Michele Bullock’s savings advice enough to make a millennial choke on their imaginary smashed avo toast

RBA boss Michele Bullock is well-equipped to deliver assessments on interest rates but when she tells already-broke mortgagors how to save money, it comes off as way out of touch, writes Debbie Schipp.

I’m 53 with a big mortgage. My colleague is 33, with a similar big-arse mortgage.

He’s in a worse spot than me – he’s worn 13 interest rate rises.

I’ve only worn four, which I budgeted for, knowing interest rates couldn’t stay low.

I only bought because to stay in Sydney, in a job I adore, I had to buy because, when the last rent rise came, I realised I simply could not fork over another cent in dead rent to pay someone else’s bills.

I’m paying more than I ever did in rent, but at least it’s not going to someone else’s asset.

We’re managing. Just, thanks very much.

Not teetering on the edge, living week-to-week, one toothache, GP visit or electricity bill from financial disaster.

But nights out are few and far between. No, I don’t have Netflix. Holidays are carefully budgeted. For my colleague they’re non-existent.

That’s OK, he says. It’s not worth getting angry about. It’s just reality.

RBA Governor Michele Bullock gives a speech on the costs of high inflation at an Anika Foundation luncheon at the Hyatt Regency hotel on Thursday. Picture: NewsWire

What is worth getting angry about is an unapologetic RBA head Michele Bullock again handing out handy tips for paying your mortgage.

Michele is a very intelligent businesswoman, who has probably forgotten more than I will ever know about high finance and economics – that’s why she’s paid the big bucks in the big job.

Sadly no amount of responsibility or renumeration appears to have bought her a shred of empathy, or a grasp of the reality for many struggling to pay their mortgages.

Today she remained bullish about interest rate rises – and yes, that’s her job – but along the way offered some handy tips for people struggling to keep their heads above water.

Her speech at a lunch in Sydney – and we won’t even go there about the bitter irony of her statements coming at a fundraiser for the Annika Foundation – which raises money to support research into adolescent depression and suicide – was enough to make a millennial (and trust me, I’m far from being of that age) choke on their imaginary smashed avocado on toast.

Much like they choked when they discovered Ms Bullock paid off her home in Sydney’s inner west in less than a decade – courtesy of a now-discontinued special half-price deal for RBA employees.

Acknowledging that the RBA board is “very conscious” of how interest rates, currently at 13-year-high of 4.35 per cent – are affecting households and business, Michele told us the number of homeowners struggling with a “cash flow shortfall,” where their essential spending and mortgage repayments are in excess of their income, was “fairly small”.

She suggested some “quite painful adjustments”.

Among them were ground-breaking budget measures like cutting back spending to more essential items.

I guess talk is cheap. And breathing is free.

Michele suggested buying lower-quality goods and services, dipping into savings, or working extra hours.

For many people struggling to pay their mortgage, multiple jobs are a reality and they have given up much more than cafe meals.

Well colour me shocked, Captain Obvious. You don’t find invaluable financial advice like that lurking in a book on special in the Aldi centre aisle.

Inflation is bad, she reminded us. No sh*t, Sherlock.

She said key inflation drivers include housing costs and market services inflation, discretionary spending is down, and inflation had disproportionately put greater pressure on poorer and younger households, forced to allocate their funds towards essentials like “food, utility bills and rent”.

Some mortgagors, she said, might even have to sell their houses. Like this was news to those living it.

It’s probably at that point that Michele should have zipped it.

Most people feeling the cost of living bite as mortgage and rental pressures mount have already downgraded their insurance cover multiple times, before giving some policies up altogether.

They’re the ones already doing extra hours.

They’ve already scoped out the second job.

They’re the ones forgoing not only nights out, but meals, petrol, GP visits, haircuts, school excursions, car repairs.

They’ve dreamed many times of that magical move to the regions or the country where it’s cheaper – then realised the logistics of finding a new job, uprooting the kids, getting another mortgage … don’t quite add up.

Their savings are gone. Some are eyeing their super, trying to find ways to access it to stay afloat.

Michele, you’re utterly and absolutely well-equipped to deliver financial and economic assessments about interest rates and inflation and cos-of-living and employment figures and how they all meld together to create the mess Australia finds itself in.

But when you tell already-broke mortgagors how to save money, you just come off as way out of touch.

You say your only lever to get inflation under control is raising interest rates..

But from where we sit, what you’re doing isn’t working. Inflation isn’t under control.

If it was, we wouldn’t be 13 rate rises in since May, 2022, with sod-all result, dreaming of smashed avocado.