The Reserve Bank of Australia has cut the cashrate to 4.1 per cent, representing the first cut since 2020.
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00:00Well today the Independent Reserve Bank decided to cut the cash rate to 4.1%.
00:06This is very welcome news for millions of Australians.
00:10This is the rate relief that Australians need and deserve.
00:15Now we know that it won't fix every challenge we have in our economy or in household budgets
00:20but it will help.
00:22It's a demonstration of the progress that Australians have made together in this fight
00:27against inflation.
00:29Now that progress that we've made has been substantial, it is now sustained and it's
00:35reflected in the decision taken by the Reserve Bank today.
00:39Now when we came to office inflation and interest rates were rising, now both are falling.
00:46Now other countries have had to pay for that kind of progress on inflation with much higher
00:50unemployment, negative quarters of growth or even recessions and Australia has managed
00:56to do better than that.
00:58Under this Labor government inflation is down, wages are up, unemployment is low and now
01:04interest rates are falling as well.
01:08This is the soft landing that we have been planning for and preparing for but we can't
01:13be complacent about the months and years ahead.
01:17We know that there is more work to do.
01:19We know that this is not the solution to every challenge that people are confronting in their
01:26household budgets but it will help.
01:28It is a welcome step when it comes to providing a bit of relief for Australians doing it tough.
01:36Now for a household with a mortgage of half a million dollars the rate cut will save them
01:42$80 a month or $960 per year.
01:47Now if you look at the statement made by the Reserve Bank Board today it makes three things
01:52very clear.
01:54Firstly inflation has fallen substantially since the peak in 2022.
01:59Secondly the inflationary pressures in our economy are easing faster than expected and
02:05thirdly the Board has more confidence that inflation is moving sustainably towards the
02:10midpoint of the 2-3% target range and because of those three developments that gave the
02:17Reserve Bank Board the confidence to make the decision that they have made today.
02:23Inflation is now almost a third of the 6.1% that we inherited and that is a reflection
02:30of that progress on inflation that the Reserve Bank Board has referenced in their press release
02:36today.
02:37Now today's decision and the statement from the Board gives us more confidence that the
02:43worst of the inflation challenge is behind us but we're not complacent about that either.
02:49Today's decision is very welcome but it's not mission accomplished because we know that
02:54people are still under pressure and that's why the primary focus of this Albanese Labor
02:59Government will continue to be the cost of living.
03:03It was before this decision and it will be after this decision as well.
03:08Now before I take your questions I wanted to let you know that this afternoon after
03:12the decision was made public I spoke to the CEOs of all four major banks.
03:20Each of them have made an announcement that each of the major banks will be passing on
03:26in full the benefits of the decision taken by the Independent Reserve Bank today.
03:31I don't take credit for those decisions that they have made and announced already.
03:37In each case they were already well progressed in their planning but I wanted to say that
03:42I consider that a very good thing that each of the four major banks has already indicated
03:48that the benefits of this rate cut will be passed on in full.