Dear Reserve Bank, the 13th interest rate rise was completely unnecessary.
We, the masses, are already broke.
You dropped the latest cash rate increase moments before the eyes of a nation were diverted to Flemington race course, claiming you need to reduce spending to get inflation under control.
But which homeowners do you think are splashing the cash?
Not first home buyers, that much is certain. And not young families, single-income households or anyone saving for retirement either.
Those of us on fixed incomes, including police, teachers, nurses and public servants, are doing it tough.
Likewise for anyone struggling under the exorbitant cost of dealing with a major health problem, or those who have given up their jobs to be carers for children, parents and sick partners.
Those building a home have tightened their belts as they deal with higher-than-expected progress payments on top of rent. Come to think of it, builders are probably cautious too.
Most renters are surviving on the bare minimum following exorbitant rental increases. Many Baby Boomers trying to help their adult children out of the rental trap and into their own property don’t have much to spare either.
Those of us who fall into any of these categories contribute to inflation primarily through ever-rising insurance, rents and utility costs which are clearly a necessity and not discretionary expenditure.
So RBA, pray tell us why are you continuing to punish us with rate rises?
It does not make sense when those who are splashing the cash and causing inflation are not particularly influenced by what you do anyway.
The landlords who have seen their investment properties increase by hundreds of thousands of dollars in recent years don’t really care too much because they can more than cover any interest rate increases by imposing higher rents.
Trust me, this lot are spending like Rockefellers.
Who else is forking out with carefree abandon? Shareholders, anyone involved in lithium or resources generally, and governments building new infrastructure projects that will be paid over many years anyway.
News flash — they are not particularly sensitive spenders either. Using the cash rate to control inflation seems to me to be a broken system.
A much better way to take some heat out of the economy while also giving something back — eventually — to those who are making the sacrifice would be to introduce a system enforcing higher superannuation contributions.
It could be targeted at upper-middle to high income earners, given they are more likely to have discretionary income to spare.
Meanwhile, the blunt instrument of a cash rate system unduly affects lower-income mortgage holders struggling to make ends meet.