Today the Reserve Bank Monetary Policy Board held interest rates steady at 4.35 per cent.
This is a welcome reprieve for many Australians with a mortgage.
It’s a reassuring result in the face of extreme volatility in the global economy.
At a time when conflict in the Middle East is adding to inflation and interest rates are rising in parts of the world, this is an encouraging outcome.
We know this won’t make it easier for millions of Australians with a mortgage, but it won’t make it any harder.
This is the first interest rates decision since the responsible Budget we handed down last month, which delivered substantial savings and improved the Budget bottom line while providing help with the cost of living.
We recognise people are under considerable cost of living pressure and we’re taking action, including cutting taxes five times in three ways, delivering cheaper medicines, more bulk billed doctor visits and the temporary cut to fuel excise.
Inflation is down from its peak but it is higher than we would like, and the conflict in the Middle East is compounding price pressures around the world.
As the RBA made clear in its statement today, there is heightened uncertainty and volatility in the global economy.
We welcome the agreement yesterday by the United States and Iran, but we know that a full recovery will take time.
Inflation came down in the most recent data in Australia, but it has risen in the most recent data in the Euro area, United States and Canada.
We saw last week that interest rates rose in the Euro area and today in Japan.
When we came to office, inflation was north of six per cent and rapidly rising, it’s now much lower than that. Underlying inflation was almost five per cent, it’s now also much lower.
Addressing inflation was an important objective of the Budget we handed down last month.
As a result of the Government’s responsible economic management, the bottom line is stronger in every year and debt is lower in every year compared to the mid‑year update.
We delivered a larger than usual amount of savings at $63.8 billion and net decisions improved the bottom line by $26.1 billion.
The actions we took mean that the Budget is helping to take the pressure off inflation and building fiscal buffers at a time of global uncertainty.
While Australia is not immune from the impacts of the war in the Middle East, we are well placed and well prepared to navigate them.
Annual economic growth is faster than almost all of the major advanced economies, unemployment is low, business investment is booming, wage growth is solid, and debt is lower than every major advanced economy.
The Budget we handed down last month was all about cutting taxes for workers, making it easier to get into the housing market, and boosting productivity.
It’s all part of our broader economic plan to fight inflation, build a more productive and resilient economy and provide responsible cost of living relief where we can.
