Greens call for Treasurer to immediately REVERSE record ninth-straight interest rate hike and sack $1m-a-year Reserve Bank boss: 'Bring them into line'

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The Greens have sensationally called for the Treasurer to take unprecedented action and reverse a record ninth-straight interest rate hike and sack the Reserve Bank boss. 

The RBA cash rate has risen by another 0.25 percentage points to a new 10-year high of 3.35 per cent, up from 3.1 per cent, adding $93 a month to repayments on an average $600,000 mortgage.

The move is set to bring more pain to Australian mortgage-holders with the minor party calling on Treasurer Jim Chalmers to fire RBA Governor Philip Lowe, 61, who earns $1m-a-year. 

Senator Nick McKim, who holds the treasury portfolio for the party, made the call - an extraordinary act that would jeopardise the Reserve Bank's independence, formalised in 1996. 

Under the RBA Act, the Treasurer technically would be allowed to intervene against Dr Lowe's decision. However, it could lead to a confrontation between the bank and the Treasurer in Parliament and spark mass resignations on the RBA board.  

The Reserve Bank governor stepped out of his upmarket house in Sydney for a crunch board meeting where it was expected interest rates would be incrased for a ninth straight month

Greens Senator Mehreen Faruqi and Greens leader Adam Bandt. The Greens have called on the boss of the Reserve Bank to be sacked

Australian home borrowers have been smashed with a ninth straight interest rate rise with the Reserve Bank increasing the cash rate to a new 10-year high of 3.35 per cent

'Firstly, (Treasurer Jim Chalmers) needs to ask Philip Lowe for his resignation,' Senator McKim said in a statement.

'Secondly, he needs to use the powers he has to reverse today's decision by the RBA. The RBA is failing in its duty to ensure the economic prosperity and welfare of the people of Australia.

'The RBA is willing to smash Australia into a recession in pursuit of policy that is only benefiting the already wealthy.'

The latest increase means a borrower with an average $600,000 mortgage has now seen their annual repayments climb by $12,000 since May 2022.

The latest rate rise will see their monthly repayments rise by another $93 to $3,303, up from $3,210. 

A working couple with a $1million mortgage will see their repayments soar by another $154 a month to $5,504, up from $5,350.

That's based on a Commonwealth Bank variable rate rising to 5.22 per cent in February, up from 4.97 per cent, for a borrower with a 20 per cent mortgage deposit paying off a loan over 30 years. 

Lowe warned on Tuesday afternoon of more rate rises in 2023, despite borrowers already enduring the steepest rate rises since a target cash rate was first published in 1990.

'The board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary,' Dr Lowe said.

'The board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.'

Earlier, Dr Lowe looked relaxed as he stepped out of his upmarket Sydney home.He famously predicted in 2021 that interest rates would stay at record lows until 2024.

Ahead of the crunch meeting, Dr Lowe was spotted leaving his Randwick house in the city's east, where the median house price is $2.9million. A short walk from Coogee Beach, the property with its park-style garden and wrought iron fence would conservatively be worth at least $4 million.

The married father-of-three was photographed carrying a copy of The Australian Financial Review before driving off in his late-model Volvo XC40.

Unlike millions of borrowers, the powerful banker - who is on a total remuneration package of $1,037,709 and a base salary of $890,252 - is largely protected from the worst cost of living crisis in more than three decades. 

His wife now works at the Australian Prudential Regulation Authority, which sets the rules on banking lending as rates keep on rising.

Inflation is at the worst level in 32 years and the Reserve Bank on Tuesday said more monetary policy tightening would take time to work.

'It will be some time, though, before inflation is back to target rates,' Dr Lowe said.

The RBA's 325 basis point increases since May last year are the most severe since a target cash rate was first published in January 1990.

Senator Nick McKim, who holds the treasury portfolio for the Greens, made the call - an extraordinary act that would jeopardise the RBA's independence, formalised in 1996 

 Philip Lowe was seen stepping into a Volvo XC40 SUV, with even the most basic model starting at $53,000

 Dr Lowe's Reserve Bank board is widely expected to raise the cash rate on Tuesday afternoon for a ninth straight month, with January being the only month they don't meet

Philip Lowe, a father of three, lives in the wealthy suburb of Randwick in the city's inner south-east, where the median house price is $2.9million

Dr Lowe has apologised to homeowners who took out home loans based on his forecast that rates wouldn't spike for several years.

'I'm certainly sorry if people listened to what we'd said and acted on what we'd said and now regret what they had done,' he told a parliamentary committee in November.

'That's regrettable and I'm sorry that happened.'

The end of the record-low 0.1 per cent cash rate means borrowers with an average, $600,000 mortgage would, this month, have seen their monthly repayments climb to $3,303, up $997 from $2,306 in early May.

Even if rates didn't go up any more after February, this borrower's annual repayments would be $11,964 higher than they were before the rate rises. 

A couple with a $1million mortgage would have seen their monthly repayments surge by $1,661 - to $5,504 from $3,843 - equating to $19,932 over a year.

Canstar finance expert Steve Mickenbecker said surging mortgage rates were causing the most pain in the household budget.

 His home with a park-style garden would be worth considerably more, with a likely value of more than $4million

Dr Lowe, who is on a total remuneration package of $1,037,709 and a base salary of $890,252, is protected from the cost of living crisis

'There is no line in the household budget that is hurting borrowers more than the home loan,' he said.

Inflation in the year to December surged by 7.8 per cent, a level well above the Reserve Bank's 2 to 3 per cent target. 

But bread and cereal prices last year climbed by 12.2 per cent compared 13.2 per cent for petrol and a whopping 26.6 per cent for mortgage interest, Australian Bureau of Statistics figures in inflation and the cost of living showed.

The futures market is expecting the RBA cash rate to peak at 3.7 per cent by July, a level well below Westpac and ANZ's forecasts of a 3.85 per cent cash rate.

AMP Capital chief economist Shane Oliver said hiking rates up to 4.1 per cent - as the futures market had recently predicted - would spark a severe recession.

'We are near the top in rates and taking the cash rate to 4.1 per cent or more would be a policy mistake risking a major recession,' he said.

The review into the RBA is due to report to the government in March 2023.