Australia is concerned the situation in the Middle East could swell into a larger conflict after the US moved bomber planes.

The B-2 bombers were shifted to the Pacific Island of Guam as President Donald Trump considers whether the US should join Israel’s strikes against Iran.

Though it is unclear whether the deployment is linked to the tensions in the Middle East, Australian Defence Minister Richard Marles said he would not speculate on the why the US had moved its planes.

“We are worried about the prospect for escalation here and this entering into some wider kind of conflict,” he told Sky News on Sunday.

“We’ve been urging dialogue and diplomacy and we continue to do that now.”

The federal government has repeatedly insisted Australia is not a central player in the conflict, which was triggered in mid June when the Israeli military launched attacks on Iran in what it claimed was a bid to wipe out Iran’s nuclear program.

At least 430 people have been killed and another 3500 injured in Iran according to Iranian media outlet Nour News, while local Israeli authorities have reported 24 civilian deaths and almost 1300 injuries.

Opposition frontbencher Dan Tehan insisted the easiest way to reach a resolution was for Iran to state it will not pursue nuclear weapons and allow independent verification.

But Mr Tehan took issue with the federal government’s relationship with Israel, claiming Labor politicians “seem to have isolated themselves from the Israeli government”.

“This has left them in a situation where they’re trying to walk two sides here,” Mr Tehan told Sky News.

“What we need to see from the government is greater moral clarity as to whether they do, once and for all, want to see Iran get rid of its nuclear weapons program.”

Mr Marles maintained Iran’s nuclear and ballistic missile program was “most definitely a threat” to the peace and stability of the world, while also expressing concern about the conflict’s escalation.

“Both of those things can sit together,” he said.

“We recognise Israel’s right to defend itself and we very much acknowledge the risk that the Iranian nuclear and ballistic missile program represents.”

France and other Australian allies have also echoed similar positions.

About 2600 Australians in Iran are seeking assisted departures from the region, alongside about 1200 in Israel as the government urges travellers not to venture to either nation.

Staff from the Department of Foreign Affairs are helping Australians leave and defence assets are expected to be deployed to assist evacuation efforts.

However, the government has insisted they will not be used in combat.

Some Australians have already evacuated through land crossings but the government is also poised to help citizens leave once the airspace over both nations re-opens.

With Reuters

The man who writes the cheques for Australia’s largest state budget can finally focus on the future.

Inflation was “blaring” in NSW Treasurer Daniel Mookhey’s ears when he was compiling his first two budgets after Labor returned to government in 2023 for the first time in 12 years.

“But the challenge in front of the state and the nation is making sure that we are growing our economy fast enough to support a rise in living standards,” he tells AAP as he prepares to hand down his third. 

Mr Mookhey says Tuesday’s state budget is about the future of the state’s essential services and economic growth.

“There’s a lot of opportunity and a lot of ambition in NSW and the changes we’re making are designed to hold on to what we love … but also ensure that our kids and our grandkids have the same level of opportunity that we had,” he says.

While receding inflation and distance from the COVID-19 pandemic’s associated spending have allowed the treasurer to cast an eye to the future, issues from the past remain. 

Framed in Mr Mookhey’s parliament office is a newspaper headline relating to the underpayments scandal in the state’s workers’ compensation scheme he played a role in exposing in opposition.

The page is yellowing with age as Mr Mookhey pushes to reform a scheme he is now in charge of, and which he argues is becoming unsustainable due to the rising cost and prevalence of psychological injuries.

“It’s been a hard case to argue,” he says.

“This system is failing everybody. It’s a system that is fundamentally broken.”

Changes are simmering on the back burner after a parliamentary inquiry prevented action before the budget.

Mr Mookhey hopes reform can create a “prevention culture” that limits psychological injuries from occurring.

Outside of the workplace, he has promised some reassurance to people dealing with mental health issues and their loved ones.

“They will see more investment in mental health resources in our health system and they will see more investment when it comes to our social interventions,” he says.

However, public psychiatrists at the pointy end of mental health crises should not expect the budget to deliver a pay rise at the level they have been calling for amid resignations in protest and arbitration in the state’s Industrial Relations Commission.

The federal distribution of GST to the states also continues to frustrate Mr Mookhey after dashing his hopes of a surplus in 2024.

NSW now receives its lowest share of GST since it was introduced – about 85 cents for every dollar raised.

“What frustrates me is not so much that we support the other states, it’s just the missed opportunities,” he says.

The distribution needs to change but the tax’s bigger proportional hit on the spending power of lower-income Australians means Mr Mookhey does not support raising the rate.

“We can do better,” he says.

“What we need to focus on is just making sure the system is simple, the distribution is fair, the distribution is predictable, but also the distribution is understandable.”

Another federal issue with implications for state budgets is the rise of the black market for illicit tobacco fuelled by rising excise on dinky-di durries.

The market shift is robbing the Commonwealth of expected revenue and creating criminal complications for states.

It has already led to increased funding for enforcement within the health budget, but Premier Chris Minns indicated earlier in June a decision would have to be made about the resources devoted to combating illicit tobacco sales.

While smoke clouds what the budget might do to address the issue, Mr Mookhey notes it is a source of public anxiety.

“It’s right and fair that we respond to community concerns about it … we’re going to have to work through what is the right solution.”

The tax issues are part of what economic researchers at the e61 Institute call a “vertical fiscal imbalance” that characterises the nation.

“The states carry many of the spending responsibilities but lack equivalent revenue-raising capacity,” chief executive Michael Brennan says, warning state finances are drifting onto an unsustainable path.

But NSW will at least bank a cash surplus in Tuesday’s budget for the first time since 2021.

“Which means we’re no longer borrowing money to pay our day-to-day bills as a government,” Mr Mookhey says.

“That gives us a platform for further progress.”

Australian Public Policy Institute chief executive Libby Hackett expects the budget will be a step forward, building on previous years.

“This will be a structural reform budget: supporting better service delivery, infrastructure alignment and long-term productivity, even in a tight fiscal environment,” Professor Hackett tells AAP.

“Moreover, this budget presents a real opportunity to advance whole-of-government objectives in cross-cutting areas.”

Opposition Leader Mark Speakman sees it differently, warning the state is heading for “yet another low-vision, low-value, low-energy budget”.

“We have had not one visionary pre-budget announcement.”

Australians are embracing electrification in the name of decarbonisation, healthier homes and cheaper bills but the shift has policymakers under pressure to insulate a shrinking pool of gas users from price shock.

Ron Ben-David, a former regulator who holds a professorial fellowship with the Monash Business School, describes the flight from the gas network as a “death spiral”.

Like a runaway train, once some households start leaving the gas network, the cost of running and maintaining it increases for those who remain, prompting even more to make the switch. 

And so on, and so on.

While a win for electrification and cutting emissions, the death spiral has consequences, not least for renters and others who might struggle to get off gas.

Even middle-income households could be challenged to stump up the hefty sums needed to replace gas heaters, ovens and stoves as gas bills continue to rise.

Left unchecked, Dr Ben-David said the problem could undermine community support for the net-zero transition.

“If we lose consumer support, then we can kiss the transition away,” he told AAP.

The stranded gas asset issue has not gone unnoticed, with governments, regulators and industry all looking for solutions

Consumer and welfare groups have also been active, with Energy Consumers Australia pushing for a rule change to force developers and new customers to pay the full cost of new connections up front to stop the problem becoming even bigger.

Dr Ben-David believes there are no easy solutions to what is ultimately a political decision.

The debate boils down to “who pays for what”, with consumers, investors and taxpayers all in play.

The matter is complicated by the unusual nature of gas distribution regulation.

As natural monopolies, gas network companies are not allowed to set their prices. 

Prices must be approved by the Australian Energy Regulator under what is often described as a “regulatory compact” that ensures investor funds are returned to them during the life of the assets.

Forcing investors to cop the risk asset of stranding, therefore, allegedly amounts to a broken compact, Dr Ben-David said, making network stranding more complicated than just writing off a dud investment.

For gas network companies, “accelerated depreciation” is the answer. That effectively means asking the regulator to account for the shortened life spans of their assets so they can push up customer prices in the near term to hasten the recovery of their investments.

Governments could also help absorb some of the shrinking customer base costs but state and federal budgets are already under strain and bailing out gas networks could be politically contentious.

Dr Ben-David has put forward another option.

Under his proposed model, electricity distribution networks would underwrite the shrinking gas network. 

There’s more to his thinking, but using income generated by electricity distribution companies – and their customers – to underwrite declining gas networks is a key element.

It’s based on the rationale that electricity networks would continue to expand and have long life spans in a low-carbon economy.

While he concedes it is controversial to be adding to electricity prices to pay off gas networks, he argues the other options are just as unappealing.

He also put the call out for better ideas, and fast.

“The best time to solve a problem is before the problem takes off,” he said.

The grandfather of a 24-year-old man who died in custody has drafted an open letter to the prime minister calling on Canberra to step in and address “madness” in the Northern Territory’s justice system.

The senior Warlpiri leader and kin of Kumanjayi White, who died after being forcibly restrained by two plain clothes officers inside a supermarket in Alice Springs in May, said justice in the Territory was “in crisis”.

“Your government in Canberra has total power over the NT,” Ned Jampijinpa Hargraves, a Yuendumu man, wrote. 

“The prisons are so full they need private security guards; guards on buses and public housing officers are being given guns – this madness must stop.”

The letter addressed to Prime Minister Anthony Albanese landed ahead of protests in Sydney and Alice Springs on Saturday to demand justice for Mr White.

The senior Indigenous leader renewed his call for an independent investigation into the death of his grandson. 

The family has also been calling for the release of CCTV footage and for the officers involved to be stood down while the investigation takes place.

Federal minister for Indigenous Australians, Malarndirri McCarthy, backs an independent inquiry but despite broad support, the NT government has rejected the proposal, saying NT Police are best-placed to investigate the death.

Police allege Mr White, who had a mental disability and was in care, was shoplifting and assaulted a security guard.

In his letter, Mr Hargraves demanded immediate action from the Commonwealth, including withholding funding to the NT government until it agreed to an independent probe.

“You used this power to take away all our rights, our jobs and our assets with the NT Intervention 18 years ago today,” he said. 

“Now we demand action from Canberra to see that our rights are restored and we are protected from the racist Country Liberal Party government.”

Speaking ahead of a meeting of the Joint Council on Closing the Gap in Darwin on Friday, Senator McCarthy said deaths in custody had to end and the federal government was deeply concerned about the issue.

The Yuendumu community also lost 19-year-old Kumanjayi Walker in 2019 when he was shot by then-NT police officer Zachary Rolfe during a botched arrest.

Mr Rolfe was found not guilty of all charges over the death in 2022.

Protesters in Sydney gathered to respond to a policing conference involving the former police officer but the first responders event has since been cancelled, according to the rally organisers.

US President Donald Trump has again floated the idea of firing Jerome Powell, the Federal Reserve chair he has long attacked over interest rates he wants lowered.

“I don’t know why the Board doesn’t override (Powell),” Trump wrote in a lengthy post on Truth Social criticising Fed policy. “Maybe, just maybe, I’ll have to change my mind about firing him? But regardless, his Term ends shortly.”

Trump added: “I fully understand that my strong criticism of him makes it more difficult for him to do what he should be doing, lowering Rates, but I’ve tried it all different ways.”

Fed policymakers have long been seen as insulated from presidential dismissal for reasons other than malfeasance or misconduct, but Trump has threatened to test that legal premise with long-running threats to fire Powell.

Just last week, though, Trump set aside the idea. “I’m not going to fire him,” he said at the White House on June 12.

The Fed held rates steady on Wednesday in the 4.25 per cent-4.50 per cent range and forecast slower growth as well as higher unemployment and inflation by year’s end.

Fed Governor Chris Waller, who has been floated as a possible Trump pick to be Powell’s successor, said on Friday that with inflation coming down and the labour market showing signs of weakening, rate cuts should be considered as soon as July.

But even Waller joined the unanimous Fed decision to leave rates on hold, signalling no inclination by any of Powell’s six fellow Board members, or of the five voting regional Fed bank presidents, to “override” him. 

Elected partly on voters’ belief that he could contain high inflation, the Republican US president has imposed tariff hikes in office. Powell, echoing an academic consensus, has said some of those tariff hikes will be paid for in higher consumer prices.

Powell’s term ends in May 2026, and Trump is expected to nominate a successor in the coming months.

A Supreme Court ruling in May eased concerns that Trump could fire Powell as the justices called the Fed “a uniquely structured, quasi-private entity.” 

There is appetite for the European Union and Australia to signal a “middle finger to Trump” by uniting on a long-awaited free trade deal but some in Brussels are tempering expectations of a quick turnaround.

Trade talks kicked off in 2018 but Canberra walked away about 18 months ago over unsatisfactory market access for beef and lamb producers, and a reluctance to give up naming rights on products for geographical origin reasons, including feta, parmesan and prosecco.

Fast forward to 2025 and US President Donald Trump’s tariff antics have brought both parties back to the negotiating table.

There was speculation of a quick conclusion with the Australian Financial Review reporting European Commission President Ursula von der Leyen had flagged a trip to Australia for late July or early August in anticipation of signing a deal.

This echoed the fact she had also been quick to flag an agreement while offering Anthony Albanese her congratulations on becoming prime minister via Twitter in 2022. 

But multiple EU spokespeople have declined to confirm the travel, telling AAP a Down Under trip is “not on the radar”.

Despite acknowledging renewed political will, various sources in Brussels are cautioning patience.

“There is no rush,” according to one inside the EU Commission.

“I wouldn’t even say the end of the year, I would say more next year.” 

Jacob Funk Kirkegaard, a senior fellow with Brussels think-tank Bruegel, estimates it could take at least another six months to resolve outstanding issues on agricultural tariffs and quotas.

“The broad contour of the deal is already negotiated,” he told AAP.

“They know where the skeletons are buried. It takes a political grand bargain to do it.”

He noted that if the EU makes concessions, it would likely encounter an angry backlash from French and Polish farmers, who also opposed the EU’s deal last year with Argentina, Brazil, Paraguay and Uruguay. 

However tractor and manure street protests wouldn’t be enough to block a deal with Canberra, he said.

Amid Washington’s shift to extreme trade protectionism, an EU-Australian free trade deal would send a strong message to the Trump administration, Kirkegaard said.

“As two of America’s traditional allies, if both the EU and Australia find themselves subject to US tariffs, what better way than to do a deal with each other,” he said.

“So perhaps both countries feel this political signal is kind of a middle finger to Trump as well.” 

Back in Melbourne, Sicilian-born cheesemaker Giorgio Linguanti from That’s Amore Cheese faces an anxious wait to find out whether he can continue to market his wares using generic terms like parmesan or mozzarella.

Yet he is open to compromise.

“We should call it Australian parmesan and Australian feta because Australian milk is the best in the world,” he said.

Canberra and Brussels announced on Wednesday separate negotiations on a defence pact to boost defence industry, cyber-security and counter-terrorism co-operation.

But it would not have military deployment obligations.

Venice is divided ahead of next week’s celebrity wedding of US tech-tycoon Jeff Bezos and Laura Sanchez, with some looking forward to the glitz and glamour, while others fear it will turn the scenic city of gondolas and palazzi into an amusement park.

Many details of the wedding are still under wraps – including the precise day it will happen – but it is certain that scores of stars from film, fashion and business will arrive to see Bezos tie the knot – provided they can get past the protesters.

One group has plastered banners on the city’s famous Rialto Bridge reading “No space for Bezos!” and threatened peaceful blockades, complaining that the medieval and Renaissance city needs public services and housing, not celebrities and over-tourism.

“Bezos arrogantly believes he can take over the city and turn it into his own private party venue,” said Tommaso Cacciari, a leading light of the “No space for Bezos” campaign.

Mayor Luigi Brugnaro and regional governor Luca Zaia, on the other hand, argue that the wedding will bring an economic windfall to local businesses, including the motor boats and gondolas that operate its myriad canals.

Eleven years ago actor George Clooney married human rights lawyer Amal Alamuddin in Venice, turning the city into Hollywood on the Adriatic with a weekend of lavish celebrations.

Then, locals and tourists alike were excited to witness a memorable moment in the city’s long history of hosting stars for its film festival, the world’s oldest.

Bezos, 61, the founder of e-commerce giant Amazon and the world’s third-richest man, got engaged to journalist Sanchez, 55, in 2023, four years after the collapse of his 25-year marriage to Mackenzie Scott.

After a swirl of media speculation about the venue of what has been dubbed “the wedding of the century” Brugnaro confirmed in March that it would take place in Venice, which last year began charging tourists a fee to enter the city.

The date is expected to be some time between June 23-28 in the midst of three days of stylish celebrations.

In the face of early protests from residents who feared the arrival of thousands of celebrities and hangers-on, the city issued a statement clarifying that it would involve around 200 guests and would not disrupt Venetians’ everyday life.

Bezos and Scott had four children together, while Sanchez was previously married to Hollywood agent Patrick Whitesell, with whom she has two children. She also has a son with NFL tight end Tony Gonzalez.

Conflict in the Middle East is thousands of kilometres away from the desks of Saina Salemi and her colleague Oscar, but the pair constantly discuss blasts and evacuation warnings.

Ms Salemi hasn’t spoken to her family in Iran for more than three days due to a nation-wide internet blackout, while Oscar – who asked that his surname not be used – has no idea when he’ll next see his parents who are trapped in Israel.

“My helplessness would have been made worse had someone like Oscar not been here. There’s only so many people in your life that can truly understand a situation like this,” Ms Salemi told AAP.

Israel and Iran have been trading strikes since the Israeli military began its attack a week ago in a bid to wipe out Iran’s nuclear program, but geopolitical tensions are not dividing the two friends from Melbourne.

“Despite what these countries are putting each other through, the fact that it hasn’t got between us even for a millisecond, I feel very touched,” Oscar said.

The pair are consumed by worry for their families and appalled by the scale of human suffering in countries they remember fondly from holidays.

“I said to Ocar, I feel like I’m going crazy, because everybody around me is moving so normally and is going about their day-to-day lives, and I’m just watching a 24/7 live blog all the time,” Ms Salemi said.

“The Iranian diaspora, we are really tired of people being used as collateral damage.”

She’s angry her family in Tehran have no bomb shelter to go to and worried about what could happen to her elderly grandparents after Donald Trump warned some 10 million people in Iran’s capital to evacuate.

The president said he will make a decision about whether the US joins the conflict within two weeks, demanding Iran’s unconditional surrender.

However, Iran has warned of “all-out war” if the US joins the conflict.

“I texted my cousin last night telling him I loved him and there’s a great numbness that comes with feeling like you’re saying ‘I love you’ to someone for the last time,” Ms Salemi said.

“I’m yet to hear back from that text message.”

More than 2000 Australians have registered for assistance to leave Iran and more than 1200 have registered to leave Israel, with Australian military personnel and aircraft being deployed to help.

Oscar’s parents have barely left their bomb shelter since the conflict flared and he doesn’t know how they’ll come home, after receiving a warning they may not be safe at Jordan’s land border crossing.

“I really feel for my parents, I feel for everyone in Tehran, in Gaza, in Tel Aviv,” Oscar said.

“None of them deserve it, it’s exhausting.”

He’s grateful to have grown up in Australia where he and Ms Salemi can lean on each other for support.

“I do think that there’s something really special about this country where you can have this kind of friendship,” he said.

“I hope most Australians don’t have to understand what it’s like having family in these kinds of circumstances.”

Israeli strikes on Iran have killed at least 639 people and wounded more than 1300 others, according to a Washington-based Iranian human rights group.

Israel says Iran’s retaliatory strikes killed at least 24 people and wounded hundreds.

Stock markets have ticked higher while oil has skirted close to its biggest daily drop since April after President Donald Trump pushed back a decision on US military involvement in the Israel-Iran conflict.

Rising risks from the Middle East have loomed large on the world’s top indexes again this week.

Europe’s main bourses rose between 0.5 per cent to 1.0 per cent after similar gains across Asia, although it was touch and go whether it would be enough to prevent a second straight weekly loss for MSCI’s main world index.

Israel bombed targets in Iran, and Iran fired missiles at Israel overnight as the week-old war continued although Friday’s markets moves, which also included a modest drop in the dollar, showed an element of relief.

That was largely pinned on Thursday’s statement from the White House that Trump will decide in the next two weeks – rather than right away – whether the US will get involved in the war.

European foreign ministers were to meet their Iranian counterpart in Geneva on Friday, seeking a path back to diplomacy over its contested nuclear program.

The relief the US was not charging into the conflict sent oil prices down as low as $US76.10 a barrel, although they were last at just more than $US77 and still up four per cent for the week and 20 per cent for the month.

“Brent crude is down 2.5 per cent today in the clearest sign that fears over an imminent escalation in the Israel/Iran conflict have eased,” MUFG strategist Derek Halpenny said.

Gold, another traditional safe-haven play for traders, was also lower on the day although Nasdaq, S&P 500, and Dow futures were all in the red after US markets had been closed on Thursday.

Asian shares had gained 0.5 per cent overnight thanks to a 1.2 per cent jump in Hong Kong’s Hang Seng and as newly elected President Lee Jae-myung’s stimulus plans saw South Korea’s Kospi top 3000 points for the first time since early 2022.

China’s central bank held its benchmark lending rates steady as widely expected in Beijing, while data from Japan showed core inflation there hit a two-year high in May, keeping pressure on the Bank of Japan to resume interest rate hikes.

That in turn lifted the yen and pushed down the export-heavy Nikkei in Tokyo.

The dollar was ending an otherwise positive week lower on the day, with the euro up 0.3 per cent against the US currency at $US1.1527 and the pound 0.2 per cent higher at $US1.3494.

The US bond market, which was also closed on Thursday, resumed trading with the key 10-year Treasury bond yield flat at 4.39 per cent, while German 10-year yields , which serve as Europe’s borrowing benchmark rate, fell 2.5 basis points to 2.49 per cent.

Gold prices eased 0.5 per cent to $US3,354 an ounce, but were set for a weekly loss of 2.3 per cent.

But the main commodity market focus remained oil. Brent crude futures were last down $US1.60, or 2.2 per cent, at $US77.28 a barrel in London although they were still on track to end the week four per cent higher.

PVM analyst John Evans said the big market risk of the Middle East troubles was “unintended action that escalates the conflict and touches upon oil infrastructure”.

“The world has more than adequate supply for 2025, but not if the nightmare scenario of 20 million (barrels per day) being blocked in the seas of Arabia, however briefly that might be,” he said.

The prime minister will wait a little longer for a second-chance meeting with Donald Trump as the president pushes out his timeline to act on the situation in the Middle East.

Anthony Albanese will not go to The Hague for next week’s NATO summit, with his deputy Richard Marles to represent Australia at the event as originally planned.

Mr Albanese was considering making a last-minute dash to the talks, which could have provided an opportunity to meet in person with the US president.

The pair had been scheduled to hold their first face-to-face meeting on the sidelines of the G7 summit in Canada earlier this week.

But 24 hours before they were due to meet, Mr Trump revealed he would leave the event early to deal with escalating tensions between Israel and Iran.

The prime minister is keen to meet with Mr Trump to try to negotiate an exemption from US tariffs, advocate for the nation’s nuclear submarine deal with the US and UK and discuss defence spending.

Mr Trump is expected to attend the NATO summit, but there is no guarantee he will not pull out at the last second amid volatility in the Middle East.

The US president on Friday said he would decide whether to get involved in the Israel-Iran conflict “within the next two weeks”.

Liberal senator James Paterson earlier said the prime minister should attend NATO regardless of whether he meets with Mr Trump.

He believes it would allow Mr Albanese to co-ordinate with allies and help support Ukraine in its war against Russia.

It would also present an opportunity to discuss the situation in Iran with European partners, and discuss defence spending.

“If he meets with President Trump on the sidelines, that would be a bonus,” Senator Paterson said.

“But frankly, I think his approach of now waiting seven months to go and see the president and not going to see him in Washington DC, relying on a chance meeting on the sidelines of an international forum, is a very risky strategy.”

The prime minister wasn’t the only world leader left hanging at the G7.

Mexican President Claudia Sheinbaum, Indian Prime Minister Narendra Modi and Ukrainian Volodymyr Zelenskiy also had talks scheduled with Mr Trump the day after he left.

Mr Albanese met with senior members of the president’s economic team including US Treasury Secretary Scott Bessent, US National Economic Council director Kevin Hassett and US Trade Representative Jamieson Greer.

The talks involved trade, tariffs and critical minerals – which Australia has considered using as a bargaining chip in US tariff negotiations.