(Bloomberg) — Australian Prime Minister Anthony Albanese said his government would consider new policies to combat pressures from rising inflation and interest rates, after the country’s Reserve Bank announced its biggest rate rise since 2000 on Tuesday.

Speaking at a press conference in Darwin, Albanese said while the interest rate rise had been expected for some time, it would still be a “blow for families.”

“We know that people are suffering from a cost-of-living crisis with everything going up except for their wages,” he said. Albanese said he believed his policies to make childcare more affordable and to lift productivity would help Australians cope.

Australia’s Reserve Bank announced an unexpectedly large increase to the cash rate of 50 basis points on Tuesday, taking interest rates to 0.85%. Economists expect further increases over the course of 2022 and into the next year, as the bank works to tame rising inflation.

Albanese’s Labor Party won power in the 2022 election off the back of promising to raise flat-lining wage growth in Australia and tame electricity prices by better integrating renewable energy sources into the country’s power grid.

But just over two weeks into the job, the new government faces an unexpected energy crisis, with a colder-than-usual start to winter and low domestic gas reserves leading to a surge in prices for companies and households.

Albanese said the surging cost of energy was a result of policy confusion on the part of the previous government, claiming Australia didn’t have “a grid that’s fit for purpose in the 21st century.”

Both the prime minister and Treasurer Jim Chalmers have promised cost-of-living relief for families in the October budget which will start implementing the government’s priorities. Chalmers will also deliver an economic statement to the Australian Parliament in July, laying out the state of the nation’s finances.

However in the short term, Albanese said the new cabinet would be considering the problems when they meet in coming days.

“My government has a policy of doing what we can to assist cost-of-living pressures – at the same time we’re conscious of the fact that we’ve been left with a trillion dollars of debt with not much to show for it,” he said.

©2022 Bloomberg L.P.