\n
Treasurer Jim Chalmers said the government understands the impact of interest rate rises but despite the pressures, inflation is peaking and therefore the economy is moderating.<\/div>\n<\/div>\n
\n
<\/div>\n
“It’s our job to focus on the broader pressures that are coming at us from around the world and being felt around the kitchen tables of this country,” he said during Question Time after the rise was confirmed.<\/div>\n<\/div>\n
\n
<\/div>\n
“And our plan to address this high inflation, which is causing these rising interest rates, has three main parts to it.<\/div>\n<\/div>\n
\n
<\/div>\n
“There is growing evidence that inflation is expected to have peaked in our economy, and is now beginning to moderate.”<\/div>\n<\/div>\n
\n
<\/div>\n
Chalmers flagged that the May budget will show “spending restraint” to avoid pushing the economy into a recession.<\/div>\n<\/div>\n<\/div>\n
\n
\n
\n
What would a recession mean for the everyday Australian?<\/strong><\/h3>\n<\/div>\n<\/div>\n\n
Short answer: it would be bad.<\/div>\n<\/div>\n
\n
<\/div>\n
Humphries-Jenner warned if we enter a recession as a result of RBA keeping interest rates too high for too long, we will see a rise in mortgage delinquencies and defaults.<\/div>\n<\/div>\n
\n
<\/div>\n
“It will be incredibly painful and damaging,” he said.<\/div>\n<\/div>\n
\n
<\/div>\n
“More mortgage defaults means some people might be forced to do quasi-forced sales of houses.<\/div>\n<\/div>\n
\n
<\/div>\n
“Those will be relatively less than what people think because banks want to avoid that.”<\/div>\n<\/div>\n
\n
<\/div>\n
Basically, there will be widespread financial stress, Humphries-Jenner said.<\/div>\n<\/div>\n
\n
<\/div>\n
“If rates remain high, that will impact renters and housing affordability because rent will go up as people can’t afford to buy a house,” he said.<\/div>\n<\/div>\n
\n
<\/div>\n
It will create even further demand on rental affordability, even as Australia already experiences a supply and demand crisis, causing immense housing and accommodation pressures.<\/div>\n<\/div>\n
\n
<\/div>\n
The next impact would be employment, as corporations reign in expenditure and inevitably slash jobs.<\/div>\n<\/div>\n<\/div>\n
\n
\n
\n
Should we be preparing? If so, how?<\/strong><\/h3>\n<\/div>\n<\/div>\n\n
Humphries-Jenner said Aussies should always prepare for a downturn and put some buffers in place in case of the worst-case scenario.<\/div>\n<\/div>\n
\n
<\/div>\n
“If you have a lot of credit card debt and you think you might struggle with worsening job prospects, then you could go to a personal loan provider and consolidate your credit card debt into a low-interest personal loan,” he said.<\/div>\n<\/div>\n
\n
<\/div>\n
But when considering all of these precautions, he said there are a lot of unknown factors in the coming months that may or may not lead to a recession and no rash financial decisions should be made.<\/div>\n<\/div>\n
<\/div>\n
Article Credited to Savannah Meacham, 9news.com.au\u00a0<\/em><\/div>\n