Treasurer Jim Chalmers said people will already be feeling the effect of the Reserve Bank’s rate hikes.
“These interest rate rises are already having harsh and heavy consequences on a lot of household budgets and on a lot of mortgage repayments, but the full impact of these rate rises is still to be felt in the economy,” he said.
“So already having a harsh and heavy impact on repayments. But as the RBA has made clear today, we expect that the full impact of these rate rises, will be felt down the track.”
Chalmers said the economy has a lot going for it, but there was plenty of uncertainty ahead, particularly as the global economy slows down.
“We’ve seen the beginnings now of welcome wages growth, and we’re getting very high prices for a number of our commodities which is feeding through to the budget as well,” he said.
“And so we have a number of things going for us, but we are hostage to a number of developments over which we have no control.”
Chalmers pointed to the war in Ukraine, Chinese COVID lockdowns, as well as potential extreme weather at home over summer.
“Of course, as always, as we approach the Christmas season, the festive season, obviously harsh weather events and natural disasters have the capacity to have a substantial impact on our economy and on our budget,” he said.