Already a subscriber?Strong and rising spending by both federal and state governments is fuelling demand and helping keep the economy at an unsustainable level even as the RBA tries to engineer a slowdown.
But Dr Chalmers has so far rejected those calls, saying his budget next week will avoid a “scorched earth” approach, but still put fighting inflation as the main near-term priority.Dr Chalmers on Monday said with economic growth limping along it was no time for “slash and burn” austerity.on Tuesday with net debt growing from $156 billion next year to $188 billion by 2028, but forecast an operating surplus of $1.5 billion by 2025-26.
“Inflation will typically rise above its target, as wage pressures increase in the face of very low unemployment, high vacancies and staff turnover, and as other input costs tend to rise when firms operate their stock of capital intensively and compete for scarce inputs.”