Victorian premier Jacinta Allan openly criticises RBA governor, branding recession warning a ‘gut punch’ to working people

Victorian Premier Jacinta Allan has openly criticised the Reserve Bank Governor, branding Michele Bullock’s recession warning a “gut punch” to working people.

Ms Bullock indicated Australia may be pushed into a recession if inflation remained out of control, in a press conference on Tuesday.

“We don’t want to have a recession, but if it’s hard to get inflation down, then we’re going to have to deal with that, possibly,” Ms Bullock said.

She said the RBA was prepared to continue increasing interest rates despite the recession fears because inflation was the bigger threat to the economy.

The Governor said inflation generally hit poorer people the hardest.

“The bottom line is that, in the end, if we don’t have low and stable inflation over time, we won’t have full employment,” she said.

But the Premier attacked the comments, arguing a recession needed to be avoided at all costs.

“Working people hear that, and it’s like a gut punch to them, because when working people hear those words being spoken, they know their job is at risk,” the Premier told reporters.

“They know that life is tougher for them, and that’s why I don’t think that is the path that we should be going down.

“We need to be doing everything we can to help working people, help households, get people into a home that’s affordable. Help them with their grocery bill, with their power bill. Help get the kids to school with a full tummy through our free breakfast program.

“The alternative approach that’s being proposed brings pain and hurt to working people and families, and they’re the ones that my Labor government is focused on every single day.”

Ms Bullock’s comments are reminiscent of Paul Keating’s infamous comments about a severe recession in 1990.

While announcing the national accounts showed the country was in recession, the then treasurer said it was “the recession Australia had to have”.

Asked about the RBA’s decision to increase interest rates, Ms Allan said it came at a time when households were already under significant pressure.

“This is an interest rate decision from the Reserve Bank coming at a time when households are watching fuel prices increase at the same time that there’s already significant pressure on household budgets,” she said.  

“This is the last thing that households, families, and working people need. The last thing they need is added pressure on the household budget. 

“My government understands this, which is why we understand that there is a role for government to provide support to households that are doing it tough.”