Already a subscriber?Jim Chalmers insists he’s relaxed about the range of responses to ambitious policies such as those contained in his budget – even if he doesn’t believe all of them are right.
In contrast, Treasury forecasts that inflation will now be back to the RBA’s target range by the end of the year. The unspoken corollary is that this shouldExpect a frenzy of argument about this ahead of the RBA’s board meeting next month. Chalmers may yet regret accepting the recommendation that the RBA governor must give a press conference after every interest rate board meeting.
But Chalmers is also conscious of the increasingly common view the Albanese government’s interventionist industry policy is effectively rejecting the reformist legacy of an open, trading, flexible economy bequeathed by his most famous forebear as a Labor treasurer, Paul Keating.“This is not about repudiating anyone or anything from the past – we’re building on it,” he argued.
The prime minister’s long-held enthusiasm for manufacturing jobs, including expressing regret at the loss of the car industry, now extends into promoting Australia’s potential to make electric vehicle batteries.But an abundance of natural resources like critical minerals doesn’t automatically translate into having an abundance of natural ability or comparative advantage in delivering finished products to global markets.
But the budget’s production tax credits for processing and refining of Australia’s 31 critical minerals and green hydrogen can be more easily justified, despite the concerns of purist-minded economists.