Good morning, this is Eleanor Ainge Roy bringing you the main stories and must-reads on Monday 18 December.

Top stories

The government will point to a decline in gross debt in the end-of-year official budget forecast as Malcolm Turnbull tries to reboot his political fortunes after John Alexander’s win in the Bennelong byelection. The treasurer, Scott Morrison, will unveil the midyear economic forecast today, with the document confirming debt has fallen since the May budget estimates, although the total figure remains well over $500bn.

Under the revised estimates, gross debt will be $23bn less than the May budget forecast of $606bn and net debt will peak in 2018-19 at 19.2% of gross domestic product, down from the 19.8% of GDP figure forecast by treasury in May. But Labor says the new economic statement will lock in unpopular measures, such as cuts for the universities sector, tax increases for middle-income earners and tax cuts for corporations. Having secured its lower-house position courtesy of the byelection wins in New England and Bennelong, the government’s attention will now return to climate policy, and the prime minister may reshuffle his frontbench.

Senior Trump administration officials have insisted the president is not preparing to fire the special counsel Robert Mueller, who is charged with investigating alleged collusion between Trump aides and Russia during the 2016 election. “There’s no conversation about that whatsoever in the White House,” said the director of legislative affairs, Marc Short. Steven Mnuchin, the treasury secretary, said: “I was at dinner last night with the president and the vice-president, I haven’t heard anything about any firing.” But both men were critical of the investigation, which Mnuchin said had become “a giant distraction”. On Saturday the website Axios reported that Mueller had gained access to thousands of emails sent and received by 13 senior Trump aides before and during the presidential transition.

Power prices in Australia rose almost 11% during 2017 but a new forecast says they will fall over the next two years because of the entry of 5,300MW of new generation capacity into the national electricity market – most of it renewable. The assessment by the Australian Energy Market Commission, which played a significant role in designing the Turnbull government’s proposed national energy guarantee, says the price reductions won’t last if governments don’t settle on an energy policy that provides incentives for investing in dispatchable power. It points to a rollercoaster effect in the system where the entry of wind and solar generators, which have lower operating costs than coal- and gas-fired generators, reduces wholesale electricity prices in the short term but “over time, low wholesale costs mean some gas- and coal-fired generators may not recover their operating and maintenance costs, resulting in exit from the market” and a new increase in prices.



US Republicans have said they expect Congress to pass tax cuts legislation before Christmas, with a Senate vote as early as Tuesday and Donald Trump aiming to sign the bill by the end of the week. John Cornyn, the No 2 Republican in the Senate, told ABC’s This Week he was “confident” the Senate would pass the legislation, “probably on Tuesday”. Kevin Brady, the House of Representatives’ top tax writer, said he believed his party had the votes to pass the bill. “I think we are headed – the American people are headed – for a big win on Tuesday,” Brady told Fox News. If passed, the bill would be the biggest US tax rewrite since 1986 and would provide Republicans and Trump with their first major legislative victory since they took control of the White House in January, in addition to Congress.

Papua New Guinea’s prime minister, Peter O’Neill, says a court’s decision to throw out a longstanding warrant for his arrest brings to an end a “witch hunt” that has lasted years. The PNG supreme court voided the warrant, issued by officers from the anti-corruption body Taskforce Sweep – which sought him for questioning over allegedly corrupt payments to a Port Moresby law firm – as defective. The supreme court found officers had not followed the arrest regulations, there was information missing from the form and it contained spelling mistakes. In addition the court found the warrant failed to meet legal requirements and was issued without jurisdiction. Several students were shot by police as they protested against O’Neill’s refusal to answer questions over the case this year. O’Neill survived a no-confidence motion last year before going on to retain the prime ministership at this year’s national elections.

Sport



Injury concerns over Craig Overton and Stuart Broad have added to England’s Ashes woes after they reached the end of day four in Perth on 132-4, still 127 runs short of making Australia bat again. Overton may miss the rest of series after falling and cracking a rib, while Broad faces knee problems and possible surgery.

The French sailor François Gabart has broken the record for sailing solo around the world, circumnavigating the planet in 42 days and 16 hours – six days faster than previous record. “It’s a crazy pleasure … all this human energy,” Gabart said, arriving to crowds of cheering supporters in the French port of Brest. “I’m a solitary sailor but this is a pleasure.”

Thinking time

Facebook Twitter Pinterest An installation by Uji Handoko Eko Saputro, AKA Hahan, at the NGV Triennial. Photograph: Scott Barbour/Getty Images

“At first blush the National Gallery of Victoria’s Triennial is playful – with nods everywhere to Instagram and selfies,” Brigid Delaney writes. “But it is also an unflinching exploration of the modern world.” Delaney guides us through the summer blockbuster’s mind-blowing collection, which covers everything from 3D printing to robotics, performance, film, painting, drawing, fashion design, sculpture and tapestry. The first thing visitors to the exhibition see is an 18-metre reclining Buddha created by the Chinese artist Xu Zhen, which is the largest work in Xu’s Eternal series. The exhibition also includes Ron Mueck’s installation Mass, which consists of 100 larger-than-life skulls each measuring 1.5 metres by 2 metres and the wonderful and weird work by the chemist and Norwegian artist Sissel Tolaas, whose medium is smells. “Oh God, they’re not like nice smells, they’re really gross,” one patron sniffs.

“We’re told there’s a reckoning taking place now”, Charlotte Wood writes. “Female anger is at last finding its mark and its moment, but the speed of the avalanche, its force, feels too dangerous. My own cheering at the sight of the bastards going down feels too much like the delinquent ecstasy of a classroom run amok, and beneath this lurks the fear that when the frenzy’s over, that will be that. And then we’ll all cop it worse than before.”

What were the Christmas gifts you longed for as a child but never received? In the spirit of the season, the Guardian delivered those elusive gifts to writers and readers, decades after Christmas may have lost its sparkle. For Rhik Samadder, who always wanted a pink plastic oven to practise his cooking, the Guardian’s gift sparked joy – and confusion. “I don’t know why my parents never bought it for me. I suspect it might have had something to do with being unable to afford it, but for the purposes of politicising Christmas, let’s say it was because of patriarchy,” Samadder says. “This was a gender-rigid time, when boys did not play at cooking, especially with pink ovens aimed at girls.”

What’s he done now?

Donald Trump has said he is “days away – I hope” from releasing a “giant tax cut for Christmas”. Via a Twitter video, Trump promised the cut for American families, who are “the backbone of our country”..

Media roundup

The Australian Financial Review says sheep farmers have “never had it so good”, with strong demand for Australian wool from China and shifts in the global textile industry driving record prices for Aussie fleeces. The Sydney Morning Herald has a special report into the Rohingya crisis in Myanmar, interviewing distraught refugees and devoting an editorial to the “unimaginable atrocities”. The ABC digital team has analysed150,000 Facebook posts from 11 of Australia’s most popular online news sources this year, and tallied up the more than 24m million emotional reactions. Anger was the leading emotional reaction, followed by sadness and “Haha”. Love and “wow” were at the bottom of the list.

Coming up

Political attention will focus on the government’s mid-year economic and fiscal outlook statement today.

Channel Seven’s case against its former employee Amber Harrison returns to court for a directions hearing.

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