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The Guardian - AU
The Guardian - AU
National
Elias Visontay and Amy Remeikis

Cash rate cut to new historic low of 0.1% – as it happened

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What we learned, Tuesday 3 November

That’s it for tonight, thanks for reading. To recap today’s developments:

  • The Reserve Bank of Australia has slashed its official cash rate to a new historic low of 0.1% as it desperately tries to prop up an Australian economy that has been smashed by the coronavirus crisis. The RBA also said it would buy $100bn of government bonds from banks over the next six months by printing money in a quantitative easing program.
  • Victoria recorded its fourth consecutive day of zero coronavirus cases, as Twilight Payment won the Melbourne Cup.
  • South Australia is set to open its border to Victorians in about two weeks, providing coronavirus cases remain low. Victorians will still have to quarantine for 14 days under the reopening plan, however they will be able to do so in a private home. New South Wales premier Gladys Berejiklian indicated an announcement to allow Victorians into her state could be made this week.
  • NSW recorded one new case of Covid-19 that was locally transmitted - a worker at a chicken restaurant in Liverpool - with health authorities since urging patrons of Jasmins1 Lebanese to get tested and forcing the restaurant to close for failing to collect customer details.
  • The US ambassador to Australia, Arthur Culvahouse, said he hoped this year’s presidential election would not be marred by violence and was confident the result would be honoured, playing down the travel advice recently issued by Australia warning about the potential for violence.

Updated

For more on today’s Reserve Bank decisions, my colleague Martin Farrer has this explainer on quantitative easing.

Earlier today, the Tasmanian state government confirmed it will reopen to New South Wales on Friday as planned, removing the need for people to quarantine.

Here’s AAP’s report on the border reopening:

The island state announced last week it was planning to drop border restrictions with NSW on 6 November.

Tasmanian Premier Peter Gutwein on Tuesday said the low number of unexplained cases in NSW over the past 28 days made it safe to reopen.

It means only Victorians will be unable to visit Tasmania, after the state reopened to most of mainland Australia on 26 October.

Gutwein said he hoped to open borders with Victoria on 1 December, with an earlier shift from mandatory 14-day hotel quarantine to home isolation for arrivals on the cards.

Case numbers in Victoria are ... very low, with no new cases in recent days and several complex outbreaks appearing to be controlled

Victoria is our closest neighbour and home to many Tasmanians’ families and friends.

All arrivals are being temperature checked and must take a Covid-19 test if they have symptoms, and isolate until the result comes back.

Tasmania has gone more than 80 days without recording a case.

Hobart airport’s arrivals area earlier in the year
Hobart airport’s arrivals area earlier in the year. Photograph: Steve Bell/Getty Images

Updated

Liberal senator Andrew Bragg was just interviewed on ABC radio. On the topic of today’s record low rate cut to 0.1%, host Patricia Karvelas asked Bragg if he thinks the government needs to again review deeming rates.

Bragg didn’t answer directly, but noted changes to the deeming rate announced by the government earlier in the year.

The deeming rate is the amount the government assumes your income to be from your financial assets. It uses the deeming rate to calculate how much income you receive, regardless of the actual return from the asset.

The difference between deeming rates and actual returns can have a significant impact on pensioners, as this can influence welfare payments.

The most recent changes to deeming rates (for singles) earlier this year were set at 2.25% for investments over $53,000, and 0.25% for investment under $53,000.

Updated

NSW Health have shut down the restaurant linked to a recent coronavirus case for failing to record customer details or have a Covid safety plan.

The action comes after a staff member at Jasmins1 Lebanese Restaurant at 375 Macquarie Street, Liverpool, was confirmed to have worked shifts at the restaurant while infectious.

A NSW Health statement said:

NSW Health has today directed the Jasmins1 Lebanese Restaurant in Liverpool to remain closed until further notice after they failed to provide records relating to staffing and patronage in a timely manner to support public health action.

Investigations have revealed Jasmins1 Liverpool did not have a COVID Safety Plan and did not keep contact details of patrons as required.

The restaurant will remain closed until NSW Health considers the restaurant is no longer a risk to public health.

NSW Health informed the restaurant on 28 October that cases of COVID-19 had attended the restaurant three days earlier.

After being notified that people with COVID-19 had attended the restaurant while infectious and advised that any staff who worked at that time are close contacts and required to isolate up to and including 8 November, at least one staff member continued to work at the restaurant.

A reminder here for those who visited Jasmins1 Lebanese Restaurant at the following times to get tested:

Updated

Melbourne Cup public holiday, and 30 degrees, in Melbourne today.

Now, back onto some virus numbers.

Western Australia has recorded no new Covid-19 cases on Tuesday. There are now 23 active coronavirus cases in the state.

Reserve Bank governor Philip Lowe’s final (self-posed) question: “Is the RBA now out of firepower?”

His short answer: “no”, adding that “we have additional monetary policy options and we are prepared to use those if the circumstances are direct”.

In terms of interest rates, I think we have gone as far as it makes sense to do so in the current environment. There has been no change to the board’s view that there is little to be gained from lowering the rate into negative territory...The board continues to view a negative policy rate in Australia as extraordinarily unlikely.

But monetary policy is now more than just about short-term interest rate. We have returned to a world in which quantities matter too. In this world it’s certainly possible for us to increase the size of our bond purchases. Given this, we will continue to closely monitor the economic situation and the impact of our purchases on market function and if we need to do more we can and we will.

Lowe also noted further tools the RBA has to address market dysfunction, including “further liquidity provision, asset purchases, and transactions in the foreign exchange market”.

Updated

Philip Lowe’s third question: “why have you elected to have both a price and a quantity target?”

Given that we expect the cash rate to remain low for years, we judged it was appropriate to target a three year yield and stand behind that target with our balance sheet. These arguments for a yield target remain valid and we are continuing with the three year yield target.

We considered targeting a longer yield at our meeting today, say five years, but we decided against that.This was on the basis that the yield target is most effective when it’s consistent with forward guidance regarding the cash rate.

As I said earlier, we expect the cash rate to be at its current level for at least the next three years. But beyond that we have less confidence.”

Philip Lowe’s second question: “Is the RBA now financing government?”

Lowe: “The answer here is clear and simple. It is no, we’re not.”

The RBA is not providing finance to the government, but our actions are lowering the cost of government finance. I should point out though that our actions are also lowering the cost of finance for all other borrowers in Australia, whether they are a household buying their first home or businesses wanting to employ people. This lower cost of finance for everybody is supporting the recovery from the pandemic.

It’s also important to point out that the bonds purchased by the RBA will have to be repaid by governments at maturity ... in exactly the same way they were if the bonds were held by others.

Updated

Philip Lowe now says he would like to address four specific questions about today’s decision.

First question: “Why make this change today? Why are we moving now?” (towards quantitative easing)

His short answer: Because we have “a clearer picture of the future state of the labour market” compared with earlier in the pandemic, and because “monetary easing is likely to give more traction today than would have been the case when there were widespread restrictions in place.”

He also noted the board considered “the effects on medium term financial on macro stability, as well as the impact of lower interest rates on savers, and that the recognises “that low deposit rates can create difficulties for some people, particularly those relying on interest income”.

“But the board judged that the bigger risk at the moment was the threat to our economy, and to balance sheets, from an extended period of high unemployment. Today’s decision will lessen that risk,” Lowe said.

Updated

Reserve Bank of Australia governor Philip Lowe is speaking about today’s decision that included; cutting the cash rate to a record low of 0.1%, reducing the target for the yield on three-year government bonds to 0.1%, reducing the interest rate on Exchange Settlement balances to zero, and the purchase of $100bn of government bonds over the next six months.

Lowe said the decision “compliments government efforts to support the Australian economy, and to lower unemployment”.

At its core, today’s decision reflects the Reserve Bank’s commitment to do what we reasonably can, with the tools that we have, to support the recovery of the Australian economy. The board views addressing the high rate of unemployment as a national priority, and it wants to do what it can to support job creation.

While Australia have experienced a severe recession, it has not been as bad as was earlier feared, and it has not been as bad as experienced in many other countries.

The pandemic has an active, significant damage on the Australian economy. It will take time to repair that damage, and it is highly likely that the recovery will be uneven, it will be bumpy, and it will be drawn out. In particular, we face the prospect of a long period of higher unemployment and under employment than we have become used to over recent times.

Unemployment is a major economic and social problem, and it damages the fabric of our society. So it is important that it is addressed. The Board recognises that in the context of the pandemic, responsibility for job creation falls mainly on the shoulders of business and of government. But the Reserve Bank can and will make a contribution.”

Lowe also said the RBA Board does not expect to increase the cash rate again for three years, “until actual inflation is sustainable within the target range”.

Updated

Josh Frydenberg has labelled today’s Reserve Bank of Australia decision to cut the cash rate to record low of 0.1% “good news for households” and small businesses.

The treasurer said the Reserve Bank “made it very clear in their statement today that their moves today compliment what the Morrison government announced in this year’s budget, particularly supporting job creation and our economic recovery”.

Speaking in Melbourne, Frydenberg said he expects the banks to pass the cut on in full, adding:

The decision by the Reserve Bank of Australia today to cut the cash rate down to 10 basis points and to target the three-year bond yield at 10 basis points compliments the economic support that the Morrison government has provided the Australian economy.

We realise that today’s announcement will reduce the cost of borrowing. And today’s announcement by the Reserve Bank will reduce the cost of borrowing and is good news for households, good news for small businesses and it will compliment what the Morrison government has already undertaken to support job creation across the economy.

Let’s not forget that early on in this crisis, 1.3 million Australians either lost their jobs or saw their working hours reduced to zero and we all have that picture in printed in our minds of those long queues outside Centrelink as people lost their jobs and feared for their job security.

But now with the significant support from the Morrison government, and the suppression of the virus across the country, the jobs are coming back. And they’re coming back in all sectors across the economy.

Obviously, with international borders remaining closed and some of the state borders remaining closed, tourism and aviation will continue to feel the pain of the virus. But in other sectors across the economy, we’re seeing some positive signs as jobs are coming back and restrictions are eased.

It will be a long, hard and bumpy road for the Australian economy, and indeed, for the global economy.

Updated

Paul Keating, former Labor prime minister and treasurer in the Hawke government, has responded to the Reserve Bank’s rate cut, declaring the bank “has arisen from its monetary slumber and its long, fruitless search for the inflation dragon”.

With much gritting of teeth and after running monetary policy too tightly for half a decade or more, the governor has announced a fall in the overnight cash and call rate and a decision by the bank to wade into the long bond market, to push down longer term interest rates.

This, no doubt, is designed to take pressure off the exchange rate, which overvalued, has cost thousands of jobs and diminished competitiveness over the last five to seven years.

The bank’s inflation obsession should be moderated by a switch to ‘actual’ and not ‘forecast’ inflation, which the bank has been so wedded to.

Updated

Opposition assistant treasury spokesman Stephen Jones has called the rate cut “a pretty clear signal that more needs to be done from the government to support the economy”.

We’re expecting a rare Reserve Bank of Australia press conference shortly, as well as treasurer Josh Frydenberg to respond to the rates decision.

Updated

The reviews are coming in for the RBA’s decision to cut interest rates from 0.25% to a record low 0.1%. Who loves it? Real estate agents.

“For a lot of our customers – tenants and sellers – this rate cut will help a lot,” the managing director of megagency Ray White, Dan White, said.

“We just hope that the banks will pass it on.”

Sarah Hunter, the chief economist for BIS Oxford Economics, said the RBA’s existing cuts had already helped boost house prices.

Together with the government’s HomeBuilder stimulus there has also been a sharp uptick in new construction activity, particularly amongst owner-occupiers and for detached housing.

The board will be hoping that the full set of stimulus measures feeds through to the broader economy, particularly to non-mining businesses where investment and employment intentions are weakest.

As ever, their top priority is jobs growth, with the statement explicitly mentioning the need to reduce the unemployment rate (which they now expect to peak at around 8%). This in turn will lead to upward pressure on wages growth, which is ultimately necessary for inflation to move sustainably back into the RBA’s 2-3% band.

Given inflation is currently running well below 1% pa, it is very likely that it will take three years to achieve this, confirming the Board’s expectation that they won’t be raising the cash rate before the end of 2023.

But over at big four accounting firm KPMG, chief economist Brendan Rynne might be the only person around seriously worried about an outbreak of inflation.

We know that in today’s coronavirus world, global supply chains are being disrupted at the same time as substantially more cash is floating around the economic system; these are the core elements needed to stoke the general price inflation fire.

So while long-term signalling from the RBA that the cash rate will not be increased for the next three years is a stabilising and economically enhancing measure in ‘normal’ circumstances, our world at the moment is anything but normal.

All this means is that the RBA needs to keep a close watch on price signals in the economy. Running loose monetary policy seems necessary at the moment and inflation risk seems to be an artefact of a bygone era but the old inflation genie is in the bottle and letting it out to run wild is a risk worth watching carefully.

Updated

Twilight Payment has won the Melbourne Cup.

For more on the race, my colleague Emma Kemp is on Guardian Australia’s Melbourne Cup 2020 live blog.

Updated

On that note, I am going to hand you over to Elias Visontay who will take you through the afternoon – including what the RBA has to say.

I’ll be back early tomorrow morning as we wait to see what the US will decide. All we can do is wait.

Thank you again so much for joining me. I’ll see you tomorrow – take care of you.

Updated

It’s very, very unusual for the RBA to hold a press conference – and goes to show just how extraordinary the times we are living in, actually are. The central bank usually doesn’t explain itself – that it is shows you just how important this is.

Updated

The RBA will be holding a very rare press conference at 4pm.

Updated

Jim Chalmers has responded very, very quickly to that RBA announcement.

He’s in Brisbane holding a press conference:

Today the Reserve Bank is taking unprecedented steps to support the economy during this deepest, most damaging recession in almost 100 years.

These are the most drastic steps that the Reserve Bank has ever taken. It’s a vote of no confidence in the Morrison government’s handling of this recession and their handling of the budget.

Shadow treasurer Jim Chalmers.
Shadow treasurer Jim Chalmers. Photograph: Mick Tsikas/AAP

By taking these steps, the Reserve Bank has obviously concluded that the Morrison government has not done enough in their Budget to support the economy and to support jobs during this very difficult period.

It makes no sense whatever for the Morrison government to be cutting jobkeeper and other forms of economic support at the same time as the Reserve Bank, and others, say that more, not less, needs to be done.

The Reserve Bank has been forced to do more because the Morrison government is not doing enough.

For too long now, and not just during this recession, before it as well, the Morrison government has left too much of the heavy-lifting to the Reserve Bank. We’re receiving that again today.

The Reserve Bank is stepping in and taking these unprecedented steps to lower borrowing costs and support the economy because in the most recent budget, Scott Morrison and Josh Frydenberg locked in cuts to jobkeeper and jobseeker, and didn’t do enough to replace them with other job-creating and job-supporting measures.

Now when it comes to the forecasts in what the Reserve Bank has just released a few minutes ago, it’s important to remember that the Reserve Bank still expects unemployment to be too high for too long.

They have come to the same conclusion that many others have, that even though it will look like a recovery on paper over the coming months and years, it will still feel like a recession for too many Australians who are out of work.

Already we have a million unemployed, another 160,000 expected to join them between now and Christmas. We need a government as focused on chasing jobs as they are on chasing headlines.

The Reserve Bank has stepped in and taken these unprecedented steps. If only the government. If only the government wasn’t cutting jobkeeper and was doing more to support jobs and the economy.

Updated

Record low interest rates are here to stay due to what the RBA expects to be a bumpy economic recovery and persistently high unemployment:

Given the outlook, the Board is not expecting to increase the cash rate for at least three years.

Updated

We have spoken a little bit about quantitative easing in this blog over the course of the pandemic – and we are seeing it again today.

It’s pretty crude to say it’s just printing money – but that is the most simple way to explain it. It’s more about moving numbers around on a balance sheet.

As Ben reported, the bank is purchasing $100bn of 5-10 year government bonds, which is the other very important announcement in that list. That increases the money supply – the RBA buys bonds, and therefore money flows from the central bank into the economy.

Updated

RBA cuts rate to new historic low

The Reserve Bank has cut the cash rate from 0.25% to a new record low of 0.1%. In a statement, RBA governor Philip Lowe said:

At its meeting today, the Board decided on a package of further measures to support job creation and the recovery of the Australian economy from the pandemic. With Australia facing a period of high unemployment, the Reserve Bank is committed to doing what it can to support the creation of jobs. Encouragingly, the recent economic data have been a bit better than expected and the near-term outlook is better than it was three months ago. Even so, the recovery is still expected to be bumpy and drawn out and the outlook remains dependent on successful containment of the virus.

The elements of today’s package are as follows:

  • A reduction in the cash rate target to 0.1%.
  • A reduction in the target for the yield on the three-year Australian government bond to around 0.1%.
  • A reduction in the interest rate on new drawings under the Term Funding Facility to 0.1%.
  • A reduction in the interest rate on Exchange Settlement balances to zero.
  • The purchase of $100bn of government bonds of maturities of around five to 10 years over the next six months.
The Reserve Bank of Australia headquarters in Sydney.
The Reserve Bank of Australia headquarters in Sydney. Photograph: Dan Himbrechts/AAP

Updated

There is a video now.

Updated

Just quietly making points.

Updated

It is already getting close to breaking records for a parliamentary petition*

*It has been pointed out to me that there was a petition with 1.4m signatures, so not a record breaker yet, but close.

Updated

We’ll be finding out the RBA’s rate decision within the hour.

In Melbourne, anti-lockdown protests are continuing.

The use of masks has been one of the issues the key issues. In case it needs to be said, wearing or not wearing a mask is not politics. It is public health. Communities in Asia have been doing it for years, and society has not crumbled.

Updated

Just in case you missed it earlier today.

Updated

Anthony Albanese was also asked about Labor’s childcare policy (he was at a childcare centre, so it is what he wanted to talk about).

Q: Taking you back to the childcare issue, why should a family earning more than half million dollars a year get welfare in the form of childcare?

Leader of the opposition Anthony Albanese.
Leader of the opposition Anthony Albanese. Photograph: Mick Tsikas/AAP

Albanese:

Well, it’s not welfare. That same family, when their child turns five, will be able to go to the school here and that child will receive an education. This isn’t welfare. It’s an economic reform measure. And someone on $500,000 will benefit from our packages, a family on net income will receive around about $2,000. Someone on $80,000 will receive $28,000. This is a proportionate response. But it’s one that recognises that childcare isn’t welfare. It’s early childhood learning. That’s what the IMF says. That’s what every economist says. This is about workforce participation of women. It is about driving productivity. And it’s about getting that return that will come to the Government from economic growth.

Q: As a Labor government, wouldn’t that $2,000 be better off in the pockets of a battler rather than someone who’s earning a certain amount of money?

Albanese:

When that same family, if they get sick, they can go to a hospital and they can get the care that everyone gets. One of the things that I remember very well, Royal Prince Alfred hospital is my local hospital. When the late Kerry Packer had a heart attack, he was in the public emergency ward, the same ward where I’ve been as a kid for various reasons, for appendicitis or various other things that happened, the same ward that my son has been to, with the odd knock, being looked after. That’s the system that we have. When that same family has a child that turns up at school, they don’t get turned away either. And one of the things that universal access does, it increases the support for the delivery of that program. And we value early childhood education, because it boosts productivity. And as I said, it produces a return of $2 for every dollar that’s invested. That’s why we need a progressive taxation system, which is how you deliver those services, progressive income taxes and other measures which are there. Early childhood education shouldn’t be regarded as welfare.

Updated

The new list of lending institutions participating in the first home owners scheme is out.

From Michael Sukkar’s office:

In September, the Australian Bureau of Statistics’ lending indicators data showed that first home buyers are flooding into the housing market, with the number of loans to first home buyers reaching the highest number in over a decade.

The total number of owner occupier first home buyer loan commitments rose 6.0 per cent to represent 40 per cent of the total number of owner occupier loans issued in September.

Houses and apartment buildings are seen in the Brisbane suburbs of Paddington and Petrie Terrace.
Houses and apartment buildings are seen in the Brisbane suburbs of Paddington and Petrie Terrace. Photograph: Darren England/AAP

From today, the following lending panel members are ready to accept applications for a guaranteed loan to build a new home or purchase a newly built home:

  • Australian Military Bank
  • Defence Bank
  • P&N Bank
  • Australian Mutual Bank
  • G&C Mutual
  • People’s Choice
  • Bank Australia
  • Gateway Bank
  • QBank
  • Bank of Us
  • IBA Group
  • Qld Country Bank
  • Bendigo Bank
  • The Mutual
  • Regional Australia Bank
  • Commonwealth Bank
  • MyState
  • WAW Credit Union
  • Community First
  • National Australia Bank

From 9 November 2020 onwards, the following lending panel members will begin to accept applications for a guaranteed loan to build a new home or purchase a newly built home:

  • Auswide Bank
  • Credit Union Australia
  • Police Bank
  • Bank First
  • Mortgageport
  • Teachers Mutual Bank
  • Beyond Bank

Updated

Anthony Albanese is in the Northern Territory today.

He was asked about the American election:

I had a tip last time that didn’t work out as expected. We will wait and see. That is in the hands of the American people.

I say this – that democratic processes should be respected. Our partnership between the United States is an alliance between our peoples based on our common democratic values and I am concerned at any questioning that occurs about democratic values and democratic processes. They are precious. They should not be undermined by any leader.

I await the result tomorrow. I say that the result will obviously have implications for Australia. It will have implications for the world when it comes to the vital challenge of tackling climate change.

Updated

If there is one person not to challenge on the merits of Icac and how it operates, it is Kate McClymont.

Updated

Despite decades of hearing how terrible Queensland is from southerners – it seems everyone wants to go there once they are locked out.

AAP has an update on how the border crossing is going, now that regional NSW is allowed to cross:

Gold Coast chief superintendent Mark Wheeler.
Gold Coast chief superintendent Mark Wheeler. Photograph: Albert Perez/AAP

Travellers have had waits of almost an hour at Queensland’s southern border after Covid-19 restrictions were relaxed for regional NSW.

The influx of people waiting to cross into the Sunshine State started well before the new border rules came into effect at 1am AEST on Tuesday.

Chief superintendent Mark Wheeler says some crossing points continue to have queues up to a kilometre long.

“But all in all we’re pretty pleased with the way the traffic is flowing,” he told reporters.

“The true test now will be over the coming days and weeks when we do expect to see more people wanting to travel into Queensland.

“We’re looking at over three million people from NSW who will be eligible to come in.”

Chief superintendent Wheeler said most people had listened to advice and had displayed their border declaration passes.

Updated

One extra morsel from the press conference given by the US ambassador to Australia, Arthur Culvahouse, earlier today. He argued his country “should be given more credit than some people give it” on its reduction in greenhouse gas emissions in the energy sector.

An oil and gas processing plant in Lake Charles, Louisiana, US.
An oil and gas processing plant in Lake Charles, Louisiana, US. Photograph: Chandan Khanna/AFP/Getty Images

Donald Trump’s decision to withdraw the US from the Paris agreement is due to take effect the day after the election. Joe Biden has promised to re-enter the Paris agreement, set the US on a course of net zero emissions by 2050, and to push other countries – including allies – to do more on climate.

Culvahouse was asked by a reporter whether he anticipated America once again taking a leadership role on climate if there were a change in administration.

The ambassador said he was not sure he agreed with the premise of the question – that the US was not showing a leadership role – and he pointed to US government data indicating America’s energy-related CO2 emissions had fallen by 14% since 2005 at the same time as the economy has grown by about 19%. (That includes Barack Obama’s time in office, when a clean power plan was put in place – elements of which were later unbound by the Trump administration.)

I really don’t want to speak for what might happen come January 20 if there’s a change in administration but I do think that the United States should be given more credit than some people give it.

Updated

Tis official.

A decision on Victoria and greater Sydney will be made at the end of the month – by CHO, Dr Jeannette Young (the CHO is the decision maker on these things once a public health emergency has been declared).

Updated

Rates have been cut on Melbourne Cup day for the last five years – so the cut to 0.1% is where the smart money is.

Meanwhile – it has been a decade since we last raised interest rates. So if we have solved inflation, there is room for quite a bit of quantitative easing, which, in its most simple terms, means printing money (in this case, bonds).

Updated

The rest of the morning session in the high court was taken up with debating the significance of the precautionary principle adopted by the federal court (essentially, that if the harm from a bad thing is very high, it is worth avoiding even if the probability is low).

Chief justice Susan Kiefel took Palmer’s counsel Peter Dunning to passages in which justice Darryl Rangiah found the border ban was less effective than other measures.

Dunning said Justice Rangiah accepted that other measures are not a “perfect proxy” for a full border closure. But he said the finding that Victoria, New South Wales and Queensland were still too unsafe contained an inference that there were other jurisdictions for which the border ban was no longer necessary.

Justice James Edelman had the biggest gripe with this argument – querying whether adding many more travellers from a series of low risk jurisdictions (ACT, NT, South Australia and Tasmania) really meant there was no additional risk to WA.

Dunning countered that there may be some additional risk but it is an “acceptable one” even if you agree with the precautionary principle.

Dunning argued justice Rangiah was careful not to prejudge all the issues in the case – leaving room to the high court to find that for some states and territories the border ban is excessive.

We’re at morning tea break now – it will be interesting to see if Dunning can answer concerns with Palmer’s case after some refreshments.

Updated

In two weeks time, South Australians may also be able to stand up and drink at the pub or a bar again.

Because it is 2020, we have a term for that ‘vertical consumption’ – and one of the reasons it has been a bit difficult, is because of contact tracing – but jurisdictions are getting a handle on that, so we should see another part of life we all took for granted return for more of us.

Updated

So the plan, if all goes well, is to open the South Australia/Victoria border in a fortnight – but Victorians will have to self-isolate for another two weeks when they enter the state – which they will be able to do in a private home.

Updated

South Australia to open border to Victoria – with quarantine restrictions

Steven Marshall says it is time to open the border to Victoria – it has set a two-week buffer zone, but it is all systems go (provided all remains as it currently is).

But Victorians will still have to quarantine for two weeks – which can be done in private homes – and is the same arrangement for other states, including NSW until quite recently:

South Australia premier Steven Marshall.
South Australia premier Steven Marshall. Photograph: Mark Brake/AAP

They have got on top of issues with the state. We are waiting to see what the full implications of the increased mobility will be in that jurisdiction on the coronavirus, but what we’re doing today giving advance notice that, hopefully, within two weeks will be able to move to a situation that will allow people all to do home-based isolation here in South Australia for a 14 day period.

As you know, we put our hard border arrangement in place quite some time ago to protect our state.

Recently we’ve announced that people who are moving to South Australia permanently, relocating here, or students who have any school or university are permitted to come back in to do that 14 days of isolation. But we have really cut off that option for most other people that are currently in Victoria.

What we are, if you like, messaging today is that we should be in a position in around about two weeks’ time to lift that so that people can come back in, do that 14 days isolation, we know this is great news for families, especially in the lead up to Christmas. So a big improvement there.

Updated

Labor is feeling pretty happy today – the IMF has released a report, which found investing in childcare was particularly beneficial for the economy – because it increased participation.

Here is Labor’s take on it:

This latest G-20 Report on Strong, Sustainable, Balanced and Inclusive Growth prepared by the staff at the IMF “discusses the G-20’s progress during the past year toward the goal of strong, sustainable, balanced, and inclusive growth and provides policy recommendations to help reach this goal”.

The report recommends advanced economies implement labour market reforms, and identifies boosting female labour force participation through childcare spending as a priority measure for Australia.

The IMF has also urged nations to take climate change seriously – if just for their economies, if not the fate of the planet. If they keep this up, they’ll be on Bolt et al’s hit list before you can say ‘negative globalism’.

Children are seen at an early childhood centre, in Harrison, Canberra.
Children are seen at an early childhood centre, in Harrison, Canberra. Photograph: Mick Tsikas/AAP

Updated

The US ambassador to Australia, Arthur Culvahouse, also said he doubted there would be many changes to the US policy towards China if Joe Biden wins the election, noting Biden was part of the administration that articulated the pivot to Asia.

Culvahouse told reporters this morning he believed there was now widespread agreement in the US about the challenge presented by the People’s Republic of China – but he was at pains to say this was not a reflection on the people of China:

“I want to be clear I’m talking about the Chinese government and the Chinese Communist party not the people of China.”

Recent polling by the Lowy Institute indicated only a quarter of Australians trusted China to act responsibly in the world – with such faith crashing nearly 30 percentage points in the past two years.

However the same questions, when asked about Australia’s top security ally, are revealing, with 51% trusting the US a great deal or somewhat to act responsibly in the world – a score that is about 30 points lower than the Barack Obama-induced high of 2009.

Asked about these results, Culvahouse said the embassy had reached out to younger Australians, and to Australians “that are not amongst the usual suspects that an ambassador might go see”, and to first and second generation migrants in order to help build support for the US alliance.

“That’s on us to do and we have work to do, regardless of who the next president is. And so there is important work to do.”

Updated

NSW has recorded one locally acquired Covid case

NSW has its official results – one new case as we reported earlier:

Two cases were also reported in overseas travellers in hotel quarantine, bringing the total number of cases in NSW to 4,246.

There were 8,550 tests reported to 8pm last night, compared with 7,431 in the previous 24 hours.

Of the three new cases to 8pm last night:


Updated

The official response

US ambassador to Australia says he hopes election will not be marred by violence

The US ambassador to Australia, Arthur Culvahouse, says he hopes this year’s presidential election will not be marred by violence and is confident the result will be honoured by all members of the executive branch.

Culvahouse addressed reporters at the US embassy in Canberra to emphasise a message that the alliance with Australia will remain strong regardless of the outcome of the election.

But he faced a series of questions about potential violence surrounding the election and whether the result will be respected by Donald Trump, who has cast doubt on the validity of mail-in votes and has foreshadowed legal challenges.

United States ambassador to Australia Arthur Culvahouse.
United States ambassador to Australia Arthur Culvahouse. Photograph: Joel Carrett/EPA

“I would hope and expect that all of the precautions that are being taken now by states, by localities, by cities to make sure that there’s not violence, there’s not riots, and that there’s an orderly process will be successful. I don’t think there’ll be a replication of the worst days of the 60s and 70s – that’s my hope and my prayer.”

Culvahouse played down the travel advice recently issued by Australia (which noted the presidential election will be held on 3 November and Australians should “take precautions to keep safe during the election season” and “avoid areas where protests and demonstrations are occurring”).

The ambassador noted Australia was currently warning against travel all over the globe because of Covid.

“Look, the fact fact that people are planning for violence is concerning, I wish it weren’t the case. But look, our ’68 election, our ’72 elections were also very contentious. Politics in the US is a rough business in part because we don’t have compulsory voting and so much of what is going on is to drive turnout.”

When asked about the importance of the loser of the presidential election unequivocally accepting the result, Culvahouse said:

“All I can say is that each member of the executive branch, each officer of the United States has taken an oath to support and defend the constitution of the United States and the process by which we elect a president is embedded in our constitution and I think that will be respected and honoured and supported and defended by all of us.”

Updated

High court hears Clive Palmer challenge to Western Australia's hard border closures

The high court is hearing Clive Palmer’s challenge to the Western Australian hard border closures.

The federal court has already found the closure is “substantially effective” at decreasing the coronavirus risk, but the high court must now decide legal questions about whether it is constitutional.

Palmer’s case suffered an early setback when chief justice Susan Kiefel noted that Palmer had challenged the validity of health directions not the laws enabling them.

And she said the right to interstate trade, commerce and movement in section 92 of the constitution applies to the validity of laws, not directions made under them.

This is a pretty big oops for Palmer – whose counsel Peter Dunning conceded the directions are validly made. But Dunning claimed that the directions have the “character of legislation” so can be challenged with section 92.

Justice James Edelman then noted in the precedent case he cited if the subsidiary orders are invalid, the legislation would be invalid to the same extent – poking another hole in the argument.

Kiefel asked Dunning to respond further after morning tea, meaning that answer wasn’t good enough and Palmer’s case could fail at the first hurdle unless the gap is plugged.

Justice Michelle Gordon later noted Palmer hadn’t challenged the declaration of emergency and the preconditions for it. Again, Dunning promised to return to the point after morning tea.

Dunning’s homework is piling up.

Clive Palmer.
Clive Palmer. Photograph: Darren England/AAP

Updated

The US ambassador to Australia, Arthur Culvahouse, has told reporters gathered at the American embassy in Canberra that the alliance will remain strong regardless of the outcome of the election.

He’s also said he doubted there would be many changes to the US policy towards China if Joe Biden wins the election.

And when asked about the importance of the loser of the election unequivocally accepting the result, Culvahouse noted that members of the executive branch had taken an oath to support and and defend the constitution.

I’ll have more details and full quotes for you shortly.

Updated

The global Covid blog is up and running with Helen Sullivan.

Updated

Queensland reports no local cases of Covid, and three in hotel quarantine

Queensland has reported no locally acquired cases of Covid – all three cases here are in hotel quarantine.

Updated

Well this is depressing (but not surprising).

From Lisa Cox:

Smoke cloud pushed into the stratosphere by last summer’s bushfire crisis was three times larger than anything previously recorded globally, according to research by international scientists.

Researchers from Canada’s University of Saskatchewan used Nasa satellite information to measure smoke in the upper atmosphere in the aftermath of pyrocumulonimbus storms (PyroCBs), which are fire-generated thunderstorms.

They found the cloud caused by Australia’s bushfires measured 1,000km across, remained intact for three months, travelled 66,000km and “soared to a height of 35km above earth”.

Updated

Labor MP Michelle Rowland was on ABC News Breakfast this morning and was asked about the national integrity commission:

I understand what you’re asking: should we have something half good and then make it better later on? I think the point of a proper integrity commission is that it should be set up properly from the get-go, so people know its boundaries, something that is arrived at after proper consultation and something people would have confidence in. I don’t know whether it would serve the confidence of the Australian people to have a commission that is set up as half good with a promise to make it better later on.

Switch in CPRS for integrity commission, and it’s almost 2009 again.

Updated

Consumer confidence climbs again ahead of expected rate cut

The RBA decision today has some analysts wringing their hands – Australia may be about to hit a new historic low in interest rates.

The Reserve Bank of Australia. Speculation of an interest rate cut has been rife since a speech by RBA governor Philip Lowe last month.
The Reserve Bank of Australia. Speculation of an interest rate cut has been rife since a speech by RBA governor Philip Lowe last month. Photograph: Dan Himbrechts/AAP

From AAP:

The Reserve Bank of Australia is widely expected to cut the cash rate at its monthly board meeting, and while the reduction is expected to be modest it could propel consumer confidence even higher.

Ahead of Tuesday’s meeting, the ANZ-Roy Morgan consumer confidence index rose for a ninth straight week, rising 0.2% to 99.9 points, its highest level since March and when the coronavirus pandemic struck.

Consumer confidence is a pointer to future household spending.

However, the latest overall weekly reading disguised a concerning shift with the sub-index for “current financial conditions” falling by more than 6%.

This was the biggest weekly decline since the extreme weakness in March.

“This may be a sign that the cutbacks in the jobkeeper and jobseeker payments are starting to be felt,” ANZ head of Australian economics David Plank said.

However, he also cautioned against reading too much into the result as the sub-indices can be volatile.

Speculation of an interest rate cut has been rife since a speech by RBA governor Philip Lowe last month, when he indicated the central bank is ready to do its bit to support the recovery from recession.

He said the board judged there was little to be gained from further monetary easing when the pandemic was at its worst.

“As the economy opens up, though, it is reasonable to expect that further monetary easing would get more traction than was the case earlier,” he said.

Economists widely predict the RBA will cut the cash rate to 0.1% from the already record low of 0.25%, the first change since March.

The same reduction will go for its three-year bond yield target rate and its term funding facility rate for banks.

And in its increasingly complex monetary policy actions in a low interest rate environment, economists also expect the RBA to start buying five-to-10-year bonds to further keep market interest rates and funding costs low.

Shadow treasurer Jim Chalmers said the RBA had only been put in the position of taking “extreme measures” because the Morrison government was cutting back its support too soon.

“When unemployment is high and rising, Scott Morrison can’t leave too much of the heavy lifting to the Reserve Bank,” Chalmers said.

If the cash rate cut is passed on in full by the retail banks, the average monthly saving could be around $55 on a $400,000 loan for an owner occupier paying principal and interest.

Updated

For all my pedant fans out there

Federal Icac model given thumbs-down by Centre for Public Integrity

Christian Porter said he will open the proposed national integrity commission legislation up for consultation for six months, but it really doesn’t seem necessary.

The views are, overwhelmingly, it is terrible.

Here’s the Centre for Public Integrity’s first take:

The following aspects of the bill need to be remedied:

• No public hearings may be held in respect of public sector corruption;

• The definition of corrupt conduct is too narrow. It excludes anyone outside the public sector who dishonestly or improperly influences or attempts to influence the probity and efficacy of public decision-making. This is not the case in most state jurisdictions;

• The threshold for a referral is too high. Public sector corruption can be investigated only where there is a reasonable suspicion that at least one of a number of listed offences has been or is being committed;

• In the case of the public sector and parliamentarians, the making of referrals is significantly circumscribed;

• The commission can only investigate on its own motion in the case of law enforcement corruption;

• The bill would not operate retrospectively;

• There may be no findings of corrupt conduct for parliamentarians or public servants in any final report; and

• There is provision under section 270 for a certification process which may prevent the integrity commissioner and inspector general from accessing certain information certified by the attorney general. This may cover an extremely broad category of information.

Updated

No Dan Andrews again today – Victorian health minister, Martin Foley, gets the update gig again today.

He’ll be up at 10.30am.

And no, that is not a complaint. It’s just another sign of how much things have calmed down in Victoria – their daily press conference on Covid, is now, like the other states, a precursor to other announcements.

Updated

Labor MP Andrew Leigh had a chat to Sydney radio 2SM this morning about the government’s proposed national integrity commission.

The government has proposed a model with no public hearings (and a bunch of other “keeping it all secret” stuff).

Leigh says that defies the point:


When you hold public hearings, you carry out one of the core functions of an integrity commission, which is to build public confidence in government and in administration. David Ipp, the late commissioner of Icac in New South Wales, talked about the importance of public hearings in encouraging other witnesses to come forward. They serve a vital part of the work of an integrity commission. It does seem pretty strange to me, Marcus, that the prime minister was happy to castigate Christine Holgate for her role over the Cartier watches very publicly in parliament, but now wants the integrity issues of his own government to be scrutinised privately behind closed doors.”

Labor’s Andrew Leigh.
Labor MP Andrew Leigh. Photograph: Mike Bowers/The Guardian

Updated

Labor leader Anthony Albanese is holding his press conference at a childcare centre this morning – don’t expect that debate to go away anytime soon.

Updated

The federal housing minister Michael Sukkar is holding a press event this morning – he will be announcing the next round of the first home owners’ grant opening.

Updated

Decision on Victorian border could be this week

AAP has an update on the Victoria-NSW situation:

Travellers from regional NSW are now able to go to Queensland for the first time in almost four months, but Sydneysiders are still not welcome in the Sunshine State.

Travel restrictions eased at 1am on Tuesday, with the Queensland border flung open to everyone except those in greater Sydney and Victoria.

The NSW premier Gladys Berejiklian is fuming that Sydney residents are banned, arguing the bar Queensland has set for resuming free travel between the states is too high.

Meanwhile, Berejiklian has indicated a reopening of the NSW border with Victoria could happen soon.

“We’re talking weeks not months in terms of when the Victorian border may come down, but that again is based on health advice,” she told reporters on Monday.

“I wouldn’t be surprised if we moved more quickly against Victoria than Queensland did against us.”

When asked if an announcement would be made this week, Berejiklian said, “potentially, yes”.

People wearing face masks walk along Collins Street in Melbourne.
People wearing face masks walk along Collins Street in Melbourne. Photograph: Diego Fedele/SOPA Images/REX/Shutterstock

Only one locally transmitted case of coronavirus was diagnosed in NSW from 7,431 tests in the 24 hours to 8pm on Sunday, but authorities remain concerned there may be undetected transmission in south-west Sydney.

NSW Health on Monday night said a staff member at Jasmins Lebanese restaurant in Liverpool had also tested positive for coronavirus and would be included in Tuesday’s virus numbers.

Updated

Queensland border opens to anyone outside Victoria or greater Sydney

It’s November 3, which means the Queensland border is now open to anyone – outside Victoria and greater Sydney.

Those restrictions will be reviewed again at the end of the month.

Updated

Daniel Hurst has been exploring Australia’s relationship with China:

Australia is likely to keep suffering economic harm from “repeated rounds of Chinese economic coercion” and needs to find a way to reset the relationship, a former ambassador to Beijing has warned.

Seafood exporters are the latest industry group to report disruptions in accessing the Chinese market and Geoff Raby, the Australian ambassador to China from 2007 to 2011, said Australia needed China more than the other way around.

Raby, in an interview with Guardian Australia, argued that Australia had joined itself at the hip with the United States over the past few years in seeking to resist China’s rise – an approach he believed went against Australia’s interests.

That is despite the Morrison government’s assertions – including at high-level talks in Washington in July – that Canberra is pursuing its own policy and is not doing anything to injure the important relationship with Beijing.

Victoria records no new Covid cases and no deaths

Victoria is starting to make a habit of this – thrilled for them.

The daily average remains at just under two.

Updated

The government is finally pressing forward with a version of a national integrity commission – but it is not exactly winning hearts and minds. Or confidence.

Updated

It’s RBA day and for the first time in quite some time, economists are expecting some movement on the cash rate.

We are already at a historic low of 0.25% – which the RBA has previously called its floor. But we live in strange times, so there is an expectation the Reserve Bank will cut interest rates to 0.10%.

Updated

Good morning

Welcome to Tuesday, which, when America gets here, will be the most talked about Tuesday we’ve had in decades.

All eyes are, understandably, turned to the United States, waiting to see the outcome of the election. The only thing for certain is it’s going to be a very bumpy few weeks, no matter who wins the election. I was taught never to tempt demons, so I’m not wishing, but it’s not hyperbole to say that there is a lot riding on the outcome of this election – not just for America, but the world.

Closer to home and it’s lobsters which have auspol watches nervous. China is once again flexing its trade muscle, and, as Daniel Hurst has reported, that’s not something which looks like changing any time soon. Australia is looking to expand its trade horizon, but that takes time. So, in the meantime, the Australian government is trying to walk a fine line between politics and economics – but we don’t exactly have a lot of power in this game, and it shows.

And of course, we are still in the midst of a pandemic. NSW has broken its – and Australia’s – run of no community transmission, with a case at a Liverpool restaurant.

NSW Health has issued an alert after a staff member worked while infectious with the virus. NSW Health is advising those who dined or worked at Jasmins1 Lebanese restaurant in Liverpool during the past week that a staff member is now a confirmed case of Covid-19.

This person will be included in tomorrow’s numbers.

Anyone who worked at or attended the restaurant for more than one hour on the following dates and times is now considered a close contact and must get tested immediately and isolate for a full 14 days from exposure, regardless of the result:

  • Jasmins1 Lebanese Restaurant, 375 Macquarie Street, Liverpool:
    • Monday 26 October, 4pm–9pm
    • Saturday 31 October, 3pm–8pm
    • Sunday 1 November, 9am–1.45pm

Anyone who attended for less than one hour during the above times is considered a casual contact and must monitor for symptoms and get tested immediately if they develop. After testing, you must remain in isolation until a negative test result is received.

We’ll cover all of that and more, as it happens. You have Amy Remeikis with you.

Ready?

Updated

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