“The RBA interest rate cut of 25 basis points is welcome news and will provide some relief in the cost-of-living crisis, but Labor’s inability to get inflation under control sooner has meant they were too high for too long and Australians have paid the price,” Mr Birrell said.
“For inflation to reduce, consumers and governments must rein in spending.
“The consumers did — they were forced to because of interest payments on their mortgages (which has affected rents also), but the Labor government did not — meaning the reserve bank had to wait longer before a cut.
“It’s time for a change of government and some better economic management.”
Why did the RBA cut interest rates?
The RBA adjusts interest rates based on how the economy is performing. Over the past few years, interest rates were raised to slow inflation, which happens when prices of goods and services rise too quickly.
By making borrowing more expensive, people and businesses tend to spend less, helping to bring inflation down.
Now that inflation has started to slow, the RBA has decided to ease financial pressure by lowering rates slightly. The bank stated that while inflation was still a concern, it was moving in the right direction.
What does this mean for you?
• Homeowners with mortgages may see their loan repayments decrease slightly, depending on how banks respond to the rate cut.
• Renters could see small changes if landlords pass on lower mortgage costs.
• Businesses and borrowers may find it cheaper to take out loans.
• People with savings might receive lower interest on their bank deposits.
