Will interest rate cut affect the election?

The Reserve Bank’s recent cut in interest rates is likely to have only a minimal effect on the Federal election, according to many pundits.

The rates were cut to 4.1% on February 18 after having been on hold at 4.35% for more than a year – the first cut since November 2020.

Prime Minister Anthony Albanese is hoping the rate cut, following 13 consecutive increases, might influence cash-strapped voters.

Opposition Leader Peter Dutton has countered that almost all prices have surged under Labor’s leadership.

But Federal Member for Robertson Dr Gordon Reid says the cut is the “rate relief that locals need and deserve”.

“It won’t solve every problem in our economy but it will help,” Reid said.

“This result is a demonstration of the substantial and sustained progress we’ve made on inflation together.

“When we came to office, interest rates were going up, now they are going down.

“For a household with a mortgage of $500,000, this rate cut will save them $80 a month, or $960 per year.”

Reid said under Labor, inflation was down, wages were up, unemployment was low and now interest rates had started to come down too.

“Inflation is now almost a third of the 6.1% we inherited, and that’s a testament to the efforts of all Australians,” he said.

“This decision is welcome but it’s not mission accomplished because people are still under pressure.

“The Government will maintain a primary focus on the cost of living.”

Reid said Australians would be “thousands of dollars worse off” if Peter Dutton had his way on tax cuts, wages and energy bill relief – and worse off still if he wins the election.

“The biggest risk to the progress we have made together is a Coalition government that would come after Medicare, push wages down again, and push electricity prices up with more expensive nuclear energy,” he said.

“We’re fighting inflation, helping with the cost of living and building Australia’s future, and this encouraging decision shows our policies are making a meaningful difference.”