‘A tough ask’: coalition braces for by-election defeat
Coalition parties have conceded holding onto the seat of Farrer will be a tall order ahead of the crucial by-election.
Voters will head to the polls on Saturday to replace former opposition leader Sussan Ley in federal parliament, following her resignation.
While the electorate has been held by coalition parties since the seat’s creation in 1949, the contest is looming as a showdown between One Nation’s David Farley and independent Michelle Milthorpe.
Should One Nation win, it will be the first time the minor party has taken a seat in the lower house at an election, while Ms Milthorpe is seeking to win after coming close to unseating Ms Ley at the 2025 poll.
Deputy Liberal leader Jane Hume said a win for the party in the seat would be difficult.
“We know it’s a tough ask, when a long-serving local member retires, a by-election is always difficult,” she told ABC Radio on Friday.
“We’ll be fighting for every single vote, not taking anyone for granted.”
Senator Hume warned against voters turning anger for the Labor government into a protest vote against the major parties and going with One Nation.
“The good folks of Farrer definitely know that they’re angry at the Albanese government,” she said.
“They’re beginning to understand that a vote for One Nation will simply entrench the Albanese government, and a vote for teal will simply mean that you get Greens politics.”
Nationals leader Matt Canavan also admitted reclaiming Farrer for the junior coalition party would be a struggle.
“There’s no doubt it’s an uphill battle for us, it’s a real challenge,” he told ABC Radio.
One Nation leader Pauline Hanson said she was confident ahead of Saturday’s poll.
“(Mr Farley) is going to be very beneficial on the floor of parliament, working with Barnaby Joyce … we’re going to have such a voice,” she told Sky News.
“It’s going to put a clear message to all those other people out there. A vote for One Nation is not a waste of a vote.”
The comments came after a video emerged of Liberal senator James Paterson in a scuffle outside a pre-poll centre in Albury with a One Nation volunteer.
The Liberals have been running campaign ads on Mr Farley’s political past in Farrer following revelations he had previously tried to run for Labor.
But Senator Hanson said Mr Farley had not been a member of Labor.
“Regardless of it, everyone out there who’s voting this election, a lot of people never voted for One Nation before. They’ve been associated with some other political party before One Nation,” she said.
“I’m sick of the dirty games constantly being directed at One Nation all the time because they know they’re losing their support. They know they’re losing the votes and they can’t handle it.”
As of Wednesday, 36,000 people had voted early in Farrer with the Australian Electoral Commission also receiving 9000 postal votes.
Price impact uncertain from gas reservation scheme
An east coast gas reserve will help prevent shortfalls, a federal minister says, but uncertainty remains on how much the scheme will bring down prices for households.
Under the reservation plan, gas exporters will have to set aside 20 per cent of their volume for use in the domestic market.
The scheme will come into effect from July 2027, and apply to three LNG exporters based in Queensland.
Industry Minister Tim Ayres says gas prices will come down as a result of the scheme, but hasn’t detailed the amount consumers can expect to pay in the future.
“We are not making predictions about specific price levels, but this will provide the lowest possible price for Australian households and Australian industry,” he told ABC TV on Friday.
The scheme will be grandfathered, with gas export contracts signed before the reservation plan was announced in late 2025 being excluded.
The gas industry has criticised the proposal, saying there was a lack of detail and could cause a downturn in investment.
Senator Ayres said the federal government would be working closely with the sector on the scheme on how it would work.
“We’ll be working through those details over the coming months with industry to make sure that there’s not scope for industry to … game the process,” he said.
Nationals leader Matt Canavan, also a former resources minister, said the government was playing catch up on a gas reservation.
The coalition did take a policy of a gas reservation on the east coast to the 2025 federal election, which would have added between 10 to 20 per cent extra to domestic supply in its first year of operation.
“I’m putting it out there to them to me how a 20 per cent reservation policy is going to make a difference when 35 per cent of gas in eastern Australia is already supplied to domestic market,” he told ABC Radio.
Weapon-maker investments stoke warnings for Future Fund
Australia has been warned it could be in breach of international law after it was revealed the Future Fund has invested millions in weapons companies involved in Israel’s bombardment of Gaza.
The nation’s sovereign wealth fund has invested $8.6 million in Israeli weapons company Elbit Systems and $13.6 million in Lockheed Martin, which supplies military war planes to the Israeli Air Force, according to a recent Future Fund investment report.
It has also injected $165.3 million into Palantir, which has supplied AI-driven technologies to Israel for its offensive in Gaza.
Another $72.2 million has been devoted to Bank Hapoalim, Bank Leumi and Israel Discount Bank, which were named on a United Nations database as furthering Israel’s illegal settlement activity in the West Bank, East Jerusalem and the Golan Heights.
Established two decades ago, the total of funds managed by Future Fund was $337.2 billion as of March 31.
In a letter sent to Treasurer Jim Chalmers and Finance Minister Katy Gallagher from the Australia Palestine Advocacy Network, the federal government has been urged to address the Future Fund’s investments and stymie the flow of Australian money to Israeli weapons in its May budget.
“The Future Fund was set up for our children’s future, but it’s being used to fund the killing of children in Palestine,” the advocacy network’s executive officer, Katie Shammas, said.
Australia has recognised the state of Palestine and for years recognised Israeli settlements in the occupied territories as illegal.
The federal government has also sanctioned Israelis responsible for inciting and perpetrating settler violence.
But Ms Shammas warns the sovereign wealth fund’s investments create a contradiction that also puts Australia at risk of breaching international law, with the 2024 Advisory Opinion of the International Court of Justice reaffirming the settlements’ illegality.
The IDF’s bombardment and starvation of Gaza has killed more than 72,000 people and destroyed the territory’s infrastructure, leaving four per cent of its cropland undamaged and accessible, according to the UN World Food Program.
A genocide case against Israel has also been brought to the International Court of Justice, but the nation’s prime minister has rejected the accusations.
Israel’s military campaign in Gaza began after designated terror group Hamas killed 1200 Israelis and took about 250 hostages on October 7, 2023.
A federal government spokesperson told AAP the Future Fund invests independently of the government and cannot be legally directed where to invest.
However, the spokesperson said the Future Fund Board invests in accordance with relevant laws, including applicable sanctions, and excludes activities banned under treaties and conventions signed by the government.
“The board and the Future Fund Management Agency have robust processes in place to ensure these exclusions are applied appropriately,” the spokesperson said.
AAP has approached the Future Fund for comment.
‘Inflationary’ WA handouts could inflame GST debate
“Unnecessarily inflationary” handouts in the cashed-up West Australian budget are likely to displease the Reserve Bank, according to a top economist.
And such was the largesse on offer in Thursday’s budget – headlined by a $2.4 billion surplus – it could also supercharge the GST wars.
WA Treasurer Rita Saffioti confirmed the state’s eighth consecutive surplus, with major spends underpinned by a royalties boom and GST take.
There is a four-year infrastructure pipeline of $44.3 billion, including a much-needed boost to support housing stock.
However, it was the cash handouts that caught the eye, including to motorists and families.
Every WA licence-holder will receive $100 – irrespective of whether they drive a gas-guzzler, an EV or a bike – while families will be handed $250 for every high school student, and $150 for each in primary school or kinder.
The cost-of-living relief was announced two days after high inflation caused the central bank to raise interest rates owing to high inflation.
On announcing the rise, RBA governor Michele Bullock urged governments, state and federal, to look for ways to constrain demand.
AMP chief economist Shane Oliver labelled the handouts “unnecessarily inflationary” and “a classic example of why we cannot rely on politicians to keep inflation in check”.
“They are in complete defiance of RBA governor Bullock’s comments on Tuesday,” he said.
“They just make it harder to get inflation back down and will put more pressure on the RBA and hence mortgage holders.”
The handouts also run counter to Premier Roger Cook’s pre-budget pledge to target cost-of-living relief, although there is plenty of that too.
A $1 billion package funds a new carers gold card, expanded free public transport, capped regional flight costs for locals, and energy rebates.
BankWest Curtin Economics Centre director Alan Duncan said it would be wrong to characterise the budget as un-strategic.
“It was a budget that was looking to try and address bottlenecks in the system, address shortages of housing, shortages of skills, address infrastructure struggling to keep pace with population growth,” he said.
“It was a really welcome scale of commitment to those issues.”
There’s no doubt Western Australia’s economy is powering the nation, the question is, how much of that largesse should it keep, and how much should it share with the less well-off.
The past eight years of combined surpluses – which tallies more than $23 billion – correlate to a 2018 policy by Scott Morrison’s government to increase its GST distribution.
That move has been labelled the “worst public policy decision of the 21st century” by economist Saul Eslake, but is cheered in WA.
Prof Duncan said he saw the debate as live, but without a compelling case for change.
“I would not take this budget as a signal that says WA is swimming in it,” he said.
“The use of the additional revenues have been very smart, exactly what you should be doing, not locked into recurrent spending, and looking to the longer term.”
Sensation, controversy: premier portrait to be unveiled
It’s the Archibald, so everyone has an opinion.
Ahead of the winner’s announcement on Friday, 59 finalists have been on public display at the Art Gallery of NSW, with various critics weighing in.
“It’s no surprise that the Archibald Prize is once again a chaotic collection of disparate pictures varying spectacularly in style as well as in quality,” wrote The Australian’s Christopher Allen.
The annual $100,000 contest has gone for sensation and controversy that will attract a mass audience, with too many works painted from photographs, he argued.
Critic John McDonald believes the award has put too much store in inclusivity rather than quality, with the Archibald treated as light entertainment.
“The result is outstandingly mediocre, a sideshow rather than an art show,” he wrote.
And that’s just their take on the finalists; the winner will ultimately be chosen from a crop of more than 1000 entries vying for Australia’s premier portrait prize.
The portrait competition has been running for more than a century, and as has become tradition, a long list of famous Australians have posed as subjects for the 2026 edition.
They include Governor-General Sam Mostyn and actors Marta Dusseldorp, Susie Porter and Sheridan Harbridge.
There’s also musician Mick Turner, surfer Layne Beachley, fashion designers Nicky and Simone Zimmermann, and Alemais founder Lesleigh Jermanus.
Artist Sean Layh has already won the $3000 Packing Room Prize with his portrait of actor Jacob Collins as Hamlet.
The winners and finalists in all prizes will be on show at the Art Gallery of NSW until August 16 before touring regional NSW and Victoria.
‘Decline’: housing downturn looms as rate hikes bite
Australia is on the cusp of a housing market downturn as interest rates and affordability woes sap buyer demand, new data suggests.
Sydney and Melbourne are already in the early stages of decline while price growth across the mid-sized capitals is losing momentum, Cotality’s latest Housing Chart Pack found.
Combined capital city home values rose just 0.2 per cent in April, with the property analytics firm’s research director Tim Lawless warning the national market could dip into negative territory within months.
“Sydney and Melbourne are already five months into the early phases of decline, while price growth is slowing across the mid-sized capitals,” Mr Lawless said.
“Listings are picking up as demand softens, interest rates are rising, while affordability and serviceability pressures are biting.”
A significant increase in distressed sales or mortgage arrears wasn’t expected, Mr Lawless told AAP.
It would only likely occur if a worse-than-expected housing outcome were accompanied by weaker-than-forecast labour market conditions, or a larger than expected jump in interest rates.
The forecast comes after the Reserve Bank lifted the cash rate to 4.35 per cent, the third hike so far in 2026 that have fully reversed cuts in 2025.
Over the past four decades, Australia’s housing market has recorded 10 downturns lasting at least three months, Cotality said.
Rising interest rates, tighter lending conditions and affordability pressures are among the most common triggers.
Sydney dwelling values fell 0.6 per cent in April and are now one per cent below their November 2025 peak.
Melbourne prices also dropped 0.6 per cent over the month and sit 2.3 per cent below their March 2022 high.
Despite the slowdown, sharp differences remain across the country.
In Perth, values surged 26 per cent over the past year compared to Melbourne’s two per cent growth, highlighting the sizeable gap between the strongest and weakest capital-city markets.
Brisbane, Adelaide, Perth and Darwin all remain at record highs.
The market shift is also beginning to favour buyers after years of tight conditions.
New property listings rose to 39,319 nationally over the four weeks to early May, 4.7 per cent above the five-year average.
Despite the downturn, most homeowners remain well insulated from a downturn after values climbed by a third nationally over the past five years, Cotality said.
REA Group senior economist Eleanor Creagh agreed that April marked a “turning point”, with major capitals leading a downturn in national house prices.
“Australia’s housing market is rebalancing, with April marking a clear turning point in the cycle,” she said.
A range of factors including ongoing housing undersupply, population growth and a resilient labour market will soften any downswing, she said.
Billions more set in train for contentious rail project
Australian taxpayers will shell out billions of dollars more in the federal budget to help fund Victoria’s controversial Suburban Rail Loop.
Treasurer Jim Chalmers’ fifth financial blueprint will include an extra $3.8 billion for the massive infrastructure project, for which preparatory work started in 2023.
Prime Minister Anthony Albanese said Suburban Rail Loop East – which will connect established train lines in the suburbs of Cheltenham, Glen Waverly, Box Hill and Clayton – would make Melbourne’s economy more productive and improve connectivity.
The cash splash takes the Commonwealth’s spend on the project to $6 billion – still $5.5 billion short of the amount the Victorian government wants from its federal counterpart for the rail line.
“Ensuring Victorians can get into greater Melbourne and across suburbs, rather than having to go into the CBD then back out, helps speed up travel times, get cars off the road and increases opportunities for businesses in Melbourne’s east,” Mr Albanese said.
Tunnelling for the project is expected to start by the end of 2026, with the project scheduled to be running by 2035.
But the rail loop has been much maligned for the first stage’s $34.5 billion price tag.
The Victorian government argues the spending is worthwhile because it will reshape how people travel around Melbourne, creating new hubs in the suburbs and generating thousands of jobs.
Despite the criticism, the cost per kilometre is forecast to be similar to comparable projects such as Sydney’s Parramatta-to-CBD Metro, which is under construction.
Victorian Premier Jacinta Allan praised her federal counterparts, saying they were a “partner in Canberra who gets what our growing state needs”.
“The Suburban Rail Loop will slash travel times and cut congestion for busy families,” she said.
The government angered farmers and regional leaders this week when it announced a major freight rail line intended to connect Melbourne and Brisbane would be cut short because of cost blowouts.
The budget will include plans to pare back the Inland Rail project and instead end it at Parkes in central NSW after analysis showed the cost had soared from $16.4 billion to $45 billion.
The federal budget will be handed down on Tuesday.
Final showdown set in Rebel’s fiery fight with co-star
The curtains are set to close on the fiery high-profile court battle between Hollywood actor Rebel Wilson and the star of her directorial debut film after two weeks.
The pair had nothing but mutual admiration for each other when they began working together on musical comedy The Deb, which Wilson directed, co-produced, and starred in.
But three years later, the Pitch Perfect star and Charlotte MacInnes are on opposite sides of a heated defamation lawsuit in the Federal Court.
“Unfortunately, what started as a dream has turned out to be a nightmare,” Wilson wrote in her sworn statement.
The sentiment was echoed by MacInnes, who claimed the older actor defamed her in a series of social media posts that suggested she was a liar and a sellout who walked back a sexual misconduct complaint to further her career.
The posts claimed the rising star confided to Wilson – and later recanted – that she felt uncomfortable when the film’s co-producer Amanda Ghost asked to have a shower and a bath together.
MacInnes has denied making or retracting a complaint, insisting she was not uncomfortable when the pair shared a bath in their swimwear after Ms Ghost suffered a medical episode in September 2023.
The legal fight is set to conclude on Friday with closing remarks from both sides.
Accusations of dishonesty were flung from both corners when the hearing began two weeks ago.
“(This is) a malignant allegation against my client that she sold the allegation of sexual harassment in exchange for her own professional and commercial benefit,” MacInnes’ barrister Sue Chrysanthou SC said.
She argued Wilson had been embroiled in an increasingly tense dispute with her co-producers about the budget as well as a bitter fight over writing credit at the time.
The Hollywood actor took out defamation insurance the day after finding out she wouldn’t be credited as a writer on The Deb so she could “go ballistic on social media”, Ms Chrysanthou said.
“Ms Wilson was not a whistleblower who was seeking to protect a young actress,” she asserted.
“She raises, we say, this non-existent allegation that had been put to bed for her own commercial benefit.”
Wilson’s barrister Dauid Sibtain SC dismissed the suggestion as “preposterous”.
He argued MacInnes dishonestly changed her story in exchange for future opportunities, which have since materialised as a lead role and a six-figure record deal.
“She changed her story … to ensure her career as an actress and musician progressed by appeasing Ms Ghost,” Mr Sibtain told the court.
“Ms MacInnes knew that Ms Ghost was the person who had the power to make her acting and music dreams come true.”
He argued the young actor had not suffered any damage to her reputation or experienced any slowing of her career after the social media posts, contrary to her allegations.
Justice Elizabeth Raper is expected to reserve her decision after closing addresses conclude on Friday.
‘ISIS brides’ return home to chaotic airport scenes
Three Australian women with ties to Islamic State could face court as soon as Friday on slavery, crimes against humanity and terror charges after returning home following years in a Syrian refugee camp.
The trio is part of a larger group including children who boarded a flight in Damascus before landing in Sydney and Melbourne on Thursday evening.
Years ago, the women travelled to the Middle East with their partners who intended to fight for Islamic State.
There were chaotic scenes upon their arrival: in Melbourne, intermittent scuffles broke out between members of the media and a group of men, some wearing masks, who escorted some of the group to a waiting minibus.
Some of the men told media to stop recording, including one who yelled “turn your f***ing cameras off”.
Heavily armed police officers kept the groups apart and barked orders at the crowd as the women and children were guided into the vehicle.
In total, three women will be charged with eight offences, AFP Assistant Commissioner Stephen Nutt told reporters in Canberra on Thursday night.
They include a 53-year-old, arrested in Melbourne who is facing four crimes against humanity – slavery charges, including keeping and using a slave, and engaging in slave trade.
A 31-year-old woman, also arrested in Melbourne, is facing two slavery charges.
In Sydney, a 32-year-old woman was charged late on Thursday night with entering a declared area and joining the Islamic State group.
The 32-year-old was expected to face Downing Centre Local Court on Friday.
Once the two others are formally charged, a court date will be locked in.
Further investigations into the group are ongoing.
The senior AFP officer would not answer questions about the fate of the children, many of whom were born in Middle Eastern prison camps notorious for squalid conditions and the presence of extremist groups.
But the group of young people is expected to need significant support to help them adjust to life in Australia and to determine whether they’ve been radicalised while overseas.
Some of the women travelled willingly to support their partners who wanted to fight for Islamic State, but advocates for the group say others were coerced or only went to the Middle East to keep their family together.
There were still unanswered questions about the financial cost of the cohort returning to Australia, opposition home affairs spokesman Jonno Duniam said on Thursday, claiming it may cost as much as $2 million a year to monitor each person.
“That’s a lot of money being spent on managing 13 people who I say we should have done more to prevent coming back in the first place,” he told Adelaide radio station FiveAA.
Education Minister Jason Clare said the government had confidence in federal police’s ability to protect the community from any potential risks.
“This is not their first rodeo. The Federal Police have done this before,” he told reporters in Sydney on Thursday.
It would take time for the children to be able to go to school and take other steps to integrate into Australian society, and that would be guided by police, Mr Clare said.
The senior minister added that while nobody would have sympathy for anyone who supported Islamic State, the young people involved had no choice in who their parents were, and the trauma they have experienced would be with them for some time.
Fuel bonus as WA posts eighth straight budget surplus
Motorists and families will bank cash handouts in Western Australia courtesy of another bumper state budget surplus.
The state Labor government has announced a $2.4 billion surplus in its 2026/27 budget, its eighth straight set of books in the black.
Off the back of another bumper year for iron ore, it has also upgraded the current year’s surplus to $3.5 billion, allowing for a suite of new measures.
Among more than $1 billion in cost-of-living relief in Thursday’s budget were a new carers gold card, energy rebates, capped regional flight costs and free public transport initiatives.
While not the biggest line item in the budget, two payments are sure to be the most popular.
The state’s 2.1 million motorists will get a $100 “fuel support payment” to offset rising costs, while mums and dads will continue to receive $250 for every secondary school student and $150 for every primary and kindergarten student.
The money will be paid directly to bank accounts.
Ms Saffioti said the payments would help Western Australians “weather the economic storm”, including the fuel crisis.
“We will not be swept off course; this budget will support Western Australians in navigating our way through the changing and unpredictable swell,” she said.
WA’s rude fiscal health included net debt of $34.5 billion this financial year, the lowest per capita in the nation.
Victoria, by contrast, is $176 billion in the red, as revealed in its budget on Tuesday.
Much of that is down to the state’s biggest export: iron ore, which has enjoyed another bumper year in price and volume, sending excise flowing into WA’s coffers.
Total income in mining royalties hit $11 billion this year, also bolstered by higher average gold and lithium prices.
“You can always bank on resources in a time of crisis,” Chamber of Minerals and Energy WA chief executive Aaron Walker said.
“In a world of uncertainty, iron ore, gas and gold keep getting sold.”
The revised surplus is also down to conservative budgeting.
The state last benchmarked the price of a tonne of the red dirt at US$97, but as the average price in 2025 soared to US$104.70, it has banked a windfall, offset slightly by the strong Aussie dollar.
WA is also a beneficiary of a 2018 shift by Scott Morrison’s coalition government, backed in by the Albanese government, to set a “GST floor”.
Under that deal, at least 75 cents in each dollar of GST revenue received by the federal government is returned to each state.
While many economists have criticised that decision and other states argue to revise the deal, WA champions it as integral to its success.
“Instead of criticism from the other states, a simple thank you would be nice,” Ms Saffioti said.
“We will double down in our fight to protect the 2018 agreement and ensure Western Australia is not punished for our economic success.”
The Chamber of Commerce and Industry WA chief economist Daniel Kiely called it a “building block budget that sets a strong foundation for future growth”.
However, the chamber was disappointed by a lack of “meaningful reform”, including payroll tax concessions.
The cash handouts were the day’s biggest surprise – much of the budget spend had been laid out in previous weeks, as has become customary for cashed-up governments bearing gifts.
That included billion-dollar spend-ups in health infrastructure and housing, investment in clean energy projects and public transport.
WA BUDGET 2026/27 AT A GLANCE
* Surplus: $2.4b – down from $3.5b in 2025/26
* Revenue: $55b – up 4.4 per cent from $52.6b
* Expenditure: $52.5b – up 6.9 per cent from $49.1b
* Net debt: $40.2b – up 16.8 per cent from $34.5b
* Interest repayments: $1.5b – up 19.2 per cent from $1.3b
* Iron ore price (2025/26): $US104.7 / tonne
* Unemployment: 4.0 per cent now – 4.25 per cent in 2026/27
* Economic growth: now – 3.25 per cent, next year – 2.25 per cent