• The Council of Social Service urged the RBA to tackle inflation.
  • The unemployment rate rose from 3.5% to 3.7% in January.
  • ACOSS also wants to see greater diversity on the RBA Board

Rising interest rates are now starting to cause job losses and the Reserve Bank of Australia (RBA) needs to pause according to an advocacy group.

The Australian Council of Social Service (ACOSS) is urging the RBA to delay its rate hikes and tackle inflation by regulating rent and energy prices.

CEO Cassandra Goldie said the government can combat inflation by tackling price rises at their source rather than relying on the blunt tool of interest rate rises.

Ms Goldie said, “Today we are seeing the real and harsh effects of rapidly rising interest rates, with 21,900 people losing their jobs.

“High inflation is a serious challenge and should be addressed, but we need a more nuanced approach that avoids pushing more people onto woefully inadequate income support.

“Now is the time for the RBA to pause on interest rate rises and take stock while the government should curb inflation directly with better regulation of exorbitant rent and energy prices, and by strengthening the Australian Competition and Consumer Commission (ACCC) so that businesses can’t take advantage of price rises to lift their profit margins” she said.

Unemployment to hit 4.5 per cent

With the RBA estimating that unemployment will rise to 4.5 per cent by mid-2024, Ms Goldie fears that hundreds of thousands of more people will be out of work if the RBA continues on its current trajectory.

The latest jobs numbers for January show that the unemployment rate rose from 3.5 per cent to 3.7 per cent, while underemployment, or insufficient paid working hours, rose from 5.8 per cent to 6.1 per cent.

Monthly hours worked decreased by 9 million to 1,888 million and the overall employment-to-population ratio decreased to 64.3 per cent.

ACOSS is also calling on the government to agree with the RBA on a formal full employment target and give it an equal priority to the Bank’s inflation target.

In addition, it wants to see greater diversity on the RBA Board, including representation of people on the lowest incomes and those excluded from the labor market.

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