The rise in interest rates by the Reserve Bank will impact every aspect of the society and even so, it’ll drag down communities and individuals who are already doing it tough.
After a recent 0.25 per cent hike, the RBA’s 4.1 per cent official interest rate is a level not seen since 2012 amid inflation concerns.
Teresa Postregna runs her family business, ‘Chapel Road Eggs’, which was established in 1962 in Keysborough and is now in Noble Park.
“When interest rates go up you can see a steady decline in sales. People are just conscious of their spending now.
“Things that they can go without like a jam for example, they won’t buy it. You can see they just get what they need with eggs and poultry.”
Even with the eggs, people search for the cheapest eggs as prices have gone up on the market.
“Flicking through every day and looking at end of the day totals i was thinking, Jeez this is bad, the sales have almost halved,” Ms Postregna said.
As rent prices increase for them, just like many other businesses, traders are finding themselves crushed by staggering basic expenses and the interest rate hike.
“It’s just going up and up. It’s hard.”
Recently, at a council meeting, councillors Tim Dark and Bob Milkovic opposed Greater Dandenong Council’s 2023-24 Budget and Long Term Financial Plan.
They argued that Council is not spending where it’s most needed.
“We’re facing massive amount of inflation. Businesses are going out and under and people are losing their jobs,” Cr Dark said.
“Interest rates are skyrocketing. The fact is people are struggling as hard as they possibly can.
“I will not support a budget to say it’ll go fund infrastructure when people are suffering. This Council has gone too far.”
The hike may hit some municipalities harder than others, such as Greater Dandenong with the state’s highest homelessness rate, up 22 per cent in five years.
With the increase in cost of living, rent, fuel prices and bills, organisations such as the Orange Sky will be in demand for their services during these tough times.
Co-founder and chief executive officer, Lucas Patchett said they’ve seen the impact of the cost of living increase and now the interest rate hike.
“Orange Sky services have never been busier, as many people who thought they would never be in a position of needing our service, are coming to us for help.
“Some people have shared with us that right now every dollar counts. If they can save money on going to a Laundromat or being able to reduce their electricity and water bills by accessing our service, that it can mean the world of difference to them.”
Orange Sky provides a regular mobile laundry and shower service all over the Australia to those experiencing homelessness.
Mr Patchett said the cost of living pressure is impacting everyone differently and that’s not those experiencing homelessness, but also friends and volunteers.
“Some volunteers have had to reduce their volunteer commitments with us due to having to work more hours or pick up second jobs to combat the rise in cost of living, and we have also found that some donors have had to pull back their regular support of Orange Sky.”
Sue Delwaney, a retired nurse and volunteer at Orange Sky had dedicated seven years of her life to help people in the community.
“We provide the service at Doveton where Manna4Life (charity) does meals every week.
“Its basic needs, food and clean clothes make an incredible difference. Some people are living in their car and getting to work. It’s very difficult and I see it increasing.”
Every week the organisation provides more than 1,600 loads of laundry, 1,600 hours of human conversations and 130 hot showers across the country, an increase of almost a quarter (21%) over the last 12 months.
“It’s not only to provide that service but also to have a conversation, someone may not have had a conversation in a week. It’s about engaging with a friend.
“It’s about reconnecting them with another basic need, communication with another human being,” Ms Delwaney said.
According to Ms Delwaney, some of those people search out multiple organisations to meet their different basic needs.
“A lot of factors contribute to their situation some just lose their job, some are unable to work for different reasons, unable to pay their rent and the fact that they’re unable to find suitable employment,” Ms Delwaney said.
Other Greater Dandenong organisations Cornerstone, South-East Community Links and WAYSS have all reported an increase in demand.
Cornerstone chief executive Naomi Paterson says a rising number of up to 500 people were desperately seeking food parcels, fresh fruit and veg, clothes and other emergency relief.
“A lot of people are struggling to make ends meet.”
About 70 were visiting the centre for hot meals.
The recent monthly consumer price index from the Australian Bureau of Statistics showed prices rose 6.8 per cent over the year to April.
Reserve Bank governor Philip Lowe said the rate hike is to provide confidence that inflation will return to its target within a reasonable timeframe.
“High inflation makes life difficult for people and damages the functioning of the economy. It erodes the value of savings, hurts family budgets, makes it harder for businesses to plan and invest, and worsens income inequality.
“Recent data indicate that the upside risks to the inflation outlook have increased and the Board have responded to this.”
