Treasurer Jim Chalmers wages ‘war’ on RBA declaring rate rises are ‘smashing the economy’ ahead of GDP figures
Shadow finance minister Jane Hume has hit out at Treasurer Jim Chalmers after he declared rate rises were “smashing the economy” in a surprise attack on the Reserve Bank.
Dr Chalmers made the comment as he attempts to set expectations ahead of the release of the latest GDP figures on Wednesday, which are expected to show anaemic growth of just 0.2 per cent growth in the June quarter.
“With all this global uncertainty on top of the impact of rate rises which are smashing the economy it would be no surprise at all if the national accounts on Wednesday show growth is soft and subdued,” Dr Chalmers said.
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By continuing you agree to our Terms and Privacy Policy.“We anticipated a soft economy at Budget time and that’s what most economists now expect to see in these new numbers for the June quarter.
“We are striking all the right balances between a primary focus on inflation and understanding the pressures on people in an economy already being hammered by higher interest rates and global volatility.”
The comments represent a shift in rhetoric from Dr Chalmers, who has avoided criticising the independent central bank as it heaped pain on mortgage holders with rolling rate rises throughout 2022 and 2023.
Speaking on Sky News on Monday morning, Senator Hume argued the Federal Government’s failure to curb high inflation had left the Reserve Bank with little choice.
“The reason why it’s no surprise is because these wars have been going on for two years now,” Senator Hume told Sky News on Monday.
“You’ll recall that when Labor first came to government, Jim Chalmers blamed overseas factors for high inflation, then he blamed Philip Lowe, and now he’s blaming his handpicked replacement for Philip Lowe, Michele Bullock.
“The RBA can only respond to the inflation which it finds itself in, and the problem is the Government isn’t doing its fair share of the heavy lifting,” she said.
“It is turning responsibility entirely over to the RBA.”
Senator Hume said household disposable income had fallen dramatically in the past two years through a combination of inflation, interest rates and taxes.
“Inflation is the root cause of the problem. If you’re feeling poorer, you are poorer,” she said.
