Australia news as it happened: RBA raises interest rates for first time since 2023; Cory Bernardi recruited by One Nation as Ley, Littleproud fail to reach Coalition resolution

Thanks for reading the national news blog. This is where we’ll end today’s coverage. We will be back tomorrow with the latest news.

To conclude, here’s a look back at some of the day’s major stories:

• The RBA has increased interest rates, with the Commonwealth Bank the first to raise mortgage rates
• The Australian dollar rose above US70c after the Reserve Bank raised the cash rate to 3.85 per cent, while the sharemarket gave up some of its earlier gains.
• Reserve Bank governor Michele Bullock has admitted the bank’s rate rise is bad news for mortgage holders, but that it is needed to get inflation back under control over the next few years.
• In politics, question time returned for the first full sitting fortnight of the year, with a split Coalition and a Liberal only front bench.
• Qantas will sell its share in Jetstar Japan, as the flagship Australian carrier directs its attention and capital on core businesses and routes.
• Federal authorities have charged a man who allegedly performed a Nazi salute in front of Jewish children at Melbourne Airport
• And overseas, US President Donald Trump said his administration was pursuing a $US1 billion ($1.4 billion) in damages from Harvard University, rejecting a report by The New York Times that said the White House had dropped its demand for a $US200 million payment to settle its dispute with the educational institution.

Thanks again for joining us. This is Isabel McMillan signing off.

US President Donald Trump said his administration was pursuing $US1 billion ($1.4 billion) in damages from Harvard University, and rejected a report by The New York Times that said the White House had dropped its demand for a $US200 million payment to settle its dispute with the educational institution.

In a Truth Social post, Trump accused Harvard of “feeding a lot of nonsense” to the newspaper and called the university “Strongly Antisemitic”.

“We are now seeking One Billion Dollars in damages, and want nothing further to do, into the future, with Harvard University,” Trump wrote, without specifying what harms the school had caused. He later said the Times report was “completely wrong” and demanded a correction.

Harvard did not immediately respond to a Reuters request for comment.

The Trump administration has pursued a broader effort to use federal funding to push changes at Harvard and other universities, arguing they are affected by antisemitism and “radical left” ideology.

Reuters

A Melbourne man will appear in court after allegedly performing a Nazi salute directed at a group of Jewish school children.

The Australian Federal Police said the man, 23 and from Greenvale in the city’s north, allegedly performed the act in front of the children in a terminal at Melbourne Airport on Monday.

He then allegedly left the terminal before the matter was reported to the AFP. Officers reviewed CCTV footage and spoke to witnesses to identify the man, and attended a home in Greenvale later on Monday.

The AFP said the man was identified as an airport employee. He has been summonsed to appear in Melbourne Magistrates’ Court next month, charged with one count of making a public display of a prohibited Nazi symbol or giving a Nazi salute.

If found guilty, the man faces a maximum penalty of five years in prison.

Shadow treasurer Ted O’Brien has again risen to question Treasurer Jim Chalmers, this time asking him to rule out future rate rises.

Chalmers replied: “The shadow treasurer would know that the Reserve Bank takes its decisions independent of government.

“We need to get on top of this inflation challenge in our economy. We need to do that in a way that doesn’t sacrifice too many jobs, Mr Speaker, and that’s the task that the Reserve Bank, independently and the government separately, are engaged in now.”

In his question, O’Brien referenced a statement from the Reserve Bank that indicated inflation would remain higher than desirable for some time.

But Chalmers said: “If the shadow treasurer wants to refer to the statement put out by the Reserve Bank a little while ago, he should concede that this whole campaign that they’ve [the opposition] been running up to today – and they’ve been desperately hoping for a rate rise today – in saying that the Reserve Bank was terribly concerned about public spending, they [the opposition] need to admit now that that was rubbish.

“If you look at the Reserve Bank statement today, it doesn’t mention government spending. It’s not a factor in the decision that they took today. In fact, they’ve gone out of their way to say that the upside surprise in inflation and the pressure on the outlook is coming from private demand.”

Reserve Bank governor Michele Bullock has lamented Australia’s sluggish productivity.

“Productivity is the issue. And I’m not the productivity tsar. [Productivity Commission chair] Danielle Wood has plenty of good ideas about what we can be doing about productivity, but it’s hard,” she said at her press conference.

Bullock reiterated she would not tell the government what to do on fiscal policy because the RBA and the government do not work hand in glove.

“I’m not going to tell the government what to do with fiscal policy. That’s not my business. As I said earlier, we work with aggregate demand and basically, we aggregate demand, public and private, push up against the limits of growth, and that is what we’re seeing in terms of inflation at the moment,” she said.

“I actually would say that I think – at least what I heard the treasurer say – is that he is focused on inflation. It’s his No.1 thing he’s focusing on at the moment. So I think he’s conscious [to] it. But I think we can work, I think the idea that somehow we work hand in glove is not the way … these things work. We are independent. They are independent. We work with what we have got.”

This masthead’s economics correspondent, Shane Wright, has asked Reserve Bank governor Michele Bullock why the RBA keeps getting it so wrong, as inflation has only been within the mandated band in eight out of 40 quarters in a decade.

Bullock responded: “I have no particular response other than to say we are determined, and the board is determined, to bring it back down into the band.

“But it’s not a science. It’s a bit of an art, really. And there’s so many things that can push you off course. There were things that pushed us off course before COVID, and then there was COVID, which completely pushed us off course. So we’ve just got to respond as best we can.”