- Reserve Bank boss reveals more Australians relying on charity
The country’s most powerful banker has revealed that an increasing number of Australians are turning to charity for the first time in their lives to get by.
Reserve Bank Governor Michele Bullock told a mental health charity luncheon that aggressive rate hikes were now forcing more people to ask for the kind of help they had not sought before.
“Information received through the RBA’s outreach program indicates that more people than usual are seeking support from community organisations, often for the first time,” she told the Australian Business Economists luncheon in Sydney on Thursday.
However, Ms Bullock ruled out any rate cuts before Christmas in her speech titled “The High Cost of Inflation” to the Anika Foundation.
“Circumstances can change, of course, and if economic conditions do not evolve as expected, the board will respond accordingly,” he said.
“But if the economy broadly evolves as anticipated, the board does not expect to be in a position to cut rates anytime soon.”
The RBA’s cash rate held at a 12-year high of 4.35 per cent last month and relief is unlikely soon after 13 rate hikes in 2022 and 2023.
The most aggressive hikes since the late 1980s are already taking a toll on the economy; the 1 percent growth rate in the year through June is the weakest since the 1991 recession, outside of a pandemic.
The country’s most powerful banker has revealed that an increasing number of Australians are turning to charity to survive (pictured is a Food Bank charity worker)
But Ms Bullock said failing to tackle high inflation now would simply lead to even higher unemployment in the future.
“High and variable inflation can also cause changes in people’s wealth and purchasing power,” he said.
‘Agreeing to a new contract or making savings plans is harder if you don’t know how expensive things will be in the future.
‘Moreover, high inflation eventually requires disinflation, which can have lasting costs for households through higher unemployment.’
Inflation hit 3.8 percent in June and the Reserve Bank does not expect the annual consumer price index to fall within its 2 to 3 percent target until the end of 2025.
Unemployment rose to a two-year high of 4.2 percent in July and the RBA forecasts it will rise to 4.4 percent by the middle of next year.
Reserve Bank Governor Michele Bullock told a charity luncheon on mental health that aggressive rate hikes were now forcing more people to seek the kind of help they had not sought before.