The Reserve Bank of Australia must start delivering on long-awaited interest rates relief for workers who have been hit hard financially by the past 13 interest rate rises.
Australian Unions are calling on the RBA to act decisively today to lower the official cash rate when its two-day meeting wraps up in Sydney this afternoon.
Inflation is falling faster than projected and at 2.4 per cent, is now well within the RBA’s target range of 2–3 per cent.
Even a quarter of a percentage point rates cut would put an extra $100 a month back into workers’ household budgets, or $1,200 a year for the average mortgage holder.
A broad consensus among economists is predicting a cut in rates today. Only Opposition Leader, Peter Dutton, appears to think there is a risk of cutting rates “too early.”
Peter Dutton’s assertion that this is a “real concern to economists and families” underlines how little he knows about the pressure ordinary households are under to stay above the breadline.
Working Australians need to reclaim some of their lost spending power and to confidently expect to be able to hold onto the 1.1 million newly created jobs this term.
If the RBA waits any longer to move on rates, the risk of job losses will compound the slow-down in consumer spending, which saw workers decide to save, not spend, the stage three tax cuts.
Quotes attributable to ACTU Secretary, Sally McManus:
“The Reserve Bank should cut rates to maintain low unemployment which is part of its mandate.
“If it doesn’t, the slowdown in consumer spending coupled with the threat to jobs could tip the economy over.
“That’s a risk working Australians should not have to confront after a long inflation fight.
“Workers should not be asked to absorb high interest rates for any longer than is necessary, now that inflation is within the RBA’s target band.
“Any stalling now poses a risk to economic growth and Peter Dutton should know that and stop putting his own political electioneering above the needs of workers with mortgages and bills to pay.
“Dutton’s claim that working families are concerned the RBA could cut interest rates ‘too early’ is plain wrong. No working family has ever put that to me.
“It is very concerning that he is happy to put his own interests before those of the rest of us, when that means less money in the bank accounts of working people.
“Being too cautious now won’t help workers and it won’t help the economy. Inflation is coming down faster than the Bank forecast and unless the strategy is to wait until the economy goes under, taking jobs down in the undertow, the Bank should announce the first rates cut today.
“Similar economies started cutting rates six months ago. It’s long past time for the RBA to do the same.”
