RBA and government must work together on priorities

October 30, 2026 — 8:00pm

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It is a sad fact that the economy drives government priorities when it should be the other way around. Governments should look at what people need and place those needs in some sort of priority order and then decide how they can be funded. The last thing that should be cut are socially critical items of infrastructure and services.
The Reserve Bank, as part of its mandate, is supposed to try to get close to full employment. It prefers around 4 per cent unemployment. This consigns 4 per cent of the employable people to poverty. People are also expected to spend more to stimulate the economy but that becomes difficult with rising interest rates.
So to what should the government and the RBA aspire? Full employment, welfare above the poverty line, affordable interest rates, very low inflation allied with reasonable growth, provision of needed social infrastructure and support, money circulating in the economy, and good gross domestic product (GDP) through overseas trade. But what we are subjected to is a bleak future based on increased unemployment, high inflation and high interest rates, which feed off each other and stoke the cost-of-living crisis.
The government and the RBA need to work out a plan together to deliver what Australians need. They need to work out a way of massaging the economy rather than bludgeoning it into submission using interest rate rises and cuts to important government services. Do they not see what the public is enduring?
Greg Tuck, Warragul

Other side of interest coin
Ross Gittins argues, with some cause, that current mortgage interest rates are hurting households with a mortgage (Comment, 28/10). The problem with his argument is twofold. First, using a rule of thumb that a previous RBA governor (Bernie Fraser) outlined – mortgage interest rates should equal the sum of the inflation rate and a margin of 400 basis points. That equals, today, 8.3 per cent. The banks currently ask much less than that. So interest rates for borrowers are low, not high. Second, the banks have money to lend, at least partly, because some people have deposited money with them, for interest. Such people need to be receiving about 5.3 per cent interest to be properly compensated for their saving. They aren’t.
Alun Breward, Malvern East

AI, what’s the answer?
One-third of households are mortgage holders, many of whom are under mortgage stress, yet they are expected to carry the load of managing inflation through continuous rate rises. This is such a blunt instrument, and seems incredibly unfair. Surely economics theory has moved on this century? Has anyone asked AI for a better idea?
Fiona White, Alfredton

THE FORUM

Tired, but looking ahead
Your correspondent (Letters, 30/10) provides an exemplary overview of Jess Wilson who, she claims, is “surprisingly mired in the past”. Her pledge to dump Victoria’s historic treaty with its First Peoples and her refusal to commit to net zero both mirror One Nation. Rolling back Labor’s energy transition could cost billions and require years to reset. Wilson has (astonishingly) proposed reducing tax concessions for new renewable projects. She should take a look at South Australia, which aims to reach 100 per cent renewables by the end of 2027. Can only imagine what the socially progressive voters of Kew might make of all this. Policy formulation has never been a strong feature of the state Liberals, and I cannot see that changing any time soon. Labor might be a “tired government”, as your correspondent says, but at least its vision is forward looking.
Neil Hudson, East Melbourne

Polar climate options
Your correspondent is right: climate and energy policy is vital to our future, and the parties’ plans are worlds apart (Letters, 30/10).
Under Labor’s renewable energy policies, Victoria has gone from 11.6 per cent clean energy in 2015 to 42.4 per cent in 2025. Our wholesale power prices are now among the lowest in the world.
The Liberal Party, by contrast, plans to place unreasonable restrictions on wind farm development, scrap transmission lines and pursue more gas. One Nation is backing coal and nuclear.
The choice between cleaner, cheaper power and costly, polluting alternatives couldn’t be starker.
Larni Dibben, Glen Iris

Tax gas exports
Talk about the PM, the treasurer and the budget fails to acknowledge that many financial problems could be resolved if gas exports were taxed. Why on earth is the government giving away our resources like this, free of charge?
Peta Colebatch, Swan Reach

ATO, see the light
Surely the ATO would benefit if it absorbed the cost of merchant fees of people and companies meeting their tax instalments via credit card payments. The current arrangements represent a real benefit to the monthly cashflow of any sized business and is ultimately benefiting individual Australians by avoiding potential price increases.
Iain Carmichael, Richmond

Follow the money
Have I got this right? “SRL ‘pause’ would cost taxpayers $1billion” (30/10). Yet if we don’t pause it, it’ll cost taxpayers at least $33.5 billion. As a taxpayer, I know what I’d do.
Tony O’Brien, South Melbourne

ABC, SBS independence
The recent report highlighting a “new wave of antisemitism” from progressive critics raises serious concerns about the push for external oversight of Australia’s public broadcasters (“New wave of antisemitism comes from progressive social justice critics: report”, 30/10). Jillian Segal’s assertion that the ABC and SBS are incapable of handling complaints of antisemitism and require an independent, external reviewer lacks objectivity. Given her alignments, Segal cannot be viewed as an independent arbitrator on these matters.
Subjugating our public broadcasters to external review mechanisms would fundamentally undermine media freedom. The ABC and SBS must maintain their internal review systems to safeguard independent journalism from partisan interference.
Paul Caine, Glen Huntly

Conflicting figures
On Background’s reporting (30/10) of Liberal senator Sarah Henderson’s questioning of the ABC at this week’s Senate Estimates includes the claim that ″⁣almost 300 (journalists) have been killed by Israeli strikes (in Gaza) in three years″⁣. However, an Israeli terrorism and intelligence research institute has previously found strong evidence that about 60 per cent of killed individuals identified as journalists were members of, or affiliated with, terrorist organisations, primarily Hamas and Palestinian Jihad. Furthermore, even the Committee to Protect Journalists has recently acknowledged that some of those previously on its list of killed journalists actually had such terrorist affiliations.
Geoff Feren, St Kilda East

Repeat offenders
Starting a war is a terrible thing to do, but, until I thought about it more carefully, I hadn’t realised just how stupid it is (Letters, 30/10). Since 1900 almost every country that started a war was worse off at the end – the two world wars, of course, the Korean War, Saddam Hussein against Iran and Kuwait, the Falklands War, the Suez Crisis, attacks on Israel. Even when the country ″⁣won″⁣, as in Vietnam and the Second Gulf War, it was a disaster for the winner. Donald Trump and Vladimir Putin, don’t you know that those who do not learn from history are condemned to repeat it?
Aidan Sudbury, Malvern East

No o in gulf
On what other planet does a government allocate $6million to upgrade a golf club while crisis accommodation services are offering tents to homeless Australians.
The separation of the sheep from the goats comes to mind: looking out for those who don’t have food, or water or clothing or shelter or are sick – can’t see golf courses in there.
Geoff Sheahan, Glen Waverley

Accommodating data
The article about the Victoria University Data Academy ″⁣One way to turn data centres into a positive″⁣ (30/10) suggests that offering locals faster internet would calm any opposition. That still won’t get rid of the visual bulk of the building, nor the very significant humming noise, that upsets the neighbours.
Another way to make the neighbours happier would be to do what now happens with every major building. There are several basements for cars. As the data centres are usually only about three storeys high, they could be constructed in the ground.
That would give the advantage of sound absorption and would eliminate the bulk of the building. With the top of the building then level with the surrounding ground, it could be turned into a park or a playing field.
Near my home, the same concept has been used, with the local football ground being built as the top of a large reservoir.
Jeffrey Newman, Ivanhoe

Fins have changed
After watching the gloom of SBS News I was bemused that SBS felt the need to preface a food show on the Sydney Fish Market with a warning that the program contained “scenes of commercial fishing”. Unsure how to react to this seemingly over-the-top sensitivity, I quickly returned my fish fingers to the fridge and threw a tea towel over the fish tank before any piscine trauma occurred. Thank you SBS.
Stephen Farrelly, Donvale

More power to Speaker
The political wrangling over the appointment of MPs’ staff numbers should cease. Additional staff allocation should be outside the domain of the PM. As in The Netherlands, it should be under governance of the Speaker.
Henk van Leeuwen, Elsternwick

MPs, lift your game
At a memorial service for Brunswick MP Tim Read this week, the premier led tributes, applauding his integrity, character, commitment to evidence-based policy decisions and willingness to work across the parliament for a better future. He was acknowledged as ″⁣the best of us″⁣, a phrase also used widely to describe Helen Haines. Despite this recognition of the character and commitment of these selfless individuals, we still see too many politicians focused on point scoring, stirring outrage, and prioritising votes and donations over sound policy outcomes. We have a right to expect a lift in behaviour.
Peter Allan, Taradale

AND ANOTHER THING

Politics
Australia may have ″⁣done its bit″⁣ about climate, as Angus Taylor says. But only after his coalition of climate deniers had been sidelined.
Bernd Rieve, Brighton

Victoria is on the road to nowhere. Mind the potholes.
Ross McPhee, Seaford

Jeff Kennett is right (for once) with his ″⁣sniff of arrogance″⁣ remark (Comment, 29/10). Besides fortuitous timing, what has Jess Wilson actually done to deserve to be elected premier?
Steve Melzer, Hughesdale

Bluey, you were certainly dreaming if you thought Pauline Hanson would ever offer an apology like that (Illustration, 30/10).
John Walsh, Watsonia

Pauline Hanson misusing our iconic Bluey in its election material is beyond the pale!
Greg Curtin, Nunawading

Your correspondent (Letters, 28/10), rightly, baulks at the use of Alice in Wonderland in political cartoons. But the use of The Mad Hatters’ Tea Party to highlight One Nation’s shenanigans is deliciously appealing.
Jim McLeod, Sale

Furthermore
The inflation rate is still about 2 per cent less than when the Labor government was voted in four years ago and is higher across the world. Don’t get too hysterical out there media.
Ross Hosking, Blackwood, SA

Had Scott Boland been in the Test team in South Africa instead of Marnus Labuschagne, Australia would have had a stronger attack and probably would have made a higher first innings score.
Les Aisen, Elsternwick

I note in next year’s AFL draw, Melbourne play North Melbourne once. The game is in round 23, after they have each played multiple teams twice. Perhaps the AFL would prefer that they didn’t play each other at all.
Greig Morris, Essendon

Finally
Would anyone under 50 understand the origin of VicPol’s Operation Furlong campaign title?
Ian Macdonald, Traralgon

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