Treasurer Says Labor Not ‘Artificially’ Lowering Inflation

The minister’s comments come as new ABS figures reveal a 3-year-low for Australia’s inflation rate.

Federal Labor Treasurer Jim Chalmers speaks to the media during a press conference at the Commonwealth Parliamentary Offices in Brisbane, Australia on Sept. 25, 2024. AAP Image/Darren England

Treasurer Jim Chalmers has responded to the latest inflation figures calling it “heartening.”

Chalmers emphasised that the numbers show a drop in both headline and underlying inflation, a sign that the government’s cost-of-living measures are making a real impact.

Inflation in August dropped to its lowest point in three years.

According to the latest figures from the Australian Bureau of Statistics, annual headline inflation fell to 2.7 percent last month, down from 3.5 percent in July.

Chalmers countered the opposition’s claim that government policies have “artificially reduced inflation.”

“There is nothing artificial about helping people with their power bills. We’re proud to be delivering support for every Australian household, especially when people are under pressure.”

He pointed out that similar measures, like the former government’s fuel excise changes, also temporarily affected inflation but not being criticised at the time.

Meanwhile, Finance Minister Katy Gallagher credited the drop to the government’s “responsible economic management.”

She added that on Sept. 30, the government will release the final budget outcome, showing its second surplus.

“And that improvement in the budget outcome is not related to increased revenue, but is related to less spending. We know from the comments of the RBA governor that surplus budgeting is helping in the fight against inflation.”

Opposition’s Criticism

Shadow Treasurer Angus Taylor argued that the latest inflation data does little to bring Australians to enjoying lower interest rates or price drops for goods and services.

“We’re no closer to an interest rate cut than we were yesterday, and no closer to inflation sustainably coming within the target range,” Taylor said.

He emphasised that sustained reductions in inflation, particularly in services, are essential for restoring living standards.

“Trimmed mean inflation is still well above the target range,” he noted, adding that Reserve Bank Governor Michele Bullock highlighted the importance of looking beyond temporary price drops.

Taylor criticised the Albanese government’s economic management, citing a 10 percent increase in prices since Labour took office.

“For working families, the cost of living has gone up by over 18 percent, and we’re seeing record levels of insolvencies,” he said.

He warned of a likely surge in electricity prices when temporary government measures expire, saying that “underlying electricity prices did not fall this month, and we know there will have to be a surge next year.”

Treasurer on Upcoming China Visit

Meanwhile, Australia’s treasurer is set to visit China for key talks aimed at stabilising the economic relationship.

This marks the first visit by an Australian treasurer in seven years and comes amid global economic uncertainty, inflationary pressures, and a slowdown in the Chinese economy, which has significant consequences for Australia.

“We’re not immune to weakness in the Chinese economy, and that’s why it’s so important that over the next two days, I'll be meeting with key Chinese counterparts in Beijing,” Chalmers said.

The treasurer said he would co-chair the Australia-China Strategic Economic Dialogue, resuming for the first time since 2017, with China’s National Development and Reform Commission.

Ahead of the meetings, Chalmers said he had consulted with major businesses with strong ties to China, including Rio Tinto, BHP, and Wesfarmers, to ensure discussions are productive.