Prime Minister Scott Morrison dismissed suggestions that an interest rate hike could hurt him on Election Day, saying Australians understand the impact of global inflationary pressures.
The Reserve Bank of Australia may raise the cash interest rate on Tuesday for the first time in 12 years after inflation hit a 20-year high of 5.1%.
Mr Morrison, who will start the campaign day in Melbourne, said voters would support the party they believe to be better economic managers.
“They know there are (inflationary) pressures coming from outside Australia on interest rates,” he said on Monday.
Asked if the rate hike could hurt the coalition’s chances in the May 21 federal election, Mr Morrison accused reporters of looking through a “totally political lens”.
“I don’t. And Aussies don’t,” he said.
“Australians are focused on what they are paying for and who they think will be best able to manage an economy and manage finances, so they are in the best possible position to achieve their aspirations.”
Finance Minister Simon Birmingham also played down the potential political damage of a possible rate hike, saying the spot rate was coming off an “abnormally low” base of 0.1%.
“I don’t think Australians expected interest rates to stay at historic lows of 0.1% forever,” he told the Nine Network on Tuesday.
“In fact, that’s no doubt why so many Australians have chosen to lock in fixed rates.”
Mr Birmingham stressed that the upward pressure on interest rates was “largely driven at least by international factors”, rather than government policy.
“It’s important that they [the RBA] apply monetary policy parameters independently and in a way that works in concert with what we have done on fiscal policy,” he said.
Financial markets priced in a 0.15 percentage point hike in the cash rate to 0.25% on Tuesday, ahead of further expected increases of 0.25 percentage points in the following months.
But some economists believe the RBA may not act until next month.
Opposition Treasury spokesman Jim Chalmers said Australians were facing “a real cost of living crisis and Scott Morrison and Josh Frydenberg have no plan beyond the election”.
“Scott Morrison’s failures have dealt Australians a triple whammy of skyrocketing living costs, falling real wages and now interest rates are rising either this week or next month,” he said. he declared.
“When things are going well in the economy, Scott Morrison takes all the credit, but when Australians do the rough stuff he takes no responsibility.”
Labor leader Anthony Albanese will start in Sydney on Tuesday.
Meanwhile, Seven Network has secured the third and final leaders’ debate, which airs May 11 and is hosted by the channel’s political editor, Mark Riley.
Mr Morrison and Mr Albanese will face off in the second election debate on Nine Networkd on Sunday.
Australian Associated Press