2 weeks Ago By Andrew Brown
Cuts to US interest rates won't necessarily prompt Australia's central bank to do the same, a federal minister says, but could deliver some cost-of-living relief in the long run. Login or signup to continue reading The US Federal Reserve cut interest rates by 50 basis points on Thursday - the first reduction in its benchmark federal funds rate in four years. While the move prompted speculation the Reserve Bank could cut Australia's cash interest rate at its next meeting on Tuesday, Government Services Minister Bill Shorten said that was unlikely to happen.
"It is significant that the Fed has decided to lower interest rates in American by half a per cent, but our economies are not identical, so how long that takes to flow through, and the impact that has, remains to be seen," he told ABC Radio on Friday. "Our dollar rallied on the basis that the Fed was cutting rates, and of course, with a rallying dollar, it means that we're able to buy more, it takes some inflationary pressure off us." Expectations remain the Reserve Bank will keep interest rates on hold at 4.
35 per cent after stronger than expected jobs data on Thursday. The unemployment rate remained steady at 4.2 per cent for August, with the number of jobs added to the economy being almost double what was forecast.
The figures prompted the Commonwealth Bank to revise its predictions for an interest rate cut, shifting its forecast from November to December. Opposition Leader Peter Dutton said the jobs data indicated people were looking for multiple jobs to make ends meet. "People are finding second and third jobs.
They're working more hours, businesses are more reluctant to put people on full time, which is why we see full-time numbers come back under this latest announcement," he told Nine's Today program. "People are really scratching around for every dollar they can to make their mortgage repayments, to pay their electricity or their insurance bill." It comes as the federal government rolled out further cost-of-living measures from Friday.
Payments such as the aged pension, JobSeeker and the disability pension will increase in line with indexation. JobSeeker payments will increase to $56 per day, while those who are able to work less than 15 hours per week will also move to the highest rate of the payment and get an extra $71.20 a fortnight.
Commonwealth rent assistance will also rise by 10 per cent, while the income limits for Commonwealth seniors health card will increase to $99,025 for singles and $158,440 for couples. Social Services Minister Amanda Rishworth said the changes would give extra financial support. "People are of course doing it tough.
We know that rents have gone up for many people, and we want to make sure that they are getting the assistance they need, and extra assistance," she told ABC TV. "In terms of those on the lowest incomes, we're very focused on supporting those people. Many people on JobSeeker will also get Commonwealth rent assistance.
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