Today’s interest rate decision will make life harder for the more than three million Australian households with a mortgage.  

Along with persistent high inflation, this is just another cost-of-living pressure on aspirational Australians in the lead up to Christmas.  

Repayments on a typical $750,000 mortgage will have now increased by more than $1000 since May. 

While the Reserve Bank of Australia makes its decisions independently, the Government can and should use its fiscal levers to reduce pressure on households.  

The most important thing the Labor Government can do is to run a sensible budget in October. 

The Labor Government has inherited a strong economy and an improving budget position from the Coalition – with the Final Budget Outcome confirming a $50 billion reduction in the Budget bottom line since March. 

The test for the Treasurer is to make decisions that consolidate the Coalition’s improving position, without raising taxes.  

If the Treasurer stands by Labor’s election promise to run larger deficits and borrow more debt, he will put more pressure on inflation.  

This will mean the Reserve Bank will have no choice but to keep hiking interest rates.  

Monetary policy and fiscal policy need to work together. You can’t have the foot on the accelerator and the brake at the same time or you’ll blow up the engine.  

If the Treasurer produces a big spending, big taxing budget at the end of this month, it’ll be Australia’s mortgage belt who will pay the price.