RBA actions highlight need for macroeconomic reform

Australian Greens

Greens Treasury spokesperson, Senator Nick McKim, has responded to today’s decision by the RBA to raise rates again by highlighting the need for macroeconomic reform to deal with the housing market and declining real wages.

“The RBA has seriously undermined its credibility this year.

“They should not have raised rates as fast as they have, and should not have gone again today.

“Today’s decision is the RBA thumbing its nose at people who are hurting the most.

“High inflation was sparked by supply-side shocks and has been fuelled by corporate profiteering.

“It has not been driven by wage claims.

“Yet the RBA has consistently invoked wage pressures to justify eight consecutive interest rate increases.

“By jawboning down wages and openly aiming to increase unemployment the RBA has been running cover for corporate Australia.

“The RBA’s interest increases have also significantly increased housing costs for renters and mortgage holders.

“This comes after the RBA’s forward guidance during the pandemic sent house prices to record highs by inducing people to borrow record amounts.

“The last three years have demonstrated that Australia’s economic institutions and policy settings are not fit for purpose.

“House prices should not be a primary tool for economic recovery. Doing so only increases volatility and decreases affordability.

“And wage suppression should not be the only tool to reduce demand. Doing so worsens inequality and hurts those who are most vulnerable.

“The RBA review must call for monetary and prudential policy to be brought under the one roof to curb the flow of credit to housing.

“And the government needs to pull its finger out and implement tax reform that hits speculators and the wealthy.

“Getting rid of negative gearing and the capital gains tax discount would stop housing costs yo-yoing up and down in response to shifts in interest rates.

“And taxes on super profits and the super wealthy could help slow inflation and fund cost of living relief for those who need it.”

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