Minns is right to sound the alarm — but politics mustn't deepen economic pain

NSW premier Chris Minns has done something few state leaders dare: he has publicly warned that an expected Reserve Bank of Australia rate rise will force shops to close and cost jobs. Coming from the leader of Australia’s largest state, that is not a throwaway line. It is a blunt diagnosis of what higher borrowing costs do to marginal businesses and the households that rely on them, and it ought to prod federal and state governments to think harder about the choices they make in the weeks and months ahead. Minns’ intervention also carries an unmistakable political subtext. With the RBA’s cash rate decision due on Tuesday and frustration about the economy rising — one Labor MP has said voter anger is already high — his comments heap pressure on the Albanese government. That pressure is understandable: when people see their local café, barber or retailer shuttered, their concern about interest rates and cost of living translates into political anger. But the right response from responsible governments is not to score short‑term points; it is to focus on policy settings that reduce the economy’s vulnerability to rate shocks. Minns urged both the federal government and the states to rein in spending to ease pressure on the economy. Fiscal discipline across governments can play a legitimate role in stabilising demand and relieving some pressure on prices and interest rates. But “reining in spending” is not a panacea. How governments cut or reallocate dollars matters: savage cuts to essential services, infrastructure or targeted supports for low‑income households would compound hardship and risk further job losses. The task for premiers, treasurers and ministers is to be surgical — prioritising investments that strengthen productivity, alleviate cost pressures for vulnerable households and support businesses to modernise and compete. There is also an element of political theatre here. Publicly blaming an independent central bank for economic pain is an old play. But the RBA sets monetary policy to meet inflation and employment objectives; it does so based on wide‑ranging data. Governments, by contrast, control taxes, spending and regulation. If Minns’ message is to be more than a political cudgel, it should be accompanied by concrete plans: where will savings be found, which programs will be reprioritised, and how will cuts avoid hitting those least able to absorb them? For ordinary Australians the stakes are immediate and personal. Higher interest rates raise mortgage repayments, dampen consumer spending and make it harder for small businesses to survive stretched cashflows. Shops closing and jobs lost in local communities do more than hurt individual livelihoods — they erode social fabric, reduce local services and make recovery harder. So governments at all levels should treat Minns’ warning as a wake‑up call rather than a scorecard. Fiscal restraint has a place, but it must be exercised judiciously and transparently. Policymakers should explain what they will stop, what they will keep, and how any savings will protect jobs and services. Above all, they need to act in ways that restore confidence rather than stoke political division. The coming RBA decision will be closely watched. Whatever it brings, the most constructive political response is honest, targeted budgeting and steady stewardship — not headline‑grabbing rhetoric. Ordinary Australians deserve that steadiness now more than ever.