In painting a rosy picture of how Australian households were coping with interest rates at their highest level in 12 years, Reserve Bank Governor Michele Bullock ignored advice from her own analysts that many were struggling to put food on the table.
In late November, Ms Bullock told a high-powered meeting of central bankers that “despite the political noise” caused by 13 rate hikes in 19 months, Australian households and businesses were “in a pretty good position”.
However, a Freedom of Information request tweeted by former Senator Rex Patrick shows that just 12 days before Ms Bullock made this claim, the RBA's economic analysis reported that community services were being overwhelmed by requests for help.
“Cost-of-living pressures remain acute for their constituents,” the analysis reads.
Reserve Bank Governor Michele Bullock told a meeting of central bankers in November that households were doing 'surprisingly' well financially despite thirteen rate hikes.
'More people than usual are seeking support from community services, including wage earners and households with mortgages who have sought food support.
'Calls for support include housing assistance, financial counseling services, mental health services, domestic violence services and food support.'
Ms Bullock said in November that households and Australian businesses were proving remarkably resistant to the rate hikes.
“We're a little surprised by the strength of the activity,” she said.
'It's holding up a little better than we thought. This means that service price inflation has remained at the same level for a little longer. So what we are seeing is slightly greater domestic price pressure than we expected.”
However, Ms Bullock admitted that many borrowers were “very unhappy” with the central bank, which she placed under the “political economic challenges” category.
In December, Reserve Bank financial stability chief Andrea Brichetto conceded that mortgage repayments were putting pressure on households, but said most could cope by working longer or getting better-paid jobs in a tight labor market.
“While there has been an increase in the number of borrowers under severe financial pressure, the vast majority of borrowers remain able to cover basic expenses and repay their loans,” she said in a speech on Friday.
Food charities have reported a growing number of mortgage holders needing their services (pictured charity van feeding homeless people in Sydney)
However, the RBA said it was aware that searches on Google for financial advice and the National Debt Helpline were increasing.
In October, the RBA reported that the proportion of Australian mortgage holders having to spend more than a third of their income on home repayments, considered a 'red line' measure of financial stress, had increased sharply.
The percentage of variable-rate homeownership borrowers spending at least one-third of their reported income on mortgage payments increased from about 4 percent in April 2022 to about 20 percent in July 2023.
The majority of borrowers saw monthly payments increase by 30 to 50 percent over the same period.
Charity Foodbank reported in October that more than a quarter of mortgage-paying households in NSW and the ACT (27 percent) had experienced difficulty feeding themselves.
In 2023, charity Secondbite found that of households with moderate food insecurity, 16 percent had a mortgage, while 18 percent of households with severe food insecurity were paying off a property.
“Food insecurity is now affecting households that have never experienced it before,” the report said.
“In the past 12 months, 77% of households experiencing food insecurity did so for the first time last year.”
Former South Australian Independent Senator Rex Patrick tweeted the FOI showing the RBA analysts said something different from the Governor
“We moved into our own house and at the same time the interest rates went up,” said one charity recipient.
'My partner just started a company and I started a new job. Expenses are simply more than income.'
Many of those who commented on Mr Patrick's tweet accused Ms Bullock of being out of touch with the need being felt nationally.
“I live in Central Queensland and have never seen so many people taken onto the streets by their landlords, leaving entire families homeless,” one person wrote.
“Blind Freddy could see that many people cannot handle the interest rate increase and the domino effects,” another commented.
However, some accused charities and NGOs of exaggerating the problem.
“The social service providers are causing a firestorm so they can keep expanding,” one person said.
“Like America, the growth industries will soon find their way into the welfare state and government.”