Australia news live updates: China ambassador’s speech threatens to stall diplomatic reset

Key events

Peter Hannam

Australia’s RBA and Treasury (and so the Albanese government) are forecasting inflation to peak at just under 8% by the end of 2022, with commercial banks (but not investors) tipping the RBA’s cash rate to peak around the same time.

The US provided some indication overnight that higher official interest rates are taking the steam out of price rise, with inflation in July coming in at 8.5%, down from 9.1% in June. Prices were unchanged on a monthly basis.

The impact on financial markets has been notable, with Wall Street up 1.6%-2.9%, depending on your index.

The prospect of fewer interest rate rises to come – based on the latest inflation numbers at least – also sent the US dollar tumbling. That sent the Australian dollar bolting over the 70 US cent mark, rising about 1.6 cents to 70.8 US cents.

One month doesn’t make a trend, of course, with much hinging on what happens to oil and food prices. Putin and wild weather are tough to predict.

Still, there may be some short term reassessment of inflation prospects in Australia too. Prior to the release of US data, investors were still predicting a steady march higher of the RBA’s cash rate. That may ease back a bit.

Prior to the slightly weaker US July inflation data, investors were tipping a 3-in-4 chance the RBA will lift its cash rate 50 basis points to 2.35% at its Sept meeting. Presumably these odds will be pared back to the extent Australia’s inflation trajectory will be lower too.

— Peter Hannam (@p_hannam) August 10, 2022

A side note: the ABS yesterday set a timetable for when it will finally start releasing monthly consumer price index data – rather than just quarterly ones.

From October, the stats bureau will start providing monthly numbers that will “be an important tool for policy makers, academics and businesses,” David Gruen, the Australian Statistician (who knew there was such a title?) said. (Media types might also find it useful).

A caveat, though:

One important point of distinction with the monthly Indicator is that, while it will include prices for all the items in the CPI basket, not all these prices will be updated each month.

So it won’t be quite apples and apples, for now at least.

What’s not clear is when the equivalent wage price index will have a monthly readout (so we can see how much our real wages are falling). The next iteration of that will land on 17 August, when the June quarter WPI lands.

NSW teachers could be offered higher-paid roles

Top teachers in NSW could be offered higher-paid roles under a plan being considered to stop the best educators leaving the classroom.

Education minister Sarah Mitchell said creating a stronger career path for classroom teachers which better rewards excellence was key to modernising the education system and attracting more people to the profession.

NSW has some of the best teachers in the world, but they often leave the classroom and move into management roles to secure higher pay and career progression.

This model is not “performance pay”, this is about expanding the career options for teachers and keeping our best in the classroom.

Teachers in NSW start on a salary of $73,737, which increases to a maximum of $117,060 if they gain accreditation as “highly accomplished” or lead teacher, while assistant principals get $126,528.

The announcement comes a day before the nation’s education ministers meet to discuss the ongoing issue of chronic teacher shortages.

NSW teachers’ unions are at loggerheads with the Perrottet government over pay and staff shortages they say have led to unmanageable workloads.

Public school teachers have walked off the job three times this year, and NSW Teachers Federation president Angelos Gavrielatos says the crisis is putting the state’s education future at risk, with some 3800 teachers needed by 2027.

The unions want a pay rise of 5% to 7%, while the NSW government has offered 3%.

– from AAP

NSW building commissioner’s resignation letter to be released

The NSW building commissioner’s resignation letter which reportedly exposes his “problematic” relationship with a former government minister is set to be released today.

The government has passed the controversial letter on to the state’s anti-corruption body.

Premier Dominic Perrottet said during question time yesterday that he had read David Chandler’s letter and it would be provided to the upper house on Thursday.

This is a letter related to an employment matter.

Out of an abundance of caution the letter was provided to the ICAC for information.

Labor successfully managed to force the government to release the letter from Chandler, who tendered his resignation in June and will finish in November.

All emails, texts and instant messages sent in the past eight months between then fair trading minister Eleni Petinos, her current and former staffers, former deputy premier John Barilaro and Chandler will also be released.

– from AAP

More wet weather on way for NSW

New South Wales residents have been warned by the Bureau of Meteorology to expect fresh rains with flood warnings current.

Good morning

And welcome to Thursday’s Guardian Australia live blog.

Chinese ambassador to Australian Xiao Qian addressed the National Press Club yesterday with a surprisingly candid speech. Over the course of 90-minute address Xiao drew a line in the sand on Taiwan while indicating that a thawing in relations between China and Australia on trade relations may be possible – and the terms under which China would re-engage.

The speech will be expected to add to heightened tensions as Xiao made clear that China was intent on reunification between Taiwan and the mainland, saying it would use “all necessary means”. When asked what “all necessary means” meant, Xiao responded by saying: “Use your imagination.”

I’m Royce Kurmelovs, taking the blog through the day. With so much going on out there, it’s easy to miss stuff, so if you spot something happening in Australia and think it should be in the blog, you can find me on Twitter at @RoyceRk2 where my DMs are open.

With that, let’s get started …

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