Government Unlikely to Deliver More Living Cost Relief: Treasurer

Australian Treasurer Jim Chalmers hands down the 2023 Budget in Canberra, Australia, on May 9, 2023. Martin Ollman/Getty Images

Treasurer Jim Chalmers has hinted that the federal government is unlikely to provide more living cost relief to Australians in the coming period.

This comes as the treasurer is holding a meeting with his Labor colleagues to discuss how the government should tackle the current cost of living crisis.

In an interview with ABC Radio, Mr. Chalmers said the government had already rolled out tens of billions of dollars in living cost relief since the release of the May federal budget to take pressure off households without adding to inflation.

The treasurer noted that those living cost measures were the result of the government’s engagement with communities.

“Electricity bill relief, cheaper early childhood education, increased rent assistance, cheaper medicines, boosting income support payments, and all of these things that we are doing, which are taking some of the edge off these cost-of-living pressures, are a product of the way that people are deeply engaged with their communities and understanding their needs and concerns,” he said.

However, Mr. Chalmers stated that the government needed to calibrate the budget settings in accordance with the current economic conditions and budget constraints.

“There is still an element of uncertainty about how the next 12 or 18 months will play out,” he said.

“There’s a lot of uncertainty in China, around the world, we’ve got two conflicts–one in the Middle East one in Europe, we’ve got uncertainty at home when it comes to the way that these interest rate rises are biting in our economy, so there’s still a lot of uncertainty.”

At the same time, Mr. Chalmers pointed out that it was unlikely that the government would deliver another budget surplus in the next mid-year budget update in 2024.

People should expect to see a substantial improvement in the bottom line, but the government was not forecasting a second surplus, he added.

Under such complicated conditions, the treasurer did not promise any new cost of living relief for Australians.

“The assurance I give … is that we will always carefully calibrate our economic policy and our budget strategy to make sure that we can deliver for people in a way that recognises that inflation is still the defining challenge in our economy,” he said.

Treasurer Says Cost of Living Measures Help Curb Inflation

While not promising any new relief, Mr. Chalmers believed that the cost of living measures introduced by the government were effective in bringing down inflation.

According to data from the Australian Bureau of Statistics (ABS), the monthly consumer price index rose 4.9 percent in the 12 months to October, down from 5.6 percent in the year up to September.

However, the core inflation rate, which represents the long-run trend in the price level, only dropped from 5.4 percent in September to 5.3 percent in October.

“Our economic plan is carefully calibrated to help ease inflation in our economy and ease pressure on Australians, and today’s figures show our policies are taking some of the edges off the cost of living and putting downward pressure on inflation,” Mr. Chalmers said in a statement.

Customers line up to order seafood at Sydney Fish Market in Sydney, Australia, on Dec. 24, 2022. Jenny Evans/Getty Images

The treasurer stated that without the government’s energy rebates, Australians would have seen an 18.8 percent increase in electricity prices since June 2023 instead of the current 8.4 percent rise.

“Without the largest increase to Commonwealth Rent Assistance in 30 years, the ABS said rent would have gone up 8.3 percent in the year to October, not 6.6 percent,” he added.

Opposition’s Response

However, Shadow Treasurer Angus Taylor warned Australians not to believe in the government’s “spin.”

“Inflation is still too high, and you are paying for this distracted government,” he said in a social media post.

Earlier, citing the latest wage price index data, Mr. Taylor said Australians had seen a drop in living standards due to inflation.

“What we’re continuing to see for Australians is a reduction in their real wages,” he told Sky News Australia.

“We’ve learned just in the last week that Australians’ standards of living have collapsed—5.1 percent (drop) in disposable income the last year.

“That’s the worst of any major advanced country in the world, and this is a disastrous situation for Australian households.”