Good morning, this is Eleanor Ainge Roy bringing you the main stories and must-reads on Wednesday 9 May.

Top stories

Donald Trump has announced he will impose “the highest level of economic sanctions” on Iran, violating an international nuclear agreement and a UN resolution, breaking decisively with US allies in Europe, and potentially triggering a new crisis in the Gulf. In a statement at the White House, Trump said the US would “exit the Iran deal” agreed with other major powers in 2015, and signed an executive order reimposing sanctions on any foreign company that continued to do business with Iran.

The leaders of the UK, France and Germany issued a statement expressing their “regret and concern” and emphasising their “continuing commitment” to the deal. Iran’s president, Hassan Rouhani, warned that he had instructed the country’s atomic energy agency to prepare to restart enrichment of uranium at an industrial level in a few weeks’ time should the deal collapse completely. “This is a psychological war, we won’t allow Trump to win,” he said. Saeed Kamali Dehghan explains why the Iran deal was so important, while Patrick Wintour explores what might remain of the deal without the US.

Labor has signalled it will support tax cuts for low and middle income earners while reserving its position on the rest of the 2018 budget centrepiece, as the Turnbull government prepares to introduce legislation today giving effect to its seven-year plan. After handing down the budget on Tuesday night, and launching into the hard sell, the treasurer, Scott Morrison, declared the Coalition’s tax plan would hit parliament as one package on Wednesday morning, despite some elements not taking effect until 2024 – at least two federal election cycles away. Our comprehensive budget coverage continues throughout the day.

Today’s high court ruling on the eligibility of the Labor senator Katy Gallagher is likely to also decide the fate of four MPs with dual citizenship issues relying on the same defence. If Gallagher is ruled ineligible, the result is likely to trigger resignations leading to byelections in three Labor-held seats (Braddon in Tasmania, Longman in Queensland and Fremantle in Western Australia) and the Centre Alliance’s sole lower house seat of Mayo, in South Australia.

The Catholic Archdiocese of Sydney has been running ads in the Catholic Weekly, seeking donations to fund Cardinal George Pell’s legal costs, a move that a lawyer representing victims of child sexual abuse, Judy Courtin, describes as “utter hypocrisy”. While the Catholic Weekly has been running the ads with the bank account details for the fund since last year, it ran an article promoting the fund after Pell was ordered to stand trial this month on historical sexual offence allegations. He has pleaded not guilty to all charges. Pell’s legal team, which includes defence barrister Robert Richter, is believed to be costing him tens of thousands of dollars every day court sits. Details of the fund have also been appearing in the newsletters of Catholic parishes around Australia, including St Patrick’s parish in Ballarat. Courtin, who represented a number of abuse victims who gave evidence to the royal commission, said Pell was entitled to a defence team and to seek funding for it. But she questioned the involvement of the archdiocese in promoting that fund.

The Queensland mining company New Hope spent $1.2m on a pre-state-election advertising blitz last year, promoting the company’s blocked New Acland coalmine expansion. But a senior economist at the Australia Institute, Cameron Murray, has written that New Hope also ran an “astroturfing” campaign – managing social media pages and running petitions that looked like grassroots community initiatives. Murray said Adani and BHP were the only resources companies to spend more on advertising than New Hope in 2017. “None of this marketing effort is directed at ... customers, encouraging them to buy more of the company’s coal,” Murray said. “Instead, it is aimed at the public, media and political decision makers; a clear sign of rent-seeking behaviour.”

Sport

In the Premier League, Southampton have effectively guaranteed their survival with a 1-0 win over relegation rivals Swansea. That means West Brom go down, and Swansea will join them even before the final round of games if Huddersfield take a point at Chelsea on Wednesday.

Elite sportswomen are becoming more visible about being in same-sex relationships. AFLW, and in particular Erin Phillips’ now infamous kiss with partner Tracy Gahan, can be pinpointed as a turning point, with sportswomen increasingly able to control the extent to which their sexuality is visible.



Thinking time

Andrew P Street offers his definitive guide to Eurovision 2018, taking in everything from voting blocs to cheering on Jessica Mauboy. On whether Australia should even be competing, he writes: “There are two schools of thought on this. The first is that we have great talent and this is an opportunity to overcome our geographical disadvantage and showcase that talent to the world. Then there’s the counter argument: that treating Eurovision like a legitimate talent quest and global marketing platform tarnishes its magic as a showcase of white pants, uplifting key changes, ghastly instrument miming and gloriously godawful music you’d otherwise never hear outside very specific regional Spotify playlists.”

The budget confirmed a deluge of tax revenue for the government which will result in the tax-to-GDP ratio rising over the next few years to a peak of 23.9% in 2021-22. Scott Morrison has decided to use that peak as a self-imposed “policy speed limit”: in other words, he will put a cap on the tax-to-GDP ratio at this arbitrary level to 2028-29. But why? And what will happen to the economy if he sticks to it when the economy booms next? He might just blow it up, writes Stephen Koukoulas.

If you have ever wanted to know what happens in the annual budget lockup, when the cream of Australia’s political media have to work without their smartphones and the internet, we have the gallery for you. Photographer Mike Bowers offers up a day in the life of the Australian budget – from the leaves on the “budget tree” to the stale sandwiches, lonely Barnaby Joyce and an indefatigable Scott Morrison.

What’s he done now?

Donald Trump found time before pulling the US out of the Iran nuclear deal to have a personal shot at the former secretary of state John Kerry, who had urged him not to withdraw. Trump said on Twitter: “John Kerry can’t get over the fact that he had his chance and blew it! Stay away from negotiations John, you are hurting your country!”

Media roundup

The papers have had some fun with last night’s budget on their front pages: “Fistful of Dollars” at the West Australian; “Hurry up and Wait” at the NT News, which has superimposed Scott Morrison’s head on to that of a snail; “Scomo’s Tax Tease” at the Courier Mail; and “Scomo Stops the Creep” at the Australian. The ABC reports that Australia’s aid commitment to Pacific Island countries is the biggest ever at more than $1bn, with observers noting that growing concerns about Chinese influence in the region are causing Australia to show more commitment – and put up the cash.

Coming up

Budget reaction rolls on today, from an early breakfast addressed by the former prime minister John Howard, among others, through to Scott Morrison’s speech to the National Press Club in Canberra. Our politics live blog will cover the lot.

The high court will rule this morning on Labor senator Katy Gallagher’s eligibility to sit in parliament. If she is ruled ineligible, the result is likely to trigger resignations leading to byelections in three Labor-held seats and the Centre Alliance’s sole lower house seat.

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