Treasurer Jim Chalmers has hailed his Canadian counterpart as an “absolute legend” after she caused turmoil in the government when she resigned.
Without being asked, Dr. Chalmers praised Canada’s outgoing Finance Minister Chrystia Freeland, who resigned yesterday.
The move surprised the country and raised questions about how much longer unpopular Prime Minister Justin Trudeau can remain in office.
“The last thing I want to briefly mention is my friend Chrystia Freeland: Canada’s Finance Minister has resigned overnight,” Dr. Chalmers told reporters.
‘Chrystia is a great friend to me and Australia and I really just wanted to wish her the best.
“Over the last two and a half years, I have worked very closely with Chrystia Freeland; she is an absolute legend and has been a great supporter of Ukraine, a big part of our efforts on the global economic stage and we have an extremely strong relationship with all of our Canadian counterparts.’
Freeland, who is also a former deputy prime minister, has clashed with Trudeau over how to deal with US President-elect Donald Trump’s plans to impose 25 per cent tariffs on imports of goods from Canada and Mexico.
Treasurer Jim Chalmers has praised his Canadian counterpart as an “absolute legend” after she undermined her boss by resigning (pictured alongside Prime Minister Anthony Albanese)
“We need to take that threat very seriously,” he said in an open letter. ‘That means keeping our fiscal powder dry today, so we have the reserves we may need for a next tariff war. That means avoiding costly political tricks, which we cannot afford and which make Canadians doubt that we recognize the gravity of the moment.
Freeland disagreed with Trudeau’s push for a two-month sales tax holiday and $250 relief checks for “Canadian workers” to offset the effects of inflation.
Dr Chalmers’ praise for his Canadian counterpart comes amid tensions within the Australian Labor Party amid poor polls and high inflation.
Canada’s center-left Liberal Party is widely expected to lose next year’s election to the Conservative Party led by Pierre Poilievre.
In Australia, Peter Dutton’s opposition has been ahead of Labor in several opinion polls, although not by a large enough margin to secure a majority government in its own right.
But unlike Australia, Canada has inflation under control and borrowers there have had five rate cuts this year.
Australian borrowers have had no relief this year and economists and financial markets do not expect a cut until May 2025.
The Bank of Canada’s policy rate of 3.25 per cent, following another 50 basis point cut last week, is now substantially 110 basis points below the Bank of Canada’s 4.35 per cent cash rate. the Australian Reserve.
Canada’s inflation rate is also much lower than Australia’s.
Its headline inflation rate of 2 per cent is right in the middle of the Bank of Canada’s target of 1 to 3 per cent.
Australia’s equivalent headline inflation rate of 2.8 per cent is based on $300 electricity rebates and is on the higher side of the Reserve Bank of Australia’s 2 to 3 per cent target.
Unprompted, Dr. Chalmers praised Canada’s outgoing Finance Minister Chrystia Freeland (R), whose resignation threatens to unseat Prime Minister Justin Trudeau’s (L) nine-year leadership of her country.
Canada’s core inflation rate of 2.6 per cent is also significantly lower than Australia’s equivalent level of 3.5 per cent, which is still well above the RBA’s target.
The Treasury will publish its mid-year economic and fiscal outlook on Wednesday, with updated figures compared to the May budget.
Dr Chalmers warned on Monday of falling iron ore revenues, which could potentially mean bigger budget deficits.
“What you will see in Wednesday’s figures is that we are reducing mining exports by more than $100 billion,” he said.
‘As a result, corporate taxes will be reduced by $8.5 billion in the updated budget. In fact, this is the first corporate tax cut since 2020.’
The Treasurer became defensive on Wednesday when asked about the size of the upcoming deficits.
“You’ll see what the deficit is for the year we’re in now – I caution you not to make assumptions based on figures made up by other people,” Dr Chalmers said.
Australians are still bearish, with the Westpac-Melbourne Institute consumer confidence index for December producing an even weaker score of 92.8 points, well below the 100 level where optimists outnumber pessimists.
The survey of 1,200 adults showed that more respondents are pessimistic about how the economy will fare in the next 12 months, with elections scheduled for May.