EDITORIAL: Desperate Jim Chalmers prolongs household pain

Jim Chalmers is desperate to avoid being the Treasurer who sent Australia into a recession.

Things were so much easier when he got to be the surplus guy, the first Treasurer to deliver a Budget in the black since Peter Costello.

So deep is his aversion to being the bloke holding the reins during a downturn that the impact on households is very much a secondary consideration.

Dr Chalmers’ list of priorities reads: 1. Avoid recession. 2. Daylight. 3. Do something about inflation, if we manage to find time.

So we have an economy that is crawling along, at 0.2 per cent growth in the June quarter. That sliver of a percentage point is enough, in Dr Chalmers’ eyes. Technically, not a recession. Job done.

But what does that mean for you?

About 0.2 per cent of stuff all.

We may not be in a technical recession, but we are very much in a household recession, and it’s been the longest and deepest in 40 years.

It won’t come as a surprise to you to hear Australians are buying less stuff, because we have less disposable income.

That which we do buy, the non-discretionary purchases such as food, is costing us more and more. And even then, we’re cutting back. The dollar value of food retail turnover is climbing, even as the volume of food sold shrinks.

It’s an indisputable fact that irresponsible Government spending is prolonging this pain.

State and Federal governments don’t want to be the bad guys. They want to be seen as helping, even when they know that “help” is actually causing greater long-term pain.

So they shovel money into the economy and call it “cost-of-living relief”, despite knowing it is exactly the opposite.

Dr Chalmers and others are making decisions to avoid political pain, the direct consequence of which is to extend household pain.

And then they have the gall to tell you they’re the ones with your best interests at heart.

It’s the bullies at the Reserve Bank and their ruthless interest rate rises who are to blame for the fact you’re left standing in the dairy aisle on a Saturday morning, pondering whether you can afford to buy that block of tasty cheese.

Interest rates are having a profound impact on households. But as Reserve Bank governor Michele Bullock keeps telling us, allowing inflation to run rampant would be far, far worse.

Inflation squeezes everyone, and worst of all those on low incomes who can least afford it. It erodes the value of their savings and reduces their buying power.

And the one and only tool the RBA has at its disposal to get inflation under control is hiking the cash rate. It’s working. But it would work faster if governments weren’t actively working to undermine it.

Dr Chalmers has gone on the attack, accusing anyone who dares question the wisdom of his economic strategy of barracking for a recession for their own political purposes.

The hypocrisy is astounding. He needs to stop blaming everyone else, and join in the fight.