Australian news and politics live: Sussan Ley blasts Chris Bowen on energy prices

Senior opposition senator James Paterson has warned against the “premature recognition of a Palestinian state” after Canada became the latest Australian ally vowing to do so this year.

“It’s not a matter for me to commentate on Canadian foreign policy – that’s a matter for the Canadian government,” he told Sky News.

“But I’m very happy to give you my view on Australian foreign policy, and that is that I do not support the premature recognition of a Palestinian state before the conclusion of a peace process that establishes two states of Israel and Palestine.

“And the reason for that is that if you were to recognise a Palestinian state today, as the Albanese government is leaning towards doing.

“Yyou would be recognising a state which is in part governed by a terrorist organisation … which continues to hold 50 Israelis hostage, which has sworn the destruction of the State of Israel and the people in it, which has caused death and devastation for people of Gaza.”

Canada will join the UK and France in recognising a Palestinian state at the United Nations in September, Prime Minister Mark Carney has announced.

Mr Carney said the planned move was predicated on the Palestinian Authority’s commitment to reforms, including commitments to fundamentally reform its governance and to hold general elections in 2026 in which Hamas can play no part.

“Canada has long been committed to a two-state solution — an independent, viable, and sovereign Palestinian state living side by side with the State of Israel in peace and security,” he said in a statement.

“For decades, it was hoped that this outcome would be achieved as part of a peace process built around a negotiated settlement between the Israeli government and the Palestinian Authority. Regrettably, this approach is no longer tenable.”

Read the full story.

The US Federal Reserve has left its key short-term interest rate unchanged for the fifth time this year, brushing off repeated calls from President Donald Trump for a cut.

The Fed’s decision on Wednesday leaves its key short-term rate at about 4.3 per cent, where it has stood after the US central bank reduced it three times last year.

Chair Jerome Powell has said the Fed would likely have cut rates already if not for Trump’s sweeping tariffs.

Read more.

Details of the phone call between Anthony Albanese and UK Prime Minister Keir Starmer have been revealed.

“Prime Minister Albanese updated Prime Minister Starmer on Australia’s aid contribution and commitment to continue increasing aid to Gazans. He reiterated Australia’s long standing and strong support for a two state solution,” the statement read.

“Prime Minister Starmer laid out the UK’s framework for taking forward recognition of Palestine as a driver for peace and the latest on the UK’s involvement in delivering aid.

“The leaders agreed on the importance of using the international momentum to secure a ceasefire, the release of all hostages and the acceleration of aid, as well as ensuring Hamas did not play a role in a future state.

“The leaders also discussed AUKUS and welcomed the progress being made by all partners on the program.”

Treasurer Jim Chalmers has argued recognising a Palestinian state is a matter of “when, not if”.

He underlined that Australia’s position included conditions such as the release of hostages and ensuring no role for Hamas in future statehood arrangements.

“I think it’s a matter of when, not if, Australia recognises a Palestinian state,” he told ABC radio on Thursday.

“It’s been a longstanding bipartisan policy that we see a two-state solution in that part of the Middle East ... that momentum that we’re seeing in the international community is welcome but it’s also conditional.

“There are a number of obstacles still in the way to recognition of a Palestinian state. For example, the treatment, the release, of the hostages, making sure that there’s absolutely no role for Hamas. These are the sorts of things that the international community is working through.”

Borrowers will be hoping the latest inflation figures confirm the Reserve Bank’s case to cut rates next month but Treasurer Jim Chalmers stresses he won’t pre-empt the RBA’s independent decisions.

“I’m not going to pre-empt decisions that the Reserve Bank takes independently,” he said on ABC radio on Thursday.

“I think rate relief is welcome, certainly when interest rates were cut twice already this year, that provided some very, very welcome rate relief for millions of Australians with a mortgage.

“What yesterday’s numbers showed when it comes to those inflation numbers is really quite remarkable progress.

“Inflation has been brought down at the same time as we keep unemployment low, we have got real wages growing again.

“But it’s never mission accomplished because the global environment is uncertain.

“We have got some persistent structural issues in our economy. Growth is soft and people are under pressure. That’s why the primary goal... has been to roll out more cost of living help.”

Treasurer Jim Chalmers says Donald Trump’s moving tariff announcements is a ‘major source of uncertainty’ in the economy.

The US President’s universal 10 per cent tariff is meant to come into effect on Friday but Mr Trump this week suggested that could be doubled to 20 per cent.

He also announced overnight India would be hit with a 25 per cent tariff.

“We haven’t heard different from the 10 per cent baseline that’s been levied on Australia,” Dr Chalmers told ABC radio.

“Obviously, we continue to engage with the Americans on this. It’s one of the main issued playing out in the global economy.

“It’s a major source of uncertainty in the economy whether it’s what’s been said overnight about India, whether it’s the back and forth between the US and China, or the tariffs levied directly on Australia.

“We have got the baseline rate as far as we are aware and as we understand it which is 10 per cent.”

When asked if he thinks the 10 per cent tariff will increase, Dr Chalmers said: “I think it would be a brave person to assume that there won’t be .. there will always be more announcements about this. These tariff announcements are a moving feast.”