Data centres will likely be the sticking point in testy negotiations between Canberra and the states on cutting environmental red tape. 

Handing over all responsibility for environmental approval of projects to states and territories was the subject of a meeting between state ministers and their federal counterpart Murray Watt in Brisbane on Friday.

While developers will still have to navigate federal environmental law, the changes would allow those assessments to be done by each state alongside their own regulations, halving the number of governments to navigate.  

But less than a year remains before the looming mid-2027 deadline for states to sign on, with only NSW and WA having inked bilateral agreements.

“If anything, it’s actually happening faster than I expected,” Mr Watt told ABC TV on Friday, stressing delicate federal-state agreements could not be rushed.

“We do not want to see our national environmental requirements being reduced or weakened by a rogue state or territory.”

Harmonising restrictions on polystyrene food trays, packing peanuts, plastic confetti, heavyweight plastic shopping bags and reconciling state-to-state models for how to handle dead solar panels and batteries were also on the agenda at the Brisbane round-table. 

It comes after weeks of debate over new national standards for artificial intelligence infrastructure which could require developers to provide their own renewable energy.

Queensland and the Northern Territory have appeared to receive a carve-out from mandates for centres to provide their own power, allowing for sites in those jurisdictions to be fueled by coal and gas.

That much was hinted at by a consultation paper on the burgeoning standards released by the federal government on Friday, which floated setting national minimum standards for investment in renewables but granting leeway to certain states. 

“AI standards will operationalise the requirement for large data centres to invest in new renewable electricity supply … taking into account state-owned generation as considered by National Cabinet … or where jurisdictional arrangements may not yet meet the standards,” the paper read.

Most of Queensland’s and nearly all of the Northern Territory’s power generation is publicly owned, which the consultation paper flagged could mean those jurisdictions could lower the renewable electricity quotas for their data centres.

“(They can apply) if they can demonstrate their alternative energy mix would result in clear benefits for grid stability and lowering electricity prices for customers,” it said.

Two-thirds of Queensland’s electricity comes from coal, with gas providing more than 80 per cent of the NT’s power.

Economists at one of Australia’s big four banks expect the Reserve Bank to raise interest rates imminently after the central bank’s governor issued a dire warning about inflation.

Michele Bullock told a parliamentary hearing in Canberra that it appeared that inflation was worse than the central bank had expected at its last meeting in August.

At the time, Ms Bullock said inflation risked coming in above the bank’s forecasts and, if that happened, it might have to raise rates again.

“Developments since then suggest that, although growth in the Australian economy is slowing, some of these upside risks to inflation appear to be materialising,” Ms Bullock said on Friday.

With the conditions for a hike appearing to be met, that was enough for Westpac chief economist Luci Ellis to bring forward her rate rise prediction from November to September.

Ms Bullock’s testimony to a House of Representatives committee was the latest in a string of hawkish appearances by top RBA officials that have convinced economists and traders that the bank is more determined to get inflation under control, even at the expense of jobs.

Inflation was too high, Ms Bullock said, retiring the bank’s narrow path for good.

“The bottom line is that we need to get inflation back down because if we don’t, that is a worse outcome across the board,” she said.

The Iran war, the AI boom, and a particularly strong El Nino have heaped pressure on energy, food, and tech prices.

“There is little sign of resolution in the Middle East conflict,” she added.

The benchmark Brent crude price remained above $US104 a barrel, following attacks by Iran-backed Houthi forces on Saudi Arabian oil infrastructure.

Despite a modest oil sell-off overnight, Commonwealth Bank head of commodities Vivek Dhar warned prices could be forced to rise as high as $US150 a barrel.

Global oil supplies were still diminishing at the same time as China was ramping up oil imports.

Mr Dhar estimated there might be only five to 10 weeks before global oil and fuel inventories run dry.

“Inventory depletion raises the risk that Brent oil futures need to rise to $US150 a barrel to trigger uncontrolled demand destruction (i.e. where high prices force lower demand) in emerging and developing Asian economies,” he wrote in a research note.

As firms were increasingly seeing no end in sight to the war and price increases, they were growing more inclined to pass on costs to consumers, which risked entrenching inflation, Ms Bullock said.

Businesses had delayed passing on prices as long as possible, but they could not go on much longer, said Andrew McKellar, chief executive of the Australian Chamber of Commerce and Industry.

“Profitability and cash flow are under real pressure, particularly for smaller businesses,” he told reporters in Canberra.

Higher for longer interest rates and fuel prices would hit economic growth, but that has been swamped by the AI boom, which has pushed up demand in a way the central bank did not foresee.

“We’re just back from the US and in addition to … the upside risk of inflation from the Middle East, what is also very striking is how strong the AI and tech boom is and has been,” bank deputy governor Andrew Hauser said.

After inflation came in hotter than expected in July, money markets have steadily raised the chance of a September rate hike.

Following Friday’s hearing, a September rate rise was almost fully priced in, with another hike expected by March.

Advanced economies around the world were entering a higher interest rate environment after recent rises by the Federal Reserve and the Bank of Japan, Treasurer Jim Chalmers said.

“Markets are expecting multiple interest rate hikes in other countries and that’s because the war in Iran, which has dragged on and dragged out for more than six months now, has pushed up inflation very substantially.”

Japan’s central bank on Friday raised the benchmark interest rate to 1.25 per cent from 1.0 per cent, a 31-year-high. 

The Bank of Japan has been trying to normalise monetary policy after decades of keeping interest rates near or below zero to try to encourage more borrowing and spending to counter deflation and pull Japan’s economy out of the doldrums. 

Inflationary pressures are rising because of the war in Iran, which has sent oil prices soaring in recent months. 

That is a big negative for resource-poor Japan, which imports virtually all its oil. 

The rate increase, coming at the end of the two-day monetary policy board meeting, was expected, widely figured into recent global markets. 

The raise on Friday comes after the US Federal Reserve also raised its key rate. 

It raised its benchmark interest rate on Wednesday for the first time since 2023 in an effort to quell stubbornly high inflation. 

The US has also been pressuring Japan to raise rates because of concerns about the weakening yen. 

Analysts say the Bank of Japan could raise interest rates another time later in 2026, or possibly early 2027. 

The nations intervened together recently to prop up the yen. 

The US dollar is trading at about 155 yen. 

It reached above 160 yen earlier in 2026. 

The Bank of Japan has set a target inflation rate of about two per cent. 

Inflation is about that now in Japan, although some consumers complain that the recent surge in prices is too much, especially in gas and oil-related products. 

Tokyo’s benchmark Nikkei 225 rose after the Bank of Japan decision was announced. 

Australian shares have had a flat final session to end the week slightly lower, as the Iran war and a tighter outlook for global interest rates kept investors subdued.

The S&P/ASX200 fell 1.2 points on Friday, down 0.01 per cent, to 8,731.2, as the broader All Ordinaries gained 12 points, or 0.13 per cent, to 8,922.9.

The top-200 shed 0.11 per cent in a fifth week of losses of the past six, making early August’s 9,296.7 record high seem like a distant memory.

Local mining stocks put up a fight in the final session before the weekend, with raw materials stocks up 1.4 per cent as copper and precious metals prices bounced from their recent sell-off.

However, banks and interest rate stocks dragged after Reserve Bank governor Michele Bullock outlined a hard road ahead in the central bank’s inflation battle, as ongoing oil supply disruptions pressured price growth.

The Australian dollar is buying 71.26 US cents, up slightly from 71.17 US cents on Thursday at 5pm.

“Congratulations!”, “great to hear from you”, and “that is wonderful news!”

So replied an AI chatbot to a terminally ill patient who confessed to considering ending their life through voluntary assisted dying.

Senior Liberal MP Andrew Hastie related the interaction during a parliamentary inquiry into artificial intelligence in Canberra on Friday.

The user, a constituent within Mr Hastie’s Western Australian seat of Canning, had emailed with news of the exchange in July, he said.

Mr Hastie, who has advocated for Australia to develop AI sovereignty, said it demonstrated how “wanting” the chatbot was in terms of its ability to uphold the ethical standards of broader, human society.

On the eve of Friday’s hearings, big tech companies took the opportunity to warn the federal government Australia needs to slow down its artificial intelligence use and create better security laws.

The inquiry is probing Australia’s embrace of AI and the policy settings needed to protect against its social, environmental, security and privacy risks.

Prime Minister Anthony Albanese was due to depart to the US on Friday for talks on international measures to prevent online harm and meet the challenges posed by AI.

“AI presents an enormous opportunity for Australia for our economy, for workers and for the jobs of the future,” Mr Albanese said in a statement.

“But we must make sure this growth happens in a way that works for Australians and in our national interest.”

Among the more tangible flare ups surrounding the rollout of AI-enabled technologies concerns the use of smart glasses capable of covertly recording people.

Public Service Minister Katy Gallagher is spearheading efforts to ban or limit their use in government departments, a move that has sparked debate about whether the public should be afforded the same protections.

Greens senator David Shoebridge said the step was welcomed, but only banning smart glasses in commonwealth buildings protected the government more than its citizens.

“We shouldn’t have smart glasses wandering about through the public sector, but nor should we have them in gyms, nor should we have them in beaches, nor should we have them at supermarkets,” he told reporters on Friday.

The Greens want smart glasses banned from import for 12 months while tighter policies are established.

Liberal senator Jonno Duniam backs the sentiment, telling ABC Radio the glasses are “frankly, creepy”.

“Until we properly assess them and have safeguards in place, why will we allow there to be a free for all?” he said.

Also on Friday, Employment Minister Amanda Rishworth chaired of roundtable of key employers in the bid to adopt a national best-practice guidance for AI use in Australian workplaces.

”To realise the potential productivity gains from AI, workers and businesses need the capability to adopt new technologies with confidence that appropriate safeguards are in place,” Ms Rishworth said in a statement ahead of the roundtable, attended by employers including Commonwealth Bank, Microsoft, AGL, Telstra and Kmart.

Treasurer Jim Chalmers will on Friday provide a preview regarding the controversial technology from next week’s 2026 Intergenerational Report.

Dr Chalmers is expected to examine what AI means for productivity, jobs and investment over the next four decades.

The Office of AI is also due to launch public consultation on the development of AI standards for the nation.

The federal government on Thursday released a consultation paper on the future of AI training and large data centres, rolling out across the nation.

The power-hungry facilities have run into concerns about their energy use and sparked major planning disputes, added to doubts about the technology’s overall value to society.

Mr Albanese used a keynote speech at the University of Sydney in July to lay out his expectations for big tech operators in Australia and hopes to legislate national AI standards in early 2027.

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Changing migration policies is hindering Australia’s chances of attracting the world’s best and brightest minds, industry leaders are warning.

Builders, aged-care workers and educators fronted a parliamentary probe into skilled migration in Canberra on Friday, the morning after Immigration Tony Burke announced long-awaited reforms to student visas, working holiday-makers and over-stayers.

Chopping and changing arrangements only exacerbated a core problem, the committee was told.

“It’s the boom and bust cycle on all things, we need some certainty and stability,” Universities Australia chief executive Luke Sheehy said.

“There’s been incentives … they’ve come and gone.”

Australia also lacked a clear definition of “regional” so it knew where to steer migrants to, Mr Sheehy said.

“At some point, the Gold Coast was a region, Adelaide was a region,” he told the inquiry.

“The more we continue to tinker with it, the less attractive we become … it sends a terrible signal to the outside world.”

As part of the changes, Labor will ban international students and graduate visa holders from bringing their families with them, with small carve-outs for PhD students the university sector argued neglected the needs of smaller regional unis.

“If secondary visa holders are going to be restricted, we believe that there will be a case for regional students studying at regional campuses to be excepted,” Regional Universities Network representative Graham Brown told the MPs.

Those outside the big smoke are also trembling at the prospect of working holiday-makers drying up under the proposed reforms.

Backpackers will now have to enter a lottery for a shot at one of the 45,000 second-year working holiday visas – down from 57,000 today – with third-year visas slashed from 31,000 to just 5000.

“We will have fruit rotting on the vines,” Tasmanian Premier Jeremy Rockliff said on Friday in response to the changes.

“If you don’t pick the fruit, there are no jobs in packing, no jobs in transport, no jobs in marketing, it must be reversed otherwise it will destroy the … job opportunities of young people.”

A total overhaul of skilled visas was needed, according to opposition migration spokesman Jonathon Duniam, who said the coalition’s fully fleshed-out policy was still weeks away.

“There needs to be a complete reformation of the skilled visa list … in line with actual need in this country,” he told ABC TV.

“The visa hopping, which they’ve attempted to make some remedies to, is a massive concern, we don’t think they’ve gone far enough on that.”

Geological belts rich in copper, gold and critical minerals have been discovered in southeastern Australia, at a time of surging global demand and commodity prices.

The good news comes from a ‘deep dive’, under a 35-year government initiative to unlock resources key to the nation’s energy transition and future prosperity.

The huge project examined 300,000 square kilometres spanning South Australia, NSW, Victoria and Tasmania.

Geoscience Australia’s Delamerian Project, completed with the support of its state counterparts, crunched data from millions of geochemical data points, aerial and ground surveys, and more than five kilometres of drilling.

If taken to production, the stretch could be worth billions, with copper now trading at all-time highs on the back of global supply constraints and surging demand for the energy transition, electrification and grid upgrades, and data centres and artificial intelligence.

Gold prices have also been strong due to safe-haven demand and central bank buying, as investors seek insurance against currency devaluations and soaring sovereign debt around the globe.

The project has helped scientists better understand the potential of one of Australia’s largest undercover geological provinces, project leader Chris Lewis said.

“The Delamarian project really has given Australia a much clearer picture of a major geological province that’s largely been hidden beneath a lot of the younger sediments,” he told AAP.

While the project’s findings don’t estimate mineral volumes, it does give exploration companies confidence to narrow down potential deposits.

Among the key discoveries was that the Delamerian region of the Earth’s crust is not one mineral province but a series of distinct metallogenic belts formed during a series of episodes of tectonic evolution.

Similarly, the project allowed scientists to combine a semi-fragmented knowledge base into a more coherent regional understanding of the area’s geology, how it formed, and its resource potential.

“And that matters, because it helps to identify what opportunities there might be as we transition to a net zero future, particularly for materials like copper, gold, and other critical minerals,” Mr Lewis said.

Similar projects underway in the federal government’s Resourcing Australia’s Prosperity program include deep dives in Queensland’s Georgetown-Julia Creek and NT’s Birrindudu regions.

The latest findings, released on Friday, are an example of the value of such investment, Geoscience Australia chief executive Melissa Harris said.

“These results are an example of the value Australians are seeing from the Australian government’s 35-year investment in nationally significant … geoscience,” Ms Harris said.

Applied geoscience underpins roughly $76 billion in economic value each year, supporting industry, infrastructure and decision-making across the country, equivalent to 3.5 per cent of Australia’s gross domestic product.

Labor should make visa processes faster rather than copy Donald Trump’s immigration playbook, according to political rivals and human rights activists who have slammed a move to reopen detention centres for overstayers.

Immigration Minister Tony Burke on Thursday announced the scheme aimed at drawing down the roughly 77,000 unlawful non-citizens in Australia.

More of those people will now be placed in detention for a matter of weeks, Mr Burke said, although the government will encourage them and others to leave of their own accord.

Greens immigration spokesman David Shoebridge said the policy was comparable with President Donald Trump’s move to use US Immigration and Customs Enforcement (ICE) to round up and detain overstayers.

“If you don’t want your immigration changes to look like what Donald Trump does, don’t contract with the same private multinational prison company to open detention centres in Australia, because that’s what Labor has said they’re doing,” he told reporters on Friday.

Senator Shoebridge challenged Labor to reintroduce the rest of the pre-2015 visa programs, which largely limited migration detention to criminals, not visa over-stayers.

Labor should stop focusing on net migration figures and instead increase resources to process visa applications and speed up the appeals process, he said.

“Maybe we can have a parliament that bases its immigration policy on evidence and what has worked in the past, rather than … something that Donald Trump has reheated in his microwave.”

A report by the International Detention Coalition in 2015 found the Community Assistance Program pilot had a 93 per cent compliance rate and offered a significantly cheaper alternative to detention.

Australia’s pre-2015 migration detention regime put children in a “horrific pipeline,” former head of the Australian Human Rights Commission Gillian Triggs told AAP.

“There were 1100 children held in detention without education, for more than a year and longer for some, but detained indefinitely,” Dr Triggs said, referencing a 2014 report published by the commission.

“Most of those children were severely mentally and physically ill … the damage that was done to children and families is well documented, and probably unique globally.”

The report helped spur significant reductions in number of migrant children detained in Australia.

In the intervening decade, indefinite detention without reasonable prospect of being returned to one’s own country has been outlawed by a landmark 2023 High Court decision, but it’s unclear how that might apply to this change.

Labor’s plan would also involve hiring 100 new compliance officers and freeing up 250 beds, as well as potentially repurposing a 100-bed quarantine facility near Melbourne Airport used during the COVID-19 pandemic.

Ramping up removals – voluntary or forced – would help bring net overseas migration down from 292,100 to meet budget forecasts of 245,000 in 2026/27 and 225,000 each year thereafter.

Mr Burke described the proposed new system as “modest”.

“When people overstay, they come into detention, you give them a bridging visa first, at the end of the bridging visa, they come into detention and then they leave,” he told the ABC’s 7.30 program on Thursday.

Five womenswear stores will close just days after an Australian fashion retailer went into voluntary administration, as the receivers try to find a buyer for the struggling business.

Sydney-based fashion business Cue Clothing Co, which operates women’s labels Cue and Veronika Maine, was founded in 1968.

Now, four standalone Cue stores and one Veronika Maine store will shut down, administrators Kate Warwick and Vaughan Strawbridge from FTI Consulting said on Friday.

The chain, which went into administration on Tuesday, has around 50 stores across Australia and also sells its apparel at Myer and David Jones.

The Levis family last year sold the chain to British distressed assets investor Hilco Capital, which specialises in turning around underperforming businesses.

But an improvement in sales could not offset higher overhead costs.

There had been good initial interest from potential buyers, with expressions of interest due in early October, the receivers said.

The five stores to close include Veronica Maine in the exclusive Sydney suburb of Mosman, and Cue in Woden in the ACT, Parramatta in western Sydney, Armadale southeast of Perth and Melbourne central.

Australian fashion brands are having a tough time due to increased competition from fast fashion stores and online retailers like Shein.

Mosaic Brands, the owners of Katies, Noni B, Autograph and Crossroads, entered voluntary administration in 2024 and all its roughly 700 stores were shut down by receivers in early 2025.

Colette by Colette Hayman, which had 140 stores, entered voluntary administration in 2020 and emerged as an online-only retailer, with its handbags sold at David Jones.

Cue opened its first store in Sydney’s Strand Arcade almost 60 years ago.

An Australian startup aiming to make green hydrogen work for heavy industry has launched an AI-optimised production line making electrolysers to split hydrogen from water.  

Hysata has opened the first part of its manufacturing platform, called HysataFab, at its 8500-square-metre headquarters in Port Kembla, south of Sydney.

The company celebrated its fifth birthday in July with its first heavy industry export customer and though the deal is still under wraps, it expects to deliver a large-scale electrolyser in the first half of 2027.

Electrolysers split hydrogen and oxygen from water using electricity generated from clean sources, but the amount of power used can make the process uneconomic.

The Hysata electrolysers were designed in conjunction with the University of Wollongong. 

Hysata maintains it makes the most efficient electrolysers in the world, and its production line efficiency will be boosted by artificial intelligence monitoring the process, learning from it and making improvements.

In a project worth almost $100 million at Port Kembla, three production lines will be housed covering electrode, membrane and cell and stack manufacture, with the electrode line opened on Friday.

Additional investment will expand the factory to 200 megawatts of capacity, making it the largest electrolyser manufacturing facility in the southern hemisphere.

Hysata chief executive officer Paul Barrett said the company had two compounding efficiency advantages – more hydrogen per megawatt and more product per line, leading to cheaper hydrogen.

“We built Hysata to get more hydrogen out of every unit of electricity. We are now doing the same thing to manufacturing, getting more product out of every line,” he told AAP.

Hysata electrolysers used 20 per cent less energy than any of the incumbent technologies and that was getting the company traction in global markets, Dr Barrett said.

The company’s heavy use of data collection and AI tools to monitor and learn from that data enabled the company to “sweat the manufacturing equipment” to maximise efficiency, he said.

Green hydrogen was critical to decarbonising sectors that cannot simply electrify, such as shipping, aviation, steelmaking and other heavy industry, Dr Barrett said.

After generating headlines in the early 2020s, investment in renewable hydrogen has slowed, with several major Australian developments cancelled.

The prospects of hydrogen-fuelled cars and homes were undercut by the superior economics of electrification.

“The hype has gone and we can no longer seriously talk about hydrogen heating every home or powering every passenger car, and frankly nor should we,” Dr Barrett said.

Hydrogen should be seen as a chemical feedstock to make value-added products such as ammonia for fertiliser, green steel production and low-carbon fuels for aviation and shipping, he said.

“There are fantastic opportunities globally for electrolysers and we’re proud to be doing it in Australia.”