Hope for cost-of-living relief as Treasurer vows to heed ‘lessons’ from Qld election
Will there be more cost-of-living relief? Five takeaways from Treasurer Jim Chalmers’ media blitz
Treasurer Jim Chalmers has left open the door to rolling out fresh cost-of-living relief over Christmas as the government faces anger from voters about inflation.
Chalmers was on a media blitz on Monday defending the government’s agenda after Labor suffered a resounding election defeat in his home state of Queensland over the weekend.
Asked about cost of living being a factor for voters, Chalmers said the government is “working through” options for additional relief in December’s mid-year budget update (MYEFO).
Here are five takeaways from Chalmers’ comments on Monday and what it means for Australians.
Cost of living
Chalmers faced multiple questions about the cost-of-living crisis at his press conference on Monday, with housing and energy bills still front of mind for voters heading into the federal election next year.
The government has already swung open federal coffers to provide billions in energy bill subsidies and other supports to reduce medicine and childcare bills.
But Queensland Premier Steven Miles also unveiled a series of cost-of-living handouts and was still punished by voters, sparking questions about whether voters will also blame Labor federally.
Chalmers said the federal government will draw “lessons” from the Queensland election, particularly around how voters are feeling about inflation and the economy.
You might like
“We won’t be ignoring the lessons of Saturday,” Chalmers said.
“We understand people are doing it tough. We understand that people often express that at the ballot box … and so we will go through the lessons of Saturday with that in mind.”
More relief? MYEFO and budget
Attention is now turning to whether Chalmers will do more to ease the cost of living before the federal election, with MYEFO and then another full federal budget to come.
That will be key for Australians who are looking for government to ease budget pressures heading into the holiday season.
The Treasurer was asked repeatedly about whether further handouts for voters will be unveiled, and while leaving the door open, he also said it wouldn’t be a “public spending free-for-all”,
“I want to reassure people that we will continue to put responsible economic management as the defining feature of [this government],” he said.
Inflation data
Economists have repeatedly warned the government risks making inflation more stubborn with broad cost-of-living help that isn’t means tested, such as the most recent power bill subsidies.
And so Chalmers is hedging his bets because the government hopes the RBA will be positioned to cut interest rates before the election, something that could boost Labor’s political fortunes.
Whether that happens remains an open question, but it is nevertheless clear that price growth is easing substantially.
Stay informed, daily
Inflation data this week is tipped to show the headline rate of price rises easing to the top of the RBA’s target band.
“The strong expectation from economists is that progress [easing inflation] will have continued in these numbers,” Chalmers said.
What Chalmers didn’t say, however, was that the Reserve Bank will actually be more interested in the underlying (trimmed mean) inflation measure, which is expected to remain above the target.
The reason for that is that the billions of dollars in public power bill subsidies that Chalmers has repeatedly claimed will lower inflation are being ignored by the RBA as a temporary support.
So Australians struggling with high mortgage bills shouldn’t expect relief before Christmas, with most economists still forecasting next year for the first rate cuts.
Global pressures
But a considerable risk to Australia’s outlook before the next election is a gloomier global environment amid escalating war in the Middle East and an economic crunch in China.
Sluggish demand from Australia’s largest trading partner is a threat to local export businesses, particularly mining companies, and the federal budget, which benefits from all the tax revenue.
Chalmers said Treasury forecasts predict the “weakest” period of Chinese growth since its economy opened up to global trade in the
1970s.
“There’s still a lot of concern about the Chinese economy,” Chalmers said, referencing a stimulus scheme unveiled by Beijing during his recent trip there.
“We’re very welcoming of the steps the administration in Beijing has announced. There’s more detail to come on the quantum of that.”
Qantas
Chalmers was also asked on Monday about whether he has taken any freebies such as flight upgrades from national carrier Qantas amid the political fallout from Prime Minister Anthony Albanese and other federal politicians doing so.
“I’m not sure if I have received one [an upgrade on personal travel],” Chalmers said.
“I don’t think so, but I’d have to have a look.”
Chalmers was then asked about whether the current rules about gift disclosures should be strengthened to ensure the value of gifts is disclosed.
“It’s appropriate that the arrangements are robust,” he said.
“That includes some kind of declaration.”
– TND
