Jim Chalmers (Rankin, Australian Labor Party, Treasurer) Share this | Hansard source

Thank you to the member for Lalor. Congratulations to her tomorrow, on the ninth anniversary of her election to this place as part of the mighty class of 2013. The independent Reserve Bank has just announced its decision to increase interest rates by another 50 basis points, and that brings the cash rate to 2.35 per cent. This will be very difficult news for a lot of Australians with a mortgage. Once again, it isn't a surprise to anyone. The bank had flagged more increases, the markets had anticipated it and homeowners were expecting it as well. But the fact that we knew it was coming doesn't make it any easier for people. This is tough. This will tighten the screws on family budgets. This will put more pressure on a lot of Australians who are already stretched enough.

As the House would be aware, a half-percentage-point increase in the cash rate means average homeowners owing $330,000 will have to find about $95 a month more for repayments. For Australians with a typical $500,000 mortgage, it's about an extra $145 a month in addition to the extra $475 they have had to find since rates are started rising before the election in May. Interest rate rises do mean that Australians will have to make more hard decisions about how to make ends meet. It also means more difficult decisions for governments because higher interest rates mean a higher cost of servicing the trillion dollars of debt that has been left to us.

As I've said previously in this place and elsewhere, it's not for the government to interfere with the independent decisions of the Reserve Bank. It is our job to do what we responsibly can to help Australians deal with these pressures in the near term and to build a much more resilient economy into the future that is able to withstand some of these global and domestic shocks. Our jobs summit, our economic plan and our budget are all deliberate and direct responses to these economic circumstances that were left to us: high and rising inflation, flat and falling real wages and productivity paralysis. That's why we are doing so much to ease the cost of living, whether it comes to child care, wages or medicine costs.

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