Record number of Australians working multiple jobs during cost of living crisis with more rate hikes tipped

A record level of Australians are working multiple jobs to cope with the cost-of-living crisis as the highest crude oil prices in four months threaten to spark two more rate hikes by Melbourne Cup day.

With petrol typically selling for $2 a litre again, motorists face more pain with crude oil prices on Thursday night soaring above $US100 a barrel for the first time since May, which has the potential to worsen an already bad inflation situation.

The Reserve Bank’s three hikes so far this year have led to a record 6.9 per cent of the labour force working more than one job during the June quarter, up from 6.6 per cent in the three months to the end of March, the Australian Bureau of Statistics revealed on Friday.

This was the highest level in records going back to 2004, with 1 million Australians working multiple jobs, including 7.7 per cent of working women and 6.2 per cent of men.

Low-paid workers were more likely to be holding multiple jobs with 9.8 per cent of staff in the administrative and support services sector in this position, well ahead of 8.1 per cent of hospitality workers.

Shadow treasurer Tim Wilson said this was a reflection on the high rate of inflation under Prime Minister Anthony Albanese, which is seeing workers suffer a real cut in their wages.

“More than one million Australians are now working two jobs to get by in the economy Labor built and to survive the Albanese active inflation agenda,” he said.

Citi on Friday updated its forecasts to have the Reserve Bank of Australia raising interest rates on September 29 and November 3 at consecutive meetings, given the 3.5 per cent headline inflation rate is still well above its target band.

Senior economist Faraz Syed said higher crude oil prices were likely to push up both headline and underlying inflation in the September quarter, with that official data being released ahead of the RBA’s Melbourne Cup day decision.

“In our view, the RBA needs to hike further to get on the front foot of inflation, though a dovish board could delay action,” he said.

“Anaemic productivity, a tight labour market, and elevated oil prices likely mean inflation will remain stubbornly high.”

Those two hikes, in 25 basis point increments, would take the cash rate to 4.85 or the highest level since December 2008.

That would add $243 to monthly repayments on an average, new mortgage of $731,000 compared with now, meaning an extra $2916 over the year.

The RBA’s increases in February, March and May have already added $4248 to average, annual mortgage repayments.

The construction of new data centres to power artificial intelligence is adding to high inflation, with its demand for labour and materials likely to outweigh the effects of the RBA’s three rate cuts this year on household spending.

“This view is driven by a two-speed economy, where a deepening housing correction is offset by an AI-related investment boom that is adding to capacity constraints,” Mr Syed said.

Former Treasury economist Warren Hogan said soaring crude oil prices could see the RBA cash rate go even higher to 5.1 per cent.

“It adds to the pressure on the RBA to hike rates,” he told The Nightly.

“While this is a transitory impact for the overall economy, it could push some businesses and households into financial difficulties.”

Higher interest rates also mean higher interest payments on Federal Government debt with the 10-year Australian Government bond rate this week hitting a 15-year high of 5.2 per cent as shorter-dated three-year bonds reached 4.8 per cent, also the highest since July 2011.

Mr Hogan said longer-dated yields were more likely to rise, even if the RBA delayed raising interest rates, given the market would still be expecting increases.

“If market volatility and scary stories from the Australian property markets cause the RBA board to hold off on a rate hike in September, long-term rates and government funding costs could rise even further,” he said.

“The RBA is flirting with its credibility.”

Treasurer Jim Chalmers on Friday suggested State governments were also to blame for higher spending, after S&P Global downgraded his home State of Queensland’s credit rating to AA from AA+ citing the cost of the 2032 Brisbane Olympics.

“Right around Australia, governments of both political persuasions have got Budgets under pressure, and the Commonwealth Budget is under substantial pressure as well,” he told reporters in Brisbane.

“Every Budget in one way or another is under pressure. There are a whole range of reasons why the Queensland Budget is under pressure, but the Commonwealth is not one.”

The Commonwealth Treasury is already expecting interest on Australian government debt to cost $31.9 billion this financial year, which would make it the seventh most expensive item for the Federal Government.

The interest bill also is higher than the projected $31.5b deficit for 2026-27 and is costlier than the $23.5b projected to be spent on the Pharmaceutical Benefits Scheme.

Higher yields could the annual bill for servicing government debt interest rival the $37.6b cost of medical benefits, including Medicare.

The Reserve Bank’s next two-day meeting on September 28 and 29 is being held a day before the ABS releases August inflation data.

But in July, the headline inflation rate of 3.5 per cent was higher than expected and marked the 12th consecutive month of the consumer price index being above the RBA’s 2-3 per cent target.

The Reserve Bank most recent update in August didn’t see inflation returning to the band until June 2027, with the mid-point seen as an unlikely prospect until early 2028.