Anthony Albanese has defended his Caribbean trip as “worthwhile” despite returning to Australia as homeowners faced another interest rate rise and mounting pressure on household budgets.
The Australian prime minister attended the Commonwealth Heads of Government Meeting in Antigua and Barbuda, where he dined with King Charles III and Queen Camilla and took part in the launch of the Commonwealth Nature Initiative.
He also visited the Green Pioneer, a vessel owned by mining billionaire Andrew “Twiggy” Forrest, alongside Antigua and Barbuda’s prime minister, Gaston Browne, and Guyana’s president, Irfaan Ali.
While Mr Albanese was overseas, the Reserve Bank of Australia raised its cash rate by a quarter of a percentage point, from 4.60 per cent to 4.85 per cent.
The increase, the fifth of the year, pushed borrowing costs to their highest level since 2008. Industry modelling indicated that a borrower with a $600,000, 30-year mortgage could see monthly repayments rise to $4,056, compared with $2,399 when Labor came to power in May 2022.
That represents an additional $1,657 a month, or $19,884 a year, according to the modelling. A separate comparison found that increasing the rate on a $600,000 mortgage from 2.5 per cent to 6.74 per cent added $2,120 a month in interest alone.
Mr Albanese said the increase would not alter the government’s approach to its Mid-Year Economic and Fiscal Outlook, which is expected to include a savings package.
“We’ll be consistent. We’ve looked for savings in each and every economic statement, and we’ll do so again in MYEFO,” he said.
He said the Labor government was continuing to work on the measures, although few details have been provided and it is not clear whether they will produce net savings.
Albanese defends Commonwealth summit
Mr Albanese argued that attending the Commonwealth meeting allowed him to discuss important issues with other leaders outside the strategic rivalry between the United States and China.
“If there wasn’t a forum that didn’t feature the strategic competition between [the] US and China, and didn’t have authoritarian regimes like Russia involved, you might have to make it up. But there is, it’s called the Commonwealth,” he said.
He highlighted discussions with Canadian Prime Minister Mark Carney and Andy Burnham, and said talks with Mr Burnham about regional work arrangements for British backpackers had been constructive.
No major policy announcements emerged from the gathering. Mr Albanese said the visit had nevertheless been justified and that he had accepted the invitation personally from King Charles.
Opposition Leader Angus Taylor accused Mr Albanese and Treasurer Jim Chalmers of being “in denial” about the economy, arguing that government spending needed to be reduced.
“This [inflation challenge] is homegrown. This is specific to Australia because of this government’s failures,” Mr Taylor said.
He said attending the Commonwealth summit would normally be the right decision for an Australian prime minister, but added that “these are not circumstances that are normal”.
Reserve Bank governor Michele Bullock declined to say how high interest rates could rise, saying the bank would continue tightening monetary policy for as long as necessary.
The bank acknowledged that the economy was slowing but said persistent inflation and global risks, including the war in the Middle East and rising oil prices, warranted the latest increase.
Mr Albanese is due to leave Australia again within days for overseas summits including COP31 in Türkiye, ASEAN in the Philippines and APEC in China, as families face continued cost-of-living pressures ahead of Christmas.
