The Times Australia
The Times Australia

.
The Times Real Estate

.

Chalmers claims ‘sustained progress’ against inflation, as government crosses its fingers for rate cut

  • Written by Michelle Grattan, Professorial Fellow, University of Canberra



After Wednesday’s encouraging inflation numbers, the Albanese government – and the financial markets – would be shocked if the Reserve Bank doesn’t cut interest rates in February.

Having said that, with interest rates there are no guarantees, especially in a volatile world.

Underlying inflation was 3.2% through the year to the December quarter, with headline inflation 2.4%. The numbers were better than earlier forecasts by either the Reserve Bank or Treasury. The trimmed mean (the measure the bank uses for underlying inflation) for the last six months was 2.7%.

After the inflation numbers came out the markets boosted their expectations of a cut to more than 75%.

Treasurer Jim Chalmers quickly pointed out: “On every measure, we’ve made substantial and sustained progress in the fight against inflation.”

“Australia’s headline inflation is now lower than most major advanced economies including the United States, United Kingdom and Germany.”

The fight against inflation was not over, Chalmers said, but he insisted “the worst of the inflation challenge is well and truly behind us”.

It was a message for the public – and the bank. Not, of course, that Chalmers was giving any “free advice to the independent Reserve Bank”. Certainly not.

There is now considerable pressure on Reserve Bank Governor Michele Bullock. Bullock is conservative, and very much her own woman. Equally, she is also aware of the immense pressure that high rates have been putting on many households.

The inflation outcome was the last major piece of data the bank has been waiting for. If the bank at its February 17–18 meeting – the last before its new monetary policy board begins operating – decided to sit on its hands, that would be against the odds as they stand now.

Speaking before the numbers came out, AMP chief economist Shane Oliver said: “If the trimmed mean inflation rate cools in line with our expectations [3.2% year on year] it will be very hard for the RBA not to cut rates at its February meeting”.

What a February rate fall would mean for election timing is unclear. The practical choices are between April 12 or one of three Saturdays in early May. While some observers believe this increases the chances of an April 12 poll, Prime Minister Anthony Albanese will have a number of factors in mind. These include whether he wants to use a March 25 budget as a launch pad, which would put the election in May.

Finance Minister Katy Gallagher flagged on Wednesday more cost-of-living relief. “As we are putting our budget together – it’s due on the 25th of March – obviously we are mindful of the economic conditions, how people are feeling out and about and whether there are any further responsible decisions we can take that can assist households as we navigate this time”.

Chalmers cautioned against the recent speculation that if there is a March budget it could contain a surplus. The treasurer also made it clear that while he is working towards a March budget, whether there will be one is in the hands of the prime minister.

Read more https://theconversation.com/view-from-the-hill-chalmers-claims-sustained-progress-against-inflation-as-government-crosses-its-fingers-for-rate-cut-248538

David Littleproud on US tariffs, a government-owned Rex, and the Nationals’ identity

With the election only months away, the Labor government finds itself suddenly battling with the Trump adminis...

The Times Features

What are physician assistants? Can they fix the doctor shortage?

If you’ve tried to get an appointment to see a GP or specialist recently, you will likely have felt the impact of Australia’s doctor shortages[1]. To alleviate workforce sho...

Do men and women agree on how easy it is for each other to find a job or a date?

Typically, you don’t have to write a cover letter before attending a candlelit dinner. But there are some eerie emotional parallels between finding a job and finding a date. ...

Australia’s clinical guidelines shape our health care. Why do so many still ignore sex and gender?

You’ve heard of the gender pay gap. What about the gap in medical care? Cardiovascular diseases – which can lead to heart attack and stroke – are one of the leading causes[1...

Don't Get Burned—Smart Insurance for Your Investment Property

Real estate investment offers lucrative opportunities even though it brings operational risks. Real estate investment protection fundamentally depends on obtaining the correct insu...

Why it’s important to actively choose the music for your mood

Many of us take pleasure in listening to music[1]. Music accompanies important life events and lubricates social encounters. It represents aspects of our existing identity, a...

The Link Between Heart Health and Ageing Well

Millions of Australians are at risk of heart disease, but fewer realise that keeping their heart healthy can also help protect their brain, memory, and cognitive function, redu...

Times Magazine

Improving Website Performance with a Cloud VPS

Websites represent the new mantra of success. One slow website may make escape for visitors along with income too. Therefore it's an extra offer to businesses seeking better performance with more scalability and, thus represents an added attracti...

Why You Should Choose Digital Printing for Your Next Project

In the rapidly evolving world of print media, digital printing has emerged as a cornerstone technology that revolutionises how businesses and creative professionals produce printed materials. Offering unparalleled flexibility, speed, and quality, d...

What to Look for When Booking an Event Space in Melbourne

Define your event needs early to streamline venue selection and ensure a good fit. Choose a well-located, accessible venue with good transport links and parking. Check for key amenities such as catering, AV equipment, and flexible seating. Pla...

How BIM Software is Transforming Architecture and Engineering

Building Information Modeling (BIM) software has become a cornerstone of modern architecture and engineering practices, revolutionizing how professionals design, collaborate, and execute projects. By enabling more efficient workflows and fostering ...

How 32-Inch Computer Monitors Can Increase Your Workflow

With the near-constant usage of technology around the world today, ergonomics have become crucial in business. Moving to 32 inch computer monitors is perhaps one of the best and most valuable improvements you can possibly implement. This-sized moni...

Top Tips for Finding a Great Florist for Your Sydney Wedding

While the choice of wedding venue does much of the heavy lifting when it comes to wowing guests, decorations are certainly not far behind. They can add a bit of personality and flair to the traditional proceedings, as well as enhancing the venue’s ...

LayBy Shopping