Today’s modest interest rate reduction is welcome.
However, for many Australians it is too little too late.
And that’s because this government has allowed inflation to stay too high for too long.
The USA started cutting interest rates five months ago. New Zealand and the UK cut interest rates six months ago. Canada and Europe cut interest rates 8 months ago.
These countries have all now cut rates multiple times. For example, the USA has cut interest rates by 1 percentage point, New Zealand by 1.25 percentage points, Europe by 1.6 percentage points and Canada by 2 percentage points.
Today the Reserve Bank expressed caution about the prospects of further reductions.
Today’s rate reduction will only offset one of the twelve rate rises under Labor.
A family with a typical mortgage has spent an additional $50,000 of interest since Labor came to government.
Australia was one of the few countries that did not lower interest rates last year.
This is because the Reserve Bank has been concerned by inflation they described as “home grown” and which is made worse by high government spending.
In three budgets, Labor has added $347 billion in spending, which has kept inflation and interest rates higher for longer.
While inflation averaged 2.2% during the previous Coalition Government, it has averaged 4.1% under Labor.
In just 2.5 years, food is up 12%, education up 12%, housing up 14%, rents up 17%, financial and insurance up 18%, electricity up 32% (before rebates) and gas up 34%.
Australians have had to squeeze their budgets, because Labor can’t control its budget.
High inflation and interest rates mean in the last two years, Australia has had the biggest fall in real disposable incomes in the developed world.
You can’t manage inflation if you can’t manage the economy.
We must – and can – do better.
The Liberals will strengthen our economy by reining in wasteful spending, supporting small businesses and fixing the energy system.
We will reduce pressure on inflation and interest rates, so Australians can get ahead.
