Treasurer Jim Chalmers has defended the Albanese Government’s track record on inflation on the eve of an anticipated rate hike that would push interest rates to their highest level in 15 years. Source: ABC News.
Mr Chalmers yesterday confirmed the budget deficit for last financial year was $6 billion better than the $28.3 billion forecast in May.
He said that showed the government had been “limiting spending growth” and doing the work to curb inflation ahead of the Reserve Bank’s looming decision on Tuesday whether to again hikes the official cash rate to a possible 4.6 per cent.
The last time the cash rate was around this level was October to November 2011, meaning anyone who has purchased their first home since that time has never had to service a higher borrowing level on their loan.
Mr Chalmers revealed the projected national debt was lower than forecast in the May budget, with health costs and other payments down $1.4 billion and revenue up $4.6 billion more than expected.
The increased tax was driven by better-than-expected returns on superannuation and other investments, rather than a higher take from wage earners or mining revenue, the latter which came in short on budget forecasts.
The treasurer pushed back on suggestions the government could do more to help households, pointing to global economic pressure and the Iran-US war as “absolutely disastrous” for family budgets in Australia.
While Mr Chalmers celebrated an improvement for the budget, he conceded that there would be “difficult months” ahead.
The Reserve Bank is meeting today for the sixth time this year, and both financial markets and economists think it is almost certain it will raise interest rates for the fourth time.
The figures released yesterday showed government spending had risen from 26.6 per cent to 26.9 per cent of GDP, largely reflecting the weaker economic growth of the Australian economy.
Mr Chalmers insisted the war in the Middle East, not government spending, was to blame for increasing inflation.
But Opposition Leader Angus Taylor pointed the finger back at Mr Chalmers, saying the government was wrong to put the blame on international factors.
“The link between inflation and high interest rates that we’ve seen for the last four-and-a-half years is with this government,” he said.
The Australian Bureau of Statistics is due to release the inflation figures for August on Wednesday.
FULL STORY
Treasurer Jim Chalmers defends inflation record as 15-year interest rate high looms (By Holly Tregenza, ABC News)
