Podcast Summary: The Morning Edition — "Why our obsession with interest rates and cost of living is a problem" (February 3, 2026)

Episode Overview

This episode features host Samantha Selinger-Morris interviewing senior economics reporter Matt Wade about Australia's collective focus on interest rates and the so-called "cost of living crisis." Wade challenges pervasive media narratives, using data and historical context to argue that, for most Australians, the economic situation is less dire than headlines suggest. The discussion explores why this obsession may crowd out other important economic conversations, with insights into who actually faces financial pressure, and the consequences for public policy.

Key Discussion Points & Insights

1. Is There Really a Cost of Living Crisis?

• Historical Data Challenges the "Crisis" Narrative

  • Matt Wade references the HILDA Survey, a 20-year longitudinal study, which suggests current financial stress levels are not unprecedented.
    • “While the level has risen a bit, it's not out of step with that whole 20 year period. And in fact it's a little lower than it was in the early 2000s.” (Matt Wade, 01:36)
  • The language of “crisis” is likely an “overstatement for the vast majority” of Australians. (01:16)

• Relative Household Wealth Growth

  • Recent years have seen extraordinary growth in household wealth, especially among homeowners.
    • “Overall Australian households are far more wealthy than they were even five years ago, let alone longer.” (Matt Wade, 02:27)
  • Real wage growth has kept pace with (or exceeded) inflation over much of the past decade.

2. Contextualizing Interest Rates

• Recency Bias Skews Public Perception

  • Current interest rates, while higher than the COVID era's extraordinary lows, are “certainly not high by historical standards.” (Matt Wade, 03:44)
    • For comparison: Interest rates peaked at 18% in the 1980s–90s, are currently near 5%, and were at today's levels even 20 years ago. (03:28–05:05)
  • The public became accustomed to near-zero rates during COVID, which was unusual.
    • “A lot of us kind of got used to that as sort of... It was great. You know, we've never experienced such low interest rates ever.” (Matt Wade, 05:38)
    • “Interest rates have gone back to a more normal level and that's where they are now. That was always going to happen.” (05:45)

• Not All Households Are Affected Equally

  • Newer mortgage holders face higher burdens, while those who purchased 10–20 years ago carry less financial risk. (Matt Wade, 04:06)
  • Not everyone is a mortgage holder; a broad perspective is valuable.

3. Who Is Under Financial Strain?

• Disproportionate Impact Acknowledged
  • Certain households, such as single-parent families and low-income individuals living alone, face higher financial stress.
    • “Single parent households with kids often have a high rate of financial stress. ...People who don't have a family who are on low incomes...they also are overrepresented.” (Matt Wade, 07:41)
  • Despite rising bills, data do not suggest widespread inability to pay, even for electricity:
    • “The most recent HILDA survey found it's lower than it was at several points over the past 20 years.” (Matt Wade, 08:23)

4. Wealth Inequality vs. Cost of Living

• Homeownership Drives Wealth Gains; Renters Left Behind
  • The benefits of wealth growth have been uneven, largely favoring property owners.
    • “If you do own property, you benefited disproportionately.” (Matt Wade, 09:05)
  • Calls for nuanced policy focus:
    • “Wealth inequality is a big deal and it's going to take good, thorough, thoughtful policy to address it. ...If politicians are constantly responding to complaints about the cost of living, it means there's a lot less political bandwidth to deal with these other economic challenges.” (Matt Wade, 09:18)

5. The Dangers of Fixating on Cost of Living

• Two Major Pitfalls Identified
  • 1. Poor Economic Policy:
    • Political pressure leads to inefficient policies, like blanket electricity subsidies for all households, many of whom don't need them.
      • “Not all of them needed it and therefore it's a bit of a waste of money. …That is like, if you like, an inefficient policy for the government to adopt.” (Matt Wade, 12:09)
  • 2. Neglect of Bigger Challenges:
    • Focus on cost of living diverts attention from critical topics such as productivity stagnation, the clean energy transition, and growing inequality (especially intergenerational).
      • “When some issue like cost of living is taking up all the political space, it's very hard for that process to get going in a meaningful way or to get the space that it needs for the community to be brought along.” (Matt Wade, 13:38)

6. Public Debate & Conclusion

• Healthy debate about these issues is necessary, even if controversial.
  • “It's good to have a bit of a debate about it because I do think that, yeah, the debate is good and healthy.” (Matt Wade, 14:29)

Notable Quotes & Memorable Moments

• On the overuse of ‘crisis’:
  • “Calling it a crisis is probably overstating it for the vast majority.” (Matt Wade, 01:12)
• On recency bias with rates:
  • “A lot of us kind of got used to that as sort of... It was great. You know, we've never experienced such low interest rates ever.” (Matt Wade, 05:38)
• On the need for policy focus shift:
  • “Wealth inequality is a big deal and it's going to take good, thorough, thoughtful policy to address it. We need to do it. But if politicians are constantly responding to complaints about the cost of living, it means there's a lot less political bandwidth to deal with these other economic challenges.” (Matt Wade, 09:18)
• On the dangers of blanket subsidies:
  • “Not all of them needed it and therefore it's a bit of a waste of money.” (Matt Wade, 12:09)
• On political debate:
  • “The debate is good and healthy.” (Matt Wade, 14:29)

Important Timestamps

• Cost of Living ‘Crisis’ Language Challenged: 01:01–02:09
• Historical Perspective on Interest Rates: 03:10–05:28
• Distribution of Financial Stress: 07:31–08:48
• Discussion on Wealth Inequality & Policy: 09:02–09:49
• Consequences of Cost-of-Living Obsession: 11:47–14:15

Tone and Style

The conversation is measured, evidence-backed, and thoughtful, with both host and guest focused on providing context and challenging prevailing media narratives. Wade is composed, occasionally contrarian but always data-driven, while Selinger-Morris plays devil’s advocate to drive the discussion deeper.

Summary Takeaway:
Australia's genuine cost-of-living issues are real for some, particularly vulnerable households, but the widespread sense of “crisis” is not fully supported by long-term data. The country’s focus on this single issue overshadows larger challenges like inequality and energy transition, risks poor policy choices, and limits the scope for necessary public debate.