Sunrise 03/05/22

03 May 2022

SUBJECTS: Interest rates; Scott Morrison’s full-blown costs of living crisis; Scott Morrison always takes the credit but never takes responsibility.





SUBJECTS: Interest rates; Scott Morrison’s full-blown costs of living crisis; Scott Morrison always takes the credit but never takes responsibility.

NATALIE BARR, HOST: All eyes will be on the Reserve Bank today as we find out whether we are in for an interest rate rise. There hasn't been an increase to the official cash rate for more than a decade, which means more than a million Aussie mortgage holders have never experienced a rate hike. I'm joined now by Shadow Treasurer Jim Chalmers, morning to you. Jim, your prediction, will the Reserve Bank raise interest rates today?

JIM CHALMERS, SHADOW TREASURER: Good morning, Nat. I'm not in the prediction business when it comes to interest rates and the independent Reserve Bank. Certainly the market expects that there will be an interest rate rise, if not today, then certainly either today or next month. That's the strong expectation that people have. I think there's a lot of anxiety around breakfast tables this morning as they watch the show, because people know that their pay isn't keeping up with prices in the economy already, and they know that at some point, whether today or next month, that interest rate rises are about to be part of the pain.

BARR: We've got the former Governor of the Reserve Bank - a lot of people would remember Bernie Fraser - saying this morning both sides, you included, will be in for a rude shock when the RBA does raise rates because you're both pumping so much money into the economy. What do you say to him?

CHALMERS: I don't think anybody would be surprised if and when interest rates go up again, whether it's today or next month. The Reserve Bank's made it really clear that interest rates are heading up. I think what is concerning when it comes to the role of government is that the Prime Minister wants to pretend that he has absolutely nothing to do with it. If something good happens in the economy the Prime Minister takes credit, if something difficult happens in the economy he takes none of the responsibility, and I think Australians are tired of that.

We've been responsible and reasonable about this all throughout. We've said that there are a range of factors that feed into interest rate decisions, but we've also made this point: under Scott Morrison, this is a full-blown costs of living crisis and rising interest rates are about to be part of the pain. We've got skyrocketing costs of living, we've got falling real wages and now at some point - today or next month - we're going to have interest rate rises as well. Whether interest rates are increased today or not, the Prime Minister's economic credibility is in tatters. This is his cost of living crisis, he needs to take responsibility for once for the broader costs of living pressures that Australians are under.

BARR: And so will you do that? And when will you do that? So if we're still sitting here - if you get in on the 21st and we're still sitting here a year down the track, 18 months down the track, and rates are still going up - will you take responsibility?

CHALMERS: What we said when we released our economic plan last week - and I think we spoke about it, you and I, last week as well - is that the Government's got four things that they need to be doing, and these are all central to our own economic plan on the Labor side. We've got to get the economy growing without adding to these inflationary pressures. You've got to give genuine costs of living relief, not just to get through an election, but to get people through difficult times. You've got to get real wages growing sustainably again. And we've got to get some economic value from this Budget which is absolutely heaving with a trillion dollars in Liberal-National debt. So that's our responsibility, that's what our economic plan that I released with Katy Gallagher is all about, because it is time for a government which takes responsibility for the economy, not just the good bits but the difficult bits as well.

BARR: Okay, Jim Chalmers, we thank you very much for your time, and great to see the Labor Party has agreed to that final debate on Seven on May 11. Thank you.