Australian PM Says No to Living Cost Relief for Households

Australian Prime Minister Anthony Albanese holds a press conference at Parliament House in Canberra, Australia, on Oct. 18, 2022. Martin Ollman/Getty Images

Australian Prime Minister Anthony Albanese has rejected calls for government handouts to help struggling families cope with rising living cost pressures while stressing the need for further budget repair.

Speaking at the Economic and Social Outlook Conference in Melbourne on the night of Nov. 2, the prime minister said that untargeted spending would exacerbate the current economic problems.

“The easy option would have been for us to funnel these savings into a cash splash, a one-off giveaway to buy a headline,” he said.

“Instead of helping households, it would only add to the inflationary pressures that are eating away at family budgets and devaluing wages.”

He also said government relief payments could cause the Reserve Bank of Australia to lift interest rates higher than it otherwise would.

Echoing the sentiment, Treasurer Jim Chalmers said if the government spent the unexpected commodities windfall obtained in the past several months on living cost supports for households, inflation would go up by an extra 0.5 percentage points each year.

“In the long run, that would have delivered a deeply damaging outcome for Australians and for their economy,” he said at the Economic and Social Outlook Conference.

On another topic, while admitting that his government’s first federal budget was ambitious, Albanese said more work needed to be done to protect the country’s finances from global uncertainties.

“The new economic downturn we are facing is very different to the recession brought on by the pandemic. We can’t close our borders and wait it out. We have to reform our way through,” he said.

“Our budget was framed in recognition of this global uncertainty, as well as the intensifying fiscal challenges here at home.”

Shadow Treasurer’s Response

Meanwhile, in a speech at the National Press Club, Shadow Treasurer Angus Taylor criticised the Labor government for failing to tackle inflation and reduce living costs for Australian households.

“We have more businesses, strong terms of trade, record commodity prices, economic growth over three percent and record low unemployment,” he said.

“But despite this turnaround and economic strength, people aren’t feeling it in their everyday lives.”

Opposition Treasurer Angus Taylor delivers his budget reply speech at The National Press Club in Canberra, Australia, on Nov. 2, 2022. Martin Ollman/Getty Images

Regarding the federal budget, Taylor said it only told Australians that the government was aware of the difficult situation but did not provide any solutions.

“The budget fails to use fiscal policy to make any headway to reduce pressures on inflation, to address the source of the pressure,” he said.

The shadow treasurer also criticised the government for abandoning a cap on taxes as a percentage of economic growth and said that it would open the door to higher taxes.

“What we want to see is an environment where Australians have confidence that governments are not going to be either quietly or more explicitly raising taxes,” he said.

However, treasurer Chalmers has previously dismissed the idea the Labor government would be raising taxes, saying it was arbitrary.