David Koch pens open letter to the RBA pointing interest rate blame at parliament

Former Sunrise host David Koch has blamed a looming interest rate rise on government spending.

Koch, now the economic director of Compare the Market, publicly addressed Reserve Bank of Australia governor Michele Bullock in an open letter that peeled back layers of recent inflation to reveal the source.

A fourth rate rise for 2026 is expected after an RBA meeting next Tuesday, but Koch says it won’t fix the problem.

“I’m writing to you publicly because millions of Australians are crying out right now,” he told the RBA in his open letter.

“I don’t dispute your mandate, and I don’t envy the situation you face. But before your board votes, I’d ask you to look closely at who generated that worryingly high level of growth.

He said that houshold spending has only fractionally increased, unemployment has spiked, business conditions have turned negative and consumer sentiment has dropped.

“A meaningful slice of the inflation your board is trying to contain is not being generated in a shopping centre. It is being set in a cabinet room,” Koch said.

Koch addressed recent spending on oil, but warned the RBA it makes up “only part of the story”.

“I know fuel is front of mind for your board, and fair enough. But a petrol price shock is already a tax on every household . It strips spending power out of the economy without you lifting a finger,” he said.

“A rate rise won’t pump a single extra barrel, or fix a thing in the Middle East . It simply hits the same kitchen table twice.”

In contrast to the cost-of-living impact on household spending, Koch highlighted that federal government spending has climbed to 26.8 per cent of GDP, much of it in categories such as childcare, education, healthcare, utilities and insurance.

“Some of the stickiest price pressure isn’t coming from shoppers splurging ... it’s coming from prices governments set, subsidise, regulate or index,” Koch said.

“I’m certainly not asking you to lecture elected governments on what they should fund. Defence, health, aged care, housing and the NDIS are not luxuries. But I am asking you to use the one power you unquestionably hold: the authority of plain speech, backed by numbers.”

Koch wants the RBA to call a spade a spade and “say it out loud” when interest rates dig deeper into household purses.