Key Highlights

  • Governor Bullock said at the 29 September media conference that pay packets do not go as far as they used to, which is why high inflation must be stopped.
  • September CPI showed fuel up 23.6 per cent, electricity up 12.8 per cent and rents up 3.6 per cent over the year.
  • The RBA acknowledges its main tool, higher interest rates, also hurts many households.

Governor Michele Bullock has repeatedly framed high inflation as a cost borne by ordinary workers, and her language over the past month shows how the Reserve Bank weighs that harm against the pain of higher interest rates.

"Pay packets don't go as far as they used to, and that's why we need to stop this high inflation."

Governor Michele Bullock spoke those words at her media conference on 29 September 2026, the day the Monetary Policy Board lifted the cash rate target by 25 basis points to 4.60 per cent. It is one of the plainest explanations a central banker can give for why interest rates go up: rising prices erode what a week's wages can buy.

A month later, with headline inflation higher again and the Board set to meet on 2–3 November, the Governor's language on this theme is worth revisiting. It reveals how the Reserve Bank of Australia (RBA) thinks about who is hurt by inflation, who is hurt by rate rises, and why it believes it has to act anyway.

The words, in context

The Governor's comments on 29 September formed a consistent message. Alongside the line about pay packets, she said "high inflation hurts all Australians, especially the most vulnerable." She also said: "It's critical that we stop expectations for high inflation from becoming embedded in price-setting decisions".

In her Opening Statement to the Senate Economics Legislation Committee on 28 October 2026, delivered by videoconference, the message was compressed even further: "High inflation hurts everyone." And then: "But we can't allow high inflation to persist."

The repetition is deliberate. Central banks often speak in technical terms such as trimmed means, neutral rates and basis points. On the question of why inflation matters, Governor Bullock has chosen to talk about household budgets.

What the latest CPI means for the weekly shop

The Australian Bureau of Statistics (ABS) released its Consumer Price Index for September 2026 on 28 October. It showed headline CPI rising 4.3% over the 12 months to September, up from 4.0% in the 12 months to August. In the month of September alone, prices rose 0.8% in original terms and 0.6% seasonally adjusted.

Underlying inflation, measured by the trimmed mean, was 3.6% annual, up from a revised 3.5% in August. Both measures remain well above the RBA's 2–3 per cent target range.

For workers, some of the sharpest increases were in everyday essentials:

  • Automotive fuel rose 23.6% over the year and 9.4% in September alone, driven by higher world oil prices.
  • Electricity rose 12.8% over the year, mainly because Commonwealth electricity rebates ended.
  • Rents rose 3.6% over the year.
  • The transport group rose 8.7% and the housing group 5.2%.

These are costs that are hard to avoid. Commuting, heating and cooling a home and paying the rent are not discretionary for most people. When those prices climb, the squeeze on take-home pay is immediate. This article does not compare these price rises with wage growth, because current wage figures are not part of the verified information available today.

The other side of the ledger

The Governor has not pretended that the RBA's response is painless. On 29 September she acknowledged: "Those who have mortgages, yes, this clearly impacts them and it hurts them." She added: "But at an individual level, yes, there are households that are hurting."

Assistant Governor (Economic) Sarah Hunter offered a similar acknowledgement in her 60 Minutes interview, broadcast on 25 October 2026: "It's not pain-free, it's not costless, but the cost of it is less using interest rates than it would be using other tools." She also said: "We're not trying to put people out of their homes."

The RBA's argument, then, is a comparison of harms. Inflation reduces the purchasing power of wages for everyone, and the Governor says it falls hardest on the most vulnerable. Higher rates impose costs too, particularly on mortgage holders. The Board's judgement has been that allowing inflation to persist would ultimately be more damaging.

The October 2026 Financial Stability Review suggests the mortgage pain, while real, has not become systemic. It found that around 2 per cent of variable-rate owner-occupiers have a cash-flow shortfall, well below the 2024 peak, and that "Most Australian households with mortgages remain well placed to manage more difficult conditions".

A view from beyond the data

Governor Bullock has also spoken about the human side of economic statistics in less formal settings. In her address "Purpose, Perspective and Possibility" at the University of New England graduation ceremony in Armidale on 23 October 2026, she recalled a visit to a national debt helpline. "It provided a very human perspective on the economy that you don't get from looking at aggregate data," she said.

In the same speech she told graduates "the work of the RBA is about people." She also noted: "Parliament has charged us with promoting the prosperity and welfare of the Australian people".

Those remarks help explain why the pay packet framing keeps recurring. For the Governor, inflation is not an abstraction. It is the gap between what people earn and what they can afford.

Looking ahead, the Board's next decision is due at 2.30 pm (AEDT) on 3 November, alongside a new Statement on Monetary Policy. That decision has not been made. The Board said in September it would be attentive to the data, "including increasing the cash rate target further if needed", and the Governor has said: "I'm not going to give you forward guidance."

Speaking about inflation on 60 Minutes, Assistant Governor Hunter expressed a hope that goes to the heart of the pay packet issue: "I'd actually love it if the country could forget about it."

The bottom line

The Governor's message to workers has been consistent: inflation is quietly cutting the value of their pay, and the RBA sees stopping it as essential. With headline CPI at 4.3% and the trimmed mean at 3.6%, that squeeze has not eased. The RBA acknowledges that its main tool, higher interest rates, also hurts many households. How it weighs those two kinds of pain will be on display when the Board announces its decision on 3 November.