The Point Live: RBA decision to raise rates gives the Treasurer a headache, Liberals/Nationals still a mess, as parliament continues.

The US Congressional Research Service – which provides independent, policy and legal analysis to the US Congress – has released a new report on the Aukus nuclear-powered submarine deal. 

There’s a lot of detail in it. As former Senator Rex Patrick helpfully pointed out, the report outlines (again) that US submarine production rates just aren’t up to meeting the requirements of the Aukus deal. Put simply, the US can’t make enough subs for its own needs, so it seems unlikely it will hand any over to Australia (not that it has to).

There’s also a pretty wild section on the money Australia has committed to the deal:

In summary, Australia has committed, in USD: 

• $3 billion to our own sub industry
• $3 billion to the US industry
• $3 billion to the UK industry

And zero dollars of that US$9 billion is refundable. We don’t get our money back when the stuff we ordered doesn’t arrive. 

It also reads very much like the Congressional Research Service can’t actually confirm how much money Australia has handed over to the Trump administration, where it has gone, or how it is being used. 

Alliances are built on trust, after all. I’m sure it’s fine.

Bob Katter is focusing on the important things – the handling of the excise tariff amendment for beer.

He says it is ‘UnAustralian’ and that it is “clear Labor is drunk on power [and] was moving legislation that threatens the heart of Aussie culture – having a beer”.

The original Labor Party was born in the pubs of Australia. These fellas in those days would quite literally drag you out of a pub and punch you in the face if you didn’t take a union ticket out – yet here we are, debating a law that taxes beer. I cannot think of a better example of just how dangerous and drunk on power the Labor party have become. They are now threatening the very fabric of our social and community life.”

Why is he upset? Because the bill seeks to freeze the inflation linked increase on the excise for only two years and not forever. Barnaby Joyce moved an amendment to have the excise dropped all together and Katter seconded it, but the pair did not find support in the chamber.

Pour one out.

First Jane Hume explained how the Liberal party and National party conversations are going:

Well Sussan Ley and David Littleproud are in constructive talks right now. 

I am a committed Coalitionist, but I am a Liberal first. We want to make sure that the Coalition not only agrees on the way it’s going to operate internally, but focusses externally too because this government, this terrible Labor government, is getting away with murder while the Coalition is in flux*.

We want to make sure that we bring the coalition back together, but we do so in a way that it’s sustainable and that it’s going to work in the future to make sure that we can hold this Labor government to account every single day.  

Then David Littleproud came along and spoke to Sky News (and the hallway) that the Nationals are not a faction of the Liberal party.

We’re not a division of the Liberal Party. We’re not a faction of the Liberal Party. We’re the National Party. The Coalition is not one party. We have different values, different principles, at times, on different issues, to the Liberal Party, and we’re paid to come here and to express them.

…Now the commentariat can call me all they want. They can call the National Party all they want, but we are not a faction of the Liberal Party. We’re our own party, and we’ve been respectful in the process that we went through.”

That ‘process’ included not taking Sussan Ley’s panicked phone calls or the phone calls of intermediaries as he announced the Nationals would be leaving the Coalition on the national day of mourning.

Ley and Littleproud are meeting this evening to discuss more of the mess and whether or not they can come to any sort of agreement. If Ley replaces the three Nationals in cabinet with Liberal shadow ministers (a threat which has been made) you know that this split is hardening.

While the commentary is all focused on how government spending is fuelling inflation (it isn’t) and how the government needs to reign it in (which is just fancy people talk for cutting infrastructure, services and welfare) this is the finance questions the nation’s newspapers are answering today.

One in the AFR – can we gift $250,000 for a home without fuelling a family fued while the SMH is answering whether or not it is possible to sell an investment property to your son, and not pay tax.

And the ABC spoke to a couple this morning for who the interest rate rise may delay which investment property they look at – whether it is a house or a unit.

But hey – the problem is care sector wages.

Opposition Leader Sussan Ley has left the door open to softening her demands for a reunion with the Nationals, saying the coalition can end its messy political divorce this week.

Despite a number of MPs from the former allies expressing hope they will get back together, the two parties have been unable to agree on the terms of their reunion.

Ms Ley said she spoke with her Nationals counterpart David Littleproud on Monday night, and was expecting to meet again on Wednesday.

“The coalition can re-form this week with conditions that are supported by the overlying majority of my party room,” she told reporters in Canberra on Wednesday morning.

Ms Ley said the Nationals needed to agree that shadow cabinet solidarity is mandatory, that the joint opposition party room has primacy over any individual party room, and three senators who crossed the floor two weeks ago face ongoing consequences.

Asked if there was any room to negotiate on her demands, Ms Ley reiterated that they were supported by the overwhelming majority of Liberal MPs, but said she wouldn’t discuss any detail which could undermine negotiations with the Nationals.

The split, and Ms Ley’s requests, were prompted by a disagreement over the government’s hate speech laws in January.

While shadow cabinet – a group of the most senior Liberal and Nationals MPs – agreed to back the legislation, the Nationals subsequently decided to vote against it.

That led to three Nationals frontbenchers resigning from their portfolios for breaching shadow cabinet solidarity – a convention that requires all shadow ministers to support the coalition’s agreed stance, even if they personally disagree.

Ms Ley wants to ensure neither coalition party can breach the convention in the future.

She also wants the trio of frontbenchers to be suspended from their roles for six months.

It is understood Nationals leader David Littleproud is unlikely to accept the condition, and maintains the three senators need to be reinstated for the coalition to reconcile.

Ms Ley is threatening to replace the three former frontbenchers with Liberals, if the dispute isn’t resolved by Monday – a move which insiders believe would cement the coalition split.

The ongoing infighting also threatens to drive voters away from the Nationals and into the arms of Pauline Hanson’s One Nation, a leading pollster warns.

A number of recent surveys have shown support for One Nation surpassing the coalition.

Conservative working class voters who had experienced economic decline were flocking to the anti-immigration party out of disillusionment, Redbridge Group director and former Victorian Labor strategist Kos Samaras said.

“The point is revenge, cultural and political revenge,” Mr Samaras said.

“These individuals know One Nation might not have robust policies, but want to burn the house down.”

He said the Nationals risked losing all of their seats in regional NSW and Queensland, where One Nation was expected to perform particularly well.

The Liberals and Nationals were fighting to exist in the multi-party system, he said.

“They’re getting pressured from the left and the right and they don’t have an answer for one or the other,” Mr Samaras said.

A Redbridge Group/Accent Research poll, published on Sunday by The Australian Financial Review, showed support for One Nation had jumped to 26 per cent to make them the second-most popular party after Labor.

The polling has alarmed many within both the Liberals and Nationals, and is likely to spur conservatives to challenge Sussan Ley’s Liberal leadership.

There were a couple of visitors to the press gallery hallway this morning.

Even though the parliament is going to sit in about 30 minutes, everything is a bit quieter this morning, with both major parties hoping to avoid the lime light. The rate rise, while expected (and the inflation bounce was because of holiday spending in December) is still not great for a government that is trying to get everyone to think of it as the ‘natural party of government’. So even though inflation has fallen, there are international factors at play, data centres are driving private demand, profits for businesses are increasing (these are apparently never bad things – it is only bad if care sector workers get a pay rise) and Australia needs its governments to spend money on things like infrastructure and services – the commentary is all one way.

And well, the Liberals are the Liberals. So they don’t want to say boo.

Anyway, the first order of the day is the bill to pause excise on beer.

Over on Deepcut News (which full disclosure, I contribute to) former Greens MP Max Chandler-Mather has written an interesting piece on why he thinks the Greens 2025 campaign to ‘keep Dutton out” was a mistake – because it told voters “change comes through Labor”.

MCM’s argument is that One Nation is filling the void of voters who are angry at both the political system and those who uphold it – and the Greens are missing an opportunity to show people a different way:

Among One Nation voters today, 75% think the political system is completely broken. Unsurprisingly, One Nation voters are consistently found to report some of the highest rates of financial stress. In a November poll, One Nation outpolled everyone else among Gen X and Baby Boomers experiencing a great deal of financial stress. Alarmingly for the Greens, One Nation is also outpolling them among Millennials in this key demographic – 18% to 16% respectively.

This is why the Greens’ pivot in the last federal election towards a strategy to “keep Dutton out, and get Labor to act” was such a mistake. Rather than offering a hopeful break with the status quo in the middle of a historic housing and cost of living crisis, a vote for the Greens became a vote for a Labor government and a deeply unpopular political establishment.

In the end, the underlying political message of the Greens’ “keep Dutton out” was that change comes through Labor.

He says the Greens have to change their own thinking:

The Greens need to stop conceiving of change as something that is negotiated in parliament with Labor. People already disconnected from politics will never believe anything good can come through backroom deals with the political establishment.

And they’re right. Labor and the Liberals are part of the same political establishment, tied to the same corporate and billionaire donors. As long as either is in charge, nothing is going to meaningfully change for the better.

Jim Chalmers had to front up to every breakfast show yesterday ahead of the expected rate rise, so now it is Katy Gallagher’s turn to front up now that the rate rise has come to pass.

She told ABC TV News Breakfast:

I think you heard the Treasurer say when we’re looking at the budget together, there’s a number of things we’re looking at, managing inflation, dealing with the productivity challenge. We’ve seen slight improvements in recent economic data but that’s a challenge. Productivity [hasn’t been] what we would like for the last two decades. We’ve got some effort going there, whether it be in clean energy, digital data, housing, that work is under way.

And then looking for the third component which the is what Treasurer talked about, reform. So we had the economic reform round table, some ideas have come through that. You budget considerations in May.

We’ve got quite a number – we’ve got tax cut – if you look at the tax system, we’ve got the tax cuts coming, we’ve got instant deductions we to at the election, better targeted super reforms that we’ll need to get through the Parliament. So we have some of that reform work under already. But, you know, we’ll look at some of the ideas that came out from that economic table in the considerations we have in May for the budget.

Why is One Nation outpolling the Liberals and Nationals at the moment? Sussan Ley doesn’t know (which is part of the problem, I would argue)

Polls are a point in time. I’m focused on a serious, credible, compelling agenda* to take to the Australian people along with my team that I’m very proud to lead by the next election. One Nation is a protest party. I haven’t heard from them a serious economic policy to address the circumstances that and I have just been talking about** and that every single Australian faces and it is, indeed, only the Liberal Party that has proposed the answers sensible economist, individual who runs their own household budget, commentator, dare I say***, James, has outlined the Government must cut spending and there must be a pathway to productivity and build growth in this country, because it’s growth that lifts incomes****, delivers services and gives hope.

*I will buy a coffee to ANYONE who can tell the class what this ‘serious, credible, compelling’ agenda is. The party has no policies.

**On that the Liberals and One Nation are on a unity ticket

***Only the people who agree with me are sensible is exactly how my toddler thinks

**** Wages did not grow for 10 years under the Coalition

Sussan Ley continues this interview with the same attitude she has presented most of her senior political career – just talking about what suits her.

Q: Last week, there was a funeral in Melbourne for [former Liberal MP] Katie Allen and before the funeral, members of the Liberal Party’s right faction were meeting, not so secretly, and it was well reported that they were discussing the future of your leadership and who might potentially challenge you. Have you spoken to Angus Taylor about what on earth he is up to?

Ley:

Angus is my leadership group, part of my shadow cabinet. We’ve had discussions about interest about the circumstances Australians face and about many are pertinent to the work we do here as the Opposition.

Q: Is he plotting to replace you as early as next week, though? That has been pretty widely reported?

Ley:

These are ridiculous suggestions and they’re made by people in the media*. These are not the conversations that I’m having with colleagues** and they’re not the focus of my team and I really mean that.

Because every minute that talking about these issues have just raised – and by that I mean somebody in the media don’t prosecute the really important case that we want to make. Now, for out-of-pocket payments have gone up $23,000 a year. And that is real pain. We’ve seen the Prime Minister take credit for interest rate cuts. Where is his responsibility for 13th rate rise under this Government.

Q: OK, I’ll just take you from…

Ley:

Everything going up, James…***

*The calls are coming from inside the house – you can not shut the Liberals up at the moment about how they want to replace her but just don’t know when or whether Angus Taylor will have enough numbers for now (common view is that Hastie is now going to wait until after Taylor crashes and burns at the next election and take what is left)

**That’s kinda the point, because OF COURSE the party that doesn’t respect you as leader isn’t having conversations with you about your future.

***Except Sussan Ley’s approval ratings in the public and her numbers in the party room.

What are people telling you to your face about your leadership Sussan Ley is asked on ABC TV Breakfast.

Ley:

Well, unsurprisingly, we are discussing the real elephant in Anthony Albanese’s room, which is the interest rate rise, and what that means for struggling Australians. Yesterday, there were many conversations about exactly that. When we come to Canberra to kick off a parliamentary year and we’ve got six sitting weeks out of the nine, it’s a very busy and important session. What we are focused on is the Australian people. Every minute of every day and anyone who tuned in to Question Time yesterday and saw the way that both the Prime Minister and with disdain the issue that really, as your program has illustrated, is hurting Australians, was a disgrace. That’s what people are telling me to my face and that’s what the conversations are about.

Lols.

ACTU boss Michele O’Neil also wants attention drawn to extreme heat and its impact on workers.

The ACTU says the Commonwealth’s 2025 National Climate Risk Assessment projects heat-related deaths in major cities will more than quadruple without change – rising 444 per cent in Sydney, 423 per cent in Darwin, 312 per cent in Perth, and 259 per cent in Melbourne.

Safe Work Australia data shows workers currently carry 74 per cent of the financial burden of heat-related injuries and illnesses, while employers bear just 5 per cent.

O’Neil:

No worker should be told to push through the brutal heat and risk their own life. When it’s dangerously hot, your boss should either change your work or stop your work.

A rest break or work stoppage in extreme heat can be the difference between a worker going home safe or not going home at all.

We regulate asbestos and silica because they kill people and devastate families. It’s time we treat climate hazards like extreme heat in the same way. There is no excuse for Australia to leave workers exposed without clear, enforceable rules, especially when the government’s own reports project heat-related deaths to more than quadruple in our major cities.

No worker should have to live in a home that becomes unsafe every summer, especially renters who have the least power to demand improvements. Updating the construction code and setting minimum standards for rental homes is basic public safety.

The science tells us that heatwaves are getting worse, but our regulations haven’t caught up. If countries like Japan can introduce national heat standards, surely Australia can too.

If you get sick from working in extreme heat, it should be treated like any other workplace injury – and that means workers’ compensation coverage, so you can focus on getting better, instead of worrying about paying the bills.”

Not only does the ‘tough on crime’ obsession NOT solve crime problems and does nothing to help stop people from re-offending (particularly young offenders), it also costs an absolute motza in keeping people locked up (and we do it to children as young as 10).

AAP has this report on what the ‘crime crackdowns’ cost in dollar terms:

Sentencing and bail crackdowns may be costing billions of extra dollars in taxpayer funds as the cost of maintaining prisons spikes.

Australia’s average daily prison population is at its highest level in eight years, according to data released on Wednesday by the Productivity Commission.

More than 45,000 people on average were locked up each day in 2024-25, a rise of 5.9 per cent.

Driving the increase in prisoners is an uptick in recidivism with 44.5 per cent of inmates released returning to prison within two years, the highest level since 2019.

The growing price tag of the swelling prison population is more than $5 billion per year, or about $13.7 million a day.

The yearly sum has grown more than $1.5 billion in the last decade.

While prison numbers and costs may be escalating, many crime rates are coming down.

Household crimes like property damage, break-ins and car thefts have all dropped in the past 10 years, according to the Australian Bureau of Statistics crime victimisation database.

Most categories of physical crimes have also decreased, including assaults and robberies, while incidents of sexual assault have slightly risen.

With crime rates easing, tough-on-crime policies enacted by various state and territory governments may be behind the persistent swelling of prison numbers.

The Queensland coalition government enacted “adult time for adult crime” in 2024 after a 17-year-old fatally stabbed mother Emma Lovell during a Boxing Day home invasion in 2022.

Victoria followed suit late in 2025 and also introduced the “toughest bail laws in Australia” by removing the principle of detention as last resort for young offenders.

Former national children’s commissioner and now Justice Reform Initiative spokesperson Anne Hollonds said on Friday record funds are being poured into a system that fails to reduce crime.

“In Victoria, youth detention numbers were falling just two years ago,” she said.

“Now we are seeing a rapid reversal as punitive policies take hold. This is the same failed path we have already seen elsewhere.”

NSW tightened bail laws in 2024 by making more accused offenders prove why they should not be detained and strengthening the presumption against bail for domestic violence and youth matters.

It is Extreme Heat Awareness Day, which given last week seems very timely. Independent Kooyong MP Monique Ryan and the independent crossbench will hold a press conference later today to try and raise awareness of the “growing health crisis and national communications failure”.

Ryan wants to name heatwaves in the same way cyclones are named, so people know to prepare for them.

Her petition calling for that has so far raised 2,000 signatures and there are polls on potential names (including those contributing to climate change)
We’ll find out the winner of the public poll later this morning, but Ryan says she is serious about changing how we think about extreme heat:

On Extreme Heat Awareness Day, the Albanese Government should seriously consider the proposal to formally name heatwaves. Over the past month alone, Melbourne has endured record-breaking temperatures exceeding 48 degrees, underscoring just how urgent this issue has become. 

The government has a clear opportunity to adopt lessons from 60 years of effective cyclone communication, applying them to Australia’s deadliest natural hazard. Heatwaves represent a health crisis. They kill more Australians than fires, floods and cyclones combined. 

A heatwave naming system, paired with severity categories and consistent public messaging, would improve risk awareness, support targeted health outreach like welfare checks, pop‑up cooling and emergency response resourcing, and focus accountability for climate change. 

Climate change is driving longer, hotter and more dangerous summers, while the urban heat island effect is pushing temperatures in major cities even higher. These overlapping trends make urgent action on heatwave communication essential. It will save lives.” 

Fun fact – the reason we name cyclones people names is because Clement Wragge, known as the father of naming cyclones, started naming storms after Pacific Island women (red flag) and then after politicians started passing on his projects, started adding politicians he didn’t like to the storm naming system. Then he died and it mostly didn’t happen, which made it all a bit chaotic, but during WWII it all picked up again, with alphabetised names, but turns out there only being 26 letters in the alphabet was an issue. Then it was mostly just women names (I think you can guess why) before the 1970s when there were rules put in place.

Late yesterday, there was an attempt by Senator Fatima Payman to get the Albanese Government’s FOI Bill “discharged” (removed from the list of bills the Senate will debate).

It failed – with Labor voting to keep the bill in play and independents, Greens, Jacqui Lambie and One Nation voting to discharge the bill (I may have missed some – just relying on what I could see).

Liberals and Nationals left the chamber to avoid voting either way.

“Where’s the Libs?” could be heard even over the broadcast

Rex Patrick explained the strategy behind discharging the bill versus keeping it “on the notice paper” earlier today. He thinks the bill is dead either way, but keeping it on the notice paper allows for a debate where the bill can be publicly criticised. 

If the bill survives this week, I will again become worried again that a Labor/Liberal deal on at least some aspects of the bill is possible. 

Hello and welcome back to parliament, where the big news is still the RBA’s ‘expected’ decision to increase interest rates.

That is going to set off the Liberal party who now feel they have something to talk about. And while that is true, what they don’t have is solutions. Just a vague ‘this must be the Treasurers’ fault’ for *reasons*. The Liberals keep harping on about government spending (state and federal) but that is not what the RBA pointed out yesterday. They pointed to demand in the private sector (largely thanks to data centres). Now the most recent inflation bump was, at least on the data, down to the holiday spending – given it was December, that makes sense. And we have a cautious RBA board, who love to raise at the first sign of sticking inflation, but are not as quick when it comes to cutting it. Because will this interest rate rise stop AI slop or the Ashes? No. No it will not. But it will slow the economy for most of us. And that is never a great thing.

But most of the experts having a little moment here have their little ideological battles to wage (how dare child care and aged care workers be paid a living wage! Outrageous!) so the focus is on government spending. Lots of ‘treasurer urged to ‘fix the budget’ which is hilarious because these same people don’t want to support the things that actually would get a lot more money into the budget – like I don’t know – taxing gas.

So, lots to talk about today, and none of it great. You’ll have me, a bunch of expert contributors, and the (borrowed) talents of Mike Bowers, to get you through the day. It is already coffee number three time. Ready?