The sixth consecutive rate rise by the Reserve Bank will place greater scrutiny on whether Labor's inaugural budget will be able to ease cost pressures facing Australian households.
On Tuesday, the RBA invoked another 25 basis points and brought the cash rate to 2.6 per cent, to try and curb soaring inflation, which is touted to rise to around 7.75 per cent by the December quarter.
While commentators now expect the rate hikes to slow down, higher levels of inflation are set to endure for up to 12 months and will have impacts on how Treasurer Jim Chalmers can navigate the economy through his fiscal levers.
Dr Chalmers and Finance Minister Katy Gallagher have not been shy about the stresses facing government spending over the forward estimates, but have lamented cost relief for households would be a focal point to the October 25 budget.
It just hasn't yet been spelt out what those reprieve measures are.
RBA Governor Philip Lowe said the worst of the inflationary pressures were short term and would likely be resolved once global supply chain disruptions, sparked by the pandemic, normalise.
But the government has not announced what short term relief could form part of its budget.
It ended the fuel excise cut last week due to the cost in lost revenue. A warranted move, but one which could be argued as an immediate relief tool, given it brought down the soaring cost of petrol after OPEC cut supply and the war in Ukraine spooked commodity markets.
Tax cuts for households could also be an option, but pressure is mounting for significant tax changes to be dumped given the loss in revenue could impact ongoing spending in health, education and aged care.
Labor hasn't flagged whether stage three tax cuts which come in effect in 2024 may be delayed or scrapped, while the Greens are campaigning for the cuts, which predominantly benefit wealthier Australians, to be dumped to assist spending and budget repair.
The Treasurer on Tuesday remained tight lipped when probed about if the cuts could be justified.
The UK government recently axed its tax cuts for top earners due to rising inflation and the added cost it would place on its economy.
But Labor voted for the cuts and has vowed to carry them through.
On a cost of living basis, there is also an argument whether tax cuts, which translate to more money in the pockets of Australians, could act as another relief measures. Particularly if the global economy is heading for a possible recession.
Those tax cuts also pose no risk to the current inflation problem given they come into effect after supply problems are expected to be resolved.
Perhaps the architects of the cuts - the Coalition - should start mounting its defence as to why the reforms are necessary?
Or is silence an acknowledgement that the fiscal matrix has changed since 2019?
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