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

The Federal Government is considering sweeping changes to Australia’s consulting giants, with options including breaking up the Big Four or capping their size after a string of high-profile scandals.

Assistant Treasurer Daniel Mulino said that the conduct exposed at KPMG, Ernst and Young and PricewaterhouseCoopers was “simply isn’t good enough”, accusing some firms of misusing confidential information across their audit, accounting and consulting businesses.

Speaking to ABC Radio National, Mr Mulino said one option would prevent firms from providing both audit and consulting services to the same client, while a tougher alternative could force them to separate those businesses altogether.

The Government is also considering cutting the maximum number of partners in a consulting firm from 1000 to 400, in line with recommendations from a parliamentary inquiry.

Mr Mulino stressed that no decisions had been made, saying he did not have a “strong disposition” towards any one reform as the Government consults on the industry’s future.

The Australian share market started the new financial year in the red after consumer staples dived and financials felt the weight of the property market suffering its biggest monthly hit in almost four years.

The benchmark S&P/ASX200 index tested 8730 levels in the first hour of trade on Wednesday before rebounding to 8753.4, down 25.3 points or 0.29 per cent, while the broader All Ords dipped 21.9 points or 0.24 per cent to 8964.3.

Coles slumped more than 6 per cent to $22.82 after the Australian Competition and Consumer Commission knocked back its acquisition of a lease for a supermarket and liquor store in Kalgoorlie-Boulder.

The retail giant said it disagreed with the decision and was considering its next steps.

Coles also confirmed it was in talks with TPG about potentially acquiring Greencross Pet Wellness Company, which owns Petbarn and City Farmers, and is Australia’s largest pet care company with 267 retail stores.

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Labor is set to reject calls from unions and the Greens to extend compulsory superannuation to hundreds of thousands of teenage workers as its payday super reforms become law.

The legislation, which takes effect today, keeps in place an exemption that allows employers to avoid paying super to workers under 18 who work fewer than 30 hours a week — affecting about 515,000 young Australians.

The Greens, backed by the ACTU and super funds, yesterday moved to overturn the exemption but the Senate delayed debate on the proposal.

The Government’s stance comes despite Treasurer Jim Chalmers saying he wanted to engage with young people and unions on the issue, signalling Labor is not yet prepared to abandon the longstanding age and hours-based exemption.

Abuse, antisocial behaviour, threats and physical intimidation is on the rise at polling places, leading to proposals to safeguard Australian elections.

Caps on signage and volunteers, a new code of conduct, volunteer registration, and bouncer-like powers for electoral staff are part of the proposed response.

A report into the 2025 federal election, won by Anthony Albanese’s Labor party, has revealed a marked uptick in ugly scenes on the campaign trail and during voting.

It points the finger at growing political polarisation and the increased role of “third-parties” - groups that are not candidates or parties, but campaign alongside them to support particular parties, policies or candidates.

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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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