Households are being warned to brace for federal budget cuts in order to tame inflation and ward off economic "booby traps".
Finance Minister Katy Gallagher set the scene for further cost-cutting measures after the latest decision on interest rates.
Senator Gallagher welcomed the possibility of pumping the brakes on more rate hikes, following the 10th consecutive rise.
Reserve Bank governor Philip Lowe has indicated a pause could be coming soon.
Interest rates have risen from a historic low of 0.1 per cent in May 2022 to reach 3.6 per cent.
NAB, Westpac and ANZ have passed on the latest 0.25 percentage point hike to their variable-rate home loan customers.
The big banks have also increased rates across various deposit products, improving returns for savers.
Senator Gallagher said there was a need for fiscal repair in May's federal budget and a responsibility to lessen the impact of inflation.
"There are areas where we can make sensible savings and I'm not going to pretend it is easy," she said.
"We've got a whole range of booby traps that were left by the former government for us that we're working through."
The finance minister said while the central bank would make its own decisions based on economic data, the toned-down language by Dr Lowe was a welcome sign.
"I don't think it's unusual for people to be wanting to see a pause because of the impact that these interest rates are having," she said.
The RBA's softened tone contrasts the more aggressive posture adopted by the head of the US central bank, who told American lawmakers this week the Federal Reserve would likely need to raise interest rates more than expected.
Dr Lowe maintains Australia is in a better condition than other advanced countries due to relatively subdued wage pressures and the large share of variable rate mortgages and short-term fixed rate mortgages, which are sensitive to interest rate movements.
But NAB markets economist Tapas Strickland said there were also signs of resilience among mortgage holders that could keep households spending for longer than anticipated.
Analysis by the RBA shows total mortgage repayments have been unchanged during the past few quarters and higher interest rates have so far mainly soaked up excess payments.
"So effectively, what households have done is they've reduced their excess repayments at the same time as the minimum repayments have increased," Mr Strickland said.
He said most people were expecting a big hit to household consumption and the prospect that mortgage holders simply reduced the excess they were paying could challenge that outlook.
"That resiliency could play out longer and that would mean rates would probably go higher," he told AAP.
