'The rate cut that Australians need and deserve', Treasurer responds to RBA decision

Australian Community Media

The Reserve Bank of Australia has cut the cashrate to 4.1 per cent, representing the first cut since 2020.

Transcript

00:00Well today the Independent Reserve Bank decided to cut the cash rate to 4.1%.

00:06This is very welcome news for millions of Australians.

00:10This is the rate relief that Australians need and deserve.

00:15Now we know that it won't fix every challenge we have in our economy or in household budgets

00:20but it will help.

00:22It's a demonstration of the progress that Australians have made together in this fight

00:27against inflation.

00:29Now that progress that we've made has been substantial, it is now sustained and it's

00:35reflected in the decision taken by the Reserve Bank today.

00:39Now when we came to office inflation and interest rates were rising, now both are falling.

00:46Now other countries have had to pay for that kind of progress on inflation with much higher

00:50unemployment, negative quarters of growth or even recessions and Australia has managed

00:56to do better than that.

00:58Under this Labor government inflation is down, wages are up, unemployment is low and now

01:04interest rates are falling as well.

01:08This is the soft landing that we have been planning for and preparing for but we can't

01:13be complacent about the months and years ahead.

01:17We know that there is more work to do.

01:19We know that this is not the solution to every challenge that people are confronting in their

01:26household budgets but it will help.

01:28It is a welcome step when it comes to providing a bit of relief for Australians doing it tough.

01:36Now for a household with a mortgage of half a million dollars the rate cut will save them

01:42$80 a month or $960 per year.

01:47Now if you look at the statement made by the Reserve Bank Board today it makes three things

01:52very clear.

01:54Firstly inflation has fallen substantially since the peak in 2022.

01:59Secondly the inflationary pressures in our economy are easing faster than expected and

02:05thirdly the Board has more confidence that inflation is moving sustainably towards the

02:10midpoint of the 2-3% target range and because of those three developments that gave the

02:17Reserve Bank Board the confidence to make the decision that they have made today.

02:23Inflation is now almost a third of the 6.1% that we inherited and that is a reflection

02:30of that progress on inflation that the Reserve Bank Board has referenced in their press release

02:36today.

02:37Now today's decision and the statement from the Board gives us more confidence that the

02:43worst of the inflation challenge is behind us but we're not complacent about that either.

02:49Today's decision is very welcome but it's not mission accomplished because we know that

02:54people are still under pressure and that's why the primary focus of this Albanese Labor

02:59Government will continue to be the cost of living.

03:03It was before this decision and it will be after this decision as well.

03:08Now before I take your questions I wanted to let you know that this afternoon after

03:12the decision was made public I spoke to the CEOs of all four major banks.

03:20Each of them have made an announcement that each of the major banks will be passing on

03:26in full the benefits of the decision taken by the Independent Reserve Bank today.

03:31I don't take credit for those decisions that they have made and announced already.

03:37In each case they were already well progressed in their planning but I wanted to say that

03:42I consider that a very good thing that each of the four major banks has already indicated

03:48that the benefits of this rate cut will be passed on in full.

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