The treasurer said the UK, Canada, and NZ had higher unemployment, and interest rates than Australia.
On day one of Parliament Treasurer Jim Chalmers was challenged by the opposition for saying “global factors” were responsible for the nation’s sluggish growth numbers.
Liberal-National MPs said countries like the United Kingdom, Canada, and New Zealand had begun to see slowing inflation, but Australia was still struggling with the problem.
In response, Chalmers said those countries had higher unemployment, and higher interest rates than Australia, while also saying their inflation had peaked higher and earlier.
Last week, the Australian Bureau of Statistics revealed the lowest GDP growth numbers since the 1991-92 financial year, as households cut back on spending and individual productivity dropped.
Government spending, however, increased with most of the country’s job growth coming from programs like the National Disability Insurance Scheme.
Shadow Treasurer Angus Taylor accused the government of causing living standards to decline.
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“Under this government, living standards have fallen by nearly one percent, the household savings rate is down 10 percentage points, personal income tax payments are over 25 percent higher, and a homeowner with a typical mortgage is over $35,000 worse off.
“Why won’t the Prime Minister admit his government is making more Australian families work harder and longer, but still go backwards?”
Albanese defended his government, pointing out that inflation peaked under the previous Liberal-National Coalition government.
“When we came to office, inflation had a six in front of it. Now it’s got a three in front. Six or three—which is better? We prefer three,” he said.
“We don’t just let it rip with $315 billion of cuts, which is what those opposite are suggesting,” Albanese added, pushing the line that the opposition would dramatically cut spending if in power.
Treasurer Chalmers elaborated on the government’s position.
“The basic learning from the GDP numbers is that there are weaknesses in the household part of the national accounts, but private investment was offset by exports and public final demand,” he explained.
Chalmers attributed the economic slowdown to three main factors: “First, global economic uncertainty. Second, persistent price pressures in our economy. Third, the impact of higher interest rates on our economy,” he said.
He then accused the opposition of politicising the issue, saying, “They want a recession for political reasons, and they’re very disappointed when they didn’t get one.”
Concerns Raised Over Tax Office’s Debt Enforcement
Amid the broader economic debate, concerns were raised over the Australian Taxation Office’s (ATO) aggressive debt enforcement practices, particularly its impact on small and medium-sized family-owned businesses already struggling.
A parliamentarian asked the government to issue guidance to ensure the ATO’s debt collection policies reflect the pressures facing small businesses.
Chalmers responded by acknowledging the issue.
“I know that a lot of small businesses, like a lot of Australians, are doing it tough,” Chalmers said.
He stressed the need for a “level playing field” between businesses that stay up-to-date with tax obligations and those struggling to meet their commitments.
He encouraged businesses to engage early with the ATO to make necessary arrangements to continue their role in the economy.
“We know it’s a tough time for them, and we want the ATO to recognise that as well,” he added.
Government Spending and Inflation Debate
Shadow Treasurer Taylor probed the issue of government spending contributing to inflation.
Chalmers, however, dismissed these claims, emphasising that government spending was not the primary cause of inflation.
“So if they [the opposition] don’t want to take my word for it, take the word of the Governor of the Reserve Bank,” Chalmers said, referring her recent comments.
He also highlighted Labor’s success in turning large Liberal deficits into surpluses, which he claimed was helping combat inflation.
“We’ve found almost $80 billion in savings, and those opposite found none in their last budget,” he said.
