Treasurer defends inflation record as 15-year interest rate high looms
The government has celebrated a deficit $6 billion lower than the May forecast but warned there are tough times ahead for households.
Treasurer Jim Chalmers defended the government's inflation record on the eve of an anticipated interest rate hike. The government celebrated a $6 billion lower deficit than forecast but warned of tough times ahead for households. The Reserve Bank is expected to raise the cash rate to its highest level since 2011 on Tuesday. Chalmers attributed rising inflation to high petrol prices, not government spending, and confirmed the budget deficit for the last financial year was $6 billion lower than predicted.
He revealed the projected national debt was lower than expected, with savings from health costs and revenue increases. Finance Minister Katy Gallagher credited budget savings to reduced spending in aged care, childcare, and the pharmaceutical benefits scheme. Chalmers pushed back against suggestions the government could do more to help households, citing global economic pressure and the Iran-US war as disastrous for family budgets.
He acknowledged difficult months ahead but insisted other countries were in a worse situation. Shadow Treasurer Tim Wilson criticized the announcement, warning of three more interest rate hikes and blaming Chalmers' spending. Chalmers attributed inflation to the Middle East war, not government spending, and said benefits from productivity gains would be felt in the coming years.
Prime Minister Anthony Albanese also blamed global inflation and acknowledged some people are struggling. The Australian Bureau of Statistics will release inflation figures for August on Wednesday.
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