The Albanese government says it deserves credit for its economic management, with Finance Minister Katy Gallagher insisting Labor's 'hard work' is showing up in the data despite borrowers facing their fifth interest rate rise this year
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Appearing on ABC News Breakfast on Wednesday, Gallagher repeatedly defended the government's record after the Reserve Bank lifted the cash rate to 4.85 per cent - its highest level in 18 years.
The increase was the 17th since Labor took office, adding to the strain on mortgage holders and small businesses in the lead-up to Christmas.
Asked what she would say to those facing higher repayments, Gallagher acknowledged conditions were 'very difficult' but insisted the government was doing what it could to ease the pressure.
'These are really difficult economic times, very challenging, and we know that it's hitting households and businesses really hard,' she said.
But when pressed on whether Labor needed to make deeper spending cuts to help reduce inflationary pressures, Gallagher argued the government was not getting enough credit for savings already made.
'The point I'm making... is that we have been doing that,' she said.
'I know people want to brush over that and say, "Yeah, well that's all been banked and we move on and do more", but there should be some acknowledgement that we have made those savings and that has been seen in the data that's coming through.
'There has to be also an acknowledgement that the hard work we have done over the last four years is actually being seen in the economic data,' she said.
Katy Gallagher (pictured) said the government's economic work should be acknowledged
Former Sunrise host David 'Kochie' Koch has called on Anthony Albanese to reign in spending
'It is not government spending that is setting the prices in the economy.'
The comments came as Prime Minister Anthony Albanese, speaking from the Commonwealth Heads of Government Meeting in the Caribbean, said the government had been responsible.
'We were always going to be fiscally responsible because my government is a fiscally responsible government, and we will take appropriate action,' Albanese said.
'We won't rip money out of health or schools. What we will do is take responsible action and take hard decisions.'
The Reserve Bank's fifth rate rise of the year has left homeowners staring down an extra $584 a month in mortgage repayments, adding almost $7,000 a year to the cost of a typical home loan.
On an average loan of $731,000, each 0.25 percentage point increase has added around $114 to monthly repayments.
Real estate expert Tom Panos said the latest rate hike would push even more homeowners to breaking point, with some families facing losses on their homes and others struggling to meet rising mortgage repayments.
He said Aussies were skipping holidays, cancelling private school plans and taking second jobs just to hang on to their homes.
Compare the Market economic director David Koch said the burden on homeowners was becoming increasingly difficult to bear - and governments needed to reign in spending.
'The Reserve Bank warned us that this could happen if inflation didn't show some sign of stablising or easing - despite the fact that consumer confidence is almost at a record lows, business confidence is at record lows and unemployment is increasing,' he said following Tuesday's decision.
'It is really hard to see is that homeowners are doing all the heavy lifting by shouldering these rate hikes, but to sympathise with the RBA – this is really the only lever they've got.
'That's why I think governments have got to get on board and start helping us fight inflation. They can't just continue being their own island, spending up big and fueling demand. And that's governments at all levels: local, state and federal.'
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