Another Rate Rise Won't Fix This

I drive a diesel, and I’m paying close to $3 a litre in my area. Back in February, I remember paying about $1.60.

The RBA is going to raise interest rates again in November. Look at these numbers. Listen to what Michele Bullock has been saying. They’re practically spelling it out.

So I’ll be paying more for fuel, households will be paying more to the bank, and politicians will explain how important it is that everyone does their bit. Again.

I’m sick of it. People are angry because they’re being asked to pay for problems they didn’t create and have absolutely no power to fix. Filling the car and buying groceries have become evidence that Australians need another financial kicking.

The September CPI figures put annual inflation at 4.3%. Transport is up 8.7% over the year. Automotive fuel is up 23.6%, including a 9.4% jump in September alone.

Explain to me how making someone’s mortgage more expensive fixes that fuel bill. Explain it without retreating into a lecture about how households need to spend less. The extra money at the bowser has already taken care of that.

Another November rise

The trimmed mean came in at 3.6%. August was revised down to 3.5%, having originally been reported at 3.6%. July was originally 3.6% too.

Broadly stuck around the same level since July, then. The revisions change the monthly comparison, but they don’t produce the convincing downward trend everyone keeps waiting for.

The quarterly trimmed mean, on the ABS’s pre-October 2025 basis, rose 1.0% in the September quarter. At her September press conference, Bullock said quarterly readings needed to be closer to 0.6% to be consistent with inflation around 2.5%.

There’s your November decision taking shape. Underlying inflation remains stubborn, the RBA has been telling everyone it wants it lower, and another rate rise is the response I see coming on 3 November.

Fuel was excluded from September’s trimmed mean. This problem extends beyond petrol and diesel, which makes the failure to tackle its other causes even more infuriating. Nothing in these figures suggests an imminent return to the target band.

Meanwhile, September’s rate rise is still working its way through the economy. Families don’t get to wait for the full effect before the next repayment lands. They’re expected to keep finding the money while everyone debates whether the previous squeeze was sufficiently restrictive.

Lovely arrangement if your job is to discuss the squeeze.

Seventeen rises later

Count the increases in the RBA’s cash rate history. Seventeen since May 2022. Thirteen across 2022 and 2023, then four this year. There were three cuts in 2025, and this year’s increases have already wiped those out. The cash rate is now 4.60%.

That’s roughly four and a half years of this.

I know how higher interest rates reduce inflation. Make borrowing expensive, reduce spending, take pressure off prices. I’m objecting to how readily governments leave that process to carry the burden while the underlying failures remain.

A policy can reduce demand and still be a miserable way to deal with a particular problem. You can stop someone complaining about the price of lunch by making sure they can’t afford lunch. I wouldn’t nominate you for an economics prize.

When fuel costs more, a household has less left over. When repayments rise as well, something else gets cut. The local cafe loses business. A small employer cuts hours. Someone postpones work on their house, and the tradie misses out too.

That damage is part of how the policy works. It deserves to be discussed with considerably more honesty than another solemn announcement that inflation remains too high.

People understand that it’s too high. They’re the ones paying it.

I didn’t cause an oil shock

At the prices I’ve seen locally, a hypothetical 60-litre fill goes from $96 to about $180. An extra $84 for the same amount of fuel.

I haven’t taken up recreational diesel consumption. I’m buying the stuff that makes the car move.

The RBA can’t produce oil or end a war. Interest rates can influence the Australian dollar and the price of imports, but that indirect effect doesn’t give Bullock control of the oil market. Cancelling dinner out won’t persuade anyone overseas to sell Australia cheaper fuel.

And diesel gets into the price of plenty of things besides driving. Deliveries cost more. Businesses absorb the cost until they can’t, or pass it on when they can. You can leave the car at home and still get hit when the goods transported by someone else’s truck arrive.

The RBA’s September minutes discuss higher oil prices and the risk of inflation expectations rising. They also acknowledge that household consumption growth had already slowed below trend in the first half of the year.

Households were already pulling back. Yet they’re first in line for another demand to pull back harder.

I expect more pressure on oil while the conflict continues. The RBA’s August forecasts assumed prices would gradually recede. That’s an assumption with an expensive downside for everyone who still needs to get to work if it fails.

Higher transport costs can spread through the economy, and the bank wants to stop that becoming persistent inflation. Fine. Governments should be working just as hard on reducing Australia’s exposure to expensive energy instead of treating another mortgage increase as the entire national response.

Essentials have become extravagances

Housing in the CPI rose 5.2% over the year. New dwellings rose 4.7%, rents 3.6% and electricity 12.8%. Food rose 3.2%. Insurance rose 5.4%.

Eating dinner in a home with the lights on. Apparently we’ve all been living like royalty.

The ABS attributes much of the annual electricity increase to Commonwealth rebates ending. Builders have passed on higher labour and materials costs, although new dwelling prices were flat in September as discounts offset increases.

Those details matter because a rebate ending and a household splashing out aren’t the same problem. Neither is a builder paying more for materials. Treating all of it as a reason to squeeze household budgets harder lets governments avoid explaining what they’re doing about the costs themselves.

The CPI excludes existing homes, land and mortgage interest. Its housing category includes things such as new construction and rent. So the higher mortgage repayment imposed to fight inflation doesn’t even directly appear in the headline number used to describe the problem.

It certainly appears in the bank account.

More expensive finance also makes building harder. A development has to stack up before somebody builds it. Governments can’t keep promising more housing while acting as though the cost of financing it is irrelevant. Approvals and serviced land require decisions the Reserve Bank can’t make for them.

Even getting inflation back to target won’t restore the old prices. It means prices rise more slowly. A family that can’t afford its bills today doesn’t suddenly become comfortable because next year’s increases are smaller.

I can already imagine the press conference celebrating that achievement while people are still putting groceries back on the shelf.

Two incomes should be enough

Two people working full-time should be able to keep a household afloat. That should be such an unremarkable statement that writing it feels unnecessary.

Apparently it needs saying.

Full-time employment doesn’t entitle you to designer clothes, overseas holidays or a new car every few years. But food and a secure roof over your head? Being able to afford electricity, get to work and see a doctor? Enough left over that a broken washing machine doesn’t become a financial emergency? That should be the bare minimum a modern society makes possible.

At what point did two people working stop being enough? When did the acceptable answer become that they should find extra work, move further away or simply get used to having less?

Moving further away can mean spending more time and money getting to the jobs that barely cover the bills in the first place. A second job consumes the hours you were supposed to have for your family, or for being a person outside work. There’s a limit to how much of someone’s life you can prescribe as the solution to their expenses.

A society where two full-time workers can do everything asked of them and still struggle to afford the basics is broken. I don’t care how healthy somebody’s preferred economic indicator looks. If keeping a household fed and housed requires two wages and a permanently favourable run of luck, the arrangement is failing the people doing the work.

People are working to live, and barely managing the living part. They deserve more than another explanation of why they need to cut back.

Paying to go to work

Then there’s the money you have to spend to earn your wage. Fuel or fares, parking where you need it, and childcare for households that rely on it. Those costs come out of the money supposedly available to cover everything else.

Don’t get me started on forced return-to-office mandates. If someone’s been doing their job successfully from home, making them spend more money travelling to an office needs a better justification than a manager liking the sight of occupied desks.

Imagine being told your physical presence is essential, paying more each week to provide it, and then hearing that households need to rein in spending. The commute is compulsory. The pay hasn’t increased to cover it. You’re left with less for yourself because your employer decided where you have to sit.

Sure, you could find another job. What a wonderfully easy sentence for somebody else to say. When you’ve got bills due and can’t afford a gap between pay cheques, the freedom to walk away can be mostly theoretical.

An employer demanding that extra expense should have to defend it. Workers shouldn’t have to prove they’re sufficiently desperate before the cost of getting to work counts as a problem.

Renters get hit too

I’m tired of this being discussed as though it’s exclusively a homeowner problem. Renters buy the same expensive groceries. They pay power bills and need fuel. They can lose work when customers stop spending, and they still have to find the rent afterwards.

A landlord doesn’t automatically get to pass every interest increase on to a tenant. Rents depend on available homes and what people can pay. But tenants don’t need a mechanically perfect link between the cash rate and their lease to be getting screwed by the wider squeeze.

Imagine your rent going up while your employer cuts your hours. You haven’t borrowed a cent to buy property, but you’re still paying for the economic slowdown. Saving a deposit gets pushed further away, assuming you can save anything at all.

According to the September jobs figures, seasonally adjusted unemployment rose to 4.7% and employment fell by 39,300. Trend unemployment was steady at 4.6%; the ABS also flags survey changes affecting the monthly figures.

That’s the labour market into which another rate rise would land. People are entitled to ask how much more damage is acceptable, and who gets to decide they’ve suffered enough.

Small businesses don’t escape either. Their costs rise while customers have less to spend. An owner can work longer hours, cut their own income and still end up closing because the customers simply don’t have the money.

Calling all of this necessary doesn’t make it fair. It should make governments considerably less comfortable with leaving the RBA to do the heavy lifting.

Good luck keeping your job

Microsoft has offered voluntary buyouts to around 60,000 eligible staff. That’s eligibility for an exit programme, rather than 60,000 completed layoffs. It’s still a hell of a signal from a company spending heavily on AI.

I’ve written plenty about how much I like this technology. I use it. I can see the opportunities. I can also see why workers might be less thrilled about the next efficiency announcement than the shareholders are.

A buyout programme overseas doesn’t measure Australian unemployment. But workers everywhere can see employers examining what they can produce with fewer people. The promise that new jobs will eventually emerge doesn’t pay this month’s bills.

There’s a particularly nasty combination available here. AI investment can compete for energy and construction capacity while workers in other parts of the economy face pressure on their jobs and wages. The costs arrive now. The promised abundance can apparently take its time.

Then someone explains that those workers need another increase in their repayments to cool the economy down.

How much insecurity are people supposed to accept before they’re allowed to be furious?

Spare me the boomer lecture

CommBank’s June spending figures showed annual spending growth of 10.1% among people aged 65 and over, compared with 4.2% for those aged 25 to 34. Those are dollar spending figures, including price increases, but the gap is striking.

Older renters and people scraping by on a pension have plenty to be angry about too. My patience runs out with wealthy, mortgage-free boomers who are comfortably insulated from another rise and still think younger households need a lecture about discipline.

Picture an imaginary George and Bette travelling Australia in a $350,000 motorhome, with a $200,000 Toyota LandCruiser back home. They’ve got half a million dollars tied up in vehicles while a working couple is trying to make the grocery budget last until Thursday.

George reckons young people need to live within their means. Bette thinks working from home has made everyone a bit soft. Somewhere, a person who can do their job remotely is paying nearly $3 a litre to drive to an office and join a video call.

I’m supposed to hear a lecture about shared sacrifice in that situation and nod along?

Fuck that.

George and Bette can enjoy their trip. They can also be spared the responsibility of explaining to everyone else why financial hardship is good for them. If higher rates improve your savings income while someone else’s repayments swallow their pay, you aren’t being asked to make the same sacrifice.

Buying at a more fortunate time doesn’t qualify someone to explain why a younger family deserves to struggle. Nor does having a valuable home mean its owner personally invented the suburb.

The cash rate reaches people very differently. A household carrying a large recent mortgage can get hammered while a wealthy household with no debt keeps spending. Yet the public conversation keeps arriving at the same vague instruction for everyone to tighten their belts.

I want policy that asks more of people with the capacity to contribute. I’m sick of indebted workers being the easiest people to extract another payment from.

Cut the right spending

Governments need to cut or defer spending that adds pressure without fixing the shortages. They also need to stop pretending every budget commitment is sacred while every household expense is negotiable.

If a discretionary project is competing for scarce construction workers and materials, explain why it has to proceed now. If a giveaway reaches people who don’t need help, justify it. Put tax concessions benefiting people with substantial assets through the same scrutiny.

I’d like to see a politician defend an unpopular saving with half the conviction used to explain why borrowers need another rate rise.

Slashing essential services would be another way of dumping the problem on the same people. Cutting housing infrastructure while complaining about housing costs would be idiotic. I want the spending choices examined properly, including what they do to supply, instead of using a budget crisis as an excuse to make the local hospital worse.

Get homes approved and the infrastructure connected. Stop treating bigger purchasing budgets as a solution to too few houses. Judge energy investment on whether it delivers reliable supply at a cost people can afford. A temporary rebate can help someone survive a bill; it doesn’t fix the bill waiting for them when the rebate ends.

Use competition policy where consumers have nowhere else to go. Investigate barriers to entry and anticompetitive conduct. The cash rate can’t do that job either.

These are political decisions. They involve upsetting people who’d rather keep their concession, project or comfortable arrangement. Tough. Households have been told to accept uncomfortable decisions for years.

Government mismanagement includes refusing to make those choices and leaving ordinary people to absorb the consequences. Nobody needs to claim Canberra controls world oil prices to demand better than this.

People will reach a limit

Look at France. People have been protesting over living costs and deteriorating public services. Italy has seen demonstrations over rising prices and economic conditions too. Education and public services are part of that anger. People are paying more and getting less, and they’ve had enough.

I think Australia is heading towards serious cost-of-living protests if this keeps getting worse. Assuming people here will keep swallowing it because Australians are supposedly laid-back is complacent nonsense.

There’s a limit to how many times you can tell someone working hard and falling behind that the solution requires them to fall further behind. Especially when they can see other people doing perfectly well and politicians dodging the decisions that might inconvenience them.

People don’t need a postgraduate economics qualification to notice that their life is becoming harder to afford. They know what the rent costs. They know which bills they’ve delayed. Being told the policy is working while their own circumstances deteriorate is going to produce anger, however carefully the announcement is worded.

When you’ve got a hammer, everything looks like a nail. Governments have other tools and keep handing the same exhausted households back to the person holding the hammer.

If ministers want people to accept another November rise, they should turn up with decisions of their own. Name the spending being deferred. Name the concession being changed. Put dates against the housing infrastructure. Then explain why those decisions weren’t made before households were asked to find the money again.