Labor minister responds to questions about rising cost of living

The rising cost of living crisis gripping most Australian families has triggered a blunt response from one MP.

Labor minister Anne Aly has conceded nothing politicians say is going to make life easier for people struggling to buy food or meet their home loan repayments.

With inflation sitting at 7.8 per cent, its highest level since 1990, MPs from across the political aisle faced questions about the rising interest rates and the cost of living on the ABC’s Q+A program on Monday.

Dr Aly said there was no sugar coating the fact that people were doing it tough and the Albanese government was doing what it could to provide relief.

The Cowan MP and Early Childhood Education and Youth Minister pointed to Labor’s existing policies such as its centrepiece early childhood education subsidy package which is due to come into effect in July.

“I know it feels like empty words coming from a politician,” Dr Aly said.

“But take it from somebody who is a single mum, and who’s been through that as well and who’s lived in poverty, that I know that nothing we say is going to make it better for you.”

Labor minister Anne Aly has responded to questions from Australians about the rising cost of living. Credit: ABC News

Her comments came in response to a question from an audience member who said she and her partner were faced with having to sell their house because rising interest rates meant they would have to pay an additional $500 a week on their mortgage even after refinancing.

Another person in the audience asked where Australians could find hope, saying conversations with her friends were all about how to negotiate extra shifts or join the gig economy just to pay school expenses, “let alone the mortgage”.

Dr Aly said there was a “glimmer of optimism” in Treasurer Jim Chalmers’s expectation that inflation peaked at the end of 2022 and was beginning to moderate.

Dr Chalmers told reporters over the weekend both the Reserve Bank and the Treasury believed inflation had hit its highest point.

However, he said inflation would be “higher than we’d like for longer than we’d like” and would be a persistent problem in the Australian economy.

Treasurer Jim Chalmers says inflation should begin to moderate. Picture: NCA NewsWire/Tertius Pickard

Q+A was broadcast on Monday night the week after the Reserve Bank raised the cash rate by a further 25 basis points to 3.35 per cent on Tuesday in its ninth consecutive rate hike since May last year.

The central bank’s governor, Philip Lowe, has come under fire for saying as late as November 2021 that the bank was likely to hold the cash rate steady at record low rates.

Since May last year, the RBA has rapidly raised rates from 0.1 per cent in a bid to slow the economy and drive down inflation.

Dr Lowe has since apologised to Australians who may now regret taking out a home loan off the back of the RBA’s guidance.

But Dr Lowe’s future at the bank is under a cloud, with several government MPs questioning his performance and Treasurer Jim Chalmers stopping short of endorsing him.

Dr Aly acknowledged there were “some controversies” around Dr Lowe, but she wouldn’t be drawn on whether the governor should step down after his seven-year term concludes in September.

“I’m not saying that at all … that’s something that’s not even in my portfolio,” she said.

“So, that’s something for the Treasurer and the government more broadly to decide.”