‘We’ll consider that’: Jim Chalmers hints at cost of living relief in election lead-up
Jim Chalmers has left the door open to new cost of living relief in the lead up to the election, conceding that Aussie families are still doing it tough.
Treasurer Jim Chalmers has left the door open to new cost of living relief in the lead up to the election, conceding he accepts that Australian families are still doing it tough.
Speaking this morning on breakfast television, the Treasurer conceded he was still hopeful of a rate cut noting he was “pretty pleased” to see that underlying inflation came down this week.
But while that’s a decision for the independent Reserve Bank when it meets in February, he is also leaving the door open to taxpayer-funded relief.
Asked, “do you think that you’ll have to offer immediate cost-of-living relief – like more help like extending those electricity subsidies before the election?” Mr Chalmers didn’t rule it out.
“People shouldn’t expect this election to be a kind of a big free-for-all of public money or a huge kind of cash splash. We have to continue to manage the budget responsibly. But if we can do a little bit more to help people with these cost-of-living pressures, of course, we’ll consider that,” he said.
“(It was) pleasing to see that headline inflation has been for some months now at the bottom end of the Reserve Bank’s target range because what that tells us is that we are making and have made really substantial and now sustained progress in the fight against inflation.
“We’re pretty confident that the worst of that inflation challenge is behind us, but we’re not complacent about that because we know that people are still under pressure. That’s why the Government’s cost-of-living help is so important.”
Experts split over when the interest rate cuts will start
Experts have warned that homeowners could be forced to wait until May for interest rate relief in a huge blow to Anthony Albanese’s re-election hopes.
While new inflation data was supportive for RBA rate cuts in the first half of 2025 Bendigo Bank Chief Economist David Robertson has warned it could be after the federal election.
“We continue to forecast three cuts this year although we still expect the first to be in May, by which time we hope the RBA has enough evidence to reduce rates by 35 basis points to an even 4 per cent,” he said.
However Commonwealth Bank Australia economist Stephen Wu was more optimistic, insisting relief could come “sooner rather than later”.
“We are still looking for February as the start of the cutting cycle,” he told news.com.au.
“If you look past that increase in the headline rate its actually a good inflation report
“Our best case is still a February rate cut. In terms of the inflation front it’s looking very promising.
“The RBA has said that inflation is their key focus. With inflation pressures improving that could be sooner rather than later.”
PM has just two chances for a rate cut before the federal election
The Prime Minister has just two chances to secure an interest-rate cut before the next election with the RBA set to meet on February 18 and March 31.
Both of those dates would slot in before an election on April 12 or May 3, 10 or 17 giving the PM two chances for rate relief.
But if the RBA waits until May to deliver the first interest rate cut in 2025, the PM could find himself in trouble. That meeting isn’t scheduled until May 19, which is just days after the last possible date to hold the election on May 17.
Inflation data released this week was again supportive for RBA rate cuts in the first half of 2025, although the Bendigo Bank Chief Economist David Robertson has warned it will need more constructive data in the coming weeks to put money on a February cut.
Consumer prices rose 2.5 per cent over the past year, on a seasonally-adjusted basis, with trimmed mean inflation up 3.2 per cent.
“A rate cut in early 2025 remains unlikely, with a rate cut in May probably the earliest that households can reasonably expect rate relief,” APAC economist at global job site Indeed Callum Pickering said.
ANZ bank more optimistic on February cut
ANZ chief economist Catherine Birch was more optimistic noting that the November monthly CPI indicator points to downside risk to our and the RBA’s Q4 trimmed mean CPI forecasts.
“This raises the probability of a February rate cut,” she said.
RBA should stop sitting on its hands and cut rates: ACTU
Unions warned that today’s economic figures offered further signs of a clear pathway for the Reserve Bank of Australia to start cutting official interest rates at its first policy meeting in February.
ACTU President Michele O’Neil urged the RBA to act.
“The RBA needs to stop sitting on their hands and start cutting interest rates from February because household budgets will take months to repair,” she said.
“There’s no more time to wait, workers and their families need interest rates to fall from February.”
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