Today’s decision by the independent Reserve Bank means by the time the Board next meets, it will be approaching nine months since the last interest rate hike.
Having rates on hold means a little bit more certainty in tough times for mortgage holders and small businesses.
Inflation is still higher than we’d like and it’s lingering around the world, but it is moderating and our policies are helping.
Inflation has almost halved since the election and the Budget forecast that the Albanese Government’s cost of living policies will take half a percentage point off inflation in 2024-25.
While we’ve made welcome and encouraging progress in the fight against inflation, it’s not mission accomplished because people are still under the pump.
We know that the interest rate rises already in the system are having an impact because people are under pressure and our economy is soft.
Our economy is slowing as a result of higher interest rates, which are already hammering consumption growth.
The Budget forecast consumption to grow by only ¼ per cent this year – when it usually grows around 2½ per cent.
Our economic plan is all about fighting inflation and easing the cost of living without crashing the economy and recent data shows that we’ve got the balance right.
It would have been badly wrong to slash and burn in the Budget when the economy is already very soft and people are hurting.
We’re doing our bit in the Budget to take pressure off inflation and ease pressure on Australians, with tax cuts for every taxpayer and energy rebates for every household as well as a million small businesses set to roll out from next month.
