Home Australia Jim Chalmers presented a desperate budget that all economists feared could spell disaster. Now, with Australia teetering on the brink of a recession, here’s how it’s trying to turn it around… writes PETER VAN ONSELEN

Jim Chalmers presented a desperate budget that all economists feared could spell disaster. Now, with Australia teetering on the brink of a recession, here’s how it’s trying to turn it around… writes PETER VAN ONSELEN

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There is a lot to think about. Treasurer Jim Chalmers (pictured) says his budget did the right thing given slowing economic growth

What do you do when you’ve approved a budget and almost every respected economist criticizes it?

Dismiss their musings as simple “partisan attacks” and pat yourself on the back for your excellent performance because no one else will. That has been the post-budget tactic adopted by Jim Chalmers in recent weeks.

Denial is not just a river in Egypt.

Chalmers made his point several times in question time, where ministers can choose for themselves the questions to be asked by their own MPs. It is the ultimate example of parliamentary performance art.

The Treasurer has even managed to contort himself into praising himself for releasing surprisingly anemic economic growth figures this week. The economy has only grown 1.1 percent annually despite record immigration.

That makes them the worst annual growth figures (outside of the pandemic) in more than 30 years.

Without immigration, Australia would already be in a deep recession and high inflation – a catastrophic combination.

There is a lot to think about. Treasurer Jim Chalmers (pictured) says his budget did the right thing given slowing economic growth

However, in Chalmers’ opinion, the poor results are evidence of its excellent financial management. Proof positive that his expansive budget was the right decision, because without the assistance provided, the bad numbers would be even worse.

The story line is especially amusing when you consider that immediately after the budget, when economists expressed concern that too much was being spent, making the budget expansionary, the Treasurer denied it.

Now that the data shows the economy is collapsing, he relies on the same argument he dismissed as false to defend himself.

So Chalmers now thinks he deserves applause for presenting an inflationary budget during a cost of living crisis. Doesn’t he understand that any cost of living crisis will only continue to get worse if inflation persists?

There is a risk of lengthening the timeline of pain felt by ordinary voters.

Perhaps ignorance – deliberate or not – is the reason why the Treasurer is now taking aim at the ranks of economists who criticize his decision-making. Dismissing his concerns because they are supposedly just “partisan critics.” I have always found it amusing that politicians of all political persuasions use this line of attack.

Pressures on the cost of living do not disappear if inflation remains high. Most economists think it is not falling fast enough

Pressures on the cost of living do not disappear if inflation remains high. Most economists think it is not falling fast enough

Essentially, if you disagree with them, some politicians will try to dismiss you as a partisan opponent. Do the same politicians who join a political party, and in turn choose to build a career by blindly following that party’s ideology every step of the way, blatantly attack others for displaying partisan bias?

It’s ridiculous to call the teapot something black.

Being Treasurer is a serious job, but read this word-for-word excerpt from one of Jim Chalmers’ press releases:

“Our balanced approach to fighting inflation without wrecking the economy is right” and “our political opponents and partisan critics are dead wrong.”

If that’s not college political rhetoric, I don’t know what is.

The serious problem for the country is that we have persistently high inflation with little prospect of a cut in official interest rates in the short term. However, this is happening while the economy falters to the point that we are on the brink of an official recession.

The budget went down like a lead balloon, despite treasurer Jim Chalmers (pictured) praising himself.

The budget went down like a lead balloon, despite treasurer Jim Chalmers (pictured) praising himself.

Unfortunately, there is no painless way out of this conundrum.

The government bet that inflation and interest rates would fall later this year despite the budget pushing in the opposite direction. He took that risk because he wanted to put more money in people’s pockets before the election so he could reap the political rewards for doing so.

However, it now appears that the tactic could backfire.

None of these decisions have been made for economic reasons. Politics has dictated decision-making every step of the way.

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