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Dire warning about war’s impact in Australia

Think petrol prices are bad now? It's entirely possible you ain't seen nothing yet, if a worse-(but not worst)-case scenario plays out in the war in Iran.

Westpac has updated its modelling on the economic impacts brought about by the conflict, particularly on energy costs.

The big four bank's baseline – the scenario it thinks is most likely to play out – is the war lasts about a month, but that shipping through the Strait of Hormuz takes a further month to normalise.

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If that does play out, the bank forecasts oil prices will hit $US110 a barrel but average out at $US90 between April and June, with flow-on effects to hit Australian motorists, and economic growth to take a 0.1 of a percentage point hit.

"Petrol and diesel prices are likely to rise by more than the direct pass-through from higher crude oil prices alone," said Sian Fenner, Westpac's head of business and industry economics. 

"As a result, we expect retail petrol and diesel prices to average around $2.02/litre and $2.50/litre respectively.

"Fertiliser prices such as urea are also up sharply and some airlines have already announced price increases due to the rise in jet fuel."

Considering Australian petrol and diesel prices already averaged 219.5 and 245.6 cents a litre last week, and Brent crude is currently sitting above $US100 a barrel, that appears to be a relatively sedate impact on the economy for what the International Energy Agency has labelled the worst oil supply shock in global history.

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Customers fill their vehicles at the 7 Eleven Mobil petrol station on Liverpool Road in Ashfield, NSW.

However, there is significant uncertainty about how long the war will last, with US President Donald Trump's erratic statements about a timeframe, and his boasting that the conflict is won while demanding help from allies to open the Strait of Hormuz, doing nothing to quell market volatility.

Fenner said there "remains a material risk of a more extensive and prolonged disruption", and Westpac's alternative scenario now has the conflict lasting three months.

In such a case, the economic impact would be far worse.

Oil prices would average $US130 a barrel in the second quarter of the year, and at their peak would hit $US200.

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Flames rise from an oil storage facility south of the capital Tehran as strikes hit the city during the U.S.Israel military campaign, Iran, Saturday, March 7, 2026.

Given Australian petrol prices rise about 1 cent per litre for every dollar oil increases by, drivers could end up being slugged more than $3 a litre in the coming months.

Underlying inflation would also remain above the Reserve Bank's target until well into 2027, and half a percentage point would be lopped off Australia's overall economic growth.

In a sobering end to her research note, Fenner said the turmoil could be even worse if energy infrastructure suffers permanent damage.

"This (alternative) scenario assumes no significant damage to oil and LNG production and freight facilities," she wrote.

"A permanent loss of supply would prolong the cost to the real economy. 

"It would also add to the risk of a sell-off in financial markets that would not only amplify the negative shock to the global economy but complicate the policy response."

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NSW government paid $700 to get serial killer out of home with foster children

The NSW government paid $700 for accommodation to remove a convicted serial killer from a home in Sydney's west where she had been living with two foster children.

Regina Arthurell, who was jailed under the name Reginald Kenneth Arthurell, had been living under the same roof as the 12-year-old and 14-year-old until the NSW Minister for Communities and Families discovered the living arrangement through a Sydney radio station.

A whistleblower raised the alarm with 2GB after she contacted multiple government departments.

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Regina Arthurell had been living under the same roof as two foster children.

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The NSW Department of Communities and Justice (DCJ) paid for three nights of accommodation to remove Arthurell from the home.

The Daily Telegraph reported Arthurell spent the three nights at the Rydges Hotel in Armidale in the NSW northern tablelands.

Once dubbed the "cowboy killer", Arthurell served almost 24 years behind bars for bludgeoning fiancee Venet Mulhall to death at Coonabarabran in 1995 while on parole.

She had earlier killed her stepfather in the 1970s and a sailor in the 1980s.

She was granted parole in 2020.

Last week, NSW Communities and Families Minister Kate Washington said the situation uncovered by the radio station was "shocking".

"It is entirely unacceptable for a vulnerable child in the care of the state to be living with a triple murderer," Washington said.

"It should've never happened and I'm deeply apologetic for what has happened."

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NSW Minister for Communities and Families Kate Washington said the situation uncovered by the radio station was "shocking".

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Washington faced questions over the situation in NSW Parliament yesterday.

She did not directly respond to questions about how much the NSW taxpayer paid for Arthurell's accommodation but a NSW government spokesperson later confirmed the $700 figure.

Since the story aired on 2GB, Washington said she had personally apologised to the family.

"I have been clear that there have been multiple failures in this case," she said.

"We want to be as open and transparent as possible to ensure it does not happen again.

"When I became aware of this incident last week, I immediately took action and the person was removed from the house."

The department has launched a review into the incident.

"The secretary of DCJ has confirmed that two staff members have been suspended based on initial investigations underway as part of that review," she said.

"Because of the significant sensitivities involved, there are young children in care in this case, we do not intend on conducting a review through the media, but we acknowledge that serious issues have been identified and we are acting to address them."

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