To hear some of the immediate reactions to Tuesday night’s budget, you would be forgiven for thinking the treasurer had reignited inflation and was about to send interest rates still higher.

No longer. Before Thursday, money markets were pricing in a small (5%) chance of an interest rate increase this year.

Following the release of the latest employment figures at lunchtime on Thursday, though, they are pricing in a 50% chance of a cut.

Unemployment and underemployment ticked up in April. Deutsche Bank penned a note to clients headed “Australia’s labour market is cracking”.

It’s a sentiment endorsed by Aruna Sathanapally a former NSW Treasury official who has headed the Grattan Institute since February.

She writes this morning there’s a very good reason why the extra spending in Jim Chalmers’ third budget won’t reignite inflation – working households are increasingly likely to be unemployed, increasingly likely to be working fewer hours, and increasingly less likely to spend.

It’s the “sad truth” at the heart of the budget.

Opposition Leader Peter Dutton’s budget reply speech last night promised lower immigration, something that would itself cut recorded economic growth, even if it left growth per person unchanged (and presumably going backwards as it has been for the past year).

In her analysis piece, Michelle Grattan assesses Dutton’s alternative vision for the country, with a focus on the “electorally emotive issues of housing and immigration”.

“The Dutton pitch on immigration will likely go down well with many voters,” she writes. “But there are quite a few questions the opposition will have to answer in coming days as the experts dissect his proposal.”

Peter Martin

Economics Editor

At the heart of the budget is the sad truth the economy is weak. That’s one reason inflation will fall

Aruna Sathanapally, Grattan Institute

In normal times, a boost in government spending would boost inflation. The budget papers show these are not normal times.

Grattan on Friday: Peter Dutton’s alternative – lower migration, more homes, and a populist swipe at billionaires

Michelle Grattan, University of Canberra

In his budget reply on Thursday night, Dutton tapped into the electorally emotive issues of housing and immigration with the new measures he put forward.

Clean energy slump – why Australia’s renewables revolution is behind schedule, and how to fix it

Alison Reeve, Grattan Institute

Without a green energy transition Australia won’t meet its emissions reductions promises. But despite punching above its weight for years, the electricity sector isn’t transforming quickly enough.

Cumberland Council’s book ban has been overturned, but what is really happening in Australian libraries?

Lisa M. Given, RMIT University; Sarah Polkinghorne, RMIT University

More than 40,000 people petitioned to reverse Cumberland City Council’s book ban, showing the power of collective action against censorship.

Friday essay: ‘me against you’ – Jon Ronson investigates the perpetual outrage of the culture wars

Alexander Howard, University of Sydney

The culture wars have been around forever, but keep taking new forms, and US variants threaten to spill over to Australia – as seen in the recent (overturned) ban on same-sex parenting books in Sydney.

Robert Fico: why the attempted assassination of Slovakian prime minister could fuel the information war between Russia and Europe

Michael Toomey, University of Glasgow

Russia is already capitalising on the situation, while government ministers are blaming the media for spreading ‘hate’.

Peter Dutton pledges to drastically slash migration in bid to free up 100,000 homes over five years

Michelle Grattan, University of Canberra

A Coalition government would drastically slash migration as its main way of freeing up more than 100,000 homes over five years, Opposition leader Peter Dutton has promised in his budget reply.

Why is New Caledonia on fire? According to local women, the deadly riots are about more than voting rights

Nicole George, The University of Queensland

Four people have been killed in civil unrest in New Caledonia’s capital, Noumea. People on the ground say the crisis isn’t just political.

We mapped a lost branch of the Nile River – which may be the key to a longstanding mystery of the pyramids

Timothy J. Ralph, Macquarie University; Eman Ghoneim, University of North Carolina Wilmington; Suzanne Onstine, University of Memphis

Why build pyramids in the desert? A centuries-old puzzle may be answered by the slow wandering of the Nile.

If I’m diagnosed with one cancer, am I likely to get another?

Sarah Diepstraten, Walter and Eliza Hall Institute; Terry Boyle, University of South Australia

That depends on a number of factors, including the cancer you had initially, as well as your genes, environment and lifestyle.

Denser housing can be greener too – here’s how NZ can build better for biodiversity

Yolanda van Heezik, University of Otago; Christopher K. Woolley, Te Herenga Waka — Victoria University of Wellington; Jacqueline Theis, University of Otago; Maibritt Pedersen Zari, Te Herenga Waka — Victoria University of Wellington

The majority of 25 surveyed developments around New Zealand lacked healthy, ecologically meaningful vegetation. Applying biodiversity targets for medium-density housing could turn this around.

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