It is too soon for working families to be slugged with another interest rate rise and the Reserve Bank should wait and see before inflicting another increase on home buyers this week says the ACTU.
The budgets of working families have only just changed to accommodate the significant increase in repayments caused by the Reserve Bank rate rise last month combined with the decision by the major lenders to increase their mark up on loans.
ACTU President Sharan Burrow said:
“It is too early to see the real impact of the recent rate increases and the Reserve Bank should hold off adding to the high level of ‘mortgage stress’ that working families are under.
“The full effect of the last rate rise has yet to be seen and we don’t know with any certainty what the outlook is for the Australian economy.
“We urge the board of the Reserve Bank to proceed cautiously; we believe the bank should wait until the full effects of previous rate rises become clearer.
“Unleashing another rate hike on households will only further hurt working families.
“Applications by lenders to repossess homes and the early release of superannuation benefits by borrowers struggling to meet home loan repayments have more than doubled in recent years.
“Many families are clearly struggling to hold onto their homes – another increase could prove the tipping point for them losing their homes,” said Ms Burrow.
The Reserve Bank board is meeting on Tuesday March 4.