Treasurer Jim Chalmers has warned of the growing impact of inflation will be ‘confronting’ with cost of living rising higher than wage growth. auspol
The nation’s workers are being told to prepare for an even bigger fall in their after-inflation wages as Treasurer Jim Chalmers signals a “confronting” economic future that will force the government to find new ways to relieve supply chain issues across the country.
Chalmers said he would update almost all the budget’s key economic forecasts with many people likely to be surprised by the extent of the hit to real wages. He said there was no credible forecast that suggests wages could keep up with inflation at present, while the RBA’s higher interest rate settings would affect broader economic growth.
“If the Reserve Bank was doing their job on lifting interest rates in the context of rising inflation they need us to do our job as well. From my point of view, the budget’s point of view, that means investing in the productive capacity of the economy to make it more resilient.” Through the three months to the end of June, spending growth outpaced income growth across all age cohorts while housing costs are rising due to higher mortgage repayments and an increase in rents.
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