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Prime Minister Anthony Albanese has welcomed the Reserve Bank’s decision to give households a reprieve from interest rate rises as “a good thing”, as the Opposition stepped up its pressure on the government to do more to fight inflation.
RBA governor Philip Lowe has signalled the rate pause may be short-lived after the board held the official interest rate steady at 4.1 per cent at its Tuesday meeting, the second halt in increases since it began raising rates in May last year.
Prime Minister Anthony Albanese has welcomed the RBA’s rate rise reprieve as the Opposition repeated its calls for the government to do more to fight inflation. Credit: Alex Ellinghausen
In a round of media interviews on Wednesday morning, Albanese acknowledged many Australians were struggling and insisted the government was doing “everything we can” to provide cost of living relief while putting downward pressure on inflation.
“The fact that interest rates were paused yesterday at 4.1 is a good thing,” Albanese told the Nine Network’s Today program.
“You have a two-speed economy, some people doing it really tough and then you have positive signs at the same time in the economy. Record jobs growth of 465,000 jobs created in our first year, inflation is going down and that’s a good thing.”
Albanese declined to weigh in on speculation Finance Department secretary Jenny Wilkinson is among the front-runners for the RBA governor role should Lowe not be reappointed for a second term before his contract expires in September.
”I’ll make those decisions around the cabinet table,” Albanese told Sky News.
But he praised Wilkinson and Treasury secretary Stephen Kennedy, who is also in the running to replace Lowe, as “outstanding public servants”.
“There are a range of people who will be under consideration, including of course, the Governor himself of the Reserve Bank.”
Australian Bureau of Statistics head David Gruen and current bank deputy Michele Bullock are among those being considered for the governor role, along with monetary policy experts from overseas. Treasurer Jim Chalmers has previously indicated he would decide on the governor’s position in July as he races to put in place major changes to the bank recommended by the recent RBA review, including a new agreement on how it targets inflation.
Opposition finance spokeswoman Jane Hume said the government should consider extending Lowe’s term, describing him as “exceptionally well qualified” and saying he had been unfairly demonised for using the bank’s only lever to fight inflation.
“He is a steady hand at the wheel at an incredibly difficult economic period of time. There’s hardly a person in Australia that would be better qualified than Philip Lowe to leave the Reserve Bank,” Hume said.
As the Opposition repeated its calls for the government to rein spending, Albanese said the government had banked most of the savings from the budget surpluses rather than providing more cost-of-living relief to households.
“We do need to understand … that if the government just splashed money around, that would put upward pressure [on] inflation, which would work to counter what the Reserve Bank is doing on monetary policy,” Albanese said on ABC News Breakfast.
“We need to make sure that fiscal policy and monetary policy work hand-in-hand and that’s why we have banked most of the savings from the surplus.”
Hume said thousands of Australian households would be “breathing a sigh of relief” as a result of the RBA’s decision but the government was too reliant on the bank to do “all the heavy lifting” in fighting inflation.
“The only way our government can do that is to curtail its innate desire to spend and spend and spend more,” Hume said.
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