Reserve Bank boss Michele Bullock has softened the bank’s previous warning that government spending is contributing to inflation, in a shift that will help shore up relations with treasurer Jim Chalmers.
Already a subscriber?Reserve Bank of Australia governor Michele Bullock has softened the bank’s previous warning that government spending is contributing to inflation and instead pointed to consumer spending, in a messaging shift that will help shore up relations with Treasurer Jim Chalmers.
“I say governments because state governments account for demands,” she said. “It’s not just the federal government. But I want to be clear that public demand is not the main game at the moment.”Ms Bullock’s clarification comes after the bank’s previous, blunter assessment on federal and state government spending annoyed the Albanese Labor government.
Dr Chalmers said in podcast released on Friday: “The Reserve Bank governor and I both say in our own way that we’ve got the same objective here, which is to fight inflation. But we’ve got different responsibilities.“When it comes to public spending, I don’t think anybody seriously suggests that government spending in a budget is the primary determinant of prices in our economy.
Some 36 per cent of the 1000 people surveyed said that government was making no difference. The survey did not delineate between federal and state governments, and just asked about “government” in general.In the survey, conducted from August 9 to 13 – after the RBA board meeting on August 6 – men and Liberal National Party voters were more likely than other people to have stronger beliefs that government spending was increasing inflation.
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