Treasurer Jim Chalmers has defended the government’s approach to tackling inflation in a tense interview, as the Reserve Bank opted to hold rates steady again.
Speaking to ABC’s RN Breakfast, Chalmers was asked if Bullock’s dousing of rumours of an interest rate cut before the end of the year was a “blow”.
Treasurer Jim Chalmers.Credit: AAPIMAGE
“I try not to second guess the language that the governor uses or the forward guidance or the signalling that she engages in. It’s up to them,” Chalmers said.
“I think the main conclusion to draw from yesterday’s decision, first of all, is a welcome outcome.”
“It’s a decision which recognises we have made progress on underlying inflation, there is certainty and the economic conditions are soft and that’s why we saw what we saw yesterday.”
The treasurer was then asked if the RBA’s increased underlying inflation forecast was evidence that the government’s energy rebates had “limited success” in artificially pushing down inflation.
Chalmers rejected the premise of the question.
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“First of all, there’s nothing artificial about helping people with their cost of living pressures. That’s the first point. What the ABS has shown in recent inflation data, is that the way that we’re delivering our cost of living help is pushing downward pressure on inflation. And that is our objective,” Chalmers said
“Now, the way that the Reserve Bank forecasts and accounts for our cost of living help is the same way that the Treasury accounts for that. And the point that’s been lost since yesterday’s decision and the new forecast from the Reserve Bank, is that the Reserve Bank’s near-term inflation forecasts are better, not worse. And that’s because of the design of our cost of living policies.”
Chalmers concluded by noting Bullock had also credited the budget surplus with helping combat inflation.
