Australia news LIVE: RBA says rates and tax changes will take steam out of housing market; Trump was ‘an hour away’ from striking Iran, warns of attack within days

Good morning and welcome to our national news live blog for Wednesday, May 20. My name is Emily Kaine, and I’ll be helming our coverage this morning.

• The federal government’s tax changes will combine with higher interest rates to take steam out of the nation’s housing market, the Reserve Bank’s chief economist has signalled, while warning that businesses are likely to keep lifting prices as the war against Iran drags on.
• Young business leaders have united to lobby Albanese to rethink his capital gains tax revamp. In a letter to the prime minister, 40 Australian founders aged under 40 said that they supported the government’s decision to remove the CGT discount and negative gearing to make houses more affordable, but warned against stripping the discount from productive asset investments.
• Football Australia is bracing for another massive financial loss, triggering a sweeping internal restructure that will see it shed more than 20 per cent of its workforce, as chief executive Martin Kugeler admitted that the game failed to harness the rise of the Matildas and the success of a home World Cup in 2023.
• The head of the World Health Organisation expressed concern over the “scale and speed” of an outbreak of a rare type of Ebola in eastern Congo, where authorities reported the suspected death toll had risen to 134, with more than 500 suspected cases.
• Donald Trump said the US may need to strike Iran again and that he had been an hour away from ordering an attack before postponing it. The US president made the remarks while speaking to reporters at the White House, just one day after saying he had paused a planned resumption of hostilities against Iran.
• And the ASX is set to slide with futures just before 6am AEST pointing to a loss of 29 points, or 0.3 per cent, at the open.

Minister for Multicultural Affairs Julian Hill said the government would be engaging in further consultation with start-ups before finalising changes to the capital gains tax discount as he flagged the possibility of a carveout in the legislation for startup owners.

Hill said consultations between the government and start-ups would take place in the next week to ensure “all the detail is right”.

He said while he could not pre-empt the outcome of the upcoming talks, a carveout in the legislation for start-up owners was a real consideration for the government.

“We’re actually sitting down … this week, talking with people to make sure the detail of that part is right.

The government should enforce temporary exclusion orders on the remaining members of a cohort of IS-linked women and children seeking to return home to Australia, Liberal MP Phil Thompson said, following reports that they could return as soon as next week.

“I believe that the government has the ability to use temporary exclusion orders to keep them in location … We’ve been told by the government that there’s nothing they can do. Well, there is, there’s temporary exclusion orders,” he told Sky News this morning.

“The first ISIS members that came back have been charged with slavery and terrorism-related offences. Is that what we’re going to see again?”

Earlier this month, three IS-linked women returned to Australia from a Syrian internment camp. All three were arrested upon arrival.

Two of the women were charged with slavery offences, and one with terrorism offences.

Infrastructure Minister Catherine King says the government consulted start-ups before establishing tax changes in last week’s budget, and will continue to consult the sector as legislation is drafted.

“The Treasurer had been meeting before the budget with the tech sector. We’ve given them assurances that we’ll work our way through this, and that’s what we’re doing, which is what a responsible government does when it’s trying to make changes,” King told ABC radio this morning.

“It’ll be a legislative fix, so it’s how the legislation works, and that’s what the government is in the process of consulting over at the moment. So, as I said, when you make big changes and changes that are incentivising or trying to get the opportunity for more young people across the country to be able to get into housing, and that’s what the focus of the government is on this,” she said.

“You can’t carve out different sectors when you’re trying to make blanket change. We have to do that through consultation in the way in which the legislation is drafted, so we’re undertaking that consultation now.”

King said there had been “a bit of misinformation” about the government’s changes to the capital gains tax discount, and that much of it was driven by the Coalition.

Opposition Leader Angus Taylor slammed Prime Minister Anthony Albanese this morning for “laughing off” AI memes trolling the government for changing the capital gains tax discount.

During a press conference yesterday, Albanese was asked about the memes. He said: “I think some of them are very flattering, and I thank them for picking the very nice photos of me.”

Speaking to Nine’s Today show, Taylor said, “I mean, laughing when you’ve got toxic taxes, you’ve got migration out of control, you’ve got energy madness under Chris Bowen, a government that is not putting Australians first. He should be crying it off. He should be crying it off, because this is an absolute disaster for our country.”

Earlier, he labelled the proposed changes to taxes “an assault on aspiration”.

Assistant Minister Andrew Charlton has said memes trolling the government for changes to the capital gains tax discount that suggest the government is taking 47 per cent of a start-up’s value are “factually incorrect” and that many will be better off under the government’s proposed changes.

“Under the new regime, we are moving to shift the regime such that it taxes real gains instead of nominal gains and those real gains will always be smaller than the nominal gains and often substantially smaller. So unlike what those claims and memes suggest, nobody is paying their full marginal tax rate on a nominal gain or shifting it to a real gain. And what that means in practice is that in some cases, on some asset classes, people will actually be better off under the new regime and be paying less tax,” Charlton told ABC radio this morning.

“If you had an apartment in some parts of Sydney, for example, there’ll be plenty of instances where people would pay less tax under the new regime than they would have under the old regime, and I think this is a really crucial point to make.”

Under the government’s new model the 50 per cent capital gains tax discount is being replaced with an inflation adjusted tax that only applies to “real gains” on assets.

Asked about an open-letter from young business leaders lobbying the government to rethink capital gains reforms on shares, Charlton said: “All the figures show that we actually have a reduced proportion of Australians investing in shares over the last 20 years, and that’s because the old regime was less generous towards shares than it was towards housing.”

The government’s federal budget will have “almost no impact on rents”, says Housing Minister Clare O’Neil, insisting “the pressure on rent will actually be downwards”.

She said Treasury modelling showed the impact of proposed changes in the budget would see rents increase by no more than $2 a week, and in the long-term, would drive rental prices down by increasing the number of rental properties on the market and reducing competition.

“We’re building more homes, and rental prices are set based on how many rental properties we have and how many people are in the market, but the thing that renters in this country want most of all, most of them at least, is to become first home buyers, and that’s the big intention of this budget,” O’Neil told Seven’s Sunrise.

Nationals senator Bridget McKenzie accused the government of failing to account for the impact of inflation – which is projected to reach 5 per cent by the end of next month, according to Treasurer Jim Chalmers – on driving up the price of rentals.

“They’re planning for inflation to go to 5 per cent, so if you are wanting to build a new house, if you are selling anything right across this economy, inflation is going to 5 per cent. That drives up the cost of everything, including rents,” she said.

Minister for Aged Care and Seniors Sam Rae has defended the government’s changes to the capital gains tax discount amid threats from Australian entrepreneurs to take their businesses abroad because of the changes.

“Ninety per cent of small businesses will have their quite generous capital gains arrangements preserved. There’s no change to that,” Rae told Today.

He said the government would continue to work with the businesses impacted by the changes.

Appearing alongside Rae was opposition foreign affairs spokesman Ted O’Brien, who said this proved the government had not done its due diligence in considering the fallout of the tax overhaul on small businesses.

“Sam talking about trying to get settings right, that’s code for saying they got the settings wrong only last week. You don’t go and penalise start-ups to build new houses if you take down the future of a young entrepreneur, that doesn’t build a new house for anybody.”

The head of the World Health Organisation expressed concern over the “scale and speed” of an outbreak of a rare type of Ebola in eastern Congo, where authorities reported the suspected death toll had risen to 134, with more than 500 suspected cases.

The virus spread undetected for weeks after the first known death as authorities tested for a more common type of Ebola and came up negative, health experts and aid workers said. The Bundibugyo virus has no approved medicines or vaccines.

Congo was expecting shipments from the US and Britain of an experimental vaccine for different types of Ebola, but experts said such efforts would take time.

WHO director-general Tedros Adhanom Ghebreyesus said he was “deeply concerned about the scale and speed of the epidemic”, and pointed to the emergence of cases in urban areas, the deaths of healthcare workers and significant population movement.

WHO expects the outbreak to last for weeks at least and authorities haven’t yet identified “patient zero”.

AP

President Donald Trump said the US may need to strike Iran again and that he had been an hour away from ordering an attack before postponing it.

Trump was speaking to reporters at the White House a day after saying he had paused a planned resumption of hostilities following a new proposal by Tehran to end the US-Israeli war.

“I was an hour away from making the decision to go today,” Trump said overnight.

Iran’s leaders were begging for a deal, he said, adding that a new US attack would happen in coming days if no agreement was reached.

In Tehran, Ebrahim Azizi, head of the Iranian parliament’s national security committee, said in a post on X that pausing an attack was due to Trump’s realisation that any move against Iran would mean “facing a decisive military response”.

Reuters

Good morning and welcome to our national news live blog for Wednesday, May 20. My name is Emily Kaine, and I’ll be helming our coverage this morning.

• The federal government’s tax changes will combine with higher interest rates to take steam out of the nation’s housing market, the Reserve Bank’s chief economist has signalled, while warning that businesses are likely to keep lifting prices as the war against Iran drags on.
• Young business leaders have united to lobby Albanese to rethink his capital gains tax revamp. In a letter to the prime minister, 40 Australian founders aged under 40 said that they supported the government’s decision to remove the CGT discount and negative gearing to make houses more affordable, but warned against stripping the discount from productive asset investments.
• Football Australia is bracing for another massive financial loss, triggering a sweeping internal restructure that will see it shed more than 20 per cent of its workforce, as chief executive Martin Kugeler admitted that the game failed to harness the rise of the Matildas and the success of a home World Cup in 2023.
• The head of the World Health Organisation expressed concern over the “scale and speed” of an outbreak of a rare type of Ebola in eastern Congo, where authorities reported the suspected death toll had risen to 134, with more than 500 suspected cases.
• Donald Trump said the US may need to strike Iran again and that he had been an hour away from ordering an attack before postponing it. The US president made the remarks while speaking to reporters at the White House, just one day after saying he had paused a planned resumption of hostilities against Iran.
• And the ASX is set to slide with futures just before 6am AEST pointing to a loss of 29 points, or 0.3 per cent, at the open.