Coalition will pin the next rate rise on Anthony Albanese when the RBA moves again

RBA governor Philip Lowe as he delivers a landmark speech to the National Press Club lunch in Sydney held at Doltone House at Jones Bay Wharf. Britta Campion / The Australian

Mortgage-holders are being warned to brace. The interest rate pain is far from over.

Whether today or next month, most economists agree that they are going up, again.

Not that economists have been that successful in their more ­recent predictions.

But assuming they are correct this time, the longer inflation scourge persists, the more heightened the risk of political pain for the federal government.

For now, Albanese has managed to inoculate Labor from any responsibility. But this won’t last forever. Blaming the war in Ukraine, “busted” supply chains and the former Coalition government has just about run its course.

While the RBA board will be conscious of the politics of hiking rates directly after a budget, to pause would go against all prevailing indicators.

And the markets have now given the central bank cover.

Either way, the opposition will seek to pin the next rate rise whenever it comes, this month or next, directly on Anthony Albanese and Jim Chalmers.

And this time it might be harder to avoid some of the blowback.

The Coalition’s argument is that the government appears content to let the central bank do the work on inflation, in other words letting mortgage-holders do the heavy lifting, rather than opt for fiscal policy intervention.

To illustrate how acute the squeeze is, modelling provided to The Australian shows that ­borrowers are facing the sharpest mortgage burden on ­record.

Forget about the rate ­settings compared with previous high-rate periods. It’s the repayment load as a percentage of income that matters.

The average mortgage-holder is now squaring away 25 per cent of their disposable income to meet their repayments. This is the average – so many are paying a lot more.

These are repayments mind you, that have risen by 50 per cent since before the pandemic.

According to Australian ­National University research, this amounts to the highest level of mortgage payments as a share of income since 1984.

By comparison, the ANU analysis shows that while rents have risen sharply, renters are still spending a slightly lower proportion of their disposable income on housing costs than before the pandemic.

It begs the question as to why Canberra’s attention seems more concerned about a “rental crisis” when mortgage-holders are the ones carrying the can.

Liberal strategists will tell you that renters are far less likely to vote for the Coalition than homeowners.

Historically speaking, the ­moment someone buys a house, the prospect of them voting liberal goes up.

This was true until the last election, with the mortgage belt aiding Albanese’s victory.

Conditions have changed considerably since then.

At some stage, these voters may start wandering back to the Coalition if they feel Albanese is failing to address their increasingly acute cost of living issues.

There are no signs that this is happening yet. The latest Newspoll shows that voting intentions haven’t shifted at all, having strengthened in Labor’s favour since the election.

Yet there is doubtless a latent and silent group of mortgage-holders who are becoming increasingly agitated and anxious.

This is where the opposition will need to sharpen its focus if it wants to turn the dial.

Another rate rise will only ­assist in this mission.