Today’s decision by the independent Reserve Bank to increase interest rates by half a percentage point is very challenging news for hardworking Australians already doing it tough.
Mortgage repayments are now eating up a bigger part of already stretched budgets.
Average homeowners owing $330,000 will now have to find another $90 a month at the same time as they try and keep up with the costs of petrol, electricity, groceries and other essentials.
For Australians with a $500,000 mortgage the extra repayments are more like $137 a month.
Rates were expected to rise, and they’re expected to bite.
While the trajectory of rising interest rates was set before the election, this rate rise is another blow to workers and families already under significant cost of living pressure.
Today’s 50 basis point rate rise comes at a time when a significant number of Australians are confronted by yet another large‑scale natural disaster, which will only add to these ongoing challenges.
The government changed hands at a time of high and rising inflation, sky rocketing interest rates and falling real wages, and we have inherited a trillion dollars in debt which is now more expensive to service.
We’ve been upfront about the combination of challenges in our economy and their impact on the Budget.
When it comes to inflation we expect it to get worse before it gets better, and the Reserve Bank has flagged further rate rises.
That’s why we’re working hard to deliver on our commitments to boost the capacity of the economy and reduce the cost of living, and why we fought for an increase to this year’s minimum wage for 2.8 million Australians.
It’s why we’re making meaningful investments in cleaner and cheaper energy, cheaper child care, skills, the digital economy and manufacturing, and progressing our waste and rorts audit.
This is all part of our plan to build a stronger, broader, more sustainable economy with a better trained and more productive workforce.
Australians can benefit from a stronger economy and a better future if we work together to navigate the inflation we inherited and the higher interest rates that accompany it.
Because of this combination of challenges, the Albanese Labor Government is focused on building an economy and a Budget as resilient as the Australian people have proven to be.