PRESS RELEASE: Premiers, Opposition must stop Chalmers surrendering power to bankers
State Labor Premiers Steven Miles, Jacinta Allen, and Roger Cook were right to call for interest rate cuts, but the Reserve Bank was the wrong target.
The Australian Citizens Party (ACP) and others have pointed out that the Premiers should be targeting their Labor Party colleague Jim Chalmers, who has the power to order the RBA to cut rates.
Instead of using his power, however, Chalmers has introduced a bill to surrender it to unaccountable bankers.
ACP Research Director Robert Barwick said today: “The Premiers were right to speak up, because millions of Australian households are suffering from the fastest interest rate hikes in history which have added thousands of dollars to their monthly bills.
“But c’mon—they need to pay attention. Their colleague Jim Chalmers literally has the power to cut rates and provide relief to those households, but just when he needs to use it, he’s actually trying to legislate it away.
“He’s the one the Premiers should be going after.”
Greens Senator Nick McKim also weighed in, tweeting 2 February: “Labor premiers are calling for the RBA to cut rates next week. But will they put pressure on Jim Chalmers to intervene?
“Jim Chalmers has the power to overrule the RBA on interest rates under S11 of the RBA Act. Instead of using this power, the Treasurer is seeking to give it away in upcoming legislation.”
The latest data on the burden being borne by mortgaged households underscores the urgency of this issue.
Digital Finance Analytics’ data scientist Martin North reports his household survey is showing the highest rates of mortgage stress and rental stress ever.
The RBA’s interest rate hikes since early 2022 have pushed up mortgage stress to 50.5 per cent of mortgaged households, and rental stress to 73.47 per cent of renters–both up from around 40 per cent in 2021.
Martin North has also calculated that, annualised, Australia’s mortgaged owner-occupiers are collectively paying $49.52 billion more in interest than in 2021, while mortgaged property investors are collectively paying $22.5 billion more than in 2021—a whopping $70 billion extra per year in just interest payments coming out of Australia’s mortgaged households.
This huge extra burden on mortgaged households completely dwarfs the government’s so-called “cost-of-living tax cuts”, which are returning $20 billion a year, but spread over most taxpayers.
Shane Wright reported in the 7 February Sydney Morning Herald that mortgage payments aren’t measured in the consumer price index (CPI) of inflation, so the RBA can raise the cost of living on mortgaged households while simultaneously claiming that inflation is coming down.
Wright reported that “the real inflation rate for working families paying off a home loan is almost 70 per cent higher than the official consumer price index”, of which the cost of mortgage interest has risen 109 per cent.
Robert Barwick added: “The Treasurer’s power to overrule the RBA, enshrined in Section 11 of the RBA Act, was originally legislated in 1945 to moderate central bank decisions if necessary, especially when its policies crippled households, as we are seeing now.
“It is a crucial democratic check on the power of unelected central bankers.
“Labor greats John Curtin and Ben Chifley fought furiously for this power—Jim Chalmers has no right to give it away.”
The Greens, One Nation, and many crossbenchers oppose the repeal of Section 11, and the ACP understands there’s growing opposition in the Coalition, which, if the Coalition votes no, would defeat it in the Senate.
The ACP is urging Australians to contact Shadow Treasurer Angus Taylor and Coalition MPs to demand they stop Chalmers from surrendering to bankers.
The Australian Citizens Party is an independent, federally-registered political party, founded in 1988. It is committed to policies that promote the economic development of Australia for the benefit of all its people, not just the vested corporate interests which have too much influence over the major political parties. It takes its inspiration from the "old Labor" party stalwarts including King O'Malley, who fought to establish Australia's national bank, the Commonwealth Bank, and John Curtin and Ben Chifley, who used the Commonwealth Bank to lead the economic mobilisation that saved Australia in WWII. The ACP fought against the privatisation of the Commonwealth Bank, which has concentrated financial power in Australia in the Big Four banking oligopoly that gouges short-term profits at the expence of Australians and the nation's economic development, and is campaigning to re-establish a national bank, modelled on the old Commonwealth Bank, as a government post office bank which would guarantee face-to-face banking services, and access to cash, for all communities, and break the Big Four banking oligopoly.
