An Australian-born backbench UK Labour MP has thrown a political hand grenade into the debate over the future of the country's besieged prime minister.

Following crushing local election defeats last week, Keir Starmer is facing a renewed threat to his leadership.

As the final results came in Saturday, Labour suffered a net loss of more than 1100 local council seats across England, and lost control of several local authorities.

Anti-immigration party Reform UK gained more than 1300 seats across England and made significant gains in legislative elections in Wales and Scotland.

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Starmer insisted he would not quit 10 Downing Street, but just hours later, former minister Catherine West, who was born in Victoria, announced she wanted a cabinet minister to challenge Starmer by Monday, or she would put herself forward in a leadership tilt.

For this to happen, 20 per cent of Labour MPs – 81 people – would have to back her.

West told the BBC she currently had 10 MPs behind her, but expected support to grow.

"My preferred option is for the cabinet to do a reshuffle within itself, where there's plenty of talent, and for Keir to be given a different role, which he might enjoy, perhaps an international role," she said.

"Then for others to come to the fore who can communicate the message, who are very able, so we can have minimum fuss."

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The goal of West is not to become UK prime minister but to become a political 'stalking horse' and affect change at the top of the country's Labour Party.

Her threat may force a leadership shot by Health Minister Wes Streeting and former deputy prime minister Angela Rayner, who are regarded as the strongest challengers.

West moved to the UK in 1998 before being elected a Labour MP or Hornsey in north London in 2015 (unlike Australia dual citizens can become British MPs).

She was a junior foreign office minister from 2024 to 2025 with responsibility for the Indo Pacific region.

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Tuesday's federal budget is shaping to become a major shake-up for the Australian economy, with major reforms in housing a wealth driver for millions of people.

Treasurer Jim Chalmers told Nine Chief Political Editor Charles Croucher on Weekend Today this morning the "status quo is not working" in the housing market, and flagged changes in the capital gains tax and negative gearing this week.

Croucher put it to the treasurer that the upcoming budget comes 40 years after then treasurer Paul Keating warned that Australia was at risk of becoming a "banana republic" due to a massive collapse in export prices and spiralling foreign debt.

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"We're now looking at a trillion dollars' worth of debt some time later this year … that speech was a line in the sand it shook the way Australians think," Croucher said.

Chalmers answered by saying there would be "more than the usual amount of change".

"There's more than the usual amount of change .. and more than the usual amount of anxiety about how our economy is playing out."

Hinting at capital gains tax changes, the treasurer also said while housing supply has to be the "main game" for fixing the housing crisis it should not end there

"Even though the problem in the housing market begins with supply, it doesn't end there. … the status quo and the tax system and the housing market is unfair … there are too may people locked out and not enough homes," Chalmers said.

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Negative gearing is when an investor has expenses associated with a property, like interest on mortgage repayments, that are greater than the profit it makes. Investors are then able to deduct many of those expenses from their taxable income, meaning they pay less during tax time.

Chalmers also announced today the budget will include an extra $2 billion over four years for infrastructure spending on roads, water, power and sewerage, that will help build up to 65,000 new homes.

The money will be given to councils and state utility providers, with $500m of the funds earmarked for regional and country areas.

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As mortgage-holders struggle to adjust to a third straight interest rate rise, new research reveals how much the banks make from customers chasing the Australian dream.

The Australia Institute says the big four banks – CBA, NAB, Westpac, and ANZ – rake in an average of $228,900 in profit over the 30-year span of an average $736,000 home loan.

Last year, those banks' profits rose to a collective $43 billion pre-tax, $16.9 billion of which was paid by owner-occupiers with a mortgage.

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The Institute found that mortgages for owner-occupiers made up 22.7 per cent of the big four banks' loans, they provided a "disproportionate" 39.3 per cent of their profits.

The banks also joined mining giants Rio Tinto and BHP as the top six most profitable companies in Australia.

Australia Institute co-chief executive Dr Richard Denniss said the figures were "obscene".

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"While so many Australians are going backwards, the banks' profits are only going in one direction – up," he said.

"In the first year of their mortgage, Australian homeowners are contributing more than $900 a month to their bank's profit."

The Institute also criticised the Reserve Bank's decision to lift interest rates to 4.35 per cent at Tuesday's board meeting.

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The increase saw interest rates hit their highest level in 15 years.

Senior economist Matt Grudnoff said the decision risked pushing the country into recession, and that increasing interest rates would not reopen the Strait of Hormuz.

"All this does is heap more pain on already stretched households," he said.

"The only tool the RBA has to fight inflation is to change interest rates. But interest rates are ineffective at stopping inflation caused by supply shocks."

If Australia is nudged into recession, Grudnoff said, the RBA would be forced to rapidly lower interest rates again in an effort to stimulate the economy, which would be a "humiliating backflip".

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Police are searching for the driver involved in an alleged hit and run that has left a woman fighting for life in Melbourne.

It is believed a woman in her 40s was riding an e-scooter on Swan Street near the intersection of Scott Street in Melton in Melbourne's west when she was hit by a small white sedan at about 12.20 this morning.

The car failed to stop and was last seen driving away from the scene heading east along Swan Street.

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READ MORE: SWAT team storms German bank after two taken hostage in locked vault

Items of clothing and shards of broken glass were seen at the site of the accident.

The woman was taken to hospital with life-threatening injuries.

Police are urging anyone who witnessed the collision or anyone with footage or further information to contact Crime Stoppers.

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A SWAT team has descended on a small town in Germany after two people were taken hostage inside a bank.

Police said they were alerted to the situation at the Volksbank branch in Sinzig, in the Rhine valley near Koblenz, about 9am.

The small town of about 17,000 people was thrust into lockdown as special operative police tried to figure out how many hostages were being held.

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Shortly before 3pm, seven members of the SWAT team stormed the bank, where they freed two uninjured hostages from a locked vault.

One of them was believed to be the driver of an armoured cash vehicle that had been ambushed.

"We are relieved that the hostages have been freed. They are deeply affected by what has happened," Koblenz Police spokesperson Juergen Fachinger said.

Police didn't find any hostage-takers in the bank, and believe the perpetrator or perpetrators left immediately after locking the people in the vault.

Police didn't indicate whether any cash or valuables were stolen.

The Volksbank branch is now a crime scene, as detectives investigate how the hostage takers escaped without notice.

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Farrer may be an electorate of only about 180,000 people, but One Nation's byelection victory in the conservative heartland is sending shockwaves across the country.

"Australia's changed, Australia's changed, Australia's changed," One Nation MP Barnaby Joyce told the ABC tonight from a celebration in the southern NSW seat.

"There'll be a bomb going off in Canberra right now."

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One Nation's David Farley was leading the two candidate-preferred count over popular independent Michelle Milthorpe by about 60 per cent to 40 per cent. And whilst there was no Labor candidate and a potent protest vote against the Liberals, Farley said it was the beginning of a new era for One Nation.

"One Nation has reached the end of its beginning, we're going through the ceiling from here," he said.

Joyce, a one-time deputy prime minister as the former leader of the National Party, said his defection to Pauline Hanson's One Nation was "a journey that so many from the Nationals and Liberals and Labor had before me and will have after me".

His joining of One Nation is being seen as key for the party to reach more voters, and he said he expected the result in Farrer to be replicated in other parts of the country.

"The Australian people are not dumb," he told the ABC.

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"What you saw tonight was not just a result for Farrer, it's a result for Australia … and what we see is the Australian people saying I'm over this, I'm going to change things around, completely change the batting order, and they did it tonight."

Joyce lashed his former Coalition colleague Angus Taylor, whose success in the Liberal Party leadership spill in February led to the Farrer byelection when his predecessor Sussan Ley quit politics.

The result for the Liberals tonight was catastrophic, attracting about 12 per cent of the vote in a seat that has only ever been held by the Liberal or National parties in its 77-year history.

Taylor blamed divisions within the Coalition as turning voters off.

"For too long we have been a party of convenience, not of conviction, and that must change," he said.

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"Over the last year or so the Coalition hasn't done what it should do: been united and stable and strong, with two breakups of the Coalition over that time.

"Those days are over."

Ley, who held the seat for 25 years, released a statement tonight as a warning to Taylor.

"I urge the Liberal leadership to accept this result with humility because the voters never get it wrong," she said.

"On the day the leadership spilled in February, the new leader said the Liberal Party needed to 'change or die'.

"Three months later, the result in Farrer demonstrates that statement to be far truer today than it ever was."

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A lunchtime barbecue has gone disastrously wrong for a Brisbane family with their two-storey house going up in flames this afternoon.

Queensland Fire and Rescue's John Longmire said it's believed the fire started from a barbecue that had been left on.

The home was gutted in the blaze that took hold in seconds in Sherwood in the city's south-west about 1.30pm.

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The fire spread across both storeys of the house.

Neighbour Sophia David said they rushed outside.

"There was already people screaming 'fire, fire' and our neighbours said they heard a couple of explosions as well," she said.

"It was all unfolding very quickly."

The family that lives at the home were already outside when the fire broke out on the balcony.

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Firefighters had the blaze under control within an hour and also rescued a cat.

"The house is completely gutted," Longmire said.