Aus orders AI security crackdown + Who's to blame for inflation?

Sacha Barbour Gatt (0:08)

Hello, Sacha Barbour Gatt with you. Welcome to The Briefing. There's anger at the government today after yet another interest rate rise. We're often told that curbing household spending is the best way to clamp down on inflation, but some experts say the government is to blame and should be the ones shouldering the burden, not us.

David Koch (0:26)

There's a sense of frustration amongst Australians saying, we're doing it tough, we're doing the right thing by the Reserve Bank and inflation, yet we're on team, fight inflation with the Reserve Bank. Heck, I'm not stop working.

Sacha Barbour Gatt (0:42)

A chat with David Koch about his open letter to the Reserve Bank is coming up in the second half of this episode. But first, it's time for the headlines with Just Me Again on Wednesday the 30th of September.

SPEAKER_3 (0:54)

Australians are paying a very hefty price for that war in the Middle East and today that price became a bit steeper with this decision from the independent Reserve Bank.

Sacha Barbour Gatt (1:05)

That was the Treasurer there speaking after yesterday's decision by the Reserve Bank that saw the official cash rate lifted to 4.6 percent. It's the highest interest rates have been in Australia in 15 years. Now, this latest increase has seen the cost of the average mortgage of $730,000 increase by more than $5,000 in annual payments since January, or an extra $480 a month. The news didn't come as a surprise yesterday, but now the blame game has ramped up along with questions about what happens next. Opposition leader Angus Taylor had this to say.

SPEAKER_4 (1:40)

The current interest rates are a result of Labor's actions. Let's be clear. And we know that this is a government that is spending too much. We also know it's an economy that is not working and that drives up inflation and it drives up interest rates.

Sacha Barbour Gatt (1:57)

Jim Chalmers spoke after the decision, saying the war in Iran is continuing to have a massive impact on inflation in Australia, but agrees the government has a major part to play too.

SPEAKER_3 (2:08)

So we do take responsibility for our part of the fight against inflation. That's why we will continue to manage the budget in a responsible way, roll out cost of living help in a responsible way and deal with these longer term challenges as well.

Sacha Barbour Gatt (2:21)

In terms of what happens next, the RBA governor has flagged future hikes are possible, perhaps even likely, with two more decisions due before the end of the year, one in November and the second in December. In speaking of her decision, Michelle Bullock blamed a number of factors on the need to hike rates, including the war in the Middle East, energy prices, economic growth and inflation, along with the AI boom.

SPEAKER_5 (2:44)

Separately, the global AI investment boom has driven significant price rises for some inputs within the AI supply chain, including software costs and some commodity prices.

Sacha Barbour Gatt (2:55)

Some economists have also started sounding the alarm on a possible recession, which would be declared if we see two quarters of negative GDP growth in a row. One economist has put the chance of that at 50-50. Now all of this talk around who's to blame and who should be shouldering the burden, I actually had that discussion with David Koch ahead of the rates decision yesterday, in which we were pretty sure we knew what was going to happen. But his whole point is that the role of governments is much bigger than what they're letting on and what they're prepared to admit to. And he says this starts from local to state to federal governments of all persuasions, all political sides, and he questions the idea that lifting interest rates is the best way to tackle inflation or the fairest way. So that is today's Deep Dive, and you can listen to that after the headlines.

The Greens will start a two day retreat in Sydney today with the new leader of the party set to be decided. Now, this, of course, follows the shock resignation from the top job by Larissa Waters, who will take medical leave to deal with a pre-existing kidney condition, she says has gotten worse over recent months. So far, two contenders have formally thrown their hats in the ring. Sarah Hanson-Young put out a statement on Instagram asking the party for its support in electing her the new leader, saying she will fight with everything she's got. While Maureen Faruqi also announced her intention to run alongside Nick McKim, who would be her deputy. In her statement, also posted to Instagram, Faruqi vowed to take the fight up to labour for wreaking havoc on the economy and nature. Both women in their statements thanked Waters for her leadership and wished her a speedy recovery. It's worth noting Waters, which we mentioned yesterday in the headlines, is intending to return to represent Queensland in the Senate, but she will take that medical leave first. So she has quit the leadership of the Greens, but hasn't quit politics at this stage. Now, today's retreat of the Greens had actually been planned before Larissa Waters' sudden departure from the top job. And it was initially set to discuss policy and strategy. And look, I'm sure those conversations will still happen, but now the focus is going to turn to who the next leader will be. Now, it's an 11-party room members who will be there, and they are likely to choose the new leader. It's not for sure, but that is pretty much what everyone's expecting to happen. Now, both women, Faruqi and Hanson-Young, had plenty of support on the Instagram post, but a lot of it was drowned out by calls from Greens members across the country to actually be allowed to vote on who becomes the leader. Now, unlike Labor and the Liberals, to a certain extent, in certain ballots, these big leadership decisions don't include rank-and-file members, don't include the grassroots. It's purely the federal representatives, of which we heard there are just 11 at the moment. So there have been calls, including from former Greens housing spokesperson, Max Chandler-Mather, to let rank-and-file members have a say in who the next leader of the Greens would be. So I don't see that happening for this vote, but you can tell that there is rising support for that to be a feature of future leadership ballots.