Working families cannot afford another interest rate rise

Unions today warned that low and middle income working families cannot afford another rise in interest rates and called on the Reserve Bank to hold rates at current levels until the full impact of the global financial situation is clearer.

Working families are already under significant financial stress and cannot afford further rises in repayments for home loans, credit cards and other loans says the Australian Council of Trade Unions.

Reports today show up to 750,000 Australians could be affected by 'mortgage stress' this year if interest rates go much higher and of these up to 300,000 home owners could be at risk losing their homes.

"The Reserve Bank needs to consider the plight of working families who are struggling to keep their heads above water," ACTU President Sharan Burrow said.

"It should wait and see on interest rates until the effect of the turmoil in the United States caused by the sub-prime housing market is clearer.

"Let's not jump to measures which will hurt working families.

"Inflation is a threat to the living standards of Australian working families, but there are a number of ways to deal with the problem besides putting up interest rates.

"There should be a serious discussion about the range of solutions available, including whether the inflation target of 3 per cent is sacrosanct," said Ms Burrow.

Unions welcome AUSTRALIA 2020 Summit

"The Summit will be an important opportunity for the Government, business, unions and the community to join together co-operatively and begin to address the social and economic challenges facing Australia after eleven years of neglect by the Liberal and National Party Government," said Ms Burrow.