Treasurer Jim Chalmers says he understands the rate rise will be difficult for mortgage holders, and that the government is doing its bit to reduce inflation.
The Reserve Bank lifted interest rates for the first time in five months this afternoon, ratcheting up the official cash rate by a quarter of a percentage point to 4.35 per cent.
“This will make life harder for people who are already doing it tough,” he said at a press conference following the RBA board’s decision to lift interest rates.
“Inflation has moderated in our economy since those peaks that we saw last year, and our economy has slowed. But inflation is still a feature of our economy.
“Now, the primary driver of inflation in the most recent data was petrol, but there are other inflationary pressures in our economy as well, [and] the Reserve Bank is responding to that.”
The treasurer said everyone wanted inflation to moderate further, and the government had the same goals as the Reserve Bank but a different job to do.
“The Reserve Bank’s job is to address this inflationary challenge without crunching the economy, I am focused on my job, which is a distinct and complimentary job when it comes to fighting inflation,” he said.
“Rolling out cost-of-living relief in a way that puts downward pressure on inflation, rather than add to our inflation challenge. We have got the budget in much better nick … [and] the first surplus in 15 years is part of that effort.”
