You do not have to read this – it matters as much as yelling at the clouds.

But for those who have a burning desire to hear from the current shadow treasurer (who is indistinguishable from a beige wall on the best of days) here is what Super Ted O’Brien has to say:

Right across the country, the average mortgage holder will be paying $1,800 more in interest payments every single month compared to when the Coalition was in government. That will continue to be the case. My heart goes out to not only to them today, but my heart also goes out to all of those young Australians who are hoping to get into the property market. The higher these interest rates are, the tougher it’s going to be for younger Australians who want to chase that Australian dream of owning their own home. What we hear from the Reserve Bank is if you look at their just the first paragraph in their statement today that inflation in the September quarter was higher than expected.

This is a direct consequence of the Albanese government’s spending spree. There is a reason why rates have been higher for longer in Australia, and that is this Albanese government ensuring that they keep spending and a big government approach is their mode of operation. This has not changed and we continue to see that in the figures that are released over time. This government is spending $160 billion extra, $160 billion extra this financial year compared to when the Coalition was in government. This is leading to a larger non-market sector crowding out the private sector. We’re seeing productivity go backwards. Productivity has gone backwards by over 5% under this government’s watch, which is why we have seen Australia experience the deepest falls in living standards across the developed world. If you look at the OECD, our productivity is the second worst. Now what this means is not only on one hand is the government on a spending spree, but on the other hand it is failing to grow the Australian economy. And this leaves very little room for the Reserve Bank when it comes to monetary policy.

Is Jim Chalmers worried that the RBA won’t cut interest rates before the end of the year?

Chalmers:

I don’t engage in that kind of commentary. We’ve seen interest rates cut three times already this year when we came to office. Interest rates were already rising. Inflation was around double what it is now and rising fast. We’ve been able to get inflation down. We’ve seen interest rates cut multiple times. As a consequence we’ve got real wages growing.

We’ve kept unemployment low. We’ve got the budget in better Nick. So all of that represents good progress. But we know that there is more work to do. People are still under pressure. They’re getting some welcome relief from those three rate cuts. Earlier this year.

They’re getting relief from the government in the form of tax cuts and responsible cost of living help. But we know that there’s almost always more work to

The treasurer is very well prepared for this press conference – it is exactly as he expected.

Chalmers:

This is not the outcome that millions of Australian home owners would have wanted but it’s certainly the outcome that markets and economists were expecting. Interest rates have already come down three times in six months this year and that’s a very good thing. The three interest rate cuts which are already in the system are already providing very welcome relief to millions of Australians with a mortgage.

For a household with a mortgage of $700,000, the rate cuts this year means they are saving about $330 a month – or about $4,000 a year. Now, the progress that we have made together on inflation this year has already given the Reserve Bank the confidence to cut interest rates three times in that 6-month period.

Now, we know that when interest rates are cut around the world, they’re not always cut at every meeting or indeed every couple of meetings and so this outcome today from the independent Reserve Bank is not a surprise to the government.

Jim Chalmers has released a statement:

Today the independent Reserve Bank of Australia Monetary Policy Board kept interest rates on hold at 3.60 per cent.  

While millions of Australians would’ve wanted to see more rate relief, this decision was widely anticipated and widely expected by markets and economists.   

Rates have already come down three times this year and that’s a good thing.   

That’s because we’ve made very substantial and sustained progress together on inflation over the past three years.   

For a household with a mortgage of $700,000, the three rate cuts mean they are saving about $330 a month, or about $4,000 per year. 

On the most reliable measure, headline and underlying inflation have both fallen to their lowest rates in almost four years, and are back in the Reserve Bank’s target band.  

We’ve seen around the world that as central banks cut rates, they don’t always cut them at every meeting.  

When we came to office, headline inflation was 6.1 per cent and rising, it’s now much less than half of that.  

When we came to office, trimmed mean inflation was 4.9 per cent and rising, it’s now almost half of that.  

This progress comes at the same time as we’ve seen inflation tick up in parts of the world including the United States, Canada and New Zealand and remain stubbornly high in places like the United Kingdom.  

The RBA’s statement makes it clear that economic uncertainty is “elevated” around the world which could weigh on global growth.  

In the face of this substantial global economic uncertainty and volatility, Australians have made remarkable progress together in the economy.   

We’ve managed to get inflation down while keeping unemployment low, growing the economy and getting the budget in better nick as we saw in the 2024-25 Final Budget Outcome earlier this week.   

We saw a welcome and substantial pick-up in economic growth in the most recent data, and as the RBA’s statement highlights the private sector has resumed its place as the primary driver of growth in our economy.   

While we have made good progress on the economy, we understand that people remain under pressure.  

That’s why the Government is rolling out responsible cost of living relief including two further rounds of tax cuts, energy bill relief for every household, cheaper medicines and cutting student debt.  

Under Labor, inflation is down, unemployment is low, real wages and living standards are growing again, more than 1.1 million jobs have been created, debt is down, the economy is growing and interest rates have fallen.  

We know the job is not finished because people are still under pressure and there’s more to do to make our economy more productive and dynamic.  

Readers will likely have heard that today Donald Trump has once again mooted putting a 100% tariff on foreign films. 

In a former life I was involved in the administration of the Location Tax Offset in the Department of Communications and the Arts, so I know a (very) little bit about film budgets and production. And to say they are complicated is an understatement of the order of saying Donald Trump seems a bit iffy on issues of race. 

The problem of course is that if this tariff did come into effect (and Trump has often thrown out a few thought bubbles that have come to nought so let’s not assume anything) it would destroy Australia’s film sector. 

Our film sector relies of tax offsets that give a 30% tax rebate on any expenditure done on the film in Australia. This is why we had films like The Fall Guy made here – it was good value for the film company to make it here. (especially given US$1 = around A$1.50). It is also good for the local film production crew because they get to work on a big budget film that means they can invest in better equipment, employ more people than they could were they only reliant on local film. It also means (theoretically at least) that when working on local films they also can make use of the new equipment, so we end up with better Australian films. 

A 100% tariff would make producing US films in Australia unviable, and given it would also make selling Australian films to the US double the cost, it would reduce a great deal of the incentive for making local films, if you effectively had no chance of selling it to the biggest film market. 

But – and it is a big BUT – how would the tariff be levied? 

When you import a good – like a car –  you pay a tariff as it comes through customs. That’s not how film production works. Let’s say a US film company makes a film in Sydney – what is the thing that is having a tariff on it? Do you charge a tariff on the cost of making the film? What if only part of the film is made in Australia? What if only the PDV (special effects) is done here (we have a number of world leading PDV companies)? What is the tariff then? 

Putting a tariff on services is tough because services are paid outside of the US – so there is no point for the US govt to hold up an import until a tariff is paid. It could be easier for film in theatres – you could potentially find a way to slap a tax on cinema tickets for certain films, but what about streaming where there is no cost on an individual film or TV show?

Putting a tariff on Australian made films would be somewhat easier – but that would do precisely zero for the US film industry. The big thing Trump wants to prevent is US films being made overseas – and that is a much tougher thing to put a tariff on. 

So let us wait and see where this goes. My gut says it is more of a threat for companies like Disney etc to do what Trump wants with people like Jimmy Kimmel than anything else. 

The RBA has kept rates at 3.6% mostly because they think their forecast done back… August… are wrong. 

The policy statement noted “Recent data, while partial and volatile, suggest that inflation in the September quarter may be higher than expected at the time of the August Statement on Monetary Policy.”

The RBA remains extremely rose coloured about the economy. It says that “Data for the June quarter show that private demand is recovering a little more rapidly than expected, taking over from public demand as the driver of growth.”

And yeah, great. Private demand SHOULD be a bigger driver of growth than the public sector. That finally happening is not a case of hot times in the economy, but more that things are no longer terrible

They also noted that “In particular, private consumption is picking up as real household incomes rise and measures of financial conditions ease.” And yeah, the growth is picking (because the RBA is no longer smashing us) but the total is still well below anywhere that you would suggest was strong:

As for the downsides? Pfft The RBA see no problems:

“Growth in employment has slowed by slightly more than expected, but the unemployment rate was unchanged at 4.2 per cent in August.” Slowing employment growth? No biggie. Unemployment steady in August? Yeah ok, but let’s not pretend we don’t know which way it is headed

They also note that “Looking through quarterly volatility, wages growth has eased from its peak, but productivity growth has been weak and growth in unit labour costs remains high.”

First off – measuring productivity is notoriously difficult and never should be looked at in quarterly or even annual growth terms if you are thinking about monetary policy – the point is that wage growth is NOT surging. So what the hell is the RBA worried about? 

The comes the uncertainty: “Trade policy developments are nevertheless still expected to have an adverse effect on global economic growth over time. Beyond tariffs, a broader range of geopolitical risks remain a threat to the global economy. This could all weigh on growth in aggregate demand and lead to weaker labour market conditions in the domestic economy.”

The RBA very much is of the school of “let us not help you know because we might need to help you later” school. 

In the end “The Board judged that it was appropriate to remain cautious, updating its view of the outlook as the data evolve” – cautious about inflation, but not about employment. But then full employment is only half of the RBA’s mandate, why care about that?  

In its reasoning on why the RBA has kept interest rates on hold they said

“Uncertainty in the global economy remains elevated. There is a little more clarity on the scope and scale of US tariffs and policy responses in other countries, suggesting that more extreme outcomes are likely to be avoided. Trade policy developments are nevertheless still expected to have an adverse effect on global economic growth over time. Beyond tariffs, a broader range of geopolitical risks remain a threat to the global economy. This could all weigh on growth in aggregate demand and lead to weaker labour market conditions in the domestic economy.”

Translation: Things are uncertain but all the uncertainty points to slower growth.

But slower growth makes the case for a rate cut stronger. Lower interest rates will increase consumer spending and help grow the economy. 

Economic growth is only 1.8%, almost half the long run average of 3.3%. Now is the time the RBA should be cutting rates to help the economy.

The RBA has a habit of really wanting to see the data before it acts. So while it has the monthly data, it doesn’t actually do anything with it until it sees the averaged out quarterly data (the ABS has recently started the monthly data release, but it is still working on tidying it up, so it makes the RBA nervous)

Here is why the RBA says it held rates:

Maintaining price stability and full employment is the priority.

With signs that private demand is recovering, indications that inflation may be persistent in some areas and labour market conditions overall remaining stable, the Board decided that it was appropriate to maintain the cash rate at its current level at this meeting. Financial conditions have eased since the beginning of the year and this seems to be having some impact, but it will take some time to see the full effects of earlier cash rate reductions. The Board judged that it was appropriate to remain cautious, updating its view of the outlook as the data evolve. The Board remains alert to the heightened level of uncertainty about the outlook. It noted that monetary policy is well placed to respond decisively to international developments if they were to have material implications for activity and inflation in Australia.

The Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions. In doing so, it will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market. The Board is focused on its mandate to deliver price stability and full employment and will do what it considers necessary to achieve that outcome.

Today’s decision by the Reserve Bank of Australia to keep interest rates on hold will force more Australians into unemployment and, ultimately, into poverty.

Greg Jericho, Chief Economist at The Australia Institute, describes the decision as “very cruel”, ensuring more pain for those struggling with high mortgage repayments, and more job losses.

He says all the key economic data supported another interest rate cut, which would have given borrowers much-needed relief after three difficult years.

“The Reserve Bank has once again chosen to be content with rising unemployment,” said Greg Jericho, Chief Economist at The Australia Institute.

“While there have been some signs of improved household spending, the major reason for the increase has been the recent interest rate cuts, rather than an underlying strength in the economy. 

“The last recent GDP figures showed the economy still growing at barely half the long-term average, while unemployment has been rising steadily for all of this year. 

“The opportunity to lock in unemployment at 4% is fast disappearing due to the Reserve Bank believing there needs to be more people unemployed in order to keep inflation below 3%. 

“For those Australians forced to live in poverty on Jobseeker, this is a very cruel decision.”

Quell surprise. The RBA has not changed the rate.