The Australian Greens have said they won’t pass Labor’s Reserve Bank reforms until interest rates are cut.
The Reserve Bank should lower interest rates tomorrow and if they don’t, the Treasurer should use his existing powers to bring down interest rates and relieve pressure on mortgage holders.
By cutting rates by 25 basis points, repayments on an average recent mortgage of $641,000 would reduce by around $100 a month, a saving of $1200 a year.
By making lower interest rates a condition of our support, the Greens are consciously and deliberately putting the RBA in the centre of political debate, where it belongs.
The RBA’s decisions are inescapably political and impact every Australian.
Part of this modernisation of the Reserve Bank requires ending the pretence that the RBA is independent and ‘above politics’. . Members of Parliament, including the Treasurer and Shadow Treasurer of the day should be able to debate, criticise, oppose or support the actions of the RBA.
Once interest rates are reduced, the Greens will back the Treasurer’s legislation to restructure the RBA as long as two existing provisions are retained in their current form:
Section 11 of the Reserve Bank Act, which allows the Treasurer to override decisions of the RBASection 36 of the Banking Act, which allows the RBA to direct the money they advance to commercial banks into productive parts of the economy instead of just letting banks inflate house prices like they did during the pandemic.
As stated by Australian Greens Economic Justice spokesperson, Senator Nick McKim:
“The Greens are using our power in Parliament to fight for renters and mortgage holders.”
“The Treasurer has the power to step in, he’s just not using it. The Reserve Bank could act, but they are not acting.”
“Mortgage holders are getting smashed right now.”
“For weeks the Treasurer has acknowledged the economy is being smashed, and that mortgage holders are being smashed by high interest rates – yet to date he’s done nothing about it despite having the power to reduce interest rates.”
“Mortgage holders are struggling to cover their bills, with the RBA’s Governor admitting some will need to sell their homes.
“We aren’t going to pass Labor’s Reserve Bank reforms until interest rates are cut.”
“The Reserve Bank Board are not infallible high-priests of the economy who are above criticism.”
“Both the Treasurer and the Reserve Bank Governor have said they want this legislation passed. Now they know what they have to do to get it done.”
“The Greens won’t support these reforms until either the RBA cuts interest rates or Dr Chalmers forces them to.”
“Mortgage holders are getting smashed and will continue to hurt until the Treasurer stops finger-pointing and starts acting.”
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