More pain in the pipeline despite interest rate pause

Tuesday, 04 April 2023

Today’s decision by the Reserve Bank to hit pause on rising interest rates is welcome relief for the three million Australians with a mortgage but the pain hitting household budgets is far from over.   

Shadow Treasurer Angus Taylor said with more than 800,000 Australians on fixed rate mortgages set to move to variable loans this year, the real impact of the rate rises is yet to sink in.

“There is more pain in the pipeline,” Mr Taylor said.

“We know the rate rises we’ve seen over the previous 10 months have taken time to be felt by families and businesses.

“Many mortgage holders still haven’t felt the real and very painful impact of the increasing cash rate but it will eventually hit home and when it does, it’ll hit like a freight train.

“For many Australians it’ll mean finding an extra $20,000 a year in their budgets. This will require enormous sacrifices from hardworking families. 

“Australian families are having to make difficult decisions to manage their budgets – the government must do the same. 

“Inflation is still far too high and the government must do everything in its power to bring it down and that means controlling its spending.

“In October the government delivered a big-spending traditional Labor budget that only promised more deficits. If Labor repeats this in May, struggling families will pay the price with higher inflation, for longer.

“If the Treasurer continues to run larger deficits and borrow more debt, he will put more pressure on inflation meaning high prices and high interest rates will stick around far longer than necessary.”