Jim Chalmers has warned of “very substantial and intensifying” economic pressures on the horizon but insists he’s not planning for a recession, as he prepares to find new ways to cut the budget ahead of its mid-year update. The treasurer on Sunday called on critics of government spending to name the services that should be cut, as he points the finger at the private sector for driving up inflation in Australia amid the protracted conflict in the Middle East. Chalmers said the US-led eight-month war against Iran, which has severely curtailed global oil supplies from the region, has been “disastrous” for cost-of-living pressures.
He also said there was “very substantial and intensifying pressure” on the federal budget. Chalmers said the government was working on finding further savings to the budget in the mid-year economic and fiscal outlook, due in December, after cuts of $44.9bn over four years were identified in the May budget. The treasurer said cuts to government spending weren’t the only factor driving up inflation in the economy, and cutting larger sums would impact essential services.
Beyond the war’s impact on driving up prices in Australia, Chalmers said the private sector was partly to blame. There’s a whole bunch of other things going on.” But the shadow treasurer, Tim Wilson, said Chalmers should be sacked, claiming his decisions have increased inflation to generate tax windfalls. The assistant science and digital technology minister, Andrew Charlton, said the consequences of having a recession, which would ease inflation, would be devastating.
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