Jim Chalmers has insisted the government’s “number one priority” is providing cost of living relief to households amid fears of another rate rise on Tuesday.
The Treasurer appeared on Sunrise on Tuesday morning where he was pressed by host Natalie Barr about what he was doing for families who were crying out for help.
She used the example of the Mackley family who were forced to sell their dream home after their mortgage repayments doubled in 12 months.
Alex Mackley, 34, works as a landscape gardener in Brisbane and his income of $1,179 a week was enough to provide for his wife, who works 10 hours a week, and a young daughter.
However, as the interest rates continued to rise so did his mortgage repayments, which surged to $600 a week. His other bills totalled to about $400.
It meant the family only had a little over $100 left for the week, and with no savings, Mr Mackley was forced to use the credit card to pay for other essentials.
“What do you say to families like the Mackley’s who can no longer pay their mortgages,” a stern-looking Barr asked Mr Chalmers.
The Treasurer recognised a lot of Australian families were “under the pump” but stressed the government were doing what it could to alleviate the pressure.
“What I say to that family and to families doing it tough right around Australia is that the government’s number one priority is to provide this cost of living help,” he said.
“At the same time we take our responsibilities when it comes to the fight against inflation. We’re rolling out this cost of living help, we’re getting the budget in much better nick to take the pressure off inflation… and we are making some progress when it comes to inflation moderating in our economy but it is still too high.
“And that means that we will continue to work as hard as we can around-the-clock to take some of the edge of these pressures the people are feeling.”
Unsatisfied with the answer, Barr pushed further about the measures Mr Chalmers was suggesting could assist households.
She pointed to calls to the national debt line were up 30 per cent, families were putting costs on credit cards or buy now pay later schemes and almost one in ten Queensland homeowners were selling their property at a loss only two years after purchase.
“So, what exactly is your cost of living help to those people?” the Sunrise host asked.
Mr Chalmers flagged the government is “acting on a range of fronts simultaneously”.
“Whether it’s making childhood education cheaper… Commonwealth Rent Assistance… making medicines cheaper and making it easier to find a bulk-billing doctor, we’ve got electricity bill relief rolling out right now,” he said.
“We are seeing inflation come off a bit but we do understand that it is still too high for too many people and the people are doing a tough, and that’s why the government’s number one priority is rolling out this cost of living help.”
“Really, right across the board, we’re acting in a responsible and methodical way to take some of the edge of these cost of living pressures that people are confronting, which we understand are putting them under quite substantial pressure.”
He later said in a press conference in Canberra that families should “engage with their banks” when they know they are financially struggling.
The Reserve Bank of Australia will announce on Tuesday at 2:30pm whether it will increase rate rises for a 13th time under outgoing Governor Philip Lowe.
It was held steady at 4.1 per cent in July, but there are fears another increase from the central bank could push Australia into a recession.
Economists are divided on whether the cash rate will rise.
Scott Phillips, the Motley Fool Chief Investment Officer, told Sky News Australia he suspects it would be held at its current rate.
“Inflation is coming down… not as quickly as we’d like… but the last quarter the inflation was only 0.8 per cent for the quarter, if you annualise that, that’s 3.2 per cent… it gets us very close to the RBA’s target ban,” he told Peter Stefanovic.
“If the RBA looks around and says, ‘you know what inflation is in the right direction, we need to be careful we don’t kill the goose and lay the golden egg’, in other words, we don’t want to push things into a recession, we can afford to wait one more month.”
Mr Chalmers refused to speculate on what will happen, adding it was an independent decision for the RBA Board when they meet later on Tuesday.
“My responsibility is to roll out this cost of living relief and to get the budget into better nick and take the pressure off inflation,” he said.