Today’s rate cut offers a bit of welcome relief to struggling mortgage holders.
But, even with this cut, interest rates remain well above where they were when Labor came to office. After 12 interest rate rises under Labor, there have been just 3 cuts.
Under today’s 3.6% cash rate, the average mortgage holder is still paying around $1,800 more in interest per month than when Labor took office. On top of far higher living costs.
Labor’s spending spree has kept inflation and interest rates higher for longer, and driven productivity backwards.
Since Labor was elected, productivity has fallen by more than 5%, and more than 1% in the last year alone. This is the key reason our living standards have been falling.
In its decision today, the RBA specifically warned that productivity growth has not picked up. The truth is that if this government had grown productivity, instead of shrinking it, inflation and interest rates would be lower than they are today.
Accordingly, the RBA has downgraded its medium-term productivity growth assumption to 0.7%, from 1.0% at the time of the recent federal election.
This significantly lowers the RBA’s outlook for economic growth. For example, the growth forecast for the end of this year has been downgraded to 1.7% from 2.1%.
This is a vote of no confidence in the government’s economic plan by the RBA.
This year, government spending will hit its highest level outside of recession since 1986, while 80% of new employment in the past 2 years has been government-supported.
Australian families are doing their part, living within their means to make ends meet. But the Albanese Government thinks it doesn’t have to live within its means.
All Labor has to offer everyday Australians is a talkfest in Canberra. They’re focused on 25 people inside the cabinet room rather than the 27 million Australians outside of it.
And there’s no major relief in sight from Labor’s cost-of-living disaster.
Markets currently expect the cash rate to settle at around 3% in the years ahead.
This would be the highest sustained level of the cash rate in over a decade, a new normal under the Albanese Government.
The Treasurer will try to claim credit today, but Australians know the reality. It’s Labor’s economic mismanagement that got us here.
ENDS