New data has revealed that Australians believe subsidising energy bills and fuel prices will help ease cost of living pressures, as economists warn a rate hike is looming.
The Reserve Bank of Australia will meet on Tuesday to consider the cash rate, which experts are tipping will increase by 0.25 per cent after months of being kept on hold.
Interest rates have remained unchanged at 4.10 per cent since the RBA Board’s June meeting.
An exclusive Newspoll published by The Australian on Tuesday asked Aussies what measures they think the government should take to tackle the cost of living crisis.
The majority of people – 84 per cent – called for subsidised energy bills, followed by 81 per cent in favour of fuel price subsidies.
As another option, 77 per cent of respondents said government spending should be cut to curb inflation, while 73 per cent of voters wanted tax cuts for individuals.
Fifty-three per cent of the 1,220 people who took part in the poll believed cash payments should be given to low-income families.
Speaking to Sky News Australia on Tuesday morning, shadow finance minister Jane Hume called on the government to do more to tackle inflation.
“If you were serious about tackling the cost of living and rising prices, why on earth would you put a tax on truckies and a tax on farmers when you know those taxes are going to immediately be passed on in a form of higher grocery prices?” she told First Edition host Peter Stefanovic.
“Why would you intervene so severely in the gas market that you’re turning away new investors, when we know that the only way to bring down energy prices, particularly gas prices, is to increase supply?”
The government announced its energy bill relief plan at the end of last year, which has seen eligible households across the country receive rebates on their bills.
Asked if she backed subsiding energy and fuel prices given the latest Newspoll results, Ms Hume warned the measures were not a long-term solution.
“Well of course putting subsidies, whether it be on fuel prices, whether it be on energy bills, whether it be on child care, all of these things can in fact fuel the inflationary fire rather than temper it. They are bandaides on the bullet hole,” she said.
“We want to see the government tackle inflation at its root cause, which of course is aggregate demand.”
Aggregate demand refers to the total level of spending in the economy in relation to consumption, business investment, government spending and net exports.
“Private sector demand has almost ground to a halt because of the 11 interest rate rises we’ve had already,” Ms Hume claimed.
“The public sector demand keeps being fuelled by government spending.
“That’s why we want to see the government come up with a specific plan to tackle inflation, not just deal with the symptoms, deal with the causes.”
If the RBA lifts the cash rate on Tuesday, it will mark the 13th rate hike since May last year.
(SKY NEWS)
