The Times Australia
The Times Australia

.

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

4 tips to exercise safely in the cold

Temperatures have dropped in many parts of Australia which means runners, cyclists, rowers, hikers, or anyon...

Times Magazine

What AI Adoption Means for the Future of Workplace Risk Management

Image by freepik As industrial operations become more complex and fast-paced, the risks faced by workers and employers alike continue to grow. Traditional safety models—reliant on manual oversight, reactive investigations, and standardised checklist...

From Beach Bops to Alpine Anthems: Your Sonos Survival Guide for a Long Weekend Escape

Alright, fellow adventurers and relaxation enthusiasts! So, you've packed your bags, charged your devices, and mentally prepared for that glorious King's Birthday long weekend. But hold on, are you really ready? Because a true long weekend warrior kn...

Effective Commercial Pest Control Solutions for a Safer Workplace

Keeping a workplace clean, safe, and free from pests is essential for maintaining productivity, protecting employee health, and upholding a company's reputation. Pests pose health risks, can cause structural damage, and can lead to serious legal an...

The Science Behind Reverse Osmosis and Why It Matters

What is reverse osmosis? Reverse osmosis (RO) is a water purification process that removes contaminants by forcing water through a semi-permeable membrane. This membrane allows only water molecules to pass through while blocking impurities such as...

Foodbank Queensland celebrates local hero for National Volunteer Week

Stephen Carey is a bit bananas.   He splits his time between his insurance broker business, caring for his young family, and volunteering for Foodbank Queensland one day a week. He’s even run the Bridge to Brisbane in a banana suit to raise mon...

Senior of the Year Nominations Open

The Allan Labor Government is encouraging all Victorians to recognise the valuable contributions of older members of our community by nominating them for the 2025 Victorian Senior of the Year Awards.  Minister for Ageing Ingrid Stitt today annou...

The Times Features

Ways to Attract Tenants in a Competitive Rental Market

In the kind of rental market we’ve got now, standing out is half the battle. The other half? Actually getting someone to sign that lease. With interest rates doing backflips and ...

Top Tips for Finding the Ideal Block to Build Your Home

There’s something deeply personal and exciting about building your own home. You’re not just choosing paint colours or furniture, you’re creating a space that reflects your lifes...

The Home Buying Process Explained Step by Step

Buying a home is a thrilling milestone, but it can also feel like navigating a maze without a map. With paperwork, finances, and decisions at every turn, understanding the home-b...

Thinking of Selling Your Home? Here’s What You Need to Know

Selling a home is more than just putting up a “For Sale” sign. It’s a strategic process that involves preparation, pricing, and negotiation - all aimed at getting the best value ...

Smart Ways to Earn Passive Income from Real Estate

Imagine making money without doing much work. You get paid even while you sleep, travel, or do fun things. This is called passive income. Indeed, real estate has great ways to do...

Small Details, Big Difference: How Minor Decor Tweaks Can Redefine Your Home

Have you ever walked into a home that felt effortlessly stylish, but you couldn’t quite figure out why? It’s often not about major renovations; it’s the small details that make a...