Anthony Albanese says Labor has done “all we can” to encourage rate cut
The Prime Minister says his government has “done all it can” to tame inflation to allow the RBA to cut rates and deliver households much needed relief.
Interest Rates
Don't miss out on the headlines from Interest Rates. Followed categories will be added to My News.
Anthony Albanese says his government has done “all we can” to reduce inflation, paving the way for the Reserve Bank to cut the official cash rate at its meeting in four weeks time.
With the election due by May 17, the government is hoping for at least one rate cut before facing voters struggling with cost of living pressures.
Despite this, the Prime Minister says he doesn’t believe Labor’s chances of a re-election will hinge on the central bank delivering long-waited rate relief.
He added that Australia was performing better than fellow industrialised countries which were in “economic decline,” and likened lowering inflation while providing non-inflationary cost-of-living relief to “landing a (Boeing) 747 on a helicopter pad”.
“What I would say is this that we have done all we can as a government to create better conditions for monetary policy to work together with what the government has done,” he told Sky News.
Mr Albanese reiterated that headline inflation was now down to 2.8 per cent – within the RBA’s target 2 to 3 per cent band.
However, underlying inflation – which removes temporary fluctuations such government energy rebates – remained above target at 3.4 per cent.
While CPI figures for the December quarter will be released on Wednesday, Mr Albanese said his government had “not only … navigated these turbulent times, but we’ve always kept our eye on the horizon”.
“We have inflation now down to the Reserve Bank band that they wanted to see for the first time in years, we have continued to put that downward pressure on inflation,” he said.
“We designed all of our cost of living support in a way that assisted that process.”
Treasurer Jim Chalmers said Australia has made “substantial (and) sustained progress” in the fight against inflation.
“What we have been able to do as a country, together as Australians over the course of the last couple of years has been truly remarkable,” he said.
“Other countries have had to pay for that kind of progress with much higher unemployment and we have been able to avoid that.
“Unemployment, average unemployment under this government is the lowest of any government in the last 50 years.”
He also referenced government modelling that a household with two average earning workers would be about $7200 worse off without the government’s Stage 3 tax cuts, and $275 energy bill rebate, all policies which the Coalition did not support.
The number assumed wages would have only grown an average of 2.2 per cent a year under a Peter Dutton led government (the average growth under the Coalition government), while wages have grown by 4.9 per cent a year under Labor.
However he stopped short of calling on RBA governor Michele Bullock to cut rates, saying the “prime minister shouldn’t do anything that even resembles directing the Reserve Bank governor … to make a decision on interest rates. They’re independent”.
Markets are tipping Wednesday’s data will show headline inflation dropping to 2.5 per cent, but the all-important underlying figure is expected to stubbornly remain at 3.3 per cent.
Ms Bullock has repeatedly said the RBA would not cut rates until inflation was sustainably reduced to the target band, with board members prioritising underlying inflation over headline inflation.
In an address in November, Ms Bullock said there was “still some way to go”.
“Indeed, over the past year, part of the decline in headline inflation has been due to temporary factors such as electricity rebates and declining fuel prices,” she said.
“While these temporary factors have undoubtedly helped many Australians, our approach is to look through them to some extent to better understand where inflation will settle in the medium term.
“The best way to do this is to look at underlying inflation. The measure we typically look at for this is trimmed mean inflation and by this measure, inflation was still too high.”
Originally published as Anthony Albanese says Labor has done “all we can” to encourage rate cut
Australia’s top performing state revealed
Two mining powerhouses are officially Australia’s best performing state economies, with one topping the list for the second time since 2014.
‘Done all we can:’ Albo’s big call on rates
The Prime Minister says his government has “done all it can” to tame inflation to allow the RBA to cut rates and deliver households much needed relief.