The federal budget is set to take another hit from “Australia’s worst public policy decision of the 21st century thus far”.

Independent economist and proud Tasmanian Saul Eslake doesn’t hold back in his assessment of the 2018 GST deal between the then-Morrison coalition government and Western Australia.

When it was first announced, changes to the distribution of GST revenue among the states, struck after years of persistent protestations from Perth that they were getting less than their fair share, were forecast to set the federal budget back $9 billion over eight years.

But Mr Eslake now expects the cost to the federal budget will exceed $60 billion over 11 years, making it the biggest blowout in the cost of any single policy decision ever, with the exception of the NDIS.

The Commonwealth Grants Commission, an independent body that advises the federal government on the share of GST each state and territory should receive, will reveal the shape of the latest carve-up on Friday.

The distribution of GST has historically been decided based on need, which meant that resource-rich WA received a lower per capita share than poorer states like Tasmania.

But the 2018 legislation meant that in the past two financial years, WA could receive no less than 75 cents to the dollar of what it would get based on a per capita distribution.

WA’s floor will increase to the equivalent of NSW’s per capita share in Friday’s carve-up, which in the prior financial year was 83 per cent.

That means the cost to federal taxpayers of topping up the pool of GST revenue to make sure no state or territory is worse off will rise from $6.1 billion to $6.9 billion in 2026/27, according to budget estimates.

“Which I think is scandalous,” Mr Eslake told AAP.

Mr Eslake did not blame the WA government for seeking to “screw as much money out of Canberra as they can” – that’s a state treasurer’s KPI, he said.

He laid the blame at the feet of successive federal governments that have continued the deal out of fear of losing votes in the electorally-significant western state. 

“How Treasurer Jim Chalmers and Prime Minister Anthony Albanese, who profess a commitment to equity, can take almost $7 billion out of the federal budget and give it to the richest state in Australia so they can run surpluses, I cannot understand,” Mr Eslake said.

WA Treasurer Rita Saffioti said other states and the federal budget have been significantly better off since 2018 due to the higher than expected company tax collections from WA, outweighing the cost of the deal.

“Without the 2018 GST reforms, we risk $6 billion being ripped from the WA economy every year, reducing our ability to invest in the critical economic enabling infrastructure that powers our state and the national economy,” she said.

Google Maps will depend more heavily on artificial intelligence to help people figure out where they want to go and the best way to get there as part of a major redesign.

The overhaul driven by Google’s Gemini technology will introduce two AI features into a digital mapping service used by more than two billion people worldwide.

One tool called Ask Maps will expand upon conversational abilities that Google brought to the service last November, giving suggestions to users looking for things such as nearby places to charge their devices, cafes with short lines or a detailed itinerary for a road trip involving several stops and excursions.

Gemini’s recommendations will draw upon a database spanning more than 300 million places and reviews from more than 500 million contributors that have been accumulated since Google Maps’ debut more than 20 years ago.

Google executives declined to answer a question about whether the company eventually plans to sell ads to boost businesses’ chances of being displayed in Ask Maps’ recommendations.

Ask Maps initially will be available on Google Maps’ mobile app for iPhones and Android software in the United States and India, before expanding to personal computers and other countries.

In what Google executives are billing as the biggest change to the maps’ driving directions, Gemini has also created a new tool dubbed Immersive Navigation that will present a three-dimensional perspective designed to give users a better grasp of where they are at any moment in time.

The 3D renderings created by Gemini will include landmarks such as notable buildings, medians in the roads and other aspects of the terrain that drivers are seeing around them as they drive to help them get their bearings more quickly.

Google believes its AI guardrails are now strong enough to prevent the Gemini technology underlying Immersive Navigation from fabricating bogus places to go, a malfunction known within the industry as a “hallucination”.

Immersive Navigation is also supposed to help Google Maps more clearly explain the pros and cons of different driving routes to the same recommendation, as well as point to the best places to park once a user arrives at a designated destination.

The new AI-powered navigation will only be available in the US initially, on Google Maps’ mobile app for the iPhone and Android, as well as cars equipped with options to activate CarPlay and Android Auto.

Mortgage holders are being warned interest rates could hit a 15-year high by the end of the year, as surging oil prices prompt all four big banks to tip an impending rate hike.

ANZ Bank on Thursday became the latest major lender to change its prediction for the Reserve Bank’s March meeting, after CBA, Westpac and NAB revised their calls on Wednesday.

Australia’s economy was already running too hot for the RBA’s liking, and the Middle East conflict was likely to send inflation even higher, ANZ economists Adam Boyton and Adelaide Timbrell said in a research note.

“The increased inflation risks will exacerbate those inflation concerns, creating more urgency to move quickly to contain inflation expectations,” they said. 

“Inflation expectations in the ANZ-Roy Morgan Australian Consumer Confidence data are at their highest level since November 2022.”

The big four banks expect the RBA to lift the cash rate a further 25 basis points to 4.35 per cent in May, which would make for three hikes in a row if their predictions for next week also bear out.

Each 25 basis point hike adds about $90 in monthly repayments to a typical owner-occupier mortgage of $600,000.

Once the cash rate gets to 4.35 per cent, ANZ expects the RBA to go on an extended pause to assess the impact of higher rates on the economy.

“At this stage, the activity impacts on the economy will become more important,” Mr Boyton and Ms Timbrell said.

“There are already signs that the consumer spending impulse has slowed this year, and this may slip further given the dip in consumer confidence in recent weeks.”

Household spending fell for the first time since September 2024, according to Commonwealth Bank’s Household Spending Insights index for February, revealing that month’s rate rise may already be taking a toll on consumers.

CBA head of Australian economics Belinda Allen said it was still too early to tell if this was coincidence or the start of a slowing trend in household consumption growth.

“More modest consumption growth will be needed to help bring the economy back into balance and inflation back to target,” she said.

“Rising energy prices will add to inflation and constrain household incomes this year and do add a downside risk to the outlook.”

Rising interest rates will also put a dampener on consumption, with money markets almost fully priced in for three more hikes by the end of 2026 to leave the cash rate at 4.6 per cent – the highest level since October 2011.

“The escalating turmoil from the Middle East conflict and surging energy prices is poised to tighten its grip on Australian households, amplifying cost-of-living pressures at a time when inflation remains sticky,” IG market analyst Tony Sycamore said.

“Following this week’s jump in consumer inflation expectations – now at multi-year highs alongside hawkish commentary from RBA deputy governor Andrew Hauser – Australian rates markets continue to reprice aggressively towards additional tightening.”

That has sent the Aussie dollar to fresh highs against its US counterpart, although it retreated to US71.25c by Thursday afternoon as high energy prices and safe-haven demand supported the greenback.

But the longer the war goes on and energy supplies were disrupted by the closure of the Strait of Hormuz, the worse the prospects were for the Aussie dollar,  NAB head of FX research Ray Attrill said.

Australia is a net exporter of energy, so is seen as better placed than other countries to deal with rising oil and gas prices. 

But the Aussie dollar was also a risk-sensitive currency, vulnerable to sell-offs in global equity markets, he said.

In an extreme risk-off scenario, Mr Attrill predicts the Aussie could fall as low as 65c against the US dollar, but his base case scenario remains for it to stay in the low 70s throughout 2026.

A local battery minerals miner is at a turning point as its flagship project takes shape to deliver a massive production improvement, its leader says.

Liontown Resources posted a first-half loss of $184.1 million, compared to a loss of $15.6 million in the equivalent period.

The half had been an “inflection point” for the West Australian business,  chief executive Tony Ottaviano said on Thursday.

“Firstly, Kathleen Valley is delivering as designed,” Mr Ottaviano told analysts at an earnings briefing.

“We completed the transition to 100 per cent underground mining during the first half and generated over $208 million of revenue, more than double the prior corresponding period.”

The Perth-based miner’s production of spodumene, the primary source of lithium, surged 70 per cent on the equivalent half to 193 kilotonnes.

Lithium’s price jumped during the second half of 2025 as a projected supply glut and concerns around EV demand in China proved overcooked.

“We’re realising higher prices, they continue to strengthen in the second half,” Mr Ottaviano said.

“The market is also helping: we’re now seeing BESS (battery energy storage systems) emerging as a second demand engine alongside EVs.”

Access to several brownfield projects and restarts gave Liontown a major competitive advantage as lithium demand continued to rise, as new projects faced years of approvals and planning.

“Which brings me to the four million tonne expansion study underway at Kathleen Valley,” Mr Ottaviano said.

“This is a brownfield growth option from an operating asset, and there is only very few around the world that can bring on additional tonnes to the market as quickly as this option can.”

Liontown’s underlying loss was $7.7 million, which was an improvement from $10.7 million in the prior corresponding half.

Its statutory $184 million loss included a $104 million accounting charge due to a convertible note deal that was impacted by Liontown’s share price more than doubling over the half.

“An estimated $58 million gain is expected to be recognised upon conversion into equity and will be reflected in our full year results,” Mr Ottaviano said.

South Korea’s LG Energy sold its 7.5 per cent stake in Liontown in a block trade in February, but it remains one of the miner’s major off-takers alongside Ford and Tesla.

The miner left its 2026 forward guidance unchanged and projected minor impacts from surging oil prices due to the Middle East conflict.

“We’re 80 per cent renewable,” Mr Ottaviano said.

“On average, our total diesel cost is about four to five per cent of our overall cost base … so we’re pretty confident from that perspective.”

Liontown’s share price fell about 2.7 per cent by the afternoon to $1.59, on par with a similar dip in competitor PLS as the broader sector slumped.

Petrol prices are at risk of rising to levels “not seen in history” as war in the Middle East causes unprecedented disruption to oil supplies, a leading commodities expert warns.

Conflict in the Middle East has sent benchmark oil prices bouncing between the low $US80s a barrel and almost $US120 a barrel as traders tried to make sense of the impact of the closure of the Strait of Hormuz and what US President Donald Trump will do next.

Brent crude settled just under $US100 a barrel, by noon Thursday AEDT, after the International Energy Agency called on its 32 member countries, including Australia, to voluntarily release 400 million barrels of oil from their strategic reserves.

But CBA commodities analyst Vivek Dhar believes energy markets are not fully pricing in the disruption posed by the conflict.

“Our expectation that this crisis could last for months instead of weeks likely means that markets are underestimating the disruption to global energy markets,” he said in a research note on Thursday.

Brent prices could surge as high as $US150 a barrel to force down demand among developing countries once supply shortfalls trickle through the pipeline, he said.

As a rule of thumb, every $US1 rise in the price of crude oil causes petrol prices to rise by about 1c/litre at the bowser, according to AMP chief economist Shane Oliver.

That means a $US50 increase in the Brent crude price to $US150 a barrel would translate to a 50c/l rise in unleaded.

But it could rise even higher if advanced economies needed to lift prices to reduce demand too.

LNG price spikes could also exceed those seen during the outbreak of the Ukraine war, which could flow through to higher energy prices in Australia.

“If the conflict is not resolved, oil and refined product prices are at risk of rising to levels not seen in history,” Mr Dhar said.

He said that prospect would likely be intolerable for world governments and likely explains why markets are reluctant to countenance an extended closure of the Strait of Hormuz, which accounts for approximately 20 per cent of global oil and liquefied natural gas shipments.

But it is also difficult to see the US leaving without its strategic goals achieved.

“This is yet another example of geopolitics clashing with economics in this new era,” Mr Dhar said.

“This adds a wildcard element to the outlook.”

ANZ commodities analysts Daniel Hynes and Soni Kumari also said markets were underestimating how long the conflict could last.

A critical risk not priced in is the prospect of wells being shut in by interrupted power supply, insufficient staffing or unstable water access, which could cause temporary disruptions to become long-term supply losses, even if the conflict is resolved, they said.

Two foreign oil tankers were set ablaze off the coast of Iraq on Thursday morning, as Iran ramped up attacks in retaliation to US strikes.

“This appears to mark a direct and forceful Iranian response to the IEA’s overnight announcement of a massive strategic reserve release aimed at cooling runaway prices,” said IG market analyst Tony Sycamore.

West Texas Intermediate, another benchmark oil price, jumped 7.5 per cent from Wednesday’s close, “underscoring how quickly supply-disruption fears can override co-ordinated stockpile drawdowns”, Mr Sycamore said.

Energy Minister Chris Bowen was considering the IEA’s request to release oil reserves, but stressed there was no immediate supply threat to Australia.

“Any action taken as part of a collective action will be in our national interest,” he said in a statement.

“If we do join this action Australia will not be required to send fuel overseas but rather use its existing domestic reserves to take pressure out of the global market.”

State-level conditions on an open cut coal mine extension will do little to prevent methane leaks, conservationists warn.

Glencore’s Hail Creek mine expansion project in central Queensland was granted state government approval on Wednesday, but still needs to be greenlit by the Commonwealth to go ahead.

The planned footprint expansion will disrupt nearly 680 hectares, including “ecologically significant” koala habitat. 

An aerial survey done by environmental groups spotted 13 of the threatened marsupials on-site in one evening.  

Criticism has also been levelled at the project’s fugitive methane that escapes during operations.

An aerial survey by the United Nations Environment Programme found methane emissions at the existing mine site were multiples higher than Glencore was reporting.

In granting approval, the Queensland government said the extension’s impact on climate change was “low” compared to global emissions and targets.

Greenhouse gas emissions, including methane, would be managed under the company’s abatement plan and reporting rules, the government said.

Glencore has promised to investigate “pre-mine drainage”, which would involve extracting the gas from coal seams before mining begins to stop it escaping during digging.

The coal producer has committed to a study of the method within two years of project approval, but Lock the Gate Central Queensland co-ordinator Claire Gronow says that is too late. 

“Pre-mine drainage of harmful methane gas needs to occur pre-mining, not two years after mining commences.”

Dr Gronow says no genuine conditions have been placed on Glencore to reduce and mitigate methane pollution.

Aerial surveys and a pre-drainage trial before mining begins were recommended by Institute for Energy Economics and Financial Analysis ahead of the decision.

Australian Conservation Foundation climate campaigner Freja Leonard described Hail Creek as a “carbon bomb” and urged federal Environment Minister Murray Watt to reject the proposal.

“The climate and environmental damage from Hail Creek isn’t worth the relatively small quantity of coal it produces,” she said.

An additional 29 million tonnes of thermal and metallurgical coal will be mined under the expansion, with operations to continue for another three years.

Glencore has been contacted for comment. 

The coalition has promised teamwork and unity after a chaotic year involving two divorces and fresh leaders.

Queensland senator Matt Canavan was elected as the new Nationals leader on Wednesday, with Victorian MP Darren Chester elevated to deputy after David Littleproud announced he was “buggered” and quit the role.

The former Nationals leader’s departure shocked members of his party as well as backers of ousted Liberal leader Sussan Ley, after Mr Littleproud split the coalition twice.

Opposition Leader Angus Taylor toppled Ms Ley in February, with the new Liberal and Nationals leaders vowing at their first joint press conference to work through any future disagreements to prevent another split. 

“Matt and I have worked together over many, many years very successfully and we have a very strong, long standing relationship and we are both strong coalitionists,” Mr Taylor told reporters while at a Canberra steel manufacturer on Thursday. 

“We’re going to have a wonderful, beautiful relationship as a Liberal-National coalition.”

Mr Canavan said he already had a strong relationship with the Liberal leader, but said there may be differences on policy down the track.

“This is an incredibly strong relationship, because Angus and I are great mates, really good mates, (going) back a long way,” he said.

“We’ve got a great Nationals Party team as well, and sometimes we do disagree, but I’m confident that, given my great relationship with Angus, we’ll work those disagreements out.”

Breaking up the coalition for the second time since the 2025 federal election, Mr Littleproud said no one within the Nationals could serve in a shadow cabinet under Ms Ley.

He blamed her for the split after she accepted the resignations of three Nationals senators who breached shadow cabinet solidarity by voting against an agreed position on hate crimes laws in the upper house last month.

While the two leaders were able to mend the fracture, the instability ultimately lead to Ms Ley being dumped as the opposition leader.

Mr Taylor said cabinet solidarity will be maintained through its usual “processes”.

Consecutive polls have revealed disastrous results for the coalition, with the political alliance’s primary vote plunging to record lows.

One Nation has made significant gains in the polls, taking over the coalition as the second party of choice among voters, alarming conservatives they might face a wipe-out at the next federal election.

The Nationals are at risk of losing all of their seats in regional NSW and Queensland to Pauline Hanson’s party, which is expected to perform particularly well in those states, based on polling.

Nationals senator Bridget McKenzie admitted winning the upcoming Farrer by-election, which was triggered by Ms Ley’s resignation from parliament, will be a “huge test”. 

“We’re all focused on the by-election going forward, it’s going to be a huge test not just for the Nationals or the Liberal Party or One Nation, but I think for the Labor Party,” she told Sky News.

“When the prime minister came to power, he said he was going to govern for everybody.

“Well, that also means us out of capital cities and to not even field a candidate, I think says a lot about the Labor party’s reflection on the region.”

A backer of Sussan Ley said some Liberal politicians were “incredulous” at Mr Littleproud’s decision to step down.

“What he did to Sussan Ley was awful and many on the right view his actions as interference into the party’s internal workings,” the parliamentarian said.

“The whole thing is unsavoury.”

The Liberal said there were reservations within the Nationals that Mr Littleproud couldn’t take on One Nation sufficiently.

Iranian explosive-laden boats appear to have attacked two fuel tankers in ‌Iraqi waters, setting them ablaze and killing one crew member, after projectiles struck three vessels in Gulf waters.

The latest attacks mark an escalation in the conflict between Iran and US-Israeli ‌forces, raising the number of ships struck in the region since fighting began to at least 16.

Shipping in the Gulf and along the narrow Strait of Hormuz, which carries about a fifth of the world’s oil, has come to a near-standstill ‌since the US and Israel began strikes on Iran on February 28, sending global oil prices surging to highs not seen since 2022.

The ships targeted in late-night armed boat attacks in the Gulf near Iraq on Wednesday, local time, were the Marshall Islands-flagged Safesea Vishnu and the Zefyros, which had loaded fuel cargoes in Iraq, two Iraqi port officials said.

“We recovered the body of a foreign crew member from the water,” one port security official said, as Iraqi rescue teams continued searching for other missing seafarers.

It was not immediately clear which ship that person was linked to.

Iran’s Revolutionary Guards have warned that any ship passing through the Strait of Hormuz will be targeted.

US President Donald Trump has threatened to ramp up attacks on Iran if it continues to obstruct the strait.

The Thai-flagged Mayuree Naree dry bulk vessel was struck by “two projectiles of unknown origin” while sailing through the strait earlier on Wednesday, causing a fire and damaging the engine ⁠room, the ship’s Thai-listed operator Precious Shipping said in a statement.

“Three crew members are reported missing and believed to be trapped ‌in the engine room,” Precious ​Shipping said.

“The company is working with the relevant authorities to rescue these three missing crew members,” it said, adding that the remaining 20 crew members had been safely evacuated and were ashore in Oman.

Images provided by the Thai ​navy showed smoke ‌pouring out of the back of the ship.

Iran’s Guards said in a statement carried by the Tasnim news agency that the ship was “fired upon by Iranian fighters”, suggesting the first direct engagement by the Guards who ​have previously fired missiles or drones.

The Japan-flagged container ship ONE ​Majesty ​also sustained minor damage on Wednesday from an unknown projectile 46 kilometres northwest of Ras ​Al Khaimah in the United Arab Emirates, two maritime security firms said.

Its Japanese owner Mitsui OSK Lines and ‌a spokesperson for Ocean Network Express, its charterer, said the vessel was struck while at anchor in the Gulf and an inspection of the hull revealed minor damage above the waterline.

All crew are safe, they said, adding that the vessel remains fully operational and seaworthy. The owner said the cause of the incident remained unclear and was under investigation.

A third vessel, a bulk carrier, was also hit by an unknown projectile approximately 50km northwest of Dubai, maritime security firms said.

The projectile had damaged the hull of the Marshall Islands-flagged Star Gwyneth, maritime risk management company Vanguard said, adding that the vessel’s crew were safe.

Iran says the world should be ready for oil at $US200 a barrel as its forces hit merchant ships and the International Energy Agency recommended a massive release of strategic reserves to ‌dampen one of the worst oil shocks since the 1970s.

The war unleashed with joint US and Israeli airstrikes nearly two weeks ago has so far killed about 2000 people, mostly Iranians and Lebanese, as it has spread into Lebanon and thrown global energy markets and transport into chaos.

Despite what the Pentagon ‌has described as the most intense air strikes since the start of the war, Iran also fired at Israel and targets across the Middle East on Wednesday, local time, demonstrating it can still fight back.

Three vessels were reported to have been hit in Gulf waters as Iran’s Revolutionary Guards said their forces had fired on ships that had disobeyed their orders.

US President Donald Trump, who has not committed to a timeline for military operations, suggested on Wednesday he was not yet ready to call an end to the war.

At a rally in Kentucky, he said “we won” the war, but the United States didn’t want to have to go back every two years.

“We don’t want to leave early, do we?” he said. “We got to finish the job.”

Trump said US forces had knocked out 58 Iranian naval ships and that oil prices would come down and told reporters in Washington that Iran was “pretty much at the end of the line”.

“Doesn’t mean we’re going to end it immediately, but … They’ve got no navy, they’ve got no air force, they’ve got no anti-air traffic anything. They have no systems of control. We’re just riding free range over that country,” he said.

Trump said the US would now “look very strongly” at the Strait of ‌Hormuz, a now-blockaded channel along the Iranian coast that serves as ​a conduit for around a fifth of the world’s oil

“The straits are in ‌great shape. We’ve knocked out all of their boats. They have some missiles, but not very many.”

An Iranian military spokesperson said the strait was “undoubtedly” under Iran’s control.

On Wednesday, the G7 group of nations – the US, Canada, Japan, Italy, Britain, Germany and France – agreed to examine the option of providing escort for ships so they can navigate freely in the Gulf.

Oil prices, which shot up earlier in the week to nearly $US120 a barrel before settling back to around $US90, rose nearly five per cent on Wednesday, US time.

The International Energy Agency, made up of major oil-consuming ​nations, recommended releasing 400 million barrels from global strategic reserves to stabilise prices, the biggest such intervention in history, which was swiftly endorsed by Washington.

US Energy Secretary Chris Wright said Trump had authorised the release of 172 million barrels from the US Strategic Petroleum Reserve from next week.

Iranian officials ​made clear ​on Wednesday they intended to impose a prolonged economic shock.

“Get ready for oil to be $200 a barrel, because the oil price ​depends on regional security, which you have destabilised,” Ebrahim Zolfaqari, spokesperson for Iran’s military command, said in comments addressed to the US.

Four people were wounded after two Iranian drones hit near Dubai International Airport in the United Arab Emirates, though flights continued, the Dubai Media Office said. 

At Oman’s Port of Salalah, firefighters battled a blaze at fuel storage tanks after days of Iranian attacks, according to the Oman News Agency.

At sea, a Thai-flagged bulk carrier was set ablaze, and a Japanese-flagged container ship and a Marshall Islands-flagged bulk carrier were also reported to have sustained damage.

In Iran, huge crowds took to the streets for funerals for top commanders killed in airstrikes, carrying portraits of slain Supreme Leader Ayatollah Ali Khamenei and his son and successor, Mojtaba.

An Iranian official told Reuters Mojtaba Khamenei had been lightly wounded early in the war, when airstrikes killed his father, mother, ​wife and a son. 

With AP

The Australian CEO of a top-tier software giant has apologised after cutting his global workforce by 10 per cent.

In a message to staff, Atlassian CEO Mike Cannon-Brookes said the decision to shed 1600 people was incredibly difficult, as staff were left waiting for an email advising them if they were on the list.

“I believe this is the right decision for Atlassian. But that doesn’t mean it’s easy. Far from it,” he said, according to documents filed in the US stock exchange.

“I know this has a huge impact on each of you, and it weighs heavily on me and Atlassian today.

“To Atlassians who are leaving us – I’m sorry for the impact this will have on you.” 

The decision was driven by the increasing adoption of artificial intelligence.

“This is primarily about adaptation. We are reshaping our skill mix and changing how we work to build for the future,” Mr Cannon-Brookes said.

Atlassian employs about 14,500 people in 14 countries across the world, including Australia.

In February, the Sydney-headquartered software company reported $US1.6 billion ($A2.3 billion) in revenue for the three months to December 31, up 23 per cent from a year ago and ahead of expectations.

But it net loss for the second quarter widened to $US42.6 million ($A61 million), up from $US38.2 million ($A54.7 million) a year ago. 

Atlassian makes a suite of cloud-based collaboration tools, including Jira and Trello, used for software development and project management.