Ahead of next month’s Mid-Year Economic and Fiscal Outlook (MYEFO), Treasurer Jim Chalmers highlighted that Australia’s economy has outperformed many other countries in the face of increased volatility in recent years, marked by higher inflation. low, reduced interest rates and low unemployment.
The Treasurer also praised the government’s efforts on the cost of living front, emphasizing that his administration has provided meaningful and responsible relief while repairing the budget, not at the expense of doing so.
“Inflation has fallen by more than half. Core inflation is also falling. Real wages are rising again. The economy is still expanding. A million new jobs have been created, the majority full-time,” he said.
“Participation is near record levels; the wage gap between men and women at a record level. We turned two huge deficits into two substantial surpluses – the first in almost two decades.
“We have achieved nearly $80 billion in savings, set aside the majority of revenue increases and saved tens of billions of dollars in interest on debt in the process.”
Chalmers added that while the government is pleased with the “very substantial progress in the overall numbers”, it understands that this does not necessarily translate into how people are doing on a day-to-day basis.
“We are not pretending that our mission is accomplished – it is not. We are realistic about this, but optimistic too,” he said.
Highlighting the global challenge of inflation, the Treasurer argued Australia has outperformed many comparable economies.
“Our inflation peaked lower and later than most developed economies. This means prices have risen less here than in countries like the US, UK and New Zealand. And our service inflation is also lower than in the UK and US,” Chalmers said.
“Interest rates have also climbed higher than ours in almost every comparable country, causing even more severe unemployment, slower job creation, weaker growth, or a combination of all three.
“And even though rates are falling slightly in countries like the US, UK and New Zealand, they are still higher than ours. »
He also revealed that Treasury MYEFO growth forecasts will show that slow growth in the Australian economy is expected to continue in the short term, however, “any growth in these circumstances is welcome given that many other countries have regressed” .
“The Treasury expects a gradual recovery in the economy driven by rising real incomes thanks to our cost of living relief, employment growth and progress in reducing inflation” , Chalmers said.
“We have already seen a modest recovery in consumer confidence, with the ANZ Roy Morgan Index at its highest level in two years and showing that households are now feeling more confident about the next 12 months.”
According to the treasurer, the government is “confident, but not complacent” that the economy has overcome the biggest problem of inflation, adding that there is “still much to do and much to lose if we do not let’s not do more.”
“The Albanian Labor Government is proud of the record I have presented today, but it is even more proud of the Australian people to whom all the credit really belongs,” he said.
Taylor is not so optimistic
While the treasurer offered an optimistic assessment of Australia’s economy, his opposition counterpart claimed Labor had made the situation worse.
In his response, shadow treasurer Angus Taylor said the government’s three “expansionary budgets” had led to inflation remaining higher for longer.
“The reality is that prices continue to rise and Australians are now experiencing almost three years of above-range inflation,” Taylor said.
“Price levels are what Australians feel and that’s why inflation needed to be tackled aggressively and early. Australians are paying the price at the checkout.
“Cost pressures are eating into the margins of Australia’s small businesses. There is nothing sweet about the pain Australians feel. If this goes as planned, Australians should be deeply concerned.
Indeed, Taylor argued that Australians have been left poorer thanks to the most inept government since Whitlam, noting that Australia has experienced the largest decline in real disposable income in the advanced world, 8.7 percent under the Labor regime.
“Labor has had three budgets and almost three years to achieve this. At every obstacle, they stumbled. Making the wrong calls at the moment. That’s like adding $315 billion in spending, thereby increasing inflation. That’s $30,000 in additional spending per household,” he said.
“Government spending is now at its highest level on record, outside of the pandemic, according to last year’s final budget result, and the structural deficit is only going in one direction. The OECD and the IMF have consistently called for stronger fiscal protection measures. The RBA said additional government spending made its task more difficult.
MYEFO, the shadow treasurer said, is a chance for Chalmers to “finally get it right”, calling for a budget update that helps improve living standards and bring inflation under control, while restoring budgetary discipline.
“Right now we have an opportunity. It’s about choosing a different future – one where fairness, opportunity, entrepreneurship and prosperity are within reach of all Australians. A future where we get Australia back on track,” Taylor said.
“To achieve this, we need a program focused on laying the right foundations. That’s why a Dutton-led coalition will get Australia back on track by restoring a core economic program. This is how we will restore our standard of living and ensure our future prosperity.”
