Victorian Premier Daniel Andrews has slammed the Reserve Financial institution of Australia (RBA) over its determination to lift charges 11 occasions inside a yr.
The central financial institution yesterday lifted the official money price goal by 25 foundation factors from 3.6 per cent to three.85 per cent.
Andrews mentioned whereas the choice was made to fight rising inflation, it as an alternative was "smashing" households throughout the state.
It comes as the state authorities prepares handy down its "difficult funds" later this month.
"They're pulling this lever and I do not know that it is essentially efficient towards the issue they're making an attempt to unravel," Andrews mentioned.
"I am sure they're creating numerous different issues.
"Many, many households are below monumental strain.
"The issue with these instruments is you do not know that you have gone too far till you've gotten gone too far."
The premier mentioned state governments have been informed throughout a 2020 nationwide cupboard assembly they need to "go and borrow" to keep away from a 25 per cent unemployment price.
He mentioned his authorities was informed "rates of interest will not be going up" and would not have borrowed as a lot because it did on the time if informed in a different way.
"I am unsure that 11 rate of interest rises in 12 months is smashing inflation," Andrews mentioned.
"I am sure it is smashing households.
"So once more, I do not know that pulling this lever is essentially delivering the result that the financial institution desires, and that is to get inflation below management."
RBA Governor Philip Lowe mentioned yesterday the price of residing in Australia was "nonetheless too excessive".
"Inflation in Australia has handed its peak, however at 7 per cent remains to be too excessive and it is going to be a while but earlier than it's again within the goal vary," he mentioned in his financial assertion.
"Given the significance of returning inflation to focus on inside an affordable timeframe, the Board judged that a additional improve in rates of interest was warranted."
Lowe mentioned it will take "a few years" for inflation to hit the RBA's goal vary of two to three per cent.
Presently, the annual price of inflation in Australia is 7 per cent.
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