Today’s interest rate rise will hurt people on the lowest incomes most

7 November 2023

Today’s interest rate rise sacrifices jobs and incomes to curb inflation and the effects will be felt most acutely by people on the lowest incomes, ACOSS says.

ACOSS CEO Cassandra Goldie says:

“The RBA’s decision to lift the cash rate to 4.35 per cent will hurt people with low incomes the most. The worthy goal of reducing inflation must not come at the expense of jobs and incomes, which have just taken another hit from the 13th interest rate rise since May 2022.

“Every rate rise leads to job losses down the line. The RBA expects unemployment to rise to 4.25%, at least an extra 100,000 people out of paid work since it began hiking interest rates. Given the storm clouds over the international economy, unemployment could rise a lot further.

“The RBA Board states that it has ‘a low tolerance for a slower return of inflation to target’ The community’s ‘low tolerance’ for more unemployment must also be taken into account.

“Instead of relying solely on the blunt tool of rate rises, the government must step in to aid the RBA with measures to tackle inflation at its roots.

“This should include working with states and territories to curb soaring rents and additional measures to bring down energy bills for those who can least afford it.”

ACOSS is calling on the government to:

  1. Work with states and territories to implement stronger regulation of the private rental market to protect against exorbitant rent increases
  2. Take further action to reduce out of pocket costs such as child care and dental health services
  3. Protect people on the lowest incomes who are facing destitution amid the rising price of essentials by lifting Jobseeker and related payments
  4. Take further action to reduce energy costs by investing to make homes energy efficient for people on low incomes
  5. Invest in a jobs and training offer for the 500,000 people unemployed long-term to improve their employment prospects and ease labour shortages.