Rising rates squeeze budgets as RBA tackles inflation
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Daniel's mortgage repayments have increased by $20,000 per year due to rising interest rates, causing financial strain.
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Economist Saul Eslake explains the rationale behind using interest rates rather than measures like super contributions or taxes to reduce inflation.
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Raising income tax would be fairer but politically difficult; banks already contribute significant tax revenue.
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Evidence doesn't support claims that corporate profit margins, especially supermarkets, are major drivers of inflation.
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Keeping interest rates low for too long and maintaining pandemic economic policies for too long stimulated demand and contributed to high inflation.