Anthony Albanese’s big call after RBA interest rate decision
The Reserve Bank’s big call on interest rates could set the scene for Anthony Albanese to make a big decision himself.
Interest Rates
Don't miss out on the headlines from Interest Rates. Followed categories will be added to My News.
The Reserve Bank’s big call on interest rates could set the scene for Anthony Albanese to call an election within weeks for April.
News.com.au revealed on January 6 that Labor insiders were placing their bets for an election on April 12 if the RBA cuts rates at its February meeting.
The speculation centred on the Prime Minister pulling the trigger straight after the March 8 WA election, jettisoning the budget which is set down for March 25.
This week, the Albanese Government has continued planning for that budget allowing the Prime Minister the flexibility to call an election on May 3, May 10 or May 17 and still bring Parliament back in March, should he choose to do so.
There is some caution over April 12, given the Saturday of Passover this year, a major Jewish holiday. April 5 is another option.
The last day for the Prime Minister to call an April 5 election is in a fortnight on March 3, although this would necessitate holding the first week of the federal election campaign during the final week of the WA election campaign.
MORE:Sneaky bank trick that will stop RBA cut
Speaking on ABC radio, the Prime Minister stopped short of telling the RBA what to do but stressed that inflation was now on track.
“Our job has been to get inflation down,’’ Mr Albanese said.
“We’ve done that. It’s now down to a headline rate of 2.4 and so that is much lower, almost a third of when we came to office. And that is within the band that the RBA aims for.
“But they’ll make a decision based upon economics, not based upon any politics.
“Cost of living pressures, of course, have been real. And there continues to be a lot of pressure on families, particularly those with a mortgage. And that’s why our job has been to get that inflation down but also to provide cost of living, relief through the tax cuts.”
Unions demand RBA cuts rates now
Unions are ratcheting up the pressure on the RBA to make their big move this morning, with ACTU secretary Sally McManus holding a protest outside the meeting.
The ACTU has called for a rate cut for months, slamming the RBA in December as “out of touch and out of step.”
“There are real people behind the statistics they see; real people who are being smashed by their refusal to join the rest of the world starting to cut rates,’’ she said.
“We are concerned that the RBA is making a serious mistake by keeping rates too high for too long. They were wrong on wages – there was no wage spiral. They were blind to price gouging when it was obvious to everyone. And their outdated idea that unemployment needs to go up is also wrong.
“Central banks around the world are already cutting rates. The US Federal Reserve and the Reserve Bank of New Zealand began cutting rates when their inflation was still above target. The RBA needs to do the same thing here. There is no clear reason not to with Australia’s headline inflation rate of 2.8 per cent within the RBA’s target band.
“The RBA is racing towards a cliff and thinks it can slam on the brakes at the last moment. The next best time is now.”
MORE: Huge prediction for Aussie house prices
Peter Dutton breaks ranks to call for a rate cut
Peter Dutton has urged the Reserve Bank to cut rates by 25 basis points on Monday, breaking with the tradition that politicians don’t tell the independent RBA what to do, warning that “Australians need relief”.
The Liberal leader and several Labor MPs including Sam Rae took the unusual step of urging the independent RBA to take action amid predictions Australian homeowners are set to receive their first cut in four long years.
“I really hope, for the sake of Australians who have had 12 interest rate increases under Mr Albanese, that there is a 25-point cut, or if it’s more than that, that’s fantastic, but families need relief,” Mr Dutton said.
Labor MPs urge the RBA to act
Mr Dutton isn’t the only politician throwing caution to the wind today, with Labor MPs also telling the RBA what to do.
As the Prime Minister prepares to call an election within weeks for April or May, many Labor MPs are praying for a rate cut for more reasons than simply mortgage relief.
“I want a cut,” Victorian Labor MP Sam Rae told Sky News. “My community needs a cut.
“I agree with the Treasurer and most other people that the RBA is independent, it will make its decision based on economics and not politics. And that is important.
“But my job is to stand up for my community and we need a cut.”
Liberal MP Angie Bell said everyone wants a rate cut but she was worried a modest cut worth around $100 a month wouldn’t “touch the sides” for average Australians.
“If the Reserve Bank does come to this decision, which I really hope they do for Australian families’ sake, it’s not going to make a big difference to make up for that $50,000 that a mortgage holder with a $750,000 mortgage has had to (find),” she told Sky News.
“What we need to do is rein in wasteful spending.”
Treasurer says still more work to do on cost of living
Treasurer Jim Chalmers, who has previously been accused of putting the hard word on the RBA to cut rates, was cautiously confident.
“I say the same thing to my colleagues privately that I say publicly. That is that we take no outcome for granted this week when it comes to decisions about interest rates,” he said.
“The respectful role that I will play in that is to not engage in a running commentary about their deliberations. I’ve made it really clear for some time now – I understand and respect their independent role.”
Mr Chalmers said there was more work to do in the cost of living space.
“In the almost three years that we’ve been in office, we’ve been able to get inflation down substantially, wages up, and keep unemployment low and that is our focus,” he said.
“The independent Reserve Bank has its own job to do.
“No matter what the Reserve Bank decides when they announce their decision tomorrow, the Albanese government’s focus won’t change.”
Jane Hume accuses Treasurer of “muscling the RBA”
As Peter Dutton called for a cut, opposition finance spokeswoman Jane Hume simultaneously accused Labor of “muscling” the RBA and pre-empting its decisions on rate cuts.
“Inflation has been too high for too long, and that’s because of decisions that the government has made and Michele Bullock, the Reserve Bank Governor, has said as much, that spending has been one of the pressures – it’s pushed inflation higher, meaning interest rates have stayed higher for longer,” Senator Hume told ABC.
“Of course, we want to see interest rates come down … There’s been 13 consecutive rate hikes, 12 of them under this government.
“If there is a reduction in interest rates, that will be a welcome relief to homeowners, to mortgage-holders that have suffered so much under this government.”
Originally published as Anthony Albanese’s big call after RBA interest rate decision
‘Bitter pill’: Grim reality for Aussie savers
It’s only going to get worse for Aussie savers already on their knees after the Reserve Bank’s decision to cut interest rates.
Move costing Aussies extra $92m
Aussie mortgage holders are at risk of losing tens of millions of dollars in interest the longer lenders withhold passing on the latest rate cut.