The Reserve Bank’s own interest rate increases, aimed at bringing inflation under control, are now fuelling the cost-of-living pressures hitting working Australians.
The ABS cost-of-living index includes mortgage interest which is overwhelmingly paid by working people. The traditional measure of inflation excludes mortgage rates. “The rise reflects the continued rollover of some expired fixed-rate to higher variable-rate mortgages, as well as flow-on effects from an increase in the Reserve Bank of Australia’s cash rate of 25 basis points in November 2023,” she said.
Reflecting their different spending patterns, age pensioners enjoy the lowest inflation rate. It has fallen to 3.3 per cent after peaking at 7.3 per cent in December 2022. Age pensioners are much less likely than a person in employment to hold a mortgage while their insurance and food costs are also lower.
On Wednesday, he said he was hoping to deliver a second successive budget surplus that would reduce inflationary pressures while also putting in place policies to protect Australians from higher prices.