Mental health and community support advocates have pleaded with the Reserve Bank to consider the “human” cost of its ongoing interest rate rises, as calls for support reach “unprecedented” levels.
On Tuesday afternoon, RBA governor Philip Lowe announced an 0.25% lift to the cash rate, taking the official interest rate to 3.6%, with at least one more increase expected to come out of the board’s meeting next month.
The increase saw interest rates rise to an 11-year high as part of the central bank’s bid to curb Australia’s worst inflation upsurge in decades, driving monthly repayments on a mortgage of $700,000 more than $1500 since May last year.
Almost half of all Australians are reporting elevated levels of distress as a result, Suicide Prevention Australia (SPA) reported yesterday, as cost of living, personal debt, job security, and housing access and affordability risk an increased suicide rate over the next year.
SPA CEO Nieves Murray is expected to meet with Lowe in the coming week to encourage the central bank to factor in the human cost of its tightened monetary policy approach.
Murray’s industry colleagues noted it isn’t just mortgage holders whose mental health is at risk. Dr Anna Brooks, chief research officer at Lifeline Australia, said on Sunday that the central bank’s interest rate rises have flowed through the economy to compound economic pressures already being felt as a result of inflation.
Lifeline Australia chief executive Colin Seery said the organisation has 41 centres across the country, and many of them are reporting a “significant increase in demand” for financial support.
“Our centres are reporting an increase in help-seekers who have never experienced financial stress before,” Seery said. “And we know cost-of-living pressures also disproportionately impact the most vulnerable, including people who are unemployed, renters and young families.”
Others noted this added stress has highlighted pain points being felt across the housing sector, where a supply-side crisis a decade in the making has been thrust into full view.
Everybody’s Home spokesperson Maiy Azize said on Tuesday that the central bank’s ongoing rate rises are “hurting everyone”, and called for the government to intervene.
“The billions of dollars we spend propping up landlords would be better spent helping struggling renters, and building more social homes,” Azize said.
While the RBA’s decision on Tuesday was delivered to an outcry from mental health and community advocates, executives from Australia’s largest companies gathered at Sydney’s Hilton Hotel to field their forecasts at the Australian Financial Review’s business summit.
Among them was Woolworths CEO Brad Banducci, who oversaw a 14% rise in profits when the company delivered its half-yearly results last month as a result of high food inflation. He warned it could be a while before food inflation eases across the board.
Business Council of Australia chief executive Jennifer Westacott urged the government to use the 16 months of campaign downtime following the NSW election to “reinvent” the economy by leaning on businesses.
“If you really want to see Australians’ wages go up, see people’s prosperity increase, you unleash the private sector, and you take this moment to do the hard renovation that’s needed in the economy,” Westacott told the summit.
Commonwealth Bank of Australia boss Matt Comyn, meanwhile, said he expects the CBA to come under pressure to pass on interest rate increases to savers as it has done so expediently for borrowers. He said the issue is “definitely a consideration” being made by the bank.
“We would expect, in any period of time, we’ll be scrutinised for our decisions,” Comyn told the summit.
He said that it was within the bank’s best interests to help borrowers through this difficult period, suggesting that if default rates increase, the banks would face losses themselves.
For anyone seeking help, Lifeline is on 13 11 14 and Beyond Blue is on 1300 22 4636. In an emergency, call 000.
