‘Australians are still under pressure’: Treasurer Jim Chalmers reacts to Reserve Bank’s decision to hold rates | Englishheadline


Treasurer Jim Chalmers has welcomed the Reserve Bank’s cash rate pause but conceded there is more work to be done to address the cost of living crisis.

The rate remained on hold at 4.10 per cent for a third consecutive month, in what was Philip Lowe’s last decision at the helm of the Reserve Bank.

He said the decision was made in light of the previous hikes working to “establish a more sustainable balance between supply and demand in the economy” coupled with “uncertainty surrounding the economic outlook”.

Following the decision being handed now, Mr Chalmers told the House of Representatives it will provide many Australians and businesses with a “moment of relief”.

“We understand that Australians are still under pressure even after this decision today,” he said in Question Time on Tuesday afternoon.

“That’s why we are working for Australia to roll out billions of dollars in cost of living relief in ways that take the edge off inflation rather than add to it.

“This is our major focus, and we are pleased to see in the most recent inflation data, and in today’s uptake in confidence, that our energy plan is helping.”

In his statement, Mr Lowe said that while inflation has passed its peak in Australia, it still remains too high and is expected to be the case until 2025.

Mr Lowe, who steps down this month to make way for Michele Bullock, signalled that further tightening of monetary policy may be needed to achieve the optimal inflation target.

“While goods price inflation has eased, the prices of many services are rising briskly. Rent inflation is also elevated,” he said.

“The central forecast is for CPI inflation to continue to decline and to be back within the 2–3 per cent target range in late 2025.”

The Australian Council of Trade Unions (ACTU) said a change of leadership at the RBA is a chance to bridge the disconnect between the board and the “lived experiences of working people”.

“Change in the RBA leadership and board is an opportunity to bridge that disconnect,” President Michele O’Neil said.

“A secure job that provides for your family can be life changing. The RBA has a chance to help make this a reality for working people across Australia by focusing on its objective of full employment.”

Meanwhile, the Australian Chamber of Commerce and Industry said there is mounting evidence that more rate hikes will not be required.

RBA keeps cash rate on hold at 4.1 per cent

ACCI Chief Executive Andrew McKellar said the economy is “evidently slowing” and the focus must now be on growth.

“Inflation settled back to 4.9 per cent in July and a there was a slight increase in the unemployment rate of 3.7 per cent,” he said.

“There is growing evidence that we have passed the peak of the cycle and there is no need for further rates rises. 

“The focus must now be on maintaining economic growth to reduce the risk of recession.”

Mr Lowe is expected to give a speech on Thursday which will be his last official address before he hands over to Ms Bullock.

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