Shadow Treasurer Jim Chalmers has been quick to criticise the federal government's economic management, saying today's interest rate rise will negatively impact millions of Australians.
Look back on all of Tuesday's updates as they happened in our live blog.
Key events
- Morrison says he sympathises with Australians about cash rate rise
- Morrison says rate rise is a sign of Australia's economic recovery
- 'This is a full blown cost of living crisis on Scott Morrison's watch' Labor says
- RBA raises cash rate by 0.25 per cent
- Anthony Albanese treads carefully, going on the attack over interest rates
- Deputy Prime Minister Barnaby Joyce criticises climate report
- Would an interest rate rise be a blow to Morrison's campaign?
- Scott Morrison said that interest rates aren't political. Here's Anthony Albanese's response
- PM insists Australians will understand RBA decision isn't a function of government's economic record
- Why does the RBA target inflation with interest rates?
- Labor accuses Coalition of shrugging off responsibility of cost-of-living crisis
- Final leaders' debate locked in for three days after the second
- Interest rates expected to rise today for the first time since 2010
Live updates
By Kate Ainsworth
That's where we'll leave the election blog today
Thanks for reading along throughout the day.
We'll bring you the latest developments from another day on the campaign trail tomorrow, but until then you can you can stay up to date here on the Australia Votes website.
By Kate Ainsworth
Morrison says Australians are ready for bigger mortgage payments. Labor says it's a cost of living crisis
Labor has seized on the Reserve Bank's decision to hike interest rates higher than many had predicted, labelling it a "tough day" for millions of Australians now facing an increase to their monthly mortgage payments.
But the Prime Minister argued home owners have been preparing for a potential interest rate rise, and said it was the result of a strong economy.
By Kate Ainsworth
Here are some of your reactions to the rate rise
Im old enough to remember when interest rates were 18%.
Anyone who banked on the y staying as it was ( regardless of which Government is in power) was just keeping there head firmly in the ground. Due to GFC and Covid, rates have been at historical lows. They were never going to stay there. Same for inflation, logists/ supply chains have been hammered all over the world. Australia has and is doing better than most.
-Graham
Well I’ve just done the maths, and apparently my husband and I are currently paying over $10,000 a year more on our mortgage than we need to, so I guess we’ll be fine? That’s the result of taking out a mortgage back in 2014 at 4.9%, making fortnightly repayments, and opting not to lower our repayments even as our rates went down to 2.53%. Would recommend a similar strategy if you can afford it!
-Lauren
With the rising cash rates, mortgage rate will go up. Still it is a lower rate. I paid 6-8% mortgage.
No one thinks of the retirees, who depend on interest the banks pay. It is also a record low, which affects their income and their spending.
-Sri Varman
By Kate Ainsworth
Confused about why the RBA lifted rates when the cost of living is going up?
Today's decision by the Reserve Bank will be the first time many Australians have experienced a rate rise.
So what is a rate rise, and why does the RBA do it?
By Kate Ainsworth
By Kate Ainsworth
Labor matches Coalition's $146 million rural health announcement
By political reporter Stephanie Dalzell
Federal Labor has matched a Coalition pledge to spend $146 million dollars over the next four years attracting, training and retaining rural and regional doctors.
The election pitch includes more money to give trainee GPs the chance to work in private practices and local hospitals, so they can learn specialist skills like emergency medicine and obstetrics.
It's the latest in a series of initiatives aiming to fix severe doctor shortages in regional Australia, an issue which has been exacerbated by the COVID-19 pandemic.
In a statement, Shadow Health Minister Mark Butler said a Labor government would also implement the plan, should it win the election later this month.
“In regional and rural areas it can take months for someone to see a specialist or counsellor with wait lists blowing out across the country,” he said.
“Only Labor can be trusted to protect and strengthen Medicare and deliver world class medical care regardless of where you live.”
By Kate Ainsworth
By Kate Ainsworth
ICYMI: Interest rates rise for first time since 2010 and RBA governor warns the economy will 'require a further lift'
But it's not just the cash rate that's increased — so too has the RBA's inflation target.
It is tipping consumer prices to rise as much as 6 per cent this year, and still be growing at an annual rate of 3 per cent in 2024.
ANZ senior economist Adelaide Timbrell said that means more rate rises will be required.
"They're going to keep raising the interest rate to make businesses think twice about investing, about hiring workers and about spending money," she said.
"They're also going to make consumers think twice about spending money.
"What this does is it slows down the spiral effect, where lots of people buy stuff at the same time, and then that stuff gets much more expensive over time.
"So the Reserve Bank is basically increasing the cost of borrowing money to decrease the speed of the cost of living going up."
By Kate Ainsworth
By Kate Ainsworth
RBA Governor Philip Lowe is speaking about the cash rate now
He says the main driver of inflation has been global supply shock — namely the ongoing impacts of the pandemic and the war in Ukraine, which translates to higher prices across the world and here in Australia.
He also says the federal election has had no impact on the decision today.
"We have operational independence and its testimony to the political culture of Australia that the independence is respected, we take our decisions in the best interest of the country," he said.
"That is what we always do and what we did today and we did that without any appearance from politics.
"We don't take the political situation into account, we do what we think is right for the country."
By Kate Ainsworth
Let's hear from you
How are you feeling about this decision from the RBA? What does this increase in the cash rate mean for you?
Are you worried about your mortgage, or how much of an impact it will it have on your household budget?
Or are you waiting to see how your bank responds to this afternoon's decision?
Let me know your thoughts by using the large blue comment button above, and I'll share them shortly.
By Kate Ainsworth
Morrison says he sympathises with Australians about cash rate rise
Scott Morrison says knowing a rate rise was likely at some point this year, and that's why the recent federal budget was focused on tackling cost of living measures.
"We expressed our concern about that in what we did in this years' budget," he said.
"It's why we reduced taxes, it's why we cut the fuel tax in half, it's why we provided support to pensioners, it's why we've ensured on the first of July of this year that Australians will keep more of what they earn.
"We've taken practical action to ensure that the impacts of these types of decisions we have addressed before they've even occurred."
By Kate Ainsworth
Why the 0.25% rise?
Has the RBA said why they chose to raise rates *by* 0.25% instead of *to* 0.25%? Now it's just at a yucky number that's not a clean fraction of a percent like before...
-Ben
Hi Ben — as the ABC's business editor Ian Verrender said, it is unusual for the RBA to increase the rate by 0.25 per cent because they usually like to deal in more rounded figures.
The RBA hasn't explicitly said why it's chosen the new cash rate of 0.35 per cent, but Governor Philip Lowe will likely shed more light on this at his press conference shortly.
By Kate Ainsworth
By Kate Ainsworth
'We don't have an axe to grind with the Reserve Bank': Frydenberg
Federal Treasurer Josh Frydenberg has dismissed questions about whether he would have liked for the RBA to hold off on raising the cash rate until wages data is released later this month, meaning any movement on the cash rate would have waited until after the election.
He says the RBA wanted to see inflation within a sustainable band and wages pick up before raising the cash rate.
"We don't have an axe to grind with the Reserve Bank, they are independent of government, they have to make decisions based on what they are seeing through the economy," he said.
"But it is very, very important to underline the fact that these are global factors that are driving up inflation."
By Kate Ainsworth
Morrison says rate rise is a sign of Australia's economic recovery
Scott Morrison says the Reserve Bank's interest rate rise is further proof that Australia's economy has recovered from the worst impacts of the pandemic.
He says the federal government's economic policy for managing the pandemic's impacts aligned with the policy of the RBA.
Morrison said both Australians and the government have been preparing for this "for some time".
He pointed to more Australians having taken out fixed rates on their mortgages, and the federal government providing tax breaks in their most recent budget.
By Kate Ainsworth
Prime Minister Scott Morrison is speaking in Melbourne now about the RBA's decision
By Kate Ainsworth
'This is a full blown cost of living crisis on Scott Morrison's watch' Labor says
Shadow Treasurer Jim Chalmers has been quick to criticise the federal government's economic management, saying today's interest rate rise will negatively impact millions of Australians.
"All we're left with is skyrocketing inflation, rising interest rates, falling consumer confidence and falling real wages," Chalmers said.
"Scott Morrison's economic credibility was already tattered and now it is completely shredded.
"This interest rate decision today will have a big impact on the household budget of millions of Australians.
"This PM has an excuse for everything and a plan for nothing."
By Kate Ainsworth
Shadow Treasurer Jim Chalmers is speaking now in Canberra
You can tune in with our live stream above.
By Kate Ainsworth
Commercial banks could respond to RBA decision by this afternoon
The ABC's senior business correspondent Peter Ryan says it wouldn't be surprising to see the commercial banks announce their decision on the increased cash rate this afternoon, but thinks they are more likely to react tomorrow.
He says the banks will likely be cautious in how they approach their decisions, and will be strategising how they will lift their own rates.
But the ABC's business editor Ian Verrender says banks are usually quick to pass on hikes to customers, because the RBA decision ultimately affects their profitability, and are traditionally slower to pass on rate cuts.
He says we can expect to see announcements from the Big 4 banks this afternoon.
