Everyone else is wrong about the Australian economy except for Treasurer Jim Chalmers – just ask him! The RBA, top economists and even his state Labor colleagues are all warning that the Albanese government’s spendathon socialist mismanagement is crippling the economy and driving up interest rates.
Nuh-uh! say Zippy and Albo. It’s all other people’s fault. Mostly those big meany-mean meanies fighting wars on the other side of the world.
In 2023 Chalmers said, “we have an inflation problem because of a war in Ukraine”. In May 2024 he said on ABC’s Q&A program that “Russian aggression” was “one of the reasons we had this inflation spike”. The war in Ukraine has intensified greatly since then, but now “the war in the Middle East”, which has abated somewhat by comparison, has been the chief culprit this and last year […]
Thankfully, even a cursory glance at Australia’s inflation performance over the past few years shows we had an inflation problem before these wars began, which has only become worse and more obviously self-inflicted ever since, relative to comparable nations.
Even NSW Labor Premier Chris Minns can see through the lie, calling on the government to rein in spending and lower inflation. Minns responded to the denialism of his Canberra colleagues by stating that every government had a “responsibility to do what it can to take demand out of the economy”. More pointedly, Minns contrasted his government’s record with that of Albanese’s and Chalmers’s.
“We have heard the advice from the RBA over the last two years that we need to be careful with public funds,” Mr Minns said on Wednesday.
“And as a result over the last four years, we’ve had the lowest increase in spending growth of any jurisdiction in the country.”
By contrast, Canberra is spending other people’s money hand over fist, making it the sole driver of inflation – inflation that the RBA is responding to in the only way it can, by raising interest rates. Every interest rate cuts into family budgets. It also drives the tens of thousands of homeowners who used the government’s low-deposit scheme to buy closer to negative equity. Couple all that with collapsing productivity and there’s only one way for the economy to go.
Everyone else can see it, except for the arts graduate running the show.
The Reserve Bank, not fooled by the treasurer’s excuses for an instant, has pushed the cash rate to a 15-year peak of 4.6 per cent. They are not acting out of a desire to punish the workers, but because underlying inflation remains at a level that would make a third-world finance minister blush – and they know whose fault it really is.
“I want to make that clear. This isn’t all about the Middle East conflict,” RBA governor Michele Bullock said at her press conference on Tuesday, singling out the nation’s woeful productivity performance.
It is a refreshing, if overdue, dose of reality. While Chalmers clings to his geopolitical excuses like a schoolboy blaming someone else for the sudden stench, the figures show who really dealt it. Our inflation is not a mere byproduct of foreign turbulence: it’s a homegrown disaster. Our colleagues in the US, UK and Canada have long since managed to drag their inflation metrics down to the twos. We, under the stewardship of our brilliant treasurer, remain shackled to the heights.
The only war that’s pushed up Australia’s underlying inflation rate is the government’s war on the private sector. Government payments as a share of the economy are almost 27 per cent of GDP, implying that the federal government alone spends more than one in every four dollars in the economy. That’s the highest share outside Covid since the late 1980s.
How can Zippy hold up a $64bn headline deficit and declare it a triumph of fiscal rigour? The same way Albo can plunge off a stage and claim that it never happened.
It’s the classic socialist delusion: if you simply ignore the off-balance-sheet spending on the NBN, housing and the rest of the green-industrial-complex, the budget looks positively sparkling. To the rest of us, however, it stinks like a glass of stale piss.
“If they had worked around some sort of tax-to-GDP rule, like other governments had, and a balanced budget restriction they’d be well and truly in surplus, that’s for sure,” Macroeconomics Advisory’s Stephen Anthony said.
Instead of anything even remotely resembling restraint, we get the carefree spending of other people’s money.
The same prime minister who denies he fell off a stage at a campaign event, or made crass jokes about women, despite the clear video evidence to the contrary, likewise insists that “fiscal responsibility” remains his guiding star. It is, as economist Professor Richard Holden rightly noted, utterly disingenuous. It insults the intelligence of every taxpayer forced to foot the bill for this socialist indulgence.
As the RBA warns that more hikes may be on the horizon, our treasurer continues to act the indignant schoolboy, blaming everyone from the Kremlin to Tehran for his own administrative incompetence.
