Kochie’s blunt message to RBA as rate decision looms: ‘Don’t keep punishing us for inflation’

Economist David Koch has doubled down on his criticism of the Reserve Bank, urging policymakers to look beyond household spending as another interest rate rise looms.

The Compare The Market economic director, and former Sunrise host, called for greater scrutiny of government spending and its contribution to inflation on Wednesday, one day after penning an open letter to RBA Governor Michele Bullock.

WATCH THE VIDEO ABOVE: Expert urges RBA governor to blame government spending for rate hikes

The RBA is due to meet on September 29, with financial markets predicting another rate rise after Bullock warned inflation pressures were building.

Koch told Sunrise his letter was ultimately a plea on behalf of Australian households who had already changed their behaviour in response to years of high inflation and elevated interest rates.

“For years, you’ve told Australian households we’ve got to tighten our belts. We can’t keep fueling inflation.

“Australian households have done that. Spending is way down. Consumer sentiment way down. Business confidence way down.

“We’re doing the right thing, but a lot of what’s driving inflation is beyond our control.”

Koch pointed to global oil prices as one factor households had little ability to influence, arguing motorists were already feeling the impact at the petrol pump.

“We’re paying the equivalent of an increase in interest rates just at the pump,” he said.

Koch said governments also needed to take responsibility for spending and the prices they control or influence.

“Government spending and government pricing of health, childcare, all the things that they can influence,” he said.

“I’m not being political. It’s not one party or another. It’s all levels of government. States are probably the biggest to blame.

“We need to focus more on governments who are spending more than they did during the pandemic to keep us out of a depression.