigh on households’ budgets over the forecast period, but the effect on consumption is expected to be cushioned by a decline in the household saving ratio,” it said.

As flagged earlier this week, the RBA expects inflation to hit six per cent by the end of the year, an upgrade from its 3.25 per cent prediction made three months ago.

This compared with the most recent result of 5.1 per cent, the fastest pace since 2001.

Underlying inflation is expected to lift to 4.75 per cent by December this year, well above the RBA’s two to three per cent inflation target.

These forecasts, along with an expected drop in the unemployment rate to 3.5 per cent next year, assume a cash rate of 1.75 per cent in the December quarter of this year and 2.5 per cent a year later.

Civilians remain trapped in Mariupol steel plant 

Ukrainian civilians, including women and children, remained trapped in underground bunkers at a steelworks in the ruined city of Mariupol although President Vladimir Putin says Russia is ready to allow them to leave safely.

Putin told Israeli Prime Minister Naftali Bennett in a phone call that Russia was still prepared to provide safe passage for civilians from the besieged Azovstal plant and officials in Kyiv should order Ukrainian fighters defending it to put down their weapons.

Russia’s military promised to pause its activity in Azovstal during Thursday daytime and the following two days to allow civilians to leave, after what Ukrainian fighters described as “bloody battles” prevented evacuations on Wednesday. 

The Kremlin said humanitarian corridors from the plant were in place.

However, nobody from Azovstal was among more than 300 civilians to leave Mariupol and other areas in southern Ukraine on Wednesday, the United Nations humanitarian office said.

Pictures released by Russian-backed fighters appeared to show smoke and flames enveloping the Soviet-era Azovstal complex. 

Ukrainian officials believe about 200 civilians remain trapped along with fighters in a sprawling network of underground bunkers there.

In an early morning address, Ukrainian President Volodymyr Zelenskiy said Ukraine stood ready to ensure a ceasefire.

“It will take time simply to lift people out of those basements, out of those underground shelters. In the present conditions, we cannot use heavy equipment to clear the rubble away. It all has to be done by hand,” Zelenskiy said.

Car regos among state fees set to rise 

A raft of fees and charges will rise from July 1, with the State Government insisting the increases have been kept to “well under half the inflation rate”.

In changes to several government-provided service costs gazetted late yesterday, a range of fees and charges will increase by around 2 per cent in the 2022-23 financial year, with the Treasurer giving notice of the changes before next month’s state budget.

Stephen Mullighan says the increases are “well under CPI which currently sits at 4.7 per cent in Adelaide”.

“The Malinauskas Labor Government have committed to use the traditional Treasury methodology to calculate South Australian government fees and charges using a combination of public sector wages and increases in prices,” the Government said in a statement.

Car regos for four cylinders or less will go up by $3 to $141, while for five and six-cylinder vehicles the cost will be $287, up $6.

A five-year driver’s licence renewal will cost $245, up from $240, with a 10-year renewal worth $490, up $10.

“South Australians are doing it tough with cost-of-living pressures and it will be a relief to many South Australians that increases in government fees and charges are being kept well below inflation,” Mullighan said in a statement.

“The Malinauskas Labor Government are acutely aware of current cost of living pressures and will continue to ensure South Australians are protected from any unnecessary increases.”

The Opposition had last week urged the Government to “assure South Australians that crippling fee increases won’t be passed on to households” after ABS data showed inflation rose 4.7 per cent over the previous 12 months.

PM pledges $100m boost for defence traineeships

Prime Minister Scott Morrison says his government will help train an additional 1500 workers for the nation’s defence industry under a $108.5 million election promise. 

Morrison, who will be in Perth on Friday, will announce the expansion of the Defence Industry Pathways Program, which will upskill additional teenagers graduating or leaving school in 14 regions across the country. 

The students will receive a nationally accredited Certificate III – Defence Industry Pathways, and will be trained with practical experience in trades, as well as skills in engineering, project management and logistics, and cyber security. 

Morrison said his government’s $270 billion investment in Australia’s defence capabilities this decade included a “strong pipeline of workers” in local industry. 

“The skills and knowledge this program will give to graduates will set them up for a career in defence equipment manufacturing technology, and set them up for life.”

Defence Industry Minister Melissa Price said more than 50 businesses have registered to mentor the 120 trainees participating in the pilot at Henderson in Western Australia.  

“By training an extra 1500 workers with on-the-job experience we know these graduates will be ready to walk into the workplace.”

Opposition Leader Anthony Albanese will campaign in Sydney today, with Labor launching a new attack on the government’s handling of the economy. 

The advertisement will target low wage growth and the surging cost of living.

“Scott Morrison doesn’t hold a hose, but he should have held a calculator,” the TV ad says.  

“The millions of taxpayer dollars he wasted on sports rorts and car parks really added up. 

“He doubled our debt even before COVID and letting massively profitable companies keep JobKeeper payments is one of the reasons our debt is now triple. 

“He says he’s good with money, but that really doesn’t add up.”

Short staffing puts the brakes on tour operators

Tour and transport businesses are struggling to stay afloat as staff shortages result in mass cancellations.

It’s prompted a call out from the Tourism Industry Council South Australia (TiCSA) for drivers and guides to help businesses remain viable.

Tour company owner Dallas Coull, who runs Taste the Barossa and Great Ocean Road & Beyond, said the situation was dire. 

“I know of many businesses, including my own, that are left vulnerable by the loss of just one guide,” Coull said. “We can’t keep operating like this.

“Without staff available, we will be forced to cancel bookings, and our broader tourism industry’s reputation will be damaged.

“Tour and transport operators are the glue that bring many visitors to our wonderful attractions, cellar doors, restaurants, and retail stores across our state. Without them, everyone suffers.”

TiCSA chief executive Shaun de Bruyn says while restrictions have eased, the industry still needs help to rebuild.

‘The struggles of the tour and transport sector are evidence of the significant damage to the industry over the last 2 years,” de Bruyn said. 

“We must continue supporting the industry to rebuild, and we cannot do that without tour and transport operators, who are the ultimate collaborators within the tourism industry.”

Coull urged those with Passenger Accreditation and an MR/LR driver’s license or willing to obtain one, to get in touch.

Boothby candidate preferences Labor

Independent candidate for Boothby, Jo Dyer. Photo: Supplied image

High-profile independent candidate for Boothby, Jo Dyer, has changed her approach to preferences for the May 21 federal election.

Dyer, who previously indicated she’d run a split ticket, announced last night she will preference the ALP ahead of the Coalition on her how to vote cards.

Liberal-held Boothby is Adelaide’s most marginal seat.

She said her decision was a result of “deep personal contemplations” and a review of the major party policies. She said the “government is full of climate deniers” and its “proposed model for a National Integrity Commission is a sham at best”.

“The polls suggest voting will be close and my priority is to ensure the Morrison Joyce Government is not re-elected. If it were to be a close vote, I would be disappointed if any of my decisions resulted in their re-election,” Dyer said.

“Despite my strong criticism of many of Labor’s policy positions, or, in some cases, their absence of policy positions entirely, I am aware that this decision will likely lead to another wave of attacks from the Government and their allies claiming I’m a ‘Labor stooge’. 

“To me, that will only demonstrate that they are incapable of understanding that there are many Australians outside of the Labor Party who do not support Scott Morrison and what his Government represents.”

Cost of living a major vote decider: poll

Australians say addressing the soaring cost of living should be the main focus for whoever wins the upcoming federal election.

Surveying what should be a top priority after the May 21 poll, an Australian National University study found addressing cost of living (65 per cent), fixing aged care (60 per cent) and strengthening the economy (54 per cent) the top three responses.

Reducing health care costs (54 per cent) and addressing climate change (53 per cent) rounded out the top five, while 37 per cent of voters still view addressing COVID-19 as a major concern.

Immigration, discussed as an election issue early in the campaign, received the lowest response at 22 per cent.

Elsewhere, the ANU poll found a slight drop in people who said they would vote for Labor at the coming election, falling from 36.3 per cent in January to 34.4 per cent in April.

The coalition dipped from 31.7 per cent in January to 31.2 per cent in April, while the Greens jumped from 14.2 per cent in January to 16.2 per cent in April.

Study co-author Nicholas Biddle said the voting intention results, the top priority issues, and a lack of confidence in the government, all looked good for the Labor opposition.

“At the midway point of the campaign, Labor is in an election-winning position,” Biddle said.

“Voting intention data is reinforced by ongoing low confidence in the federal government – still at its lowest level since the Black Summer bushfire crisis – and voters prioritising policy areas that the government is struggling to create a positive narrative about, like cost of living, aged care and climate change.”

Some 62.4 per cent of respondents said they were disappointed with the direction of the country.

The ANU surveyed more than 3500 voters.

-With AAP and Reuters

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