Australia news LIVE: Chalmers to reveal $6 billion budget boost ahead of interest rate decision; Cybersecurity experts say government blew OpenAI breach out of proportion

Updated September 28, 2026 — 10:05am,first published September 28, 2026 — 6:45am

Hello and welcome to our live coverage of national news this Monday, September 28. Here’s what is making headlines today.

• Treasurer Jim Chalmers will reveal a $6 billion budget boost today as he faces internal pressure to curb inflation ahead of the Reserve Bank’s likely decision to raise interest rates to a 15-year-high. The final budget figures are expected to show that the underlying deficit is about $6 billion lower than the $28.3 billion initially forecast at the time of the budget in May.
• Australia will press criminal charges against OpenAI if possible, senior government ministers say, after a rogue AI agent broke into the Medicare Statistics Reporting Portal back in June. Prime Minister Anthony Albanese dismissed claims he kept the hack secret until a politically opportune moment as “nonsense”, after critics noted he made the announcement while in New York for the United Nations General Assembly where he was due to make an address about the risks of AI.
• Meanwhile, cybersecurity experts and tech investors have accused the Albanese government of blowing the breach out of proportion, arguing that the website’s code was set up to send data to anyone with the skills to request it.
• Members of violent international extremism networks are coercing young Australians into harming themselves while evading authorities as they move across online platforms under multiple aliases, Swedish court documents obtained by this masthead have revealed. Australian law enforcement officials are racing to dismantle the networks they say are driving the rise of online harm to young people.

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South Korea’s presidential office demanded an official explanation and apology from Ukraine, accusing Kyiv of disclosing the transfer of two North Korean prisoners of war to South Korea and then falsely denying that the two sides had agreed to keep the move confidential.

“The presidential office expresses strong regret over Ukraine’s unilateral disclosure and its subsequent false announcement that there had not been a non-disclosure agreement,” said Seong Ghi-hong, senior presidential secretary for public relations. He said the government was reviewing additional measures over the issue if necessary.

Seong said Ukraine had requested the secrecy, arguing that public disclosure could trigger domestic criticism that Kyiv had given up an opportunity to exchange the soldiers for Ukrainian prisoners.

South Korea agreed to keep the transfer confidential given security, diplomatic and humanitarian concerns, including the safety of the prisoners and their families, he said.

According to the statement, Ukraine later disclosed the transfer in President Volodymyr Zelensky’s address to the UN General Assembly without sufficient prior consultation – and then subsequently denied the existence of any confidentiality agreement.

Seong said the denial had seriously damaged trust between the two governments and could harm bilateral relations. Ukraine’s embassy in Seoul did not immediately respond to a Reuters request for comment.

Reuters

NSW transport officials are scrambling to scrap planned trackwork after the Newcastle Knights galloped to an unlikely grand final appearance and tens of thousands of fans prepare to travel to Sydney.

Buses were yesterday set to replace trains from Newcastle to Wyong on the day of the NRL grand final, with connecting trains between Wyong and Sydney’s Central Station to run on a changed timetable.

But after the Knights clinched an unlikely place in the grand final with a win over Penrith – following a wooden spoon finish last season – the scheduled works are set to be moved to another day to accommodate increased commuter demand from the Hunter.

Plans are being finalised today to allow trains to run.

Knights fans already experienced dramas getting to their team’s preliminary final yesterday after an issue with a freight train at Warnervale led to delays and cancellations.

But those who reached Accor Stadium made their voices heard as the Knights triumphed over Penrith 22-14 despite playing more than half the game with only 12 men on the field.

Opposition defence spokesman James Paterson has suggested AI giants could agree to external evaluations as part of a deal to expand their data centre rollout in Australia.

“Australians and anyone in the world is entitled to demand an independent oversight of these companies because they are powerful, because the technology is evolving very quickly, and because they themselves say they don’t have a complete handle on what these models are doing,” Paterson told Radio National.

“I think we have an opportunity to strike a really good deal here for Australia that gives us strong oversight and evaluation, that gives us independent assurance, that gives us some confidence about safety, and also attracts billions of dollars of investment, gives Australia access to the world’s most advanced models, and allows it to use us to defend our networks from the attacks that we know are coming in the future from AI agents. So there is a package deal to be done here, and I think it should be seized.”

Government Services Minister Katy Gallagher said mandatory reporting should be the minimum legal requirement for artificial intelligence companies that breach government sites.

A federal taskforce is examining whether Australia’s laws are fit for purpose after OpenAI belatedly informed the government that rogue agents had breached a Medicare portal.

“I think at a minimum … a mandatory reporting requirement is essential, acknowledging that OpenAI did come to us and report this … and have engaged with us in the weeks afterwards to share all the information they can,” Gallagher, who also holds the finance portfolio, told Radio National.

Asked whether she wanted to see OpenAI prosecuted, she said: “I think there should be consequences, but I also have been briefed very clearly that OpenAI have been helping us”.

“We have to have a look at this incident and deal with it on its merits. But the broader question is how we deal with these in the future, we’ve got to be looking at legislation, but also engagement with these companies.”

OpenAI announced at the weekend it would pause training of its latest models.

Australia’s decision to back in the US’ war against Iran in February was “not a mistake,” Assistant Minister for Foreign Affairs Matt Thistlethwaite said this morning, as the effects of the conflict continue to be felt around the world.

Asked if the government might have made a different decision if it had been able to foresee the economic fallout of the war on Australia, Thistlethwaite told News24:

“We supported it in the beginning because it was aimed at ensuring that Iran cannot acquire a nuclear weapon, and that was the right thing to do, and we stand by that. So that was not a mistake. That was the right thing to do.

“But this conflict has now dragged on for too long, in our view, and the Australian people have every right to be completely frustrated by this ongoing conflict and its stop-start nature ... because of the closure of the Strait of Hormuz, it’s forcing up fuel costs and energy costs throughout the world.”

Fuel prices have surged across the country in September due to the conflict, which has closed the Strait of Hormuz and prevented oil supplies from travelling through the critical choke point.

Iran’s Foreign Minister Abbas Araghchi says Tehran has not been formally notified of US President Donald Trump’s rejection of its proposed deal to reopen the Strait of Hormuz.

Araghchi said Tehran awaited a US response through mediators after Trump rejected Iran’s proposal to resume negotiations.

Speaking from New York, Araghchi told NBC that Iran was “fully prepared for the war to be resumed”.

He added, however: “At the same time, we stand ready for diplomacy. It is up to President Trump to choose.”

Staying with the Finance Minister, Gallagher told Nine’s Today show just now that she “totally rejected” suggestions the government had politicised a breach of the Medicare Statistics Reporting Portal by an OpenAI agent.

Pressed to respond to reports over the weekend that cybersecurity experts and tech investors had accused the government of blowing the incident out of proportion, she said:

“That’s just not true. I completely reject that. As someone who was the minister advised of this incident and who has then talked with others, you know, the PM, the deputy prime minister, this was a significant issue.

“Yes, it was on a public-facing website, and the data that the agent accessed was not personal information or some of those data sets that we protect to the highest level … But it is the first time that we’re aware that an agent acting on its own, not with the authority of OpenAI, was able to get into one of our data systems, and I think we did the right thing.”

Finance Minister Katy Gallagher is doing the breakfast media rounds ahead of a joint press conference with Treasurer Jim Chalmers to announce the government’s final budget outlook.

The underlying budget deficit came in at about $6 billion less than projected. Gallagher said this was proof of the government’s spending restraint amid extraordinary pressures.

“The fact that the budget and the final budget outcome comes in with half the deficit that we inherited in 2022, and is lower than what we forecast at budget time, shows how much work we have been doing,” she told ABC’s News Breakfast.

“Whether it’s been savings, paying down debt, all of that in the last few years to make sure that the budget’s in as good a shape as possible.”

She said the challenges the government was facing regarding inflation were not a consequence of government spending but a symptom of external circumstances, such as the ongoing conflict between the US and Iran.

Opposition spokesman for defence James Paterson said this morning Australia should be treating the breach of a Medicare system by a rogue AI agent as “a free warning” as he cautioned against alarmist rhetoric about the incident.

“This time, it wasn’t serious in terms of the data that was taken or the method of the intrusion, but next time it could be much more serious,” he told Nine’s Today show.

He said Australia required better artificial intelligence to defend itself from cyber threats.

“We need to be doubling down and investing, particularly in our government networks, to defend them better. We’re going to need to use AI to do that … and we’re going to need to make sure that we put in place appropriate guardrails and oversight of these AI companies.”

Paterson accused the prime minister of stoking panic about the breach, which he said “was a very limited incident”.

Deputy Prime Minister Richard Marles said the government was not considering another cut to the fuel excise as fuel prices surge across the country.

Speaking to News24’s Sunday Agenda yesterday, he said the government was focused on other measures that would ease cost-of-living pressures.

“What we are focused on is other cost of living measures and managing the budget in the most prudent way possible, which gives us the space to look at cost of living as we go forward. Cost of living really has been the challenge since we’ve come to government, and it continues to be that.

“We’re obviously seeing what’s playing out around the world, and we very much know how difficult it is for Australians to make ends meet.”

Fuel prices have risen significantly in recent weeks and have surged by about 40 cents per litre since the beginning of September.