The Albanese government will continue to wrestle with spiralling inflation and living costs in the upcoming May budget amid the RBA’s hawkish stance on inflation.
“Inflation is the government’s main economic focus – it was in our first budget in October and it will be in [our] second in May,” Treasurer Jim Chalmers said in a speech at the National Press Club in Canberra in early February.
“The major priorities will be providing cost of living relief without adding to inflation, growing the economy in a more inclusive and more sustainable way; and repairing our budget so we can fund what we value and cherish,” he said.
The Treasurer will be speaking at a breakfast hosted by Conexus Financial, in partnership with BT, on Monday February 20 to discuss the roadmap for the Australian economy and the government’s plans to manage inflation.
Other priorities include a new Tax Expenditure Statement, an Employment White Paper, the Housing Accord and a review of the RBA. The first to be conducted in 40 years, the review of the central bank will examine its structure, culture, accountability, board member appointment and inflation target.
The RBA delivered its ninth consecutive interest rate rise in February to 3.35 per cent in an effort to bring down inflation which remains at a 32-year high. It revised up its forecasts for core inflation and wages growth and flagged further interest rates would be needed to dampen wage increases.
Wage growth – a plank of the government’s economic policy – has been criticised as a risk factor of the inflationary environment.
Chalmers’ recent essay for The Monthly magazine on the need for Australia to develop values-based capitalism has been debated hotly in the local media. He argued markets should devise new ways to arrange and allocate capital in order to facilitate flows into priority areas to progress on the country’s collective problems and purpose.
“[We can build a more inclusive and resilient economy] by reimagining and redesigning markets – seeking value and impact, strengthening safeguards and guardrails in areas of unchecked risk,” he said in the article.