Received

The head of the Reserve Bank is still confident he can deliver a soft landing for the economy after the board pulled the trigger on another interest rate hike.

In a speech following a 25 basis point hike at the May cash rate meeting, RBA governor Philip Lowe said it was still possible to bring inflation back to target without causing a recession.

Asked if the central bank was playing "recession roulette" by hiking rates again, he told an RBA Board dinner in Perth the "narrow path" to dodge a recession "wasn't getting any narrower" but there was still uncertainty clouding the outlook.

He also said returning inflation to target while preserving most jobs hinged on the population believing inflation would come down quickly.

"If people think inflation is going to remain high then, understandably, they will adjust their behaviour," he said.

"Firms will be more willing to put up their prices and workers will seek larger pay rises."

Once inflation expectations become entrenched, he warned, it is much harder to get inflation down and it would require even more interest rate hikes and more job losses.

The 25 basis point hike in May brought the cash rate to 3.85 per cent.

Many experts expected the central bank to keep the cash rate on hold again after pausing in April but incoming data, including inflation, jobs and home price numbers, collectively built the case for another hike.

Dr Lowe said the board opted to keep the cash rate on hold in April to take the pulse of the economy and incoming data suggested further tightening was needed.

"Since then, we have seen further evidence that the Australian labour market is still very tight, that services price inflation is proving to be uncomfortably persistent abroad, and that asset prices - including the exchange rate and housing prices - are responding to changes in the interest rate outlook," he said.

The governor confirmed he was worried Australia would end up like many other major economies struggling with sticky services inflation.

"It is possible that circumstances might be different here in Australia, but the experience abroad points to an upside risk, especially given the high degree of commonality across countries in inflation dynamics recently," he said.

As in the statement on the most recent rates decision, the governor confirmed "some further tightening of monetary policy may be required" to get inflation down quickly enough.

"The board is not on a pre-set course."

© AAP 2023

More than one million Australian families will soon get cheaper child care, with extra money also set aside to hire more early educators.

The Albanese government will commit $55.31 billion over the next four years in this month's budget to make childcare more affordable from July.

The signature election pledge will benefit about 1.2 million families nationwide, with more than 400,000 families in NSW, 302,100 in Victoria, and 284,100 in Queensland to receive a boost.

Treasurer Jim Chalmers said cheaper child care was a "practical measure that is good for children, good for parents and good for the country".

"It will help with cost of living pressures and make it easier for parents to return to paid work, or work more paid hours, if they want to," he said.

The government will also set aside $72.4 million over five years to support the training of early childhood educators and the care sector.

More than 80,000 early childhood educators will benefit from the package, with a focus on regional and remote services, and Indigenous organisations.

Funding will allow providers to backfill 75,000 early childhood positions, as workers and management undertake professional development.

Up to 6000 educators will be able to upskill by being financially supported to complete on-the-job teaching placements.

Some providers will be eligible to apply for a share in $18 million in grants of up to $900,000 to set up a new family day care service in an area with limited supply.

Early Childhood Education Minister Anne Aly said a sustainable early childhood education sector was central to Labor's reforms.

"These measures have been shaped by our ongoing engagement with the sector, responding to the needs of this vital workforce," she said.

"Early childhood education is a wonderful career with a clear path for progression. We're making sure the workforce can access the development opportunities they need."

Education Minister Jason Clare said the announcement will work to support the skills and training of early educators.

"A quality early childhood education sector is an integral part of Australia's education system and a critical building block in a child's life," he said.

The government will also invest $10.9 million to help social and economic participation of vulnerable people across the country.

Up to 32 organisations nationwide will share in the funding to deliver projects which support young people up to 18, people with a disability or mental health issues, vulnerable women or the unemployed.

© AAP 2023

More than a million Australian families will soon get cheaper childcare, with extra money also set aside to hire more early educators.

The Albanese government will commit $55.31 billion across the next four years in this month's budget to make childcare more affordable from July.

The signature election pledge will benefit about 1.2 million families nationwide, with more than 400,000 families in NSW, 302,100 in Victoria, and 284,100 in Queensland to receive a boost.

Treasurer Jim Chalmers said cheaper childcare was a key plank in addressing the cost of living as he battles to contain high inflation.

"What we've tried to do is to provide cost of living relief in a number of areas so that we can make things a little bit easier," he told reporters in Canberra on Wednesday.

"Cheaper childcare will make life easier for a lot of families in a way that doesn't add substantially to the inflation challenge in our economy."

Opposition finance spokeswoman Jane Hume said the government needed to reign in spending to curb high inflation following the central bank's rate hike.

"The RBA put out some signals," she told AAP.

"We want to make sure that we see a budget that isn't going to make the inflation situation worse. Getting inflation under control is a team sport."

The government will also set aside $72.4 million across five years to support the training of early childhood educators and the care sector.

More than 80,000 early childhood educators will benefit from the package, with a focus on regional and remote services, and Indigenous organisations.

Funding will allow providers to backfill 75,000 early childhood positions, as workers and management undertake professional development.

Up to 6000 educators will be able to upskill by being financially supported to complete on-the-job teaching placements.

Some providers will be eligible to apply for a share in $18 million in grants of up to $900,000 to set up a new family day care service in an area with limited supply.

The government will also invest $10.9 million to help the social and economic participation of vulnerable people across the country.

Up to 32 organisations nationwide will share in the funding to deliver projects that support young people up to 18, people with a disability or mental health issues, vulnerable women, or the unemployed.

© AAP 2023