Source : Perth Now news
Struggling households slammed by eye-watering fuel prices, punishing interest rate hikes, and tumbling property values have been told not to expect any fresh cost-of-living relief from Canberra.
Federal Treasurer Jim Chalmers said the Albanese Government’s upcoming mid-year Budget update will run a “pretty tight ship,” slashing spending to meet the escalating debt interest bills instead of direct household support.
Despite acknowledging the brutal financial squeeze gripping families, on Sunday, Mr Chalmers refused to commit to any new cost-of-living lifeline when asked point-blank whether Australian’s should expect no support.
“I think people understand that the midyear update will necessarily be a pretty tight ship and that’s because of these pressures on our Budget, the ones that are existing already, but also these additional pressures coming at us from around the world,” Mr Chalmers said.
“One of the primary influences on the midyear update will be the need to find more savings as we have been doing, but also the need to make room for these pressures which are coming at us from around the world.”
As the average fuel bill for households jumped by 8.1 per cent in August, and the price of diesel hits more than $3 a litre in some parts of the State, the Treasurer has dismissed cutting fuel taxes again and says it’s “not something that we have been considering or discussing”.
“It’s not our intention,” Mr Chalmers said.
“We transition from some of that temporary help, energy bill rebates, fuel excise relief, into more permanent ways to help people via the tax system, the health system, the wages system.”
The Reserve Bank of Australia recently inflicted more pain on households by delivering its fourth rate hike of the year which has pushed the cash rate to a 15-year high of 4.6 per cent.
The decision adds about $121 a month to repayments on an average mortgage of $731,000, while borrowers with a $1 million loan are shelling out an extra $606 a month.
RBA governor Michele Bullock offered cold comfort to struggling homeowners after announcing the latest rate rise.
“We knew that this was going to hit some people pretty hard but we have to do it,” she said.
Housing tax changes in the Albanese Government’s Budget have put the brakes on house prices
Perth dwelling values have already dropped $62,000, a 6 per cent slide from their peak, with concerns that property values could plunge even further.
It has triggered alarm bells inside the RBA, with its Financial Stability Review warning that first-homebuyers who entered the market under the Albanese Government’s 5 per cent deposit scheme face a heightened risk of sliding into negative equity.
Mr Chalmers defended the Government’s spending which he claims is supporting households through legislated income tax cuts, higher wages, and cheaper health care.
He also repeated his denials that Federal spending is driving out-of-control inflation.
“Budget settings are not the primary driver of prices in our economy,” Mr Chalmers said.
“Where there’s been additional spending it’s typically in areas like boosting bulk-billing because that takes pressure off family budgets.”
The Treasurer also warned that increasing global bond yields are forecast to add “billions of dollars” in debt costs to the country’s almost $1 trillion debt pile, putting further pressure on the Government’s ability to offer support.
