Jim Chalmers knew not to smile after the Reserve Bank announced its rate cut

Jim Chalmers was determined not to smile when speaking after the Reserve Bank cut rates. (ABC News: Matt Roberts)

There's some selective editing when the Coalition talks about interest rates.

Be it the opposition leader Peter Dutton or the shadow treasurer Angus Taylor, they like to talk about the 12 times the Reserve Bank of Australia (RBA) has lifted the cash rate under Labor.

But anyone with a mortgage knows all too well the RBA has raised interest rates 13 times since May 2022. 

It's not like the Coalition forgets the first rise. 

In power and on the ropes, the RBA's decision to start raising rates three weeks out from voters going to the polls was the last thing then prime minister Scott Morrison and his Coalition needed. 

The electorates home to nation's most indebted households

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Labor has long held these outer-suburban electorates in Australia's mortgage belts. They might not be the most marginal but they will likely determine the election.

"If only you could pay your mortgage with Scott Morrison's excuses," Labor's Jim Chalmers said at the time.

Irrespective of who won that election, the die was cast. Rates were always going up.

And go up they did. Over 18 months, 12 rate rises constricted tighter and tighter around household budgets.

They remained in that vice-like grip for a further 15 months, until yesterday's decision to cut rates for the first time since 2020.

Albeit unintentionally, the RBA has found itself book-ending the electoral cycle, having started raising in the last campaign and now starting its cutting on the eve of the next one. 

This term was always going to be tough

Though they would never admit it publicly, within the Coalition, senior figures knew in 2022 how hard the next three years were likely going to be.

Speaking during the 2022 campaign, a senior figured privately noted the outlook was so bleak that it might well be an election where losing wasn't so bad. 

Let the other lot deal with it, this person argued, forecasting the Coalition could knock Labor around over living costs and return to government after just one term in opposition.

It was more a hope than a forecast. In the end, it hasn't proved too far from reality. 

Voters, globally are fed up. Their wages have gone up nowhere near as much as prices have. They've taken their anger to the ballot box and turfed incumbent governments out around the world.

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In Australia, things are improving but easing inflation doesn't mean things are getting cheaper. 

Overcoming the years of inflation outstripping wage growth will take much more than just one rate cut, something the now-treasurer noted after the RBA's decision.

Keeping any trace of a smile away from his mouth, he addressed reporters soon after the RBA's decision.

He insisted Australians needed and deserved the rate cut coming their way, announcing also that the major banks had given him assurances it would be passed on in full.

Chalmers argued there was more work to do but what Australia was seeing was the soft landing he had long hoped for, with inflation easing without a surge in unemployment. 

On paper, it might be the thing of dreams, but messaging to voters doing it tough that they are better off than they otherwise would have been will require astute communication.

The Coalition's Angus Taylor quickly followed Chalmers, insisting the cut was too little, too late.

He reminded voters they were paying thousands more in interest and their living standards were the worst they'd ever experienced.

The rate cut Labor MPs had been hoping for

A Labor MP last week dubbed a rate cut as being crucial to keep Labor in the fight at this next election.

The government is facing an electoral map more complicated than Scott Morrison's. 

The party is bracing for major swings in the mortgage-belt areas of Melbourne's outer suburbs, in seats the party has long held. 

Voters with mortgages in those electorates might soon be $100 a month better off. That compares with an increase in repayments of about $1,500 a month since the bank started raising rates. 

The rate cut might have kept them in the fight. Winning the battle is a whole other thing.

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