Jim Chalmers reveals he feared the economy would ‘go backwards’

Treasurer Jim Chalmers has spoken about the moment he was most worried about the nation’s economy, and what the future will be like.

Treasurer Jim Chalmers has declared that better days are ahead for the Australian economy and that the worst of the cost-of-living crisis has passed.

With inflation no longer at a peak, Chalmers was optimistic about the future during an interview with 7News’ Spotlight program on Sunday night. He also revealed the moment earlier in the year when he was most concerned about how the nation was tracking.

“I think when it comes to inflation specifically, the worst is behind us,” Chalmers said.

“The peak in inflation is now in the rear-view mirror and we’re not complacent about that, we’re cautious about that, but we are confident that having been through a very difficult time together, better days are ahead.”

However, there’s much more to be done when it comes to lowering inflation.

“We’re still very focused on the fight against inflation, but we’ve made really quite substantial progress,” Chalmers enthused.

“Better days are ahead. There is light at the end of the tunnel, but there’s more work to do.”

When it comes to the inflation rate falling by the end of the year as forecasted in the budget, Chalmers said that while he doesn’t like to make predictions, things are looking promising.

“Well, it remains to be seen,” he said. “One of the most heartening aspects of the most recent inflation data was the fact that the headline rate came down substantially, but so did underlying inflation, so did non tradeable inflation services, inflation.

“All of that came down and that was a really welcome sign that we’re making progress together in this fight against inflation. It has come off really quite considerably since 2022.”

The trimmed mean inflation rate is currently at 3.4 per cent and is forecasted to reach 3 per cent by December.

Jim Chalmers spoke about Australia’s inflation on 7's Spotlight. Picture: Channel 7

Chalmers said it’s quite the turnaround, considering how close the nation came to being plunged into a recession.

“Well, if you look at the first two quarters of this year, we came quite close,” Chalmers pointed out. “Growth was very, very flat in March and in June … there were times where we feared that the economy would go backwards.

“But if you’re asking me was I worried at the time? Too right I was!”

It was just prior to the release of the national accounts when it became clear to Chalmers that not all was well.

“There were some moments in the lead up to the release of that data where there was a very substantial risk that the economy might have gone backwards,” he recalled.

“(There was) a lot of relief when we discovered that it hadn’t.”

A recession was close. Pictures: iStock

Chalmers also told the program that he gave up drinking four years ago following a health scare. After an operation for a benign skin cancer on his chest, he developed an infection that left him unwell for weeks.

He had been a heavy drinker for years as he sought relief from the stress he was experiencing in Canberra.

“I was a pretty enthusiastic drinker in the decades before that,” Chalmers said. “And so for me it was just time to give it away. And I’m really pleased I did.”

Chalmers said he would use it to unwind and did so too frequently, before realising he couldn’t continue.

“As it turns out, I gave a press conference in this room,” he reflected. “I remembered Laura (Jim’s wife) saying to me, you look really unwell. My face was kind of white. It was actually a kind of weird shade of grey and I was really unwell. I didn’t feel like drinking over the summer that year.

“So by the time I came good after the minor operation that went, that didn’t go well with the skin cancer I had on my chest. By the time I came out of that, I decided to basically give it up for the long term.”

So perhaps some good came of his health scare.

“You try and find the good in things and maybe in a weird kind of way, it was a bit of a blessing,” Chalmers stated.

Jim Chalmers on 7's Spotlight.

Now, he feels his health is in a better space, and his move to quit the booze has also inspired others in Canberra. Chalmers said people contact him often to ask how he quit drinking.

He makes sure to emphasise that it’s not easy.

“Probably the time I most wanted to have a tin was last year the Broncos made the grand final and I was at the semi-final at Suncorp at Lang Park and the Broncos organisation were kind enough to get me down to the rooms afterwards,” Chalmers remembered a key moment in his sobriety.

“One of my childhood heroes is Alfie Langer, a great Queensland Australian and Broncos halfback. And through the kind of the mayhem emerges Alfie Langer. And he’s got two tins of gold, one for me and one for him, and he gives me one. And I didn’t drink it, but I tell you that’s the closest I’ve come.

“I said ‘Thanks Alfie, I’m off it’.”

Chalmers has come a long way.

Originally published as Jim Chalmers reveals he feared the economy would ‘go backwards’