Media release – Greens Treasury spokesperson Senator Nick McKim, 6 June 2023
RBA engaging in generational war with Labor’s support
Greens Treasury spokesperson Senator Nick McKim has responded to today’s decision by the RBA to raise interest rates for the twelfth time in thirteen months.
“The case is now overwhelming for Labor to step in and override the RBA,” he said.
“The RBA is engaging in a war on young people with Labor’s support.”
“The total volume of retail sales is falling yet recent analysis by CBA of 7 million customers showed that older people are actually stoking demand.”
“But Labor has caved to the establishment so young people are copping it in the neck, and the worst is yet to come.”
“Young people are more likely to be renting or have recently bought a home, which means that they are paying the highest price for Labor’s culpability.”
“Young people are also more likely to be in insecure employment and be among the 130,000 people that are forecast to lose their job under Labor’s Budget.”
“By the RBA’s own admission, interest rate increases are not the right tool to respond to the current bout of high inflation that is predominately a result of supply side pressures.
“Real wages are falling and the Treasury Secretary said last week that there are no signs of a wage-price spiral.”
“Meanwhile corporate profits continue to rise.”
“But the RBA is smashing renters and mortgage holders in a pathological pursuit of price stability.”
“They are doing nothing to inspire any confidence among anyone but the already wealthy.”
“In spite of all of the evidence that interest rates are not the right tool for the job, Labor has completely succumbed to central bank orthodoxy.”
“Instead of leaving it to the RBA who will always use the one blunt instrument that they have, Labor should be dealing with the cost-of-living crisis by freezing rents, taxing super profits and the super rich, and putting dental into Medicare, wiping student debt, and raising income support.”
“Jim Chalmers should also step in and use the powers that he has under Section 11 of the RBA Act to overrule the RBA to freeze interest rates.”
Media release – Real Estate Institute of Australia (REIA), 6 June 2023
REIA SAYS RATE RISES ARE DESTROYING THE AUSTRALIAN DREAM
Real Estate Institute of Australia (REIA) President, Hayden Groves said it was disappointing the RBA chose to increase rates by another 25 basis points given the impact interest rate rises are having on housing affordability.
“We are now at risk, driving the economy closer to a recession.
“Following the national wage case decision (5.75% for minimum wage earners) and the larger than expected monthly CPI for April (6.8% up from 6.3% in previous month) the financial markets were betting on an increase in interest rates.
“The Commission in handing down its decision indicated that in their analysis the increase would not be inflationary. It is the business groups that have come out saying it will be.
“Whilst the April CPI doesn’t follow the downward trend of previous months it should be treated cautiously as the monthly stat isn’t as comprehensive in coverage as the quarterly figure (June quarter out at end of July) and was driven in large part by the change in excise on fuel.
“Retail sales volumes have fallen and unemployment has, albeit from a strong base, started to increase.
“The ABS released a statement saying household spending has risen.
“It rose by 6.0% in April in nominal terms compared to the same time last year. Growth in household spending has been on a downward trend from a peak of 29.1 % in August 2022.
“The lags in the impact of previous RBA decisions are quite long and it is only now that banks are saying that it is having an impact on some borrowers with defaults starting to creep up.
“Whilst the RBA will stick to economics, they cannot be immune to the political pressures with small business and young families holding a mortgage most impacted by the latest rate increase.
“The pace of rate increases leaves the economy in unchartered territory with the official cash rate now at its highest level in more than a decade. Some underlying inflationary pressures in the economy cannot simply be fixed by hiking interest rates,” concluded Mr Groves.
