The Reserve Bank is set to raise the cash rate to 4.85%—an 18-year high—on Tuesday, driven by inflation still above target, marking the fifth increase this year.
Critics spotlight a $170 billion ‘mystery money monster’ from higher-than-expected costs in areas like hospitals, arguing government spending fuels price pressures despite strong private demand also playing a role.
Treasurer Jim Chalmers highlights savings in NDIS and tax areas, while opposition leaders and economists warn of higher debt, taxes, and recession risks around 30-40%. Households face real pain from rising repayments as the mid-year budget update looms.