Today the independent Reserve Bank of Australia Monetary Policy Board lowered the cash rate for the third time in six months.
This quarter of a percentage point cut brings the cash rate to 3.60 per cent, its lowest level in more than two years.
This is very welcome relief for millions of Australians.
This interest rate cut will make a meaningful difference to millions of mortgage holders around the country.
It will put more money in the pockets of people under pressure.
It’s more real cost of living relief that recognises inflation is now much lower under Labor.
It reflects the substantial and sustained progress we’ve made on inflation in a volatile and uncertain global environment.
For a household with a mortgage of $700,000, this rate cut will save them $109 a month, or around $1,300 per year.
When combined with the previous two rate cuts, the same household will save about $330 a month, or about $4,000 per year.
This is the first time in almost two decades we’ve seen rates come down three times in a calendar year at the same time the unemployment rate is below 5 per cent.
The three interest rate cuts we’ve seen this year would not have been possible without our collective efforts to get inflation down.
Headline and underlying inflation have fallen to their lowest rates in almost four years, and are now both in the RBA’s target band.
When we came to office, headline inflation was 6.1 per cent and rising, it’s now about a third of that.
When we came to office, trimmed mean inflation was 4.9 per cent and rising, it’s now almost half of that.
The RBA’s statement makes clear that inflation has fallen substantially since its peak in 2022 and it expects underlying inflation to “continue to moderate”.
Under Labor, inflation is falling, unemployment is low, real wages and living standards are growing again, more than 1.1 million jobs have been created, debt is down, the economy is growing and interest rates are falling.
Today’s cut doesn’t mean the job is finished, but it will help.
As the RBA noted in its statement, economic uncertainty and volatility are prominent and defining features of the outlook around the world, but all the progress we have made together holds us in good stead.
The best defence against global volatility and the best way to lift living standards is with a more productive economy, a stronger budget, and more resilience.
That’s why we’re building consensus on long term economic reform around these three priorities.