By Joan Williamson for NCA News
00:58 June 30, 2024, Updated 00:58 June 30, 2024
- Jim Chalmers is confident that inflation will be tamed
- He admitted that it would not be easy.
Jim Chalmers said he expected inflation to be tamed, but admitted it would not be an easy process after inflation hit four per cent in May.
The Treasurer on Sunday had announced the third phase of tax cuts and other federal government measures that will take effect from Monday.
But concerns about the official interest rate – currently at 4.35 percent – could rise for the 14th time this cycle, casting a shadow over the message.
Dr Chalmers acknowledged that many households were struggling with resources due to the pressures of high living costs and interest rates, but said he expected government policies to be “helpful in combating inflation”.
“We are confident but not complacent about our ability to overcome this inflation challenge,” Chalmers said.
“We can provide this cost-of-living relief, and we can improve the budget without destroying the economy.”
Speculation about another rate hike intensified on Wednesday after hotter-than-expected inflation data, which hit 4 percent in the 12 months to May, prompted investors to increase their bets on another rate hike as soon as the Reserve Bank of Australia next meets on August 6.
“I think it’s really clear that the rise in interest rates, which has already become part of the system, is already putting a lot of pressure on people,” Dr Chalmers said.
We’ve seen that in a whole host of economic indicators. I understand that, which is another reason why this help tomorrow is so important.
But he warned that Australians should not expect easing inflation to be straightforward.
“Inflation in our economy will continue to decline. But it does not always decline in a perfectly straight line,” Dr Chalmers said.
“We’ve seen it all over the world as well. We’re seeing it here in Australia as well.
“But our role is to try to make life a little easier for people.
“That’s why tax cuts, energy bill relief, wage increases, cheap drugs, paid parental leave are all designed to do this.”