RBA raises rates to 18-year high as PM signals budget cuts

Summarised from 2 outlets · 4 reports · Updated 4 Nov, 07:34 · Archive

Australia's central bank raised interest rates by 25 basis points to 4.85 per cent, prompting calls for government spending cuts.

The Reserve Bank of Australia raised the cash rate by 25 basis points to 4.85 per cent on Tuesday, the highest level since November 2008. It was the fifth rate rise this year. Prime Minister Anthony Albanese, speaking from Antigua and Barbuda, signalled the government would pursue tighter spending policies and look for savings, with new cuts potentially introduced in next month's mid-year budget update.

Albanese said the rate rise confirmed the government's need to find savings. He criticised the Coalition for blocking cuts proposed by the government, citing their opposition to changes to private health insurance rebates for those over 65 (which would fund 5,000 additional aged care beds per year) and their hesitation over a European Union free trade agreement. Albanese argued these measures would help ease pressure on households.

The Council of Small Business Organisations Australia said the rate hike had hit small businesses hard. Chief executive Skye Cappuccio called on the government to stop making things worse and to address rising energy costs and boost productivity. COSBOA is seeking a 25 per cent reduction in the cost of regulation and wants to cut unnecessary red tape.

RBA raises rates to 18-year high as PM signals budget cuts — Image: The West Australian

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How it is being reported

PM flags ‘hard decisions’ amid calls for steeper budget cuts after RBA call to hike ratesAnthony Albanese has made a big call about government spending in the wake of the RBA’s decision to lift interest rates to an 18-year high.The West Australian · 4 Nov, 03:02
PM flags ‘hard decisions’ amid calls for steeper budget cuts after RBA call to hike ratesAnthony Albanese has made a big call about government spending in the wake of the RBA’s decision to lift interest rates to an 18-year high.Perth Now · 4 Nov, 03:02
Small businesses call for federal government cut spending and red tape after RBA rate hikeSmall businesses have made a big call to the Albanese government after the Reserve Bank of Australia lifted the cash rate to its highest point since 2008.The West Australian · 4 Nov, 01:05
Small businesses call for federal government cut spending and red tape after RBA rate hikeSmall businesses have made a big call to the Albanese government after the Reserve Bank of Australia lifted the cash rate to its highest point since 2008.Perth Now · 4 Nov, 01:05

In this story: Anthony Albanese · Skye Cappuccio · Reserve Bank of Australia · Council of Small Business Organisations Australia · Australian government · Coalition · Australia

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