According to data from the Australian Bureau of Statistics, businesses in sectors such as manufacturing, finance, insurance, and professional services are thriving, with gross company operating profits rising by 16% in 2022. However, Australian households are feeling the effects of the Reserve Bank of Australia’s 10th interest rate hike since May 2021, with household borrowers facing record-high mortgage payments that now account for around 9% of disposable income. The RBA’s moves to contain inflation have resulted in anxiety for consumers, with a spike in calls to counselling services such as Lifeline seeking advice on financial issues. Furthermore, food costs have also risen, with dairy products and fruit and vegetables up by 15% and 8.5%, respectively. Despite this, retail giants such as Woolworths and Myer are experiencing strong growth. The RBA has acknowledged the uneven impact of its policies but argues that addressing inflation is better than letting it spiral out of control. However, the effects of its policies may take up to a year-and-a-half to flow through the economy. With the Fair Work Commission set to announce its annual wage review for low-paid workers in the coming months, businesses that have avoided the pain of rate hikes may also begin to feel the pressure.
Australian businesses thrive while households suffer from interest rates
