Reserve Bank boss Michele Bullock boss delivers chilling warning as more and more hard-up Aussies turn to food banks and charities to survive in Albo’s Australia

The country’s most powerful banker has revealed that more Australians are turning to charity for the first time in their lives to help them survive.

Reserve Bank Governor Michele Bullock told a luncheon for a mental health charity that the big interest rate hikes are prompting more people to seek help they might not have sought before.

“Information we have received through the RBA’s liaison program indicates that more people than usual are seeking support from community organisations, often for the first time,” she told the Australian Business Economists lunch in Sydney on Thursday.

However, in her speech ‘The High Costs of Inflation’ to the Anika Foundation, Ms Bullock ruled out cutting interest rates before Christmas.

“Of course, circumstances can change and if economic conditions do not evolve as expected, the board will respond,” she said.

“But if the economy develops overall as expected, the government does not expect to be able to cut rates in the short term.”

The RBA cash rate was left unchanged last month at a 12-year high of 4.35 per cent. Relief is unlikely to come soon from 13 rate hikes in 2022 and 2023.

The steepest rate hikes since the late 1980s have already hit the economy, with growth of 1 percent in the year through June the slowest since the 1991 recession, barring a pandemic.

But Ms Bullock said that if we don’t tackle high inflation now, it will only lead to even higher unemployment later.

“High and volatile inflation can also cause shifts in people’s wealth and purchasing power,” she said.

‘It’s harder to sign a new contract or make savings plans if you don’t know how expensive things will be in the future.

‘Moreover, high inflation eventually requires disinflation, which can impose long-term costs on households in the form of higher unemployment.’