Treasurer Jim Chalmers is adamant that his second-ever budget will not make inflation worse and force the Reserve Bank's hand on interest rates — but economists are divided.
abc.net.au/news/federal-budget-inflation-interest-rates-rba-consequences/102324508Treasurer Jim Chalmers is adamant his second budget will not make Australia's inflation problem worse, while providing cost of living relief — but economists are divided about whether that confidence is misplaced.Some economists believe the spending will not have an impact on inflation, but others warn another rate rise could be on the horizonThe federal government will spend $14.
The centrepiece of Tuesday night's budget was the $14.6 billion cost of living relief package aimed at helping households and small businesses make ends meet while inflation and interest rates remained high. Mr Chalmers claimed responsible measures in the budget would not increase inflation, but would instead drive down the consumer price index by 0.75 per cent next year.
Speaking to The Business on Tuesday night, senior Barrenjoey economist Johnathan McMenamin said the policy changes would reduce headline inflation as well as inflation expectations.
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