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A soft landing for the economy remains on the cards as the Reserve Bank maintains it's possible to drive down inflation without sacrificing growth.

Australia's central bank opted on Tuesday afternoon to keep interest rates on hold in a move that sparked hopes the hiking cycle was over.

The RBA has jacked up rates by four percentage points since May last year in a bid to return inflation to target.

Previewing a fresh set of predictions ahead of the central bank's statement of monetary policy on Friday, governor Philip Lowe said the central forecast had inflation back within its target two-three per cent range by late 2025.

The last batch of forecasts only ran through to mid-2025 and had inflation brushing the top of the target band at three per cent.

The full predictions will detail exactly where the RBA expects inflation to land.

Other forecasts nestled in the governor's statement were largely unchanged, with the central bank still expecting "below trend" economic growth of about 1.75 per cent over 2024 and a little above 2 per cent in 2025.

It expects the jobless rate to drift up as the economy slows, from an ultra-low unemployment rate of 3.5 per cent to 4.5 per cent late next year.

While Dr Lowe outlined a range of risks to the predictions, including stubborn growth in service costs and rent inflation, he said the latest round of data was consistent with a soft landing.

"The recent data are consistent with inflation returning to the two-three per cent target range over the forecast horizon and with output and employment continuing to grow," he wrote in his post-meeting statement.

Treasurer Jim Chalmers welcomed the RBA's expectation inflation would be returned to its target band while the economy kept growing.

"And honestly, how quickly or slowly we can do that is an important question," he said.

Dr Chalmers said Treasury forecasts had inflation returning to target in the next financial year.

"Everyone would like that to be sooner, but we need to address this inflation challenge without crunching the economy, that is the challenge not just for the RBA but for the government as well," he said.

Shadow treasurer Angus Taylor warned it was difficult to keep inflation within the target range after an inflation spike.

"We know from past bouts of inflation that it is very difficult to stay within that range," he said.

Mr Taylor said there was clearly more work to be done to return inflation to target and the government played a big role in fuelling price rises.

AMP economist Shane Oliver said the RBA had already done more than enough to slow the economy.

"We are now seeing increasing evidence that rate hikes are biting with falling real retail sales, a sharp fall in building approvals, slowing business investment, slowing GDP growth, more negative corporate commentary, rising insolvencies, indications of a slowing jobs market along with a faster than the RBA expected fall in inflation," he said.

"As a result of ongoing rate hikes, the risk of recession in the next year is now very high."

Mr Oliver said continuing to lift interest rates would add to this risk.

"At the very least the economy is likely to have slowed substantially by year end or early next year with unemployment starting to rise faster than the RBA is allowing for," he said.

© AAP 2023

Social media giants have been put on notice they should make themselves more transparent and subject to Australian laws or face large fines or even bans.

An inquiry into foreign interference found popular platforms were being used to watch and gather information on people, repress and threaten diaspora communities and interfere with elections to promote preferred candidates and create disunity.

This included death threats, hacking attempt and surveillance of people within the Iranian, Tibetan, Chinese and Ukrainian communities.

"Vile" Russian-backed campaigns were being waged against the Ukrainian diaspora, including messages of "how they would be executed, beheaded, where their head is going to end up and so on".

Authoritarian governments in Iran, China and Russia targeted and harassed dissidents through the use of bots and troll farms - which use fake social media accounts to attack users or spread disinformation.

The Senate committee recommended the government require all social media platforms operating in Australia to meet minimum transparency principles, including labelling state-affiliated accounts, disclosing any directions they receive from governments and being open about accounts they censor or take down.

It additionally recommends extending the TikTok ban on government devices to include contractors and the work devices of people who work for nationally significant systems.

Chinese messaging and social media platform WeChat was also singled out, with the committee recommending it be banned on government devices in line with TikTok "given it poses similar data security and foreign interference risks".

Australian Signals Directorate acting director-general Abigail Bradshaw said the decision to ban TikTok from government devices was because the information collected could create "quite a unique fingerprint" of the user.

She said the popular social media app collected phone numbers, contacts, IP addresses and SIM card numbers.

TikTok officials conceded serious changes were needed after reports the company spied on United States journalists following negative stories.

The committee also called for strategies to counter misinformation and disinformation in the Indo-Pacific and empower foreign language journalists to target the malicious activity on in-language posts and platforms.

Committee chair and opposition home affairs spokesman James Paterson said Australia needed to stay ahead of the threat being posed through foreign media.

He said authoritarian nations engaged in foreign interference through popular social media platforms against a backdrop of increasing regional tensions.

"Perpetrating states use these platforms to skew public debate, undermine trust in democratic institutions, and peddle false narratives," he told the Senate on Tuesday.

"Social media is the place where news is reported, contentious issues are debated, consensus is formed, and public policy decisions are shaped.

"The health of these forums directly affects the health of our nation (and) foreign authoritarian states know this."

Senator Paterson said emerging technologies such as artificial intelligence was making foreign interference easier and Australia needed to develop the capability to counter the threat in real time.

This included a recommendation to stand up a new office to combat cyber foreign interference.

© AAP 2023

The Reserve Bank might have reached the pinnacle of its interest rate hiking cycle following a decision to keep the cash rate on hold for the second consecutive month.

The central bank has left the door open to more interest rate hikes, but many economists believe the chance of more tightening is starting to wane based on a more dovish tone from the Reserve Bank governor.

Leading up to the decision on Tuesday, experts were split on which way it would go, while markets were largely convinced the RBA would stay on hold.

The two months holding steady at 4.1 per cent follows four percentage points of increases, which have been heaping pressure on borrowers in a bid to dampen demand and help bring down inflation.

Consumer price increases have started to slow, with inflation rising six per cent annually through to June, down from seven per cent in March.

Inflation remains well above the central bank's target, however, with governor Philip Lowe noting in his statement it was still too high.

While Dr Lowe raised concerns about briskly rising service prices and increasing rents, he said the bank's recently updated forecasts had inflation back within the target range by late 2025.

In a positive sign for the economy, the refreshed predictions, which will be released in full on Friday, have inflation returning to the target band "with output and employment continuing to grow".

But the governor still kept open the option to hike again and outlined a range of risks on the horizon.

"Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable time frame, but that will depend upon the data and the evolving assessment of risks," Dr Lowe said.

He flagged "surprisingly persistent" services inflation overseas as a source of uncertainty for Australia, as well as the tight labour market and the unclear outlook for household consumption.

EY chief economist Cherelle Murphy said the RBA was right to stay on hold, but the move was a conservative one.

"The June quarter consumer price index showed the inflation pulse softening just enough to tell a story of an economy that is responding as designed to the 400 basis points of rate hikes so far," she said.

Ms Murphy said there were a number of caveats to the economic outlook, including the nation's sluggish productivity performance.

"If productivity doesn't pick up from the pandemic-induced slowdown, the Reserve Bank's inflation forecasts will not be met, and further rate hikes will likely be necessary," she said.

Ms Murphy said the RBA would need to see steady progress on inflation for the rate pause to be maintained.

Oxford Economics Australia head of macroeconomic forecasting Sean Langcake said the RBA appeared increasingly confident it had broken the back of high inflation.

"With economic momentum waning, it seems unlikely the RBA will be presented with more compelling arguments to raise rates than they would have heard at today's meeting," he said.

The group expects the central bank to stay on hold until deep into 2024.

© AAP 2023