The Albanese government had “waved the white flag” on interest rates as seven consecutive rate rises put families under pressure, Shadow Treasurer Angus Taylor said this week.
The Reserve Bank lifted interest rates to 2.85 per cent on Tuesday, the seventh rise in a row after rates had been at historic lows of 0.10 per cent.
Taylor said the government had no “clear and consistent” plan to deal with rising interest rates.
“Interest rate decisions by the Reserve Bank are of course made by an independent Reserve Bank as it should be, but they are made within the context of government policy,” he said.
“The great disappointment for so many Australians is that what we didn’t see from the government last week in the budget is a clear and consistent plan that can take pressure off interest rates. It was a missed opportunity.”
The rate rise coincided with the Australian Bureau of Statistics revealing the CPI had jumped more than one percentage point to 7.3 per cent year-on-year in September. This was the highest it had been in more than 30 years.
A steep rise in the cost of food – sitting at 3.3 per cent – was one of the major contributors to rising inflation.
Electricity and gas prices were also expected to directly contribute 0.75 of a percentage point to inflation in 2022–23 and one percentage point in 2023–24.
Treasurer Jim Chalmers told the National Press Club that inflation was “the dragon we need to slay”.
But Taylor said Labor had no idea what to do about economic challenges facing the country.
“The Labor government has put up a white flag when it comes to interest rates and inflation and Australians will pay the price for that,” he said.
Reserve Bank Governor Philip Lowe has said he expected inflation to peak towards the end of the year.
“Inflation in Australia is too high,” Lowe said.
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Author James Macpherson
