Jim Chalmers insists Iran war to blame for inflation surge, rejects looming budget ‘cash grab’ claims

The Treasurer concedes the latest inflation figures are “confronting,” and has used a string of media interviews to again pin the increase to soaring fuel and oil costs caused by the war in the Middle East.

On Wednesday Australia’s headline inflation figure accelerated to an annual rate of 4.6 per cent in March, up from 3.7 per cent, painting a grim outlook for the cost of living.

“First of all, we need to recognise that those inflation figures were confronting yesterday,” Dr Chalmers told the ABC on Thursday morning.

“They show that Australians are paying a hefty price for this war in the Middle East and we expect the costs and consequences of that conflict on the other side of the world to persist for a while longer yet. So we’re upfront with people about that.”

He said fuel costs were the primary driver behind the increase, pointing to global oil prices nearing $120 a barrel, and flagged the upcoming May 14 budget would focus on tackling the “inflation challenge” alongside broader economic resilience.

Jim Chalmers has also rejected suggestions any changes to capital gains tax or negative gearing in next month’s budget would raise $30 billion in Commonwealth savings.

Appearing on Seven’s Sunrise Dr Chalmers was asked if the changes were a “cash grab”, with the Treasurer responding nothing has been concluded yet.

“In principle, some of the changes that you’re talking about, some of the changes that people have been reading about, would raise nowhere near the sorts of dollars that you just referenced in your question,” he told host Natalie Barr.

Opposition Treasury spokesman Tim Wilson hit back at the Treasurer’s comments, claiming that Labor’s spending, not the war in the Middle East, was the main driver of Australia’s higher inflation.

Mr Wilson told the ABC that while the conflict in Iran contributed to the latest surge in the headline figure to 4.6 per cent in March, inflation had been rising for 12 months before the war started in late February.

“If you don’t provide inflation offsets, you give with one hand and you take later with the other, and that’s what the federal government is doing right now,” Mr Wilson said.

He also took aim at expected changes in the May budget to negative gearing and the capital gains tax discount, questioning whether the moves would create economic opportunity.

“What the Prime Minister isn’t doing is giving the next generation of Australians hope about building a better future for self-starters who want to get ahead and creating an economic environment of opportunity,” the Shadow Treasurer added.