RBA boss should lose job after interest rate hikes, but Australians expect more to come: survey

Australians are bracing for another interest rate hike and are holding the federal government responsible for the hit to their households, while 52 per cent believe Reserve Bank governor Phil Lowe should lose his job.

The nation’s economic slowdown has slashed voter confidence in their personal fortunes, with 64 per cent expecting their wages to fall in real terms, amid an escalating political row over who is to blame for high inflation.

RBA governor Philip Lowe.Credit: Alex Ellinghausen

An exclusive survey shows that 33 per cent of voters believe the Reserve Bank has the greatest responsibility for keeping inflation down, but that 44 per cent think it is primarily the task of the federal government.

The findings in the Resolve Political Monitor highlight the dispute over the central bank’s decisions to lift rates 12 times over the past 13 months when Prime Minister Anthony Albanese and Treasurer Jim Chalmers insist their fiscal policy is not fuelling inflation.

With union leaders and some Labor backbenchers taking swipes at Lowe over the rate hikes, only 26 per cent of voters believe the central bank and its governor are doing a good job, while 56 per cent think they are doing a poor job.

Albanese expressed his frustration with the bank last week when asked why the May budget assumed the central bank’s cash rate would remain at 3.85 per cent – a forecast proven wrong within weeks when the bank lifted the rate to 4.1 per cent.

“It’s not as incorrect as the one saying there’d be no increases till 2024,” the prime minister replied.

Lowe apologised to Australians last November for signalling as late as the end of 2021 that he was likely to hold the cash rate steady until 2024 but shifted his stance and began a series of rate hikes in May 2022, after the Russian invasion of Ukraine triggered a surge in energy prices.

The Resolve Political Monitor, conducted for this masthead by Resolve Strategic, surveyed 1606 eligible voters from Tuesday to Sunday, a period that included media coverage of the prime minister’s remark. The results have a margin of error of 2.4 percentage points.

Lowe was appointed Reserve Bank governor in September 2016 and his term expires in September, but his predecessors Glenn Stevens and Ian Macfarlane were both reappointed and served 10 years each.

Asked if Lowe should keep his job, 17 per cent said his appointment should be extended and 52 per cent said the government should choose someone else, with others undecided.

ACTU national secretary Sally McManus criticised Lowe last week by suggesting he should tell supermarkets to “share the pain” and drop their prices, while the Australian Services Union has circulated a TikTok video lampooning Lowe with a claim that he said people needed to spend less and work more.

Lowe has warned about the nation’s poor productivity and the threat this presents to wages, and he has predicted that people may choose to share housing to reduce their expenses, but he has not told people to spend less and work more.

“Philip Lowe is doing his job, which is to fight inflation,” said Liberal senator Andrew Bragg, adding the government should do more to help by cutting spending.

“It is so obvious that the government is lining up the ducks to sack him as a political sacrifice. The government thinks it can shift the blame for persistent inflation to Lowe.

“Removing a governor during a tightening cycle would be bad for the institutional framework and won’t fix inflation anyway, so the government should reappoint Lowe to show their commitment to the independence of the Reserve Bank.”

Last week’s interest rate hike is tipped to add about $100 to monthly repayments on the average $600,000 mortgage, with Lowe signalling further increases due to high inflation, which was 6.8 per cent over the year to April.

The Resolve Political Monitor found that 82 per cent of voters expected more interest rate increases this year and 67 per cent expected inflation to get worse this year.

Only 15 per cent said their income had kept pace with inflation over the past year.

Wages have grown in nominal terms but have not kept up with the consumer price index, with real wages down by 3.2 per cent over the past year.

Resolve director Jim Reed said the latest survey showed a downward trend in the national and personal outlook for voters, with a clear correlation with the interest rate increases.

“Most people aren’t economists, but it looks as though they assign blame to both the RBA and the government,” he said.

“The bank may be raising interest rates, but there’s a feeling that it’s in reaction to inflationary pressures since the last election, some of which could be sheeted home to government. Chalmers and Albanese are certainly not getting off scot-free here.”

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