Tuesday, 2 August 2022
Questions without Notice
It's another difficult day for Australian homeowners with a mortgage. The independent Reserve Bank has just announced its decision to increase interest rates by another half a per cent, bringing the cash rate to 1.85 per cent. Australians knew that this was coming, but it won't make it any easier for them to handle. This cycle of interest rate rises began before the election in response to inflationary pressures that began accelerating at the beginning of this year. Average homeowners with a $330,000 outstanding balance will have to find about $90 a month more for repayments as a consequence of this decision today on top of around $220 extra in repayments since early May. For Australians with a $500,000 mortgage, it's about an extra $140 a month, in addition to the extra $335 they've had to find since early May. As I said, this decision doesn't come as a surprise. It's not a shock to anybody, but it will still sting. Families will now have to make more hard decisions about how to balance the household budget in the face of other pressures, like higher grocery prices and higher power prices and the costs of other essentials.
Obviously, higher interest rates primarily affect mortgage holders, but there's a broader economic impact as well. There's an impact on economic growth, which I talked about in the ministerial statement last week. There's also an impact on the budget. It means that the trillion dollars of debt that the previous government left us gets even more expensive for us to service. We've been up-front on this side of the House about the growing economic challenges in our economy, because that's what Australians expect from us. They know that government changed hands at a time of high and rising inflation, rising interest rates, growing economic storm clouds and a trillion dollars of debt. Our job isn't to try to influence the Reserve Bank or to second-guess their decisions. Our job is to focus on what we can responsibly influence as a new government at the national level. That's why the economic plan that the Prime Minister ran through a moment ago is a direct and deliberate response to these challenges that we have inherited: responsible cost-of-living relief, addressing those issues on the supply side of the economy and beginning to trim the budget of the rorts and the waste which are becoming more and more expensive for the Australian people to fund.
Australians know that we are in for a difficult time ahead when it comes to the storm clouds in our economy, but we are confident that we will emerge on the other side of this stronger than before, and that's partly because of the economic plan that we will implement.