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The economist called on the government ‘to ‘fess up’ as inflation soars.
this year, pushing interest rates to a 15-year high. The latest increase will add about $91 a month to repayments on a $600,000 mortgage, with the RBA signalling further rises could be on the way.
Know the news with the 7NEWS app:The Compare The Market economic director argued Australian households are being left to shoulder the burden of fighting inflation as mortgage holders face another interest rate hike. He told Sunrise the latest increase would leave average mortgage holders needing to find an extra $5500 over the next 12 months, on top of the financial pressure already facing families. The rise places Australia second only to Iceland among developed economies for its cash rate.
Koch took aim at the government’s response to Australia’s high interest rates, arguing that increased public speaking was working against the Reserve Bank’s efforts to bring inflation under control.
“You could sense the frustration in Michelle Bullock, the Reserve Bank Governor, yesterday at a press conference when she was asked if global oil prices are driving inflation around the world. ”Koch took aim at the government’s response to Australia’s high interest rates. Koch said the RBA governor had made clear domestic demand was the major driver of inflation, arguing that government spending was contributing to that demand.
“Domestic demand is economic speak for spending more than we should be, and that’s basically coming from governments. ” He said households had already tightened their belts while governments at all levels continued to spend.
“Michelle Bullock challenged Australian households to go easy, tighten their belt, fight inflation,” he said. “But the counter to that is governments, all levels of government, all persuasions of government, have increased their spending and that’s countering what we’re doing. ”, telling host Nat Barr it had reduced spending, despite mounting pressure over the latest interest rate rise.
“I’m just frustrated with it. You have politicians talking BS,” he said.
“They’ve actually got to sign up for something to take action to say to you and I and Australian households, ‘We’re with you on this. We’re going to fight inflation together. This is what we’re going to be doing’. ” Koch called for a new agreement between federal, state, and local governments to limit the inflationary impact of public spending and rising charges.
He proposed a formal fiscal policy commitment requiring governments to keep fees and charges below 2.5 per cent when inflation exceeds 3 per cent.
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