Federal Treasurer Jim Chalmers meets with Labor backbenchers to address cost of living relief, while facing pressure for more action in the mid-year budget update. OECD forecasts rate cuts for next year.
Backbenchers Call for Cost of Living Discussion
Labor backbenchers are urging for a meeting with Treasurer Jim Chalmers to address the pressing issue of cost of living, seeking additional relief measures to help Australian communities cope with economic pressures.
Chalmers Assures Relief Measures and Budget Update
Treasurer Jim Chalmers reassures that the government has already implemented measures such as electricity bill relief, cost control in early childhood education, cheaper medicines, and income support boosts. He emphasized that the upcoming Mid-Year Economic Financial Outlook should be viewed as an update, not a ‘mini-budget’ for additional relief measures. Chalmers also mentioned that it is not uncommon for him to hold discussions with parliamentary colleagues regarding economic policies.
Inflation Moderation Welcomed, Opposition’s View
Mr. Chalmers welcomed the news of inflation moderating to 4.9 percent over the past 12 months, expressing caution over the monthly figure. However, Shadow Treasurer Angus Taylor criticized the government, stating Australia has the stickiest inflation among advanced countries, resulting in a drop in household disposable income.
OECD’s Forecast and Rate Cuts
The OECD’s latest forecast for the Australian economy indicates that inflation is expected to moderate towards the Reserve Bank’s target rate of 2 to 3 percent. It also forecasts a 75 basis points rate cut from mid-next year to the end of 2025.
Pressure to Reconsider Tax Cuts
Economists warned about the inflationary impact of the legislated tax cuts scheduled for next year, prompting discussions about a potential change in course on the tax cuts. Despite repeated avoidance, the government faces pressure to reconsider the tax cuts, while Mr. Chalmers affirmed that the government’s position on stage 3 tax cuts remains unchanged, emphasizing the consideration of low and middle-income individuals.
Budget Surplus Forecast and Bottom Line Improvement
Mr. Chalmers stated that the government is not anticipating a second surplus in the upcoming budget update, but highlights a substantial improvement to the government’s bottom line.