Coalition claim RBA interest rate cut spurred by Aussie sacrifice rather than good Labor policy

The Opposition has credited households tightening their belts for prompting the Reserve Bank to cut rates for the first time in four years, rather than the Albanese Government’s policy agenda.

Shadow treasurer Angus Taylor reiterated on Wednesday that the long-awaited rate cut of 25 basis points was the result of sacrifices made by Australians — hitting back at Labor in the wake of the relief for mortgage holders.

“Governments around this country, particularly the Labor Federal Government and State Labor Governments, have been spending up, and households have been having to tighten their belts,” he said.

“That’s what happens in a cost-of-living crisis, when governments spend a lot of money, households have got to do the work, and that’s exactly what has been happening.”

The cut brings the rate to 4.1 per cent, down from 4.35 per cent, but comes after 13 hikes since May 2022.

After Tuesday’s announcement by Reserve Bank governor Michele Bullock, Australia’s big banks quickly followed suit and announced they would all cut their home loan rates by 0.25 per cent.

Federal Treasurer Jim Chalmers also credited Australian households for doing the heavy lifting to spur the lower cash rate but said it was a combination of Government-led economic factors that created a desirable environment for the RBA decision.

“The progress that we’ve made on inflation in this country we’ve made together. People have been through a really difficult period,” he said.

“If you read the Reserve Bank’s statement yesterday, what they say is that we’ve made a heap of progress on inflation. That progress has actually been faster and better than anticipated. Again that’s a tribute to the Australian people for what they’ve done to get through a difficult period.

“The combination of factors playing out in the economy gave the Reserve Bank confidence that they could cut interest rates. Because we’ve got inflation down, because we got wages up and unemployment low, now we’ve got interest rates coming down as well, and that’s a good thing,

“It will take some of the edge off these mortgage repayments, and it comes at the same time as the government’s providing the tax cuts and energy bill relief and other cost‑of‑living help as well, and getting wages moving again.”

But Mr Taylor said while it’s welcome relief for Australian families, it would “be too little, too late” for many.

“The result of all of that is that we’ve seen the biggest collapse in our living standards in history. This is unprecedented. It’s also unparalleled,” he said.

“It’s been slow in Australia, we’ve had core inflation higher than peer countries around the world, and that’s meant there’s been a lot of pain for Australians.”

Prime Minister Anthony Albanese defended his Government’s financial measures to tackle soaring inflation and relentless rate hikes while meeting with homeowners in his Sydney electorate of Grayndler on Wednesday.

“They bought here in 2021 so yesterday is the first time that they’ve seen a rate cut, and that will make an enormous difference to them,” he said.

“My Government has worked with Australians to bring down inflation, to see wages increasing, to see interest rates now falling, a tax cut for every single Australian, and jobs being maintained as well.

“Angus Taylor looked like someone had run over his cat in the driveway yesterday. He looked so disappointed.

“They continue to talk Australia down. I’ll continue to talk Australia up, because it’s the interests of families like James and Lou and young Rommie here that we have that positive approach towards Australia’s future.”

Deputy Opposition Leader Sussan Ley echoed his concern saying the Government had nothing to brag about and the “damage is done” for mortgage holders.

“People are talking about an early election, and what is the Government going to spruik? That they’ve had 12 rate rises and one rate cut?” she said.