David Koch has urged Australians to start holding governments and businesses accountable for rising costs, warning households are being forced to do the heavy lifting in the fight against inflation.
The Compare the Market economic director and former Sunrise host has called on consumers to challenge businesses that increase prices and demand politicians prove they are doing their part to bring inflation under control.
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Speaking on Sunrise ahead of Tuesday’s Reserve Bank interest rate decision, Koch said households were understandably frustrated after repeated rate rises had failed to bring inflation back within the RBA’s target range.
The expected rate rise would take the cash rate to 4.85 per cent, adding another $6,450 a year in repayments for a typical household with a $700,000 mortgage compared with this time last year.
“You’re gonna have to be earning an extra nine, ten grand a year,” he said.
“Five interest rate increases, and it has failed to bring down inflation. Monetary policy has failed, and Australian households are quite rightly going, ‘Hey, we’re doing it tough; this is meant to bring down inflation, it has not budged, what are we going to do about it, why are we doing the heavy lifting ourselves?’”
Koch argued Australians should not simply accept price rises, but actively question businesses charging more than inflation.
“Your local business puts up prices more than 3% go ‘hey that’s more than inflation, that’s the reason my interest rates are going up because everyone’s just accepting it’,” he said.
He also called on governments to introduce tougher spending rules, arguing public spending was undermining the sacrifices being made by households.
Koch proposed a new agreement requiring federal, state, and local governments to limit increases to fees, charges and wages to 3 per cent while inflation remained above target.
He said new spending initiatives should also be offset by cuts elsewhere or additional revenue.
His comments come as Finance Minister Katy Gallagher faces pressure over the government’s spending plans, after refusing to guarantee the December mid-year budget update would deliver more savings than new spending.
Gallagher told ABC’s Insiders the government was working hard to find savings, but said “government spending is not the primary driver” of rising prices.
Koch directly challenged the minister’s position.
“We need you to spend appropriately so that interest rates can come down,” he said.
He warned the inflation battle could drag on and risk pushing Australia into recession if governments, businesses and households failed to change course.
“Unless we draw a line in the sand, it could go on for a while, and in the worst case, it could tip us into a recession, you don’t want that on anyone,” he said.
Koch urged families to review their budgets and shop around for better deals, but said the responsibility could not rest with consumers alone.
“Just don’t talk about it, prove it to us.”
