Today’s decision by the independent Reserve Bank means by the time the board next meets we will be approaching eight months since interest rates went up.
This period of rates on hold has provided stability in difficult times for Australian mortgage holders and small businesses.
We understand many Australians are doing it tough and that’s why next week’s Budget will focus on easing cost‑of‑living pressures, not adding to them.
Our responsible approach to the Budget is an important way we are taking pressure off inflation in the economy.
Inflation is moderating and has almost halved since the Albanese Government came to office and is less than half its annual peak in late 2022.
In annual terms, we are ahead of the inflation forecast in the mid‑year budget update that was published in December.
Our cost‑of‑living policies are directly reducing inflation and took ½ of a percentage point off the Consumer Price Index in the year to the March quarter.
The Australian Bureau of Statistics has repeatedly confirmed the Albanese Government’s energy bill relief, cheaper child care and rent assistance have helped take the edge off price pressures.
While we’ve made welcome and encouraging progress in the fight against inflation, we know it’s not mission accomplished because people are still under pressure.
As is usual practice, the Reserve Bank has updated its inflation forecasts based on the latest information. Ours will be updated next week and will take into account measures announced in the Budget.
Our main focus in the near term remains easing inflation and helping relieve cost‑of‑living pressures.
The May Budget will be carefully calibrated to the economic circumstances, striking the right balance between getting inflation under control, easing cost‑of‑living pressures, supporting sustainable growth and building fiscal buffers in an uncertain global environment.