Australian news and politics live: Anthony Albanese backs housing tax reforms ahead of Federal Budget

The Prime Minister has declared Labor is the only party “in the centre of Australian politics” as he revels in the Coalition’s landslide loss to One Nation in Saturday’s Farrer by-election.

Over the weekend, Pauline Hanson’s party convincingly won its first-ever seat in the House of Representatives, with candidate David Farley claiming the electorate once held by former Liberal leader Sussan Ley.

“There’s only one political party that is in the centre of Australian politics and looking after mainstream issues and that’s the Labor Party,” Anthony Albanese told Radio 4CA in Cairns.

“We’ve got the Greens political party on our left and now we’ve got three right-wing parties effectively all promising similar things.

“And that’s why if the Liberal Party just try to be One Nation light, then they shouldn’t be surprised that people will vote for the real thing rather than the lighter version of it.”

The Opposition has accused Labor of preparing to break election promises and “hit every single Australian” in Tuesday’s Budget because it cannot control spending.

Anthony Albanese has signalled voters would be given a full explanation for the Government’s shift on policies including negative gearing and capital gains tax concessions, while insisting the reforms were aimed at helping younger Australians enter the housing market.

Shadow treasurer Tim Wilson says Australians who have invested in their future and built for the future will not be happy with what is unveiled by the Government.

“The Government is seeking to declare an assault on Australian families and small businesses because they can’t control their spending addiction and their active inflation agenda.”

Finance Minister Katy Gallagher says the Albanese Government’s “supercharged” net zero investment spending is “not sustainable” ahead of the Budget being handed down on Tuesday night.

“We have invested heavily in this area and the transition is underway. It’s gaining pace,” she told The Australian.

“You can actually see that investment paying off, but you wouldn’t expect to see what we’ve done in earlier budgets where we’ve kind of supercharged the investment. That’s not sustainable.”

Barnaby Joyce has warned the Coalition cannot ignore the political earthquake triggered by One Nation’s shock Farrer by-election win, declaring the Liberals face an existential crisis after suffering a massive collapse in support following Sussan Ley’s departure.

Speaking on Radio National, Mr Joyce said One Nation would not simply welcome every disgruntled Coalition figure looking to defect after the result, saying, “Just because you jump doesn’t mean we catch you. It’s not an open door that anybody who wishes just walks into One Nation”.

He described the scale of the Liberal Party’s defeat as catastrophic, adding, “The Liberal Party really do have to do some soul searching after the weekend because that was catastrophic. That is almost, that’s almost a signal that things might be over.”

Mr Joyce also suggested One Nation’s support base was rapidly expanding beyond regional Australia, claiming western Sydney voters were increasingly comfortable with the party becoming a dominant political force.

Anthony Albanese was forced to defend Labor’s expected housing tax changes ahead of Tuesday’s Federal Budget, arguing governments must be prepared to make difficult decisions to address worsening generational inequality and declining home ownership.

The Prime Minister signalled Australia would be given a full explanation for the government’s shift on policies including negative gearing and capital gains tax concessions, while insisting the reforms were aimed at helping younger Australians enter the housing market.

“People are under pressure. And the easy path is to say, oh well, we’ll just sit back and watch that occur. The difficult decision, but the right decision, is to do the right thing with the right policies to deliver,” Mr Albanese said.

He added, “People are frustrated with issues like intergenerational equity. People are worried that younger Australians are never going to get a crack at home ownership … any responsible government like ours has to take these issues seriously.”

Mr Albanese also argued housing inequality had become more deeply entrenched since the last election, saying, “The circumstances that are here now when it comes to intergenerational equity, how are they different from what they were before the last election. How they are different is that they continue to be entrenched without reform and that’s the point.”

Mr Albanese also brushed aside suggestions of internal tension over the scale of reform, saying he and Treasurer Jim Chalmers were “in sync” heading into the budget.

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Prime Minister Anthony Albanese has pointed to months of Coalition infighting and the fallout from Sussan Ley’s leadership removal as key factors behind One Nation’s shock breakthrough victory in the Farrer by-election.

Speaking on Radio National, Mr Albanese said voters had become increasingly disillusioned by instability within the opposition ranks and the treatment of the former Liberal leader, who represented the electorate for a quarter of a century.

“I think also there’s been a great deal of disappointment with the breakup of the coalition, not once but twice. The removal of a leader who had represented of course that seat in Sussan Ley for 25 years, but who was removed without even being given the opportunity to do a single budget-in-reply,” he said.

Mr Albanese added: “The way that that was done having these meetings on the day of the funeral of one of their former colleagues I think left an extraordinary legacy of betrayal for people who had supported Sussan Ley for a long period of time.”

While acknowledging many Australians were frustrated with rising financial pressure and losing faith in the political system, he described the result as “a devastating result I think, for Angus Taylor and the Liberal Party.”

Fresh drone incidents across the Gulf have renewed fears the fragile Middle East ceasefire could unravel, with multiple countries reporting aerial threats and attacks over the weekend.

The United Arab Emirates said its air defence systems intercepted two drones launched from Iran, while Kuwait confirmed its military responded to “a number of hostile drones in Kuwaiti airspace”.

In Qatar, officials said a cargo ship arriving from Abu Dhabi was struck by a drone near its waters. Iranian media later claimed the vessel had been travelling under a US flag. The escalating tensions were accompanied by a fresh warning from Iranian parliament national security spokesman Ebrahim Rezaei, who declared: “Our restraint is over as of today.”

He added: “Any attack on our vessels will trigger a strong and decisive Iranian response against American ships and bases.”

Iranian state television also reported military chief Ali Abdollahi had met supreme leader Mojtaba Khamenei and received “new directives and guidance for the continuation of operations to confront the enemy”.

Donald Trump has lashed out at Iran’s latest response to a US-backed peace proposal aimed at ending the escalating Middle East conflict, declaring the offer “totally unacceptable” and casting fresh doubt over hopes of a diplomatic breakthrough.

In a fiery post shared to Truth Social on Sunday US time, Mr Trump revealed he had reviewed Tehran’s response and was unimpressed by what had been put forward through mediators in Pakistan.

“I have just read the response from Iran’s so-called ‘Representatives.’ I don’t like it — TOTALLY UNACCEPTABLE!” he wrote, without detailing which parts of the proposal he opposed.

The rejected response reportedly failed to include guarantees around Iran’s nuclear program — one of Washington’s key demands during negotiations. Iranian officials instead indicated they would support a gradual reopening of the Strait of Hormuz to commercial shipping if the US agreed to lift restrictions targeting Iranian ships and ports.

The Trump administration had submitted its latest proposal to mediators last week as part of an effort to establish a 14-point framework agreement, including a month-long negotiation period aimed at preventing further escalation in the region.

Complicating the negotiations is the continued absence of Iran’s supreme leader, Mojtaba Khamenei, who has reportedly remained out of public view since being injured in an attack earlier in the war that killed his father. Iranian supreme leaders have historically held final authority over major national security decisions, raising further uncertainty around whether Tehran can finalise any major agreement.