Chalmers acknowledged that even with the 22.1 cents-per-litre lighting, “gasoline prices are going through the roof again,” but said every dollar allocated to Labor in the coming budget should “tick a few different boxes” given the restrictions on the expenses.
Meanwhile, economists expect the Reserve Bank to raise cash interest rates again by 0.5 percent on Tuesday to 1.35 percent. The official interest rate was 0.1 percent in April.
AMP chief economist Shane Oliver said the increase was expected given RBA’s desire to reduce inflation to 2-3 percent.
“With interest rates still too low given the tight job market, inflation heading for 7 percent year-on-year and the RBA having to keep inflation expectations low — especially after the minimum wage is around 5 percent and the minimum wage is rising — we expect another 0.5 percent movement,” he said.
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