- Jim Chalmers confident that inflation will be controlled
- He admitted that it will not be a simple process
Jim Chalmers says he expects inflation to come under control, but admitted it will not be a straightforward process after the May figure hit 4 percent.
On Sunday, the Treasurer was touting the Stage 3 tax cuts and other federal government measures that come into effect starting this Monday.
But fears that the policy rate (currently at 4.35 percent) could rise for the 14th time this cycle overshadowed the message.
Dr Chalmers acknowledged that many households were “under pressure” due to higher cost of living and interest rate pressures, but said he hoped the government’s policies would be “helpful in the fight against inflation”.
“We are confident, but not complacent, that we can overcome this inflationary challenge,” said Dr Chalmers.
“We can provide this cost of living relief and we can achieve a better state of the budget without destroying the economy.”
Speculation about another interest rate hike accelerated on Wednesday after higher-than-expected inflation data, which hit 4 percent in the 12 months to May, prompted investors to increase bets on another increase as soon as the next RBA meeting, scheduled for August 6, is held.
“I think it’s very clear that the interest rate increases, which are already in the system, are already putting a lot of pressure on people,” Dr. Chalmers said.
Federal Treasurer Jim Chalmers says he expects inflation to remain under control, despite the May figure hitting 4 per cent and raising fears the Reserve Bank could be forced to raise the cash rate again.
“We’ve seen it in many economic indicators. I understand it and that’s another reason why this help tomorrow is so important.”
But he warned that Australians should not expect inflation reduction to be easy.
‘This inflation in our economy will continue to decrease. It doesn’t always decrease in a perfectly straight line,” Dr. Chalmers said.
We’ve seen that around the world too and we’re seeing it here in Australia too.
‘But our role is to try to make people’s lives a little easier.
“That’s why tax cuts, energy bill relief, wage increases, cheaper drugs, paid parental leave, that’s what it’s all designed for.”
On Sunday, the Treasurer was promoting the stage 3 tax cuts and other federal government measures that will come into effect from this Monday (file image)