Reserve Bank Governor Philip Lowe has been called on to “lose his job” over the interest rate hike “outrage.”
This as new analysis revealed that Australians with a $600,000 home loan at an average fixed rate could incur an additional $16,500 in interest repayments in a year.
Former minister and Labor powerbroker Stephen Conroy slammed the Reserve Bank for aggressively raising interest rates in an attempt to put inflation under control, as he defended the decision of Labor frontbenchers to urge RBA to put the brakes on.
“The Reserve Bank Governor is operating off a flawed economic model, he won’t admit it, he was wrong two years ago where he told everybody interest rates wouldn’t go up,” Conroy told Sky News Australia. “The industrial relations system is broken, Australians are getting declining, falling real wages and off the back of that he’s then slugging them. This is an outrage, what the Reserve Bank Governor is doing, which is why he should lose his job later this year.”
Lowe’s seven-year term as RBA governor expires on Sept. 17.
The RBA chief will be questioned about the RBA’s strategy at a Senate estimates hearing, amid fears that it could plunge Australia into recession.
Conroy, backed by the intervention of Assistant Treasurer Stephen Jones, suggested the central bank needed to pull the brakes.
“We know there’s around 800,000 mortgage holders who haven’t yet felt the full brunt of the interest rate increases that are already in the system,’’ he said. “They don’t start to cycle off until mid-year, which is why we think that there’s already a fair bit of pressure in the system and we’re hoping that we don’t see further interest rate increases.
“The Australian government will do its bit to ensure that we are bringing down the pressure on inflation, which is why we hope the Reserve Bank board can see its way clear to ensuring that we aren’t lifting interest rates any further than they absolutely need to be to tame the inflation dragon.”
When asked if he thought Lowe was doing a good job, he replied that the RBA governor’s “got a very tough job.”
Liberal frontbenchers reacted to that, however, by urging Prime Minister Anthony Albanese to “haul him into line.”
The prime minister and Treasurer Jim Chalmers have traditionally emphasised the independence of the RBA to decide on interest rates without government intervention.
Ed Husic, Labor frontbencher, also backed the assistant treasurer in warning that the government also wanted to protect jobs.
“And it’s important to send that signal,” Husic said.
Simon Birmingham, Liberal frontbencher, accused Jones of “undermining the messaging” of Australia’s central bank.
“Now Treasurer Chalmers and Prime Minister Albanese need to pull Stephen Jones into line or push him out of the ministry if he’s going to continue to speak out of turn and undermine the independent reserve bank,” Birmingham said.
Chalmers hinted that Philip Lowe may not be reappointed as RBA governor on Sunday.
In November, Lowe apologised to mortgage holders for suggesting that the RBA’s cash rate would remain at 0.2% until 2024, when instead it started increasing in May last year and is already at 3.35% and is tipped to lift further.
“He’s got a hard job to do,” Chalmers told Sky News. “He’s got to balance getting on top of this inflation challenge without crunching the economy… I’m not going to second guess the Reserve Bank governor. I genuinely respect his independence, as I’ve said probably hundreds of times, in opposition and now in government. I think that’s an important feature of the system.”
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