The Reserve Bank of Australia is widely expected to raise its cash rate by 0.25 percentage points at Tuesday’s board meeting, taking it to 4.85% and its highest level in 18 years. If confirmed, it would be the fifth rate increase this year.
Treasurer Jim Chalmers told ABC Radio National that Australians were bracing for a “difficult decision”. He said people were already under substantial pressure and that another increase would make conditions harder, particularly as the effects of previous rate rises had not yet been fully felt.
Chalmers said the government was reviewing spending pressures, economic forecasts and potential savings for its mid-year budget update, due in December. He said savings had been included in each of the government’s previous eight budget updates and would also feature in the ninth.
The expenditure review committee met on Monday and was scheduled to meet again on Wednesday to discuss savings. Chalmers said the government had more work to do to keep the budget as tight as possible, regardless of the Reserve Bank’s independent decision.
Sources: The Guardian World.