A majority of voters believe the Reserve Bank of Australia has overreacted in jacking up interest rates to tame inflation, and people worry economic conditions will get worse over the next 12 months, according to the latest Guardian Essential poll.
The latest survey of 1,044 voters demonstrates cost-of-living pressure is starting to bite in the community after nine consecutive cash rate hikes.
The Albanese government is also in the frame. A majority of respondents (71%) think the federal government wears either some or a lot of culpability when it comes to rising interest rates. Only 16% of respondents feel the government bears hardly any responsibility for rising borrowing costs (13% of respondents are unsure).
Voter approval of Anthony Albanese has also come off last year’s post-election highs.
While the prime minister retains majority approval, last November 60% of respondents said they approved of the prime minister’s performance. That’s come down to 53% in the latest fortnightly survey. Voter disapproval has also crept up, with 34% unhappy, compared with 27% last November.
But people believe there are numerous external triggers for the RBA’s aggressive tightening in monetary policy.
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Guardian Essential respondents identify high consumer prices (86% say prices have contributed a lot or a fair amount to rate rises), supply chain disruptions triggered by the pandemic (76%), an “overreaction” by the central bank (69%) and the war in Ukraine (59%) as significant inputs.
Voters are not identifying wages as a significant contributing factor. While there has been public debate about the potential risks of a wage-price spiral, only 38% of Guardian Essential poll respondents consider that a factor in the current interest rate hikes (48% say wages has hardly any or no impact).
While the strain of sustained high inflation is causing anxiety, voters haven’t defaulted to assuming the Coalition would do a better job of managing rising interest rates (29% of respondents say Labor will do a better job, 29% say Coalition and 42% say there’s no difference).
This is unusual because the Coalition often enjoys higher voter favourability in polls on metrics of economic management.
The Liberal leader, Peter Dutton, plans to put cost-of-living pressure front and centre of a looming byelection campaign in the Victorian seat of Aston triggered by the retirement of controversial former frontbencher Alan Tudge. The electorate of Aston is situated in commuter country in the eastern suburbs of Melbourne.
The latest poll suggests voter perceptions about who is best placed to manage rising interest rates differs depending on whether people are mortgage holders, property owners or renters.
Poll respondents with home loans say Labor is better than the Coalition at managing rates (33% to 28%, with 39% saying it makes no difference). Renters feel similarly (34% to 22%, with 44% saying it makes no difference), while people who own their homes outright believe the Coalition would do a better job (36% to 22%, with 42% saying it makes no difference).
Labor is also ahead of the Coalition when it comes to who voters trust to deliver cost-of-living relief (36% prefer Labor, 28% say Coalition and 36% say it makes no difference). Respondents with mortgages and renters again ranked Labor ahead of the Coalition on this metric, and homeowners put the Coalition ahead.
Labor is also continuing to exhibit higher voter satisfaction in areas of traditional policy strength – improving public services, managing climate change and reversing the trend towards insecure work.
The deterioration in people’s sense of financial security as we move into the first quarter of 2023 can be mapped by comparing sentiment in the latest fortnightly survey with sentiment a month after last year’s federal election.
A majority of respondents currently report they are either struggling a bit in the current environment (40%) or in difficulty to the point where paying regular bills has become a concern (12%). Last June, 31% reported struggling a bit and 7% identified bill paying as a regular concern.
Only 19% of respondents predict economic conditions will improve in the next 12 months (last June 32% of respondents expressed that optimism), and 56% say things will get worse (compared to 40% last June).
But the data does reveal two distinct experiences. Not everybody is battling in the high inflation environment. In the latest survey, 47% of respondents report feeling comfortable or secure. While just over half the sample, 51%, say rising interest rate has a negative impact on them, 17% report the impact as positive.
The RBA’s record run of rate hikes – combined with a public signal that there will be more to come – has triggered an unusual political backlash. The central bank governor, Philip Lowe, used two appearances before parliamentary committees in Canberra last week to defend the bank’s decision-making.
The treasurer, Jim Chalmers, while pointing to the independence of the RBA, has argued the bank and the governor need to be accountable for decision-making.