RBA Governor questioned on interest rates and inflation

ABC NEWS (Australia)

The RBA Governor Michele Bullock has told parliament inflation remains an issue for the economy but she pushed back against calls internationally to push rates higher. Ms Bullock is fronting a parliamentary economic committee where she's facing questions from MPs on the RBA's approach to tackling high inflation and raising interest rates.

Transcript

00:00 She was asked for her views on the opinions of the IMF and OECD that Australia should

00:07 be lifting its interest rates a little higher from here.

00:10 Now, recall that the RBA board kept the cash rate steady at 4.35% early this week.

00:16 She said she didn't share those views.

00:18 She was pretty happy with the way things were sitting in Australia, and those institutions

00:23 obviously had a different view on the balance of risks in the global economy.

00:27 Now, you can see more of her comments here.

00:29 They're a bit more hawkish, that's true, but lots of people have opinions and lots of markets

00:34 have opinions on where we should and shouldn't have interest rates.

00:38 They have a slightly different view on the balance of risks to us, and I think they put

00:42 a little bit more emphasis on inflation expectations.

00:48 We obviously focused on that, but our judgement is at this point that we're probably okay

00:54 on that respect.

00:55 So I think people can differ in terms of the risk.

00:59 They're not saying we should have interest rates one or two percentage points higher.

01:02 They're just suggesting, I think, that maybe we could go a little bit further, because

01:06 recall that we haven't gone up as hard as some people, as some countries have.

01:11 And Gareth, Michelle Bullock also had some comments on the government's changes to the

01:15 Stage 3 tax cuts.

01:16 Yeah, she said that she didn't think that the amendments to the Stage 3 tax cuts would

01:22 have any material impact on inflation.

01:24 She said it's just simply a redistribution of money towards low and middle income households.

01:29 It's staying within the government's fiscal envelope, and it won't have any impact on

01:34 inflation or the RBA's forecasts.

01:37 So it was pretty emphatic, I thought.

01:39 [BLANK_AUDIO]

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