The board of the Reserve Bank of Australia has been warned not to make the “stupid” decision to raise the cash rate when it meets on Tuesday.
Former Labor senator Stephen Conroy said the nation is “teetering on the edge of a recession” and any further rate hike would have “dire consequences to the economy”.
“If [the RBA] are stupid enough to shove up rates again, I mean, the retail data, the housing data, every piece of data that has come through in the last few weeks says we’re teetering on the edge of a recession,” he told Sky News.
“And if they were to push us with one more rate rise, I think you would see some dire consequences to the economy.”
The Reserve Bank of Australia will meet on Tuesday to determine whether the cash rate is increased from 4.1 per cent or held in place for the second month in a row.
The decision will be announced at 2.30pm.
Borrowers have already been slammed with 12 rate hikes in the last 14 months, and Australians who took advantage of cheap loans during the pandemic are now feeling the pain as they transition off fixed-rate loans to variable rates.
Households with a $600,000 mortgage are now paying $1,451 more every month than they were before governor Lowe started raising rates at the start of May 2022.
Recent research from Roy Morgan showed an estimated 1.43 million Australians were struggling with mortgage repayments, soaring to levels not seen since the global financial crisis in 2008.
Treasurer Jim Chalmers said on Tuesday morning he had spoken with the big bank bosses ahead of the rates call about how they were helping struggling Aussies.
“First of all I’ve spoken to the bank CEOs about this challenge and the advice they have for customers is if you think you will be in trouble because of changes in your loan, the best thing is to engage with your bank as soon as possible,” he told ABC’s RN.
“If there’s something the bank can do to make it a little easier, they’re prepared to have that conversation with customers”