Treasurer Jim Chalmers says government won’t go on pre-election spending spree

Treasurer Jim Chalmers says inflation has halved since Labor took office but more work needs to be done but Aussies doing it tough shouldn’t expect a cash splash.

Australians have been warned there will be no “free for all” of spending of public money ahead of the federal election to win over voters in the continuing cost-of-living crisis.

Treasurer Jim Chalmers says the government would continue “responsible spending” in the lead up to the next federal election due by May next year, despite the better than expected showing by Queensland Labor in Saturday’s state election.

In his first press conference since attending key economic summits in the US on the weekend, Mr Chalmers flagged responsible economic management as the “defining feature” of the current federal Labor government.

“I want to reassure people and assure people that we will continue to put responsible economic management as the defining feature of this Albanese Labor government,” Mr Chalmers said.

Federal Treasurer Jim Chalmers says government spending would be responsible ahead of the federal election. Picture: NewsWire / Martin Ollman

Former Queensland premier Steven Miles did better than expected at Saturday’s state election partly because of huge cost of living spending. Picture: NewsWire / John Gass

“This (upcoming federal) election was never going to be, from our side, a free-for-all of public spending.

“It wasn’t going to be before Saturday’s outcome, and it’s not going to be after Saturday’s outcome.”

Labor lost the Queensland election despite then premier Steven Miles big spending on cost-of-living measures, including 50 cent public transport fares, $1000 rebates on power bills and the promise of free breakfasts at state schools.

Mr Chalmers said Australia had made strides in the battle against inflation which had halved since the Albanese government took office in May 2022.

“We are making good progress in the fight against inflation although people are still doing it tough,” Mr Chalmers said.

He said his government was focusing on “doing the right thing” and letting the politics take care of itself by helping ease cost-of-living pressures over focusing on Saturday’s Queensland election result.

“We’ve tried to take a series of well-informed economic decisions, take the right economic decisions for the right reasons because I believe if you do that, the politics will take care of themselves,” Mr Chalmers said.

“I don’t want to pretend that there aren’t lessons for us as well. Of course there are. There are always lessons in (state) elections like this one.

“There are always things that we can learn. There are always things that we can do better. And we will go through the results with that in mind.”

The calls from Mr Chalmers comes as the International Monetary Fund (IMF) last week announced Australia’s inflation rate would soon exceed almost all advanced economies.

Federal Treasurer Jim Chalmers attended finance minister meetings with the IMF, World Bank and G20 in Washington over the weekend. Picture: NewsWire / Martin Ollman

IMF World Economic Outlook released on Wednesday revised up its 2025 consumer price projections for Australia from 2.8 per cent in April to 3.6 per cent, as government subsidies particularly on energy prices are removed.

While the IMF said Australia’s inflation is high, they also gave Australia the third best budget rating out of G20 countries.

Mr Chalmers put the strength of the budget down to strong economic management and pointed to its relative position compared with the rest of the world with regards to inflation.

“When it comes to inflation, in Australia we peaked later and lower than many other countries,” Mr Chalmers said.

“What we will continue to do is make the best decisions for Australians and we have budget constraints. We will manage those budget constraints.”

“We’ve got our own approach to it, and that is already rolling out tax cuts for every taxpayer, energy bill relief for every household, cheaper medicines, cheaper early childhood education, rent assistance, getting wages moving again, this is substantial and meaningful cost-of-living health, but it’s also delivered in the most responsible way,” he said.

The next chance to see if cost-of-living is falling will come on Wednesday when the Australian Bureau of Statistics releases the consumer price index for the September quarter.

Australian mortgage holders will be hoping for a figure between 2 to 3 per cent, which is the target for the Reserve Bank of Australia. Should trimmed mean inflation fall into this range, it will strengthen the case for a rate cut.

Meanwhile, Mr Chalmers also said weakening economic growth out of China, in particular, would put pressure on Australia going forward.

Jim Chalmers warns of foreign issues facing Australia’s economy. Picture: NewsWire / Martin Ollman

“People are still concerned about weakness in the Chinese economy, even after these measures have been announced to support growth in the Chinese economy,” he said.

“But the direction of travel from an Australian point of view is very welcome because if our forecast for Chinese growth in the economy over the next couple of years play out, as we expect them to do in the Treasury’s forecast, that would be the weakest period of Chinese growth since China opened up in the late 1970s, so a lot of concern about China, but the direction of travel, the kinds of steps flagged by the authorities are very welcome.”

Originally published as Treasurer Jim Chalmers says government won’t go on pre-election spending spree