‘Perfect storm’: Households and businesses warned of power pain

Queensland’s economy is the equal slowest growing of all mainland states and territories as dire economic data was released.

A “perfect storm” of energy price spikes is smashing businesses and household budgets, as the economy unexpectedly lurches to a standstill, Treasurer Jim Chalmers said as dire economic data was released.

Queensland’s economy was the equal slowest growing of all mainland states and territories, barely moving at all.

The national economy barely moved in the March quarter, falling shy of the growth predicted in the budget just two months ago.

Treasurer Jim Chalmers. Picture: NCA NewsWire / Andrew Taylor

Mr Chalmers warned that the figures released by the Australian Bureau of Statistics only covered up until March, which meant they did not cover more recent spikes in inflation, petrol prices and the interest rate hike, meaning there would be worse times ahead.

But he would not speculate on if this meant a recession could be on the way.

He said a surge in gas and electricity prices were putting huge pressures on people and hurting investment, saying the government needed to provide certainty and invest in renewables and batteries.

“This perfect storm of energy price spikes is doing enormous damage to our employers, to our households and to our national economy,” he said.

“This is an incredibly challenging set of circumstances, particularly for Australian industry, when you consider this spike in gas prices, which goes hand-in-hand with a spike in the price of liquid fuels and a spike in the price of electricity as well.”

Mr Chalmers said it was the “chickens coming home to roost” from a decade of energy policy uncertainty.

But he also noted there was a difficult international environment, with the EU blocking Russian oil.

He did not rule out “pulling the trigger” on gas, a mechanism which can restrict how much companies export to ensure there’s enough local supply, saying he would not pre-empt discussions with industry and Energy Minister Chris Bowen.

Queensland’s economic figures showed the state’s economy grew just 0.8 per cent, on par with the national average but below most other state’s and territories.

Bad weather, as well as labour and material shortages made a big impact in reducing the amount spent on housing construction.

But there was growth in Queenslanders spending up at hotels, cafes and restaurants showing people are still prepared to spend despite the tough economic times ahead.

Mr Chalmers also indicated there would be additional pressures on the October budget which he said had not been disclosed by the former government including “substantial health cost measures from Covid”, increased debt repayments from rising interest rates and productivity assumptions not becoming reality.