Interest rate pause welcomed, but still a ‘small comfort’

The Reserve Bank of Australia’s (RBA) decision to pause interest rate rises is welcome news; however, some are critical that the feeling will be fleeting as inflation soars.

The Australian Council of Trade Unions (ACTU) is one such organisation welcoming the hold of 4.1 per cent, but concerns are still being voiced that the high inflation and low wage rises of the last decade make this win a “small comfort”.

“Another rate rise would have seen already stretched family budgets cut to the bone. A pause in the rate rises provides some small relief to workers out there doing it tough,” said ACTU secretary Sally McManus.

“We are still very mindful, however, that workers have fallen way behind. From 2013–2023 Australian workers suffered the lowest wage growth on record, and in fact, real wages are now 3.1 per cent lower than they were in 2013.”

Ms McManus continued: “We know that workers have borne the brunt of inflation and these rates rises, while corporate profits have risen, and CEO pay packets grown.”

The cost of living has spiralled out of control. According to a statement from the ACTU, payments on an average mortgage of $600,000 will have increased by up to $1,496 a month since the rate rise in May 2022.

This has resulted in many families struggling to make ends meet. Compounding this issue is the rental crisis crippling the housing market, meaning nobody is safe from the rising inflation.

The recent minimum wage increases will assist in helping families navigate these tough times. The ACTU revealed that 2.3 million Aussies are on minimum wage, equating to almost a quarter of workers. This is reportedly 400,000 higher than two years ago.

The 5.75 per cent increase for award wage workers and 8.6 per cent for minimum wage workers will help these vulnerable workers stay afloat, and the ACTU is proud of the work they’ve done to implement change.

ACTU president Michele O’Neil said: “The union movement fought hard for these changes, which will be critical to helping working people staying afloat. Big business, whilst posting record profits and receiving mammoth pay rises themselves, argued against this rise for our lower paid workers.”

“Unions will always be in the corner of working people, whether it’s fighting for better pay to help workers cope with the cost-of-living crisis, or increases in super payments, to ensure workers can retire with dignity, or improved conditions such as paid parental leave and more affordable childcare so that parents can better manage their parental responsibilities without losing out financially. We’re for workers.”