Australian news and politics live: Banks warn housing market could plunge 10 per cent

Liberal Deputy leader Jane Hume has brushed off a disastrous Newspoll showing the Coalition’s primary vote has slumped to a record low, insisting the Opposition is “moving in the right direction” under new leader Angus Taylor.

Despite the poll putting the Coalition on just 17 per cent of the primary vote, Senator Hume said the Liberal Party had changed “quite dramatically” since Sussan Ley was replaced, describing the leadership team of Mr Taylor and Nationals leader Matt Canavan as united and stable.

“Everybody is moving in the right direction,” she told Sky News, arguing Labor’s handling of the economy and tax agenda had given the Coalition something to fight against.

Senator Hume said rebuilding voter trust would take time after the election defeat but insisted the party now had a credible team and a policy platform capable of winning Australians back.

KPMG Australia has stopped bidding for new Federal Government contracts for three months as it battles to contain the fallout from a damaging ethics scandal.

The consulting giant last week unveiled plans to overhaul its leadership structure and review its ethical standards in a bid to restore trust after the controversy, which has already claimed the jobs of its chair and chief executive.

The scandal has reignited concerns about how consulting firms handle highly sensitive information belonging to the Federal Government, major banks, defence agencies and senior political figures.

Former IBM Promontory partner Alex Carmichael said the repeated scandals pointed to a deeper problem within the industry.

“The steady stream of proven cases of serious conflict of interest abuse over the past two decades points to a structural problem,” he said.

Mr Carmichael warned that the risk of misconduct increased as consulting firms amassed bigger volumes of valuable and confidential information, making conflicts of interest harder to avoid and more likely to cause serious damage.

Australia’s consulting giants are facing a major crackdown, with the Federal Government proposing sweeping new powers to police the industry after a string of high-profile scandals.

A Treasury position paper released today outlines reforms that could hand greater oversight to the Australian Securities and Investments Commission, impose tougher penalties for misconduct and introduce term limits for audit firms.

The review comes after years of controversy involving the Big Four firms including PricewaterhouseCooper’s misuse of confidential government tax information, KPMG’s use of private client information to win audit work and claims junior Ernst and Young staff accessed Prime Minister Anthony Albanese’s bank details before being detected and sacked.

Treasury said recent behaviour by major consulting firms had not been “fair and honest”, undermining public trust and raising concerns about whether existing safeguards were strong enough to protect market integrity.

Greens Senator Barbara Pocock said Australians had “had enough of the repeated scandals”, accusing the Big Four of repeatedly escaping meaningful consequences while calling for tougher regulation and structural reform.

The consulting sector, which earns billions of dollars advising governments and major corporations, is now under growing pressure to clean up its practices as regulators weigh the biggest shake-up of the industry in years.

The banking sector is warning Australia’s housing market could be headed for a sharp correction, with forecasts suggesting property prices could fall by as much as 10 per cent under the Federal Government’s tax reforms.

The predictions stand in stark contrast to Treasury’s modelling, which estimates house prices will continue to rise over the medium term, albeit at a slower pace.

Prime Minister Anthony Albanese on Wednesday dismissed the banks’ forecasts, saying they did not reflect the government’s own economic modelling.

Instead, he backed Treasury’s assessment that home values would still increase but by about 2 per cent less than they otherwise would have without the changes.

“You don’t assess things like property on the basis of a day-to-day basis. What you do is assess what will happen, and Treasury have done that,” Mr Albanese told the ABC.

“As a result of these changes, there’ll be increase in the value of houses. It’ll be slightly less, 2 per cent to be precise, than it would have been otherwise.”

The Prime Minister also defended the reforms, arguing they would make it easier for first-homebuyers to compete by reducing the advantage enjoyed by investors using negative gearing.

Australia’s property market has suffered its biggest monthly hit in almost four years, with fresh figures showing house prices are falling as higher interest rates and the Federal Government’s tax reforms bite.

New data released by Cotality today showed that national home values fell 0.4 per cent in June, marking the sharpest monthly decline since 2022.

Sydney was hardest hit, with home values tumbling 1.2 per cent, while Melbourne prices fell 1 per cent.

Perth and Brisbane continued to post gains, rising 0.7 per cent and 0.3 per cent respectively, but the pace of growth has slowed dramatically compared with previous months.

Cotality said the downturn was driven by higher interest rates, weaker consumer and investor confidence, and Labor’s changes to negative gearing and capital gains tax.

Prime Minister Anthony Albanese and senior Labor ministers have sought to play down the figures, pointing to Treasury modelling that predicts property prices will continue rising over the medium term, albeit at a much slower pace.

The figures come as concerns grow for first-homebuyers who entered the market with small deposits.

Some statistics show that nine of the 10 suburbs with the highest uptake of the Government’s 5 per cent deposit scheme have already recorded house price falls, raising fears some recent buyers could be pushed into negative equity.

Cotality research director Tim Lawless said it was “in some ways counterintuitive” for the Government to expand the low-deposit scheme to encourage more first-homebuyers into the market before introducing tax changes that placed “some downward pressure on prices shortly afterwards”.

Anthony Albanese says it is “appropriate” charges have been laid after two Ernst & Young graduates were sacked for allegedly accessing the Prime Minister’s personal banking information.

Mr Albanese on Wednesday refused to “go into the detail” because the case is before court but said it was “a serious issue”.

“Accessing anyone’s privacy, any Australian’s privacy is alarming, let alone someone from a contractor who’s not an employee of Commonwealth Bank being able to access that information,” he told ABC News Breakfast.

He said his government would “continue to examine” the conduct of major consulting firms, such as EY.

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Health Minister Mark Butler says he has “no idea” why rumours are circling that he will be the country’s next Prime Minister.

“It’s all a bit befuddling,” he said on ABC News Breakfast.

“We’re only a year into a term where our Prime Minister, Anthony Albanese, won a really significant victory with a really big agenda that we’re all working together to deliver in incredibly tough times.

“Our job as a team that has the privilege of governing this country is to work together under a leader in Anthony Albanese that I feel privileged to support.”

Prime Minister Anthony Albanese, pushed on whether he wanted to see Aussie home prices tank, said he backed Treasury modelling, and that now younger buyers have more of a chance to get in.

“There will be an increase in the value of homes, but it will be slightly lower,” Mr Albanese told ABC.

“The great news is that this Saturday, like last Saturday, first home buyers would have rocked up to auctions and not be competing with investors who want to negatively gear their property and have taxpayers backing in those investments. So, a level playing field.”

Mr Albanese rejected the suggestion that the real-world impact on property prices would be worse than what Treasury forecast.

Liberal Senator Michaelia Cash has clashed with Housing Minister Clare O’Neil, accusing her and the Albanese Government of leaving Aussies worse off as the property market tanks.

Sydney’s median home price fell 1.2 per cent to $1,265,608 in June, leading a nationwide decline of 0.4 per cent, the largest month-on-month fall in national dwelling values since December 2022, property data firm Cotality said.

Before an ugly argument broke out, Senator Cash accused Ms O’Neil of crashing the property market through Labor’s controversial tax changes.

Ms O’Neil said Labor was acknowledging there was a problem and was making the market fairer to younger Australians.

“The big picture is you’re crashing the market,” Senator Cash said on Sunrise.

“You’ve got to start living in the real world and take responsibility for the real-world impact of your policies.

“You have hurt first home buyers, you have hurt renters, but worse than that, you have stalled confidence in the market. If you can’t deliver new homes, you can’t get new buyers into homes.”

Senator Cash added that the excuses from Ms O’Neil were a “load of crap”.