Federal Treasurer Jim Chalmers says the current economic conditions are “soft” amid concerns the country could be in recession.
Chalmers told reporters on Aug. 1 that the economy was under pressure.
“I certainly understand that people’s experience of the economy right now is an economy which is soft and people are under pressure,” he told reporters.
“You know, we’ve had these interest rate rises in the system already putting people under pressure and slowing the economy, and we’ve got other issues as well, a lot of global economic uncertainty. And those things combine to create an economy which is pretty soft.”
Within the June 2024 quarter, inflation increased by 1.0 percent, as it also had in the previous three months.
The main issues contributing to inflation include housing costs, food, and transport.
“We saw in the first three months of the year, the economy barely grew at all,” Chalmers said.
“We’ve seen household savings come off. We got numbers yesterday showing retail trade is soft. And none of those things would come as a surprise to Australians.”
Chalmers said Australians knew things were difficult and that Labor’s response was to hand out cost-of-living relief.
Touching on the issue of inflation on ABC Radio, Chalmers said it remained stubbornly high.
“The strategy that we have deployed here—which is to get the budget in much better nick and to roll out all of this cost-of-living help in the most responsible way that we can—has helped ensure that inflation, which had a six in front of it a couple of years ago, now has a three in front of it,” he said.
“We know that people are still under pressure. We know that this inflation is more persistent, stickier, more stubborn than any of us would like to see.”
In June, Opposition Leader Peter Dutton called on Chalmers to apologise to Australians for the nation’s financial woes.
“I think the treasurer should take responsibility and frankly apologise to the Australian people for presiding over two budgets now that have been inflationary, will keep interest rates higher for longer—and small businesses and families are going to suffer as a result of that,” he told reporters at the time.
But Chalmers has argued Labor’s budget strategy eased financial pressure, rather than add to it.
“Fiscal policy isn’t a primary determinant of prices in our economy but our budget’s helping to take some of the edge off inflation,” he said.
“We have delivered the first back‑to‑back surpluses in almost two decades, which the RBA governor has said are helping in the fight against inflation.”
Chalmers said the government was “on track” for a larger than forecast surplus.
The country’s surplus came off the back of high global commodity prices, which saw the price of Australia’s largest exports—iron ore and coal—increase.
