Australian households are feeling slightly less optimistic about the economy after reeling in their expectations for further interest rate cuts.

The Westpac-Melbourne Institute consumer sentiment index fell 3.1 per cent to a “cautiously pessimistic” 95.4 in September.

Sentiment has been steadily improving through 2025 amid falling inflation and interest rates, and nearly hit 100 in August – meaning optimists would’ve outweighed pessimists in the economy – following the Reserve Bank’s decision to cut the cash rate to 3.6 per cent.

But the recovery was moving along in “fits and starts” and outright optimism remained elusive, Westpac’s head of Australian macro-forecasting Matthew Hassan said.

“The cost-of-living crisis may be largely over and policy easing generating some uplift, but there is still clearly some unease about the path ahead,” he said on Tuesday.

Last week’s surprisingly strong GDP figures boosted sentiment around the outlook for the economy, but fewer consumers expect mortgage rates to be the same or lower in a year’s time.

Respondents assessed news around inflation as less favourable than in the previous quarter; likely a reaction to the shock surge in the July monthly consumer price index.

While Westpac expects the RBA board to leave rates on hold at its next meeting in late September, it is clear consumer spending will likely remain sluggish, with another cut tipped to come in November.

“Certainly, this month’s sentiment survey suggests the consumer recovery that began in mid-2024 is proceeding slowly and that further easing will likely be needed to sustain gains,” Mr Hassan said.

Years of lost purchasing power was still weighing on households, according to the latest Deloitte Access Economics retail forecasts report.

Despite the slow recovery, retailers were enjoying their strongest economic outlook in years, said Deloitte partner and report author David Rumbens.

“Retailers are finally seeing some more substantial economic tailwinds, but the long-awaited retail recovery is still taking its time,” he said.

“The extended cost-of-living crisis has created a hangover in more cautious consumer behaviour; real wages are nearly six per cent below their peak and consumer prices increased by almost a quarter in the five years to June 2025.”

Real growth in retail spending is 1.5 per cent higher than 12 months ago, which is the best result in nearly three years, but still well short of the pre-COVID average of 2.4 per cent.

The steady growth in conditions was reflected in NAB’s August business survey.

Business conditions rose two points to around the long-run average, while capacity utilisation ticked up and forward orders rose above their long-run average for the first time in almost two years. 

Business confidence fell three points but remained positive.

“Overall, the survey supports the view that the business outlook has become more positive in recent months, consistent with a better tone to official economic data of late,” said NAB chief economist Sally Auld.

Sovereign citizens and the far right pose a serious threat to Australia’s social unity, the nation’s leader warns after the funerals of two police officers whose accused killer remains on the run.

Detective Leading Senior Constable Neal Thompson, 59, and Senior Constable Vadim de Waart-Hottart, 34, died in Porepunkah, about 300km northeast of Melbourne, on August 26.

Freeman, 56, is connected to the sovereign citizen movement, which Prime Minister Anthony Albanese described as a “threat” to Australia along with far-right agitators.

“The social cohesion issue is something that causes me a great deal of distress,” he told ABC Radio on Tuesday.

“The fact that some people think that the government isn’t legitimate, the so-called sovereign citizens engage, therefore, in lawlessness because they don’t accept the law.”

He also hit out at neo-Nazis speaking from the steps of Victorian Parliament during anti-immigration rallies, describing it as a “shocking event”.

The prime minister was among thousands of mourners who paid tribute to Det Sen Const Thompson at a Victoria Police funeral in Melbourne on Monday. He also attended Friday’s service for Sen Const de Waart-Hottart.

Family, friends and colleagues of the 38-year Victoria Police veteran, who was due to retire within weeks, poured out their hearts out in an emotional service.

His partner Lisa Thompson said he taught her how to love without fear, and how to be brave when scared.

“Honey, I’m so grateful you did because I am scared,” the Benalla-based sergeant said.

“I don’t want to live my life without you and I don’t want to finish our dreams on my own. But I will, I promise.”

Leading Senior Constable Timothy Doyle said his great mate would have loved the fuss made in his memory.

“I can hear him, saying ‘you wouldn’t get the prime minister at your funeral, junior’,” he said to laughter.

Jason Williams, who met the keen fisherman, hunter and Essendon fan 25 years ago when they were detectives in the crime department, said his long-time friend knew the risks of policing.

“I say from the bottom of my heart to those who were with Thommo when this tragedy unfolded, never blame yourself for what happened,” he said.

“We know who to blame.”

The force is still coming to terms with the deaths of the veteran detective and Sen Const de Waart-Hottart.

A third officer was also wounded when 10 officers attempted to serve a warrant on the home of Freeman.

Tuesday marks two weeks since the alleged gunman, 56, was last seen fleeing into bushland in Victoria’s high country.

Police believe he might be receiving help from people within his network, offering a $1 million reward for information leading to his arrest.

More than 100 properties have been searched for the fugitive, with hundreds of officers still in the area trying to track him down.

Australia’s Future Fund has smashed its investment target, delivering a 12.2 per cent return to send the nation’s sovereign wealth fund above $250 billion for the first time.

The bumper result for 2024/25 exceeded the fund’s mandate of 6.9 per cent per year and came despite significant global economic and geopolitical uncertainty, including US President Donald Trump’s “liberation day” tariff shock.

The total value of the Future Fund increased by $27.4 billion to $252.3 billion, more than four times its value at inception in 2006.

It was established by then-Liberal treasurer Peter Costello after the sale of Telstra to strengthen the Commonwealth’s financial position and cover the costs of burgeoning public-sector pension payments.

No money has yet been withdrawn from the fund.

Future Fund chief executive Raphael Arndt said the strong return was a result of changes made since 2021 to increase the portfolio’s structural risk levels and resilience, including by increasing exposure to gold and developed market currencies.

The fund also manages several subsidiary funds including the Medical Research Future Fund valued at $24.5 billion, the $10.9 billion Housing Australia Future Fund, the $17.7 billion DisabilityCare Australia Fund and the $4.9 billion Disaster Ready Fund.

Total funds under management swelled to $318.1 billion, while $3.9 billion was paid out towards the various subsidiary fund programs.

Fuure Fund board chair Greg Combet said the result reflected its portfolio repositioning in anticipation of “profound changes” in global trading conditions.

“We have achieved these returns whilst also making significant investments into the Australian economy consistent with the national priorities in our new Investment Mandate,” he said.

The federal government in 2024 updated the fund’s investment mandate, requiring it to support “national priorities” including boosting housing supply and accelerating the clean energy transition, where consistent with delivering strong returns.

“The fund uplifted its investment in CDC, the largest data centre developer and operator nationally, ensuring capital support for the productivity growth that will be driven by AI,” Mr Combet said. 

“It will also drive demand for renewable energy and storage.”

The fund acquired a 10 per cent stake in electricity grid operator Transgrid and invested in student accommodation to support Australia’s housing and infrastructure needs, Mr Combet added.

A delighted Treasurer Jim Chalmers congratulated the fund’s board and staff for the “outstanding results”.

“This result is a powerful demonstration of the role the Future Fund is playing investing in national priorities and delivering very strong returns,” he said.

“Strong returns like these will and should always be the highest priority of the fund but this demonstrates how consistent that can be with investing in Australia’s national economic priorities where that’s responsible and appropriate. 

“This vindicates our investment mandate because it shows maximising returns is entirely consistent with modernising our economy for the future.”

The coalition vowed to overturn the government’s new mandate when it was announced, arguing the nation’s nest egg should not be raided to invest in the treasurer’s “pet projects”.

“These results prove them wrong,” said Finance Minister Katy Gallagher.

“Responsible, future-focused investments are not only delivering for the economy today but are also helping to modernise Australia and set us up for sustained growth and security in the years ahead.”

One of Australia’s largest banks will lay off thousands of employees over the next 12 months under a major restructure.

ANZ has announced 3500 staff and 1000 contractors will be cut by September 2026 as part of the $560 million restructure plan.

The bank on Tuesday said it was part of a push to reduce duplication within ANZ alongside a sweeping move to cut consultant spending.

ANZ also vowed to meet its commitments to the Commonwealth and the Queensland government regarding its Suncorp Bank acquisition with roles at the state lender set to be preserved.

“We know this will be difficult news for some of our staff,” ANZ chief executive Nuno Matos said in a statement.

“While some of these changes have already commenced, we are committed to working through the impacts as quickly and safely as we can, for both care and respect for our teams affected.”

The bank said it was looking at a $560 million restructuring charge with the final number set to be recorded in the coming full-year earnings update in November.

A strategy update will be provided to investors on October 13.

The bank said the restructure would simplify operations and focus on the priorities of customers with limited impacts to frontline-facing customer service roles.

Outgoing staff will be provided support including career advice, the bank said.

“While recognising our teams will change the way we structure the bank and deliver our priorities what won’t change is the dedication of our customer facing bankers,” Mr Matos said.

ANZ had posted a cash profit of $3.6 billion in May on the back of a five per cent jump in revenue to almost $11 billion.

Renters will have more support to flee abusive relationships under tenancy changes to overcome barriers that can trap people in dangerous living situations.

Existing provisions allow for tenancy agreements to be terminated without penalty due to domestic violence in NSW, but tweaks to the law will expand the list of “approved people” who can declare a tenant is experiencing violence. 

A number of the proposed changes still require a court order, ruling from the NSW Civil and Administrative Tribunal or action from another regulator.

They include being able to change locks without approval from the landlord when a court order, bail or parole conditions exclude an abuser from the property.

People fleeing abuse will be able to leave a shared lease due to domestic violence without informing co-tenants.

Landlords and realtors will also need permission to use images showing a tenant’s personal belongings in advertising, to prevent the potential for perpetrators to track them down.

Renters who have been listed on residential tenancy databases will be able to go to Fair Trading to get off them by providing evidence of abuse.

The tribunal will be able to rule on whether damage to properties stemmed from incidents of abuse to prevent perpetrators dodging liability, and to break up bonds to better help survivors recover their share.

Premier Chris Minns said the changes were “common sense”, coming after consultation with abuse survivors and frontline services and aimed at making the law work better in real-life situations.

“So women and families can get out of unsafe situations quickly, without unnecessary red tape,” he said.

Domestic Violence Prevention Minister Jodie Harrison said the changes should support people leaving abusive relationships and reduce the risk of further financial harm.

“Including reducing liability for property damage and supporting them to recover their share of the rental bond,” she said.

Fair Trading Minister Anoulack Chanthivong said accessing safe and affordable housing is a critical issue for people seeking to leave an abusive relationship.

“Many victim-survivors are unable to leave abusive relationships because they have nowhere else to live,” he said.

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Housing, energy and infrastructure developments could be fast-tracked in some areas and blocked entirely in others under a major overhaul of Australia’s planning rules.

The federal government is promising to enshrine “regional planning” in national law, allowing officials to consider the combined impact of developments in a particular area, instead of looking at them on a case-by-case basis.

Environment Minister Murray Watt will use an address to a green energy conference to unveil the planned reforms.

“For the renewable energy sector that means faster yeses and faster nos, while still ensuring that community and environmental concerns about potential projects are being managed carefully,” Senator Watt will tell the Smart Energy Queensland conference in Brisbane.

A major review of the nation’s environment laws, completed in 2020, found regional plans would give developers and communities more certainty about where construction can occur and where it cannot.

Labor promised to introduce nature reforms into parliament by the end of 2025, in the hopes of speeding up approvals for housing and energy projects while also better protecting sensitive ecosystems.

The government tried to get similar changes through parliament in 2024 but ran into difficulties in the Senate, where it does not have a majority.

Business groups have long called for an overhaul of Australia’s environmental protections, to get major projects approved more quickly.

“We know that business needs to plan with certainty if it’s to have the confidence to invest,” Business Council of Australia chief executive Bran Black told his organisation’s annual dinner on Monday night.

He argued the backlog of projects waiting for approval could put the nation’s transition towards clean energy, and its goal of net zero emissions by 2050, at risk.

“The significant capital investment required (to achieve Australia’s climate targets) will amount to nothing if it gets bogged down in the current approval delays,” he said.

Greens leader Larissa Waters will also address Smart Energy conference, urging the government to adopt an ambitious emissions reduction goal for 2035.

Labor needs to submit its next target to the United Nations by the end of September, and is widely tipped to select a range somewhere between 65 and 75 per cent.

The Greens are urging the government to choose a target at the upper end of that range.

“With a high Australian target, we all win with a safe climate and new economic opportunities open up,” Senator Waters will tell the conference.

Actors Olivia Colman, Javier Bardem and Aimee Lou Wood are among more than 1300 film workers who have signed a pledge to refuse to work with Israeli film institutions “implicated in genocide and apartheid against the Palestinian people”.

The Film Workers For Palestine pledge was also signed by the likes of Susan Sarandon, Mark Ruffalo, Riz Ahmed, Tilda Swinton, Julia Sawalha, Miriam Margolyes, Ken Loach, and Juliet Stevenson.

A joint statement by the group read: “As filmmakers, actors, film industry workers, and institutions, we recognise the power of cinema to shape perceptions.

“In this urgent moment of crisis, where many of our governments are enabling the carnage in Gaza, we must do everything we can to address complicity in that unrelenting horror.

“The world’s highest court, the International Court of Justice, has ruled that there is a plausible risk of genocide in Gaza, and that Israel’s occupation and apartheid against Palestinians are unlawful.”

The group said that “standing for equality, justice, and freedom for all people is a profound moral duty that none of us can ignore” and added that they “must speak out now against the harm done to the Palestinian people”.

The statement continued: “We answer the call of Palestinian filmmakers, who have urged the international film industry to refuse silence, racism, and dehumanisation, as well as to ‘do everything humanly possible’ to end complicity in their oppression.

“Inspired by Filmmakers United Against Apartheid who refused to screen their films in apartheid South Africa, we pledge not to screen films, appear at or otherwise work with Israeli film institutions – including festivals, cinemas, broadcasters and production companies – that are implicated in genocide and apartheid against the Palestinian people.”

The group said that the majority of Israel’s film companies “have never endorsed the full, internationally-recognised rights of the Palestinian people” and added that this was “despite operating in Israel’s system of apartheid, and therefore benefiting from it”.

Absolutely Fabulous actress Sawalha, who has signed the declaration, said: “Witnessing the annihilation of the Palestinians in Gaza by Israel over the past two years has splintered the depths of me, and the unrelenting silence to their suffering is unconscionable.

“As an actress and artist, I carry both the right and the duty to use my voice to shatter the silence by taking action.

“This pledge is my way of joining a global community that refuses to be intimidated, that refuses to surrender to hopelessness, and that insists on saying loud and clear, the lives of Palestinians matter.”

The pledge makes clear that it does not prohibit those involved from working with Israeli people and is instead aimed at institutions.

Signatories of the letter are not limited to actors and also include editors and cinema programmers.

Australia and Vanuatu are on the precipice of signing a landmark security and economic agreement as Pacific island leaders prepare to meet.

The Nakamal agreement will likely be inked on Tuesday when Prime Minister Anthony Albanese and his counterpart Jotham Napat meet in Vanuatu.

Mr Albanese will touch down in Port Vila to spend a day in the archipelago nation before he and Mr Napat travel to Honiara for the Pacific Islands Forum leaders’ meeting.

Mr Albanese has not confirmed he would sign the agreement but his counterpart has stated the prime minister was travelling to Vanuatu for that purpose.

The deal is said to contain a significant security element, but details have not been released.

This might focus on reducing a Chinese policing presence in Vanuatu, similar to Australia’s pact with the Solomon Islands, which commits it to reducing Chinese officers in exchange for budget aid and help expanding the local police force.

Vanuatu pushed for visa-free travel to Australia as part of negotiations but Mr Napat said this would be covered in a follow-up agreement when an initial deal was decided in August.

“The understanding is there,” he said.

The pact would go beyond security and cover economic development in areas Vanuatu named as priorities, Pacific expert James Batley said.

“From the Australian point of view, they will see this underlining and formalising their role as Vanuatu’s primary security and economic partner going forward,” said Mr Batley, from the Australian National University’s Department of Pacific Affairs.

It was unlikely to go as far as Australia’s agreements with Tuvalu or Nauru – which effectively give the federal government a veto over external security agreements – as Vanuatu wanted to preserve its longstanding non-alignment policy, Mr Batley said.

Mr Napat has stated that Vanuatu would retain its sovereignty and the agreement was based on trust, so Australia could not dictate which donor partners provided assistance.

Equally, blanket visa-free travel for Vanuatu citizens was unlikely, Mr Batley said, but there could be some travel concessions.

“I’m not sure if either side will get everything it wants,” he said. 

Officers have been told not to blame themselves for the death of a retiring policeman as the manhunt for an alleged double murderer enters its third week.

Detective Leading Senior Constable Neal Thompson, 59, received a stirring send off on Monday after a deadly confrontation in Porepunkah, about 300km northeast of Melbourne, on August 26.

Family, friends and colleagues of the 38-year Victoria Police veteran, who was due to retire on September 5, poured their hearts out in a tear-jerking service.

His partner Lisa Thompson said he taught her how to love without fear and how to be brave when scared.

“Honey, I’m so grateful you did because I am scared,” the Benalla-based sergeant said.

“I don’t want to live my life without you and I don’t want to finish our dreams on my own. But I will, I promise.”

Leading Senior Constable Timothy Doyle said his great mate would have loved the fuss made in his memory.

“I can hear him, saying ‘you wouldn’t get the prime minister at your funeral, junior’,” he said to laughter.

Jason Williams, who met the keen fisherman, hunter and Essendon fan 25 years ago as detectives in the crime department, said his long-time friend knew the risks of policing.

“I say from the bottom of my heart to those who were with Thommo when this tragedy unfolded, never blame yourself for what happened,” he said.

“We know who to blame.”

The force is still coming to terms with the deaths of Det Sen Const Thompson and Senior Constable Vadim de Waart-Hottart, who died in the same incident and was farewelled on Friday.

A third officer was also wounded when 10 officers attempted to serve a warrant on the home of Dezi Freeman, a 56-year-old connected to the sovereign citizen movement.

Tuesday marks two weeks since the alleged gunman was last seen fleeing into bushland in Victoria’s high country.

Police believe Freeman might be receiving help from people within his network, offering a $1 million reward for information leading to his arrest.

More than 100 properties have been searched for the fugitive, with hundreds of officers still in the area trying to track him down.

“It is important to remind the community of the ongoing police operation in the local area while they search for a dangerous and armed gunman who has murdered two police and attempted to murder a third,” a Victoria Police spokeswoman told AAP.

Freeman’s eldest son, Koah, compared his father to Rambo, said he could survive weeks without food and offered his condolences to the fallen police officers’ families.

“We never wanted it to end like this,” he told the Herald Sun.

He described Mount Buffalo National Park, where Freeman was last seen, as a second home to his father.

London’s underground rail network has ground to a halt as staff began a week of strikes over pay and working conditions, disrupting travel for commuters and tourists.

Almost no underground trains are expected to run until Thursday, so that people who take 3.7 million daily journeys on the “Tube” were either working from home or finding other ways to get around.

Forest, which operates 15,000 e-bikes in London, said it experienced four times its usual demand by 9am local time.

Other commuters switched to buses, or relied on the few other train lines that were working, with most reporting longer journeys.

“The prospect of it being all week, it’s a bit of a nightmare,” said legal counsel Laura Sutton, 46, who was near London Bridge station on Monday.

Transport for London, which operates the public transport network, said it had offered staff a 3.4 per cent pay rise, but that the union would only accept a deal that led to a reduction in the working week.

The RMT trade union said the dispute centred on pay, fatigue management, shift patterns and a reduction in hours.

Prime Minister Keir Starmer’s spokesperson told reporters that he wanted a resolution.

“Londoners who are trying to get to work, trying to drop their kids off in school, businesses who rely on the Tube for work and footfall will be fed up with these strikes,” they said.

Outside the Tower of London, Peter Rolf, 58, from Germany, said his family had decided to cut their two-day trip to London to one, spending more time elsewhere in England.

Patricia Ware, 75, who was visiting from her home near Chicago in the US, said it had taken much longer than it should to reach the historic castle.

“We had trouble getting a taxi to get here,” she said.

But she was still enjoying London:

“Traveling at best is a hassle, so we just go with the flow.”