ASIC admits it commenced two contracts with KPMG after it began investigating the company, ASX loses ground — as it happened

That's it for today. Thanks for joining us.

We'll be back on Tuesday next week. The stock market will be closed on Monday for the King's Birthday public holiday.

Until then, take care of yourselves.

Among the top performing stocks on the ASX 200 were Megaport Ltd (up $2.43, +15.19%, to $18.48), CSL (up $5.32, +5.75%, to $97.91), and Cochlear (up $5.35, +5.63%, to $100.45).

Among the worst performers were Liontown (down 14 cents, -6.14%, to $2.14), Mineral Resources (down $3.62, -5.08%, to $67.57), and Alcoa Corp (down $4.56, -4%, to $109.31).

Of the 11 sectors on the ASX 200, seven gained ground. The four that lost ground were financial stocks (-0.86%), energy stocks (-1.18%), basic materials (-2.05%), and academic & educational services (-3.16%).

Trading has finished on Australia's stock market for the day and the S&P/ASX200 has shed 61 points (-0.7%) to close at 8,625.1 points.

The ABC's national AI reporter Cameron Wilson has sent this to the blog:

Australia is backing a call from leading AI company Anthropic to stop or slow down work on the technology if AI starts improving itself faster than society can manage. 

Assistant Minister for Science, Technology and the Digital Economy Andrew Charlton said Australia welcomed efforts to make sure the world’s most powerful AI developers had agreed safety measures in place before the technology reached that point.

"The pace of progress must not outstrip understanding or undermine safety across society, and no company should develop AI that is unsafe," he said.

The call from Anthropic, the company behind the Claude chatbot, stops short of demanding an immediate halt to AI development.

Instead, it says that the "frontier" AI labs — organisations like Anthropic, OpenAI and Google that are developing cutting-edge technology —should agree on a verifiable way to slow or temporarily pause work if advanced systems begin showing signs they can rapidly improve themselves beyond what humans can do. 

In a blog post published this morning Australian time, Anthropic says self-recursive development is "not there yet" and the outcome is "not inevitable", but argues it could happen sooner than governments and public institutions are ready for.

The company said more than 80 per cent of the code merged into Anthropic's codebase was authored by Claude as of May 2026. It also said its engineers were shipping about eight times as much code per quarter as they did from 2021 to 2025.

Anthropic said that, while AI systems that could improve themselves could have great benefits, they also could "increase the risks of humans losing control over AI systems".

“If systems are capable of fully building their own successors, the ways we secure them, monitor them, and shape their behaviour all grow much more important,” the company said.

Anthropic, OpenAI and Google have been contacted for comment. 

Thanks Rob,

That's a fascinating first question. It's two-pronged.

You'd be essentially asking Hauser to explain how "important" he thinks the RBA is, and therefore how much coverage the media ought to give the RBA; and then to say whether he thinks the ABC's coverage of the RBA is more or less voluminous than other media outlets.

Luckily for you, Mr Hauser seems to enjoy questions of an existential and historical nature. How important is the RBA? The answer may end up being "42."

The latest ABC Business Daily pod is up.

Our colleague Alan Kohler has spoken to Adelajda Soltysik, senior policy advisor with the Centre for Policy Development, about the huge number of problems with Australia's childcare system.

It's a great listen. My mood has definitely not been negatively affected by the discussion. Definitely not.

Dear readers, what questions would you have asked RBA deputy governor Andrew Hauser, if you had 20 minutes with him?

Send them to the blog and I'll post them.

And here's the remainder of the questionable questions:

• Tell me about "aggregate demand". Because aggregate demand is the demand for everything in our economy. It doesn't matter whether it's data centres or it doesn't matter whether it's government or whether it's consumer spending, that is one of the keys that you monitor in regards to a) the trajectory of our economy, and therefore perhaps even the inflationary pressures that are coming inside our economy. Do you agree with that? (Hauser answered: "Yes ... where's this leading?").
• If there is disproportionate spending in any of those sectors, it is going to influence your decisions (Hauser answered: "Oh, I see where you're going with this").
• So it is aggregate demand that you look at, but if something is disproportionate in any area, it's not as though you suddenly move interest rates according to that particular area, be it the government, be it data centres. It's the total?
• Why, therefore, is it that the Reserve Bank and our Treasury inside the budget, why is it somehow that your forecasts for the economy going forward, the Reserve Bank seems more pessimistic about the growth forecasts for our economy in the next year or so, and Treasury seems more optimistic?
• Where is the economy's speed limit beyond which the economy starts to produce inflation?
• Do we have to change the way we measure productivity, or does Australia have to change to make certain that it prioritises growing the number of productive jobs?
•  You have a five-year term in Australia, you're about half-way through. What do you want to achieve in the rest of your term and is there a sense that you may stay at the RBA, or will you head back to the Bank of England?
• Do central bankers make good politicians (a reference to Mark Carney and Mario Draghi)?
• Kevin Walsh, the new chair of the US Federal Reserve, is he a politician or an independent central banker?

Well that was strange.

The "fireside chat" between Ross Greenwood and RBA deputy governor Andrew Hauser finished very quickly. In 20 minutes.

Mr Greenwood had Mr Hauser's time for 20 mins and these were the questions he decided to ask.

• Is there any advice you'd like to give the prime minister and the government about its spending or its budget? (the answer from Hauser: "No.").
• The Reserve Bank famously cut interest rates three times. This year it's increased interest rates three times. Would the nation have been better served if the RBA had simply not moved interest rates at all during that period? 
• Can you tell me, therefore, is central bank forecasting, and even setting of interest rates, more an art compared with being a science?
• Politicians famously say the central bank is independent. Central bank independence is absolutely sacrosanct, we can't challenge that independence, you make your own decisions. But the reality is it's something of a contract between government and the community and the central bank itself?
• We talked about central bankers being artists and economists. Historically, those people are not very good communicators. They don't explain themselves very well. They make mistakes in communication (Hauser had to turn that statement into a question to answer it).
• The governor herself has been really quite good at trying to get "down with the people", as it were, you know, talking about Taylor Swift tickets and the price of those. It's kind of one way of being able to communicate because, again, you have to be relatively careful with that communication as well because, really in Australia, people are invested because of the level of homeownership and the amount of mortgage finance people have, and there is a certain sort of literacy about finance and interest rates and about the job the RBA does here, that maybe there is not ... in other parts of the world (again, that wasn't a question).

Continued in next post ...

RBA deputy governor Andrew Hauser's "fireside chat" has begun, 10 mins later than scheduled. Ross Greenwood is leading the discussion.

Mr Hauser starts by talking about the ways in which Australia's economy, and the global economy, changed at the beginning of this year. It's a similar story to the one he told in February.

Mr Greenwood wants to know why the RBA's recent forecasts for Australia's economy were more pessimistic than Treasury's forecasts in the budget.

Mr Hauser said the RBA's growth forecasts were a bit weaker, but in the "scheme of things" the differences "aren't terribly large".

Mr Greenwood wants to know what the "speed limit" of Australia's economy is at the moment. As in, the rate at which the economy is capable of growing sustainably without inflation being a problem.

Hauser says he thinks it's about 2% a year. Australia's economy is currently growing at an annual rate of 2.5%, but the slowdown has well and truly begun.

He says if productivity was higher the economy would be capable of growing more quickly without having a problem with inflation.

That leads into a discussion about the difficulty of measuring productivity in services, the public sector and the potential of AI.

Hauser also repeats a point he's made previously, which is that people in other countries would love to have the problems Australia is dealing with at the moment.

ASIC has named two of the registered KPMG auditors, or partners, it is formally investigating.

KPMG is facing an auditing scandal after a whistleblower came forward in 2024 claiming partners misused confidential client information to win audits.

ASIC has launched a formal investigation into the firm, but has told Senate estimates it still has eight current contracts with KPMG.

Greens Senator Barbara Pocock asked ASIC to confirm it was investigating audit partner Paul Rogers and former chief operating officer Eileen Hoggett.

"There are currently just two registered company auditors that are the subject of our formal investigation and those are the names you put to me — Mr Rogers and Ms Hoggett," Ms Court told the committee.

"We are currently making a range of preliminary investigations into others but we haven't reached the level of a formal investigation yet.

"These issues are evolving as we speak and we are very happy to be as open as we can with the committee as these inquiries continue."

Ms Hoggett stepped down from her position on Wednesday, after chief executive Andrew Yates and head of audit Julian McPherson resigned over the scandal last week.

On June 19, current and former partners will appear before a federal parliamentary inquiry.

Reserve Bank deputy governor Andrew Hauser will start speaking in a few minutes, at an economic outlook event in Sydney, hosted by The Australian and Sky News.

We'll cover some of his comments in the blog.

The Bureau of Statistics published its quarterly labour account data this morning (for the March quarter).

In seasonally adjusted terms for the March quarter:

• total jobs increased 0.7% to 16.5 million
• filled jobs increased 0.6% to 16.2 million
• secondary jobs increased 0.6% to 1.1 million
• proportion of vacant jobs increased to 2.1%
• multiple job-holders increased 0.3% to 978,000
• hours worked increased 0.9% to 6.1 billion hours.

As it shows, there are now 978,000 people working multiple jobs, up 0.3% in the quarter.

It means the multiple job holding rate (proportion of all employed people) is currently 6.5%.

The multiple job-holding rate is an interesting number to follow. It was 6% at the start of 2020, it dropped to 5.1% at the start of the pandemic, then it recovered after lockdowns ended and the international border reopened.

Then, after inflation took off in 2022 and 2023, following Russia's invasion of Ukraine, and when the Reserve Bank lifted interest rates significantly, the multiple-job holding rate jumped to 6.7%.

A recent working paper from IMF economists (and a senior RBA researcher) found that when the RBA hiked rates rapidly between mid-2022 and the end of 2023 (from 0.1% to 4.35%) to try to dampen economic activity and kill inflation, many Australians in highly indebted households took on second or third jobs, to try manage their rising interest payments.

I wrote about that paper in the article below:

The Therapeutic Goods Administration (TGA) says it is still investigating 15 of the 16 sunscreens a Choice analysis found fell short of their SPF claims.

The TGA said the sunscreens had not been recalled while they were being investigated, meaning they could still be sold to consumers.

It told Senate estimates it hopes to conclude investigations soon.

Greens Senator Barbara Pocock continued her grilling of ASIC regarding KPMG, asking chief executive Scott Gregson whether the corporate watchdog will follow the example of the RBA and ATO and retender contracts.

"Will you review these contracts and relationships with KPMG?" Senator Pocock asked.

"Absolutely we'll consider where we are with KPMG in respect to those current matters and indeed the extent to which it should be relevant for our future procurement activities," Mr Gregson responded.

Appearing before Senate estimates today, ASIC chief executive Scott Gregson was asked by Senator Barbara Pocock why it had entered contracts with KPMG after it had commenced proceedings against the firm.

"We currently have eight active contracts, six of those for services contracts, two consultancy contracts and the total of those is approximately $3 million," he said.

"Of those contracts none involve the company audit areas of KPMG that are in question."

Senator Pocock asked how ASIC was managing the active contracts given its investigation of them.

"We have also approached KPMG this week seeking assurances of the absence of involvement of those persons involved in the matters that are public," he said.

Senator Pocock then asked why two contracts were commenced after ASIC began an initial investigation into KPMG.

"We obviously follow appropriate procurement practices and they operated independently of many of our other activities in the agency which is appropriate under procurement rules," he replied.

The corporate watchdog, ASIC, has told Senate estimates it has commenced a formal investigation into KPMG.

It follows the resignations of chief executive Andrew Yates, head of audit Julian McPherson and chief operating officer Eileen Hoggett in the past week, over a whistleblower scandal.

An internal whistleblower came forward in 2024, claiming partners misused confidential client information to win audits.

Yesterday, RBA governor Michele Bullock told Senate estimates the bank will put contracts it had with KPMG's out for tender.

Today, ASIC chair Sarah Court told parliament it has launched a formal investigation into KPMG  (after starting a preliminary investigation in April).

"We've now commenced a formal investigation this week in relation to KPMG and a number of the registered company auditors that sit within it.

In terms of correspondence we have had with Mr Shepard or KPMG, there has been a significant amount of interaction between ASIC and KPMG at the most senior levels."

You can read more about what RBA Governor Michele Bullock said about KPMG here:

Politicians have hesitated to weigh in on whether it would be good or bad if house prices start to fall.

The government's proposed changes to negative gearing and capital gains tax have contributed to a slowdown at auctions as people wait to see how it will affect them.

The reforms have passed through the House of Representatives, but will need the support of the Greens to pass them in the Senate.

You can read more on this story from political reporter Ewa Staszewska here.