Iran’s potential retaliation to US military strikes could lead to a surge in the price of fuel and higher inflation in Australia, economists say.

Motorists have already seen a slight rise in the cost of fuel after the US launched strikes against three Iranian nuclear facilities.

While Australian consumers have been told not to panic about the Middle Eastern unrest, escalating conflict in the region could lead to further price hikes, AMP chief economist Shane Oliver says.

“The real risk would be if intervention by the US sets off retaliation by Iran that disrupts oil supplies,” he told AAP.

“If Iran do successfully block the Strait of Hormuz, then you’ll end up with a bigger spike in oil prices and petrol and that will have a severe economic impact.”

Mr Oliver said petrol would rise by 25 cents per litre in the likely event oil prices skyrocketed to more than $100 a barrel.

He said an increase in petrol costs could push up inflation, which would flow on to other parts of the economy.

“If the oil price went to $100 to $150 a barrel and it’s a much bigger boost to inflation, the Reserve Bank of Australia would be inclined to wait before cutting interest rates again,” he said.

“The price of airfares could go up, as well as plastic prices, which affects a lot of household goods.”

Australian Travel Industry Association chief executive Dean Long said airfares were not likely to increase immediately following the escalation in conflict in the Middle East.

However, he said travellers heading through the Middle East on the way to Europe would likely face longer journeys.

“The increase in congestion is causing delays,” he told AAP.

“With the narrowest flight path in recent memory – with Russia, Ukraine, Iran and Israel closed – the airspace is very narrow to get to Europe.

“Beforehand, there were multiple ways to catch up delays and stay on times, but in reality, there is a very narrow window to catch up delays, and there is less room for error by the airlines.”

Mr Long said there had not been any major disruptions for Australian travellers so far and urged passengers not to cancel their flights.

Prime Minister Anthony Albanese has backed America’s intervention in the conflict between Iran and Israel.

While Iran should not have access to nuclear weapons, Mr Albanese said a de-escalation was needed.

Less money will be spent on interest and more on essential state services as $120 billion in spending for the next year is revealed.

NSW Treasurer Daniel Mookhey’s third budget on Tuesday will include an expectation for gross debt to reach $178.8 billion by June.

That’s being cast as a win by Labor after the coalition left office, projecting the June 2026 debt would hit $188.2 billion.

The $9.4 billion difference would mean $400 million less in interest payments and more capacity to “secure the future of our essential services”, the government said on Tuesday.

With inflation posing fewer problems, the state can get on with tackling ongoing issues, Mr Mookhey said.

“There’s less interest in the bandaid solutions and there’s more interest in the fundamental fixes to a lot of the challenges that the state’s facing,” the treasurer told AAP in the lead-up to the budget.

“If we think we can spend a dollar better, we will.”

While his predecessors spent big on mega transport projects such as the Sydney Metro rail system, Mr Mookhey has shifted the focus of the state’s infrastructure pipeline towards schools.

About $9 billion will be spent across four years on public school infrastructure, largely focused on growing suburban communities.

Another $700 million will be allocated to the new Bankstown Hospital while $270 million will upgrade ageing police tech, courts and public spaces.

While government expenditure could top $120 billion, income will be higher and deliver the first cash surplus since 2021.

Control of gross debt weighing on the state’s $900 billion economy also ticks off a crucial election pledge.

Mr Mookhey said Labor remained focused on housing, nominating higher mortgages and rents as key reasons the state was increasingly unaffordable for millions of people.

While a housing panel of three state bureaucrats has helped bypass planning approval gridlock, NSW remains a laggard when it comes to home building.

Housing approvals fell to 44,900 in the year to April, well short of the 75,400 per year needed for Australia to achieve a target of 1.2 million new homes by 2029.

Property Council NSW executive director Katie Stevenson welcomed what she described as clear signals housing delivery and precinct development were at the heart of the government’s agenda.

But shadow treasurer Damien Tudehope said budgets were about priorities and nothing announced so far had immediately improved people’s lives.

More than 90 private jets carrying around 200 celebrity guests to the wedding of Amazon founder Jef Bezos and Lauren Sánchez are expected to arrive at Venice’s Marco Polo airport over the days ahead, the Corriere della Sera newspaper has reported.

Among those arriving in their own jets are TV personalities Oprah Winfrey, Kylie Jenner and Kim Kardashian and billionaires Eric Schmidt of Google and Bill Gates of Microsoft.

“Marco Polo airport will practically become the global capital of the star system for almost a week,” the newspaper reported on Monday. Citing aviation sources, it said that 95 landings had thus far been registered.

The first guests are expected on Tuesday. The city is already thronged with tourists crowding its narrow streets.

It is not yet known when Bezos, 61, and Sánchez, 55, will arrive. The wedding celebration is expected to be held on Friday.

Italian media report that Bezos’ private yacht, the Koru, is currently off the Croatian coast.

The couple is reported to have booked a suite at the Aman Venice, a hotel on the Grand Canal, where George Clooney and his wife Amal stayed when they got married in the city in 2014.

The entire week has been arranged by London-based event managers Lanza & Baucina.

A resources company is defending its commitment to environmental standards as it fights a landmark legal challenge to fracking under expanded national laws. 

Tamboran B2 has been given the green light to explore 15 gas wells in the Northern Territory’s Beetaloo Basin, which concerns an environmentalist group. 

Lock The Gate Alliance is asking the Federal Court to prevent the project from progressing until the government can assess the impacts under the water trigger provisions of national environmental laws.

Research and investigations head Georgina Woods said the group’s legal challenge was “very important” because work had started on the Shenandoah fracking pilot.

“We are very concerned about the potential of the project to significantly impact groundwater resources through contamination,” she said before the first day of the court hearing. 

“The whole of the Northern Territory relies on groundwater. Water is life up there.”

But a spokesperson for Tamboran B2 said the company was “deeply committed to upholding the highest environmental standards” and the project had undergone “rigorous assessment and approvals”. 

The company said its gas well exploration bid was reviewed by two independent bodies, one of which concluded the potential impact on water was minor. 

“This Federal Court action is the latest in a series of failed attempts by those wishing to delay the development of the Beetaloo Basin that would deny the economic and social benefits of the project to the people of the Northern Territory,” the spokesperson said. 

Tamboran B2 is appraising the sites with an eye to extracting natural gas through fracking, which involves injecting a combination of water, chemicals and sand into deep shale layers underground at high pressure. 

Its parent company Tamboran is the largest acreage holder and operator in the Beetaloo Basin, with about 1.9 million net prospective acres.

James Hutton SC, for Lock The Gate Alliance, said it was the largest gas project of its kind in the Northern Territory and involved drilling through “critically important” aquifers. 

He argued the drilling, appraisal, production and decommissioning of the wells would have a significant impact on delicate ecosystems and pristine areas previously undisturbed by humans. 

Mr Hutton is pushing for an injunction under the federal water trigger legislation, which was expanded in 2023 to require the assessment of the impact of large coal mining and coal seam gas projects on water resources.

Tamboran B2 had not yet referred the project to the national regulator because it was only at the approved exploration stage, its barrister Edward Muston SC told the court. 

He said there was no likelihood of any significant impact on water from the project thanks to a series of safeguards, which he likened to a stack of Swiss cheese slices. 

“What’s the likelihood of all of those pieces of Swiss cheese that are sitting together lining up in a way which means the holes will align?” Mr Muston said. 

“We would say vanishingly small in this case.”

Ms Woods said Lock The Gate Alliance felt compelled to bring the legal action because fracking was an “inherently risky activity” that risked contaminating precious groundwater. 

Anti-fossil fuels activists gathered outside the courthouse on Monday morning to show their support for Lock the Gate Alliance, holding signs declaring “No water, no life” and “Cry me a river”. 

“Stop Tamboran fracking up NT water, use the trigger,” another read. 

The Federal Court case is the landmark legal challenge launched against fracking under the water trigger and is expected to run for several days. 

Anthony Albanese has backed America’s “unilateral action” to strike Iranian nuclear facilities after a day of silence on the superpower’s decision to enter the Middle East conflict.

But in his first public comments since the US launched strikes on the facilities in Fordow, Isfahan and Natanz, the prime minister also said a wider war must be avoided.

“The world has long agreed that Iran cannot be allowed to get a nuclear weapon and we support action to prevent that,” he said on Monday.

“We don’t want escalation and a full-scale war. We continue to call for dialogue and for diplomacy.

“Iran didn’t come to the table, just as it has repeatedly failed to comply with its international obligations.”

Some US allies in Europe have been more muted than Australia in their reaction to the strikes, while UN chief Antonio Guterres labelled them a dangerous escalation.

Mr Albanese earlier convened a National Security Committee meeting.

Asked if Australia was briefed on the US strikes beforehand, or if the nation had any involvement, the prime minister replied: “This was unilateral action taken by the United States.”

Mr Albanese would not say if the Pine Gap joint Australian-US intelligence surveillance base, located outside Alice Springs, was used in the operation.

He also defended his decision to hold off commenting on the US strikes for at least 24 hours, saying Australia wasn’t a “central player in this conflict”.

A government statement on Sunday noted Iran’s nuclear and missile programs had been a threat to international security, while also calling for “de-escalation, dialogue and diplomacy”.

Australian National University expert associate Jennifer Parker said it wasn’t surprising Canberra might not have been briefed on the attack as it no longer had major forces in the Middle East.

“The Australian government was always going to have to come out in full support of the US, otherwise it would fundamentally undermine our relationship,” she said.

“You cannot defend the actions that Iran has been taking as a destabilising force in the region for a long time.”

Australia’s support for the US acknowledged what happened in the Middle East also sent “key signals” to the Indo-Pacific, Ms Parker said.

“The US telling Iran that they need to negotiate … and then action being taken does reinforce, to a certain degree, deterrence in the Indo-Pacific,” she said.

She was unclear where the actions sat when it came to international law.

Pressed on the issue of legality, Mr Albanese dodged questions.

Acting opposition foreign spokesman Andrew Hastie said the coalition had wanted to see Iran come to the negotiating table and submit to a full inspection by the International Atomic Energy Agency.

Foreign Minister Penny Wong said the number of Australians who had registered for help to leave the region had jumped to about 2900 in Iran and 1300 in Israel.

Department of Foreign Affairs staff were evacuated from the embassy in Tehran days earlier and were now helping Australian citizens and residents who made it through Iran’s border with Azerbaijan.

“That was a difficult decision to make,” Senator Wong said.

“The advice to me, which I discussed with the prime minister and the deputy prime minister, was to ensure we got our people out.”

Iran’s parliament voted to close the Strait of Hormuz, the transit route for about a quarter of the world’s oil, prompting fears prices could push to $US100 a barrel or more.

Despite fears about rising oil prices, NRMA spokesman Peter Khoury said Australian motorists should not be concerned.

“To get back to those record high prices that we saw back in 2022, you would need a catastrophe at that level to affect global supply. We’re not there yet,” he said.

Australia previously provided resources to safeguard shipping lanes, but military involvement has been ruled out following the recent conflict.

The prime minister has backed US strikes on Iranian nuclear facilities, while also urging a de-escalation of the conflict in the Middle East.

In his first public comments since the US launched strikes on the facilities in Fordow, Isfahan and Natanz, Anthony Albanese said a larger war must be avoided.

“The world has long agreed that Iran cannot be allowed to get a nuclear weapon and we support action to prevent that,” he told reporters in Canberra on Monday.

“We don’t want escalation and a full-scale war. We continue to call for dialogue and for diplomacy.

“Australia called upon Iran to come to the table and abandon any nuclear weapons program. 

“Iran didn’t come to the table, just as it has repeatedly failed to comply with its international obligations.”

The comments came after the prime minister convened a National Security Committee meeting in Canberra on Monday.

Mr Albanese defended his decision to hold off on directly commenting on the US strikes until more than 24 hours after the American bombing mission.

“We aren’t a central player in this conflict, that’s just a fact, and what we do is we run an orderly, stable government,” he said.

“This was unilateral action taken by the United States.”

Earlier, Foreign Minister Penny Wong said Washington had not made any requests of Australia.

But she would not say if the joint US intelligence surveillance base, Pine Gap, in the Northern Territory had played a role in the operation.

Senator Wong also said the number of Australians who had registered for help to leave the region had jumped to about 2900 in Iran and 1300 in Israel.

Acting opposition foreign spokesman Andrew Hastie said the coalition had wanted to see Iran come to the negotiating table and submit to a full inspection by the International Atomic Energy Agency.

“We support those strikes, and now we want to see dialogue and diplomacy,” he told ABC Radio.

“We want to see a peaceful settlement from here, and I’m just not going to speculate on what steps might be taken next.”

Department of Foreign Affairs staff were evacuated from the embassy in Tehran last week and are helping Australian citizens and residents who make it through Iran’s border with Azerbaijan.

Senator Wong has previously said that while Australia has deployed Australian Defence Force personnel to assist with evacuation efforts, they aren’t there for combat purposes.

Iran’s parliament voted to close the Strait of Hormuz, where about a quarter of the world’s oil transits through, prompting fears prices could push to $US100 a barrel or more.

Despite questions over whether Australia should do more to support its major ally, former ambassador to the US Arthur Sinodinos said combat troops weren’t the way forward.

“There’s no way we would put troops on the ground,” he told AAP.

“I don’t think the government or the political establishment here are suggesting that we just follow whatever the US is going to do.”

Australia has previously provided some resources around shipping lanes, but during the recent outbreak of violence, the government has refused to entertain the possibility of military involvement.

However, the American strikes have also been labelled as a “terrifying and catastrophic escalation” with the Greens warning further violence from Israel or the US would impact ordinary Iranian civilians.

The cost of sending a letter is set to rise as the consumer watchdog waves through a price bump to reflect the decline in snail mail.

The Australian Competition and Consumer Commission approves of the 13.3 per cent price increase, allowing Australia Post to nudge stamps for ordinary small letters up to $1.70 from $1.50. 

The final hurdle for the fee change is Communications Minister Anika Wells, who still has an opportunity to reject the change.

If finalised, the new stamp fees will kick in on July 17.

ACCC commissioner Anna Brakey said the call was based on evidence Australia Post’s letter operations were bringing in less revenue than the money it was costing to run it.

“Our final decision recommends Australia Post examine ways to alleviate affordability issues for businesses, including those subject to requirements to send physical mail,” Ms Brakey said.

Under the fee changes, ordinary large letters between 125 and 250 grams will jump from $4.50 to $5.10.

Stamps for large letters lighter than 125g will tick higher from $3.00 to $3.40.

Charities will still be offered discount rates.

Australia Post says letter volumes have declined to levels not seen since the 1950s.

“The average household purchases five to six full-rate stamps each year and the proposed increase would cost them about $1.20 extra per year,” a spokesperson said on Monday.

Even with the price increase, Australians will still be paying less than the current median price of $1.93 for a small letter across OECD postal service operators.

The self-funded government enterprise may be losing money delivering letters, but has benefited from growing appetites for online shopping and parcel delivery. 

An environmental group “very concerned” about the impact of fracking on water has launched the first test of recently expanded national laws. 

A plan to frack 15 gas wells in the Northern Territory’s Beetaloo Basin is being challenged by Lock The Gate Alliance in the Federal Court on Monday.

The group is asking the court to grant an injunction and to compel the federal government to assess the project under the water trigger provisions of federal environmental laws. 

Lock The Gate Alliance research and investigations head Georgina Woods said their legal challenge was significant because work is already underway on the Shenandoah fracking pilot.

“We are very concerned about the potential of the project to significantly impact groundwater resources through contamination,” she said. 

“The whole of the Northern Territory relies on groundwater. Water is life up there.”

Fracking involves injecting a combination of water, chemicals and sand into deep shale layers underground at high pressure to extract gas. 

“It is an inherently risky activity and does carry the risk of contamination of groundwater sources and that’s why we’ve taken this case,” Ms Woods said. 

The federal water trigger legislation was expanded by federal parliament in 2023 to require the assessment of the impact of large coal mining and coal seam gas projects on water resources.

However, the natural gas company defending the court challenge on Monday – Tamboran B2 – has not referred itself to the national regulator and the government hasn’t selected the project for consideration. 

Parent company Tamboran is the largest acreage holder and operator in the Beetaloo basin, with about 770,000 net prospective hectares.

Anti-fossil fuel activists gathered outside the courthouse in Sydney on Monday morning to show their support for Lock the Gate, holding signs declaring “No water, no life” and “Cry me a river”.

The Federal Court case will be the first legal challenge launched against fracking under the water trigger and is expected to run for several days.

Tesla has deployed a small group of self-driving taxis picking up paying passengers in  Texas, with chief Elon Musk announcing the “robotaxi launch” and social media influencers posting videos of their first rides.

Musk called the moment the “culmination of a decade of hard work” in a post on his social media platform X and noted “the AI chip and software teams were built from scratch within Tesla”. 

Teslas were spotted in an Austin neighbourhood called South Congress with no one in the driver’s seat but one person in the passenger seat. 

The automaker planned a small trial with about 10 vehicles and front-seat riders acting as “safety monitors”, though it remained unclear how much control they had over the vehicles. 

In recent days, the automaker sent invites to a select group of influencers for a carefully monitored robotaxi trial in a limited zone. 

The rides are being offered for a flat fee of $US4.20 ($A6.50), Musk said on X. Tesla investor and social media personality Sawyer Merritt posted videos on X showing him ordering, getting picked up and taking a ride to a nearby bar and restaurant using a Tesla robotaxi app. 

If Tesla succeeds with the small deployment, it still faces major challenges in delivering on Musk’s promises to scale up quickly in Austin and other cities, industry experts say.

It could take years or decades for Tesla and self-driving rivals, such as Alphabet’s Waymo, to fully develop a robotaxi industry, said Philip Koopman, a Carnegie Mellon University computer-engineering professor with expertise in autonomous-vehicle technology. 

A successful Austin trial for Tesla, he said, would be “the end of the beginning – not the beginning of the end”. 

Most of Tesla’s sky-high stock value now rests on its ability to deliver robotaxis and humanoid robots, according to many industry analysts. Tesla is by far the world’s most valuable automaker.

The Tesla robotaxi rollout comes after more than a decade of Musk’s unfulfilled promises to deliver self-driving Teslas.

Musk has said Tesla would be “super paranoid” about robotaxi safety in Austin, including operating in limited areas.

The service in Austin will have other restrictions as well. Tesla plans to avoid bad weather, difficult intersections, and will not carry anyone below age 18.

Australian banks have been slow to trim exposure to deforestation, with big agribusiness players still found to be lending to bush-bulldozing businesses.

Two years on from the Australian Conservation Foundation’s first foray into the financing of destructive land clearing, a follow-up report points to sluggish progress.

Destruction of bushland for grazing, real estate and other development contributes to climate change and threatens species, such as the endangered pink cockatoo, as well as undermining Australia’s international commitments to halt and reverse biodiversity loss.

Deforestation also poses material risks to banks, ACF corporate responsibility policy analyst Audrey van Herwaarden told AAP.

Mature trees are important for soil integrity, she said, as well as protection from extreme weather.

Landowners with poorer soil and less productive land are more likely to miss repayments, manifesting as a credit risk to the bank.

Reputational risk are also at play, with landowners caught land clearing illegally forced to pay steep remediation costs.

The five big agribusiness players, ANZ, Westpac, Commonwealth Bank, National Australia Bank and Rabobank, were linked to cases of deforestation via mortgages over land titles in the 12 months from July 2023.

Bank loans through securities on title are a common method for financing deforestation but the environmental group stressed it could not be certain the loans were used for bulldozing. 

Several mortgages were issued or reissued during or after the destructive landclearing had taken place, raising “serious questions about due diligence or, worse, wilful ignorance”.

Nearly half the cases might have been in breach of federal nature laws and the environment group had reported them to the relevant department. 

“Our analysis shows banks still have a long way to go to mitigate the risks – and seize the opportunities – associated with their impacts and dependence on nature,” Ms van Herwaarden said.

NAB, a major agribusiness lender, was twice as exposed as its peers across the 100 cases of deforestation from around the country.

A spokesperson said the bank was addressing many of the report’s recommendations, including doing more to engage stakeholders and investing in geospatial tools.

“NAB is Australia’s largest lender to agriculture and we understand deforestation is a complex issue that requires collaboration across government, industry and landholders,” the spokesperson said.

As well as calling on banks to commit to eliminating deforestation from their lending portfolios – a move already taken by Westpac – the environmental group also wants government to step up.

A national strategy to end deforestation by 2030 is a key request, as well as executing on long-delayed reforms to broken nature laws.

Both Commonwealth Bank and ANZ pointed to their social and environmental policies that dictate how they support their customers to manage deforestation risks.