Australian Treasurer Jim Chalmers has dismissed opposition accusations that Labor's spending is driving inflation, ahead of an expected interest rate rise by the Reserve Bank. He defended the May budget as helping to tackle inflation and strengthen the economy against shocks from Donald Trump's policies.
Chalmers labelled criticism from the Liberal and National parties as hypocritical, noting that inflation fell substantially last year when the bank cut rates three times. He highlighted $20bn in savings from the December budget update, calling the government's fiscal responsibility 'unrecognisable to our predecessors'.
The Treasurer revealed a new intergenerational report (IGR) due mid-year will include a greater focus on geopolitics, describing the 2020s as a 'defining but dangerous decade'. He pushed back against claims of insufficient boldness, saying: 'I'm impatient for reform, but I'm not impetuous about it.'
On tax reform, Chalmers said the government is 'open to ideas' but any decisions beyond the current agenda—including an independent review of thin capitalisation rules—would be made by cabinet. He emphasised priorities of intergenerational fairness, attracting investment, and simplifying the system.
Inflation rose to 3.8% in December, strengthening expectations of a rate rise. Chalmers said the government remains focused on long-term challenges like productivity and intergenerational inequity, particularly in housing. He praised a speech by Canada's PM Mark Carney but said Australia will navigate its own path between China and the US.
