Treasurer Jim Chalmers’ nine words of terrifying assurance

They are not quite the great Ronald Reagan’s “nine most terrifying words in the English language”, but they are certainly in the running for the nine most un-assuring and unconvincing words in what remains of the English language in our woke 21st century.

That’s the case, especially, when they are delivered via a treasurer who is having difficulty moving on from his trainer wheels.

Reagan famously identified those terrifying words as: “I’m from the government and I’m here to help.”

Wednesday morning, after the latest rate hike from the Reserve Bank and the clear indications of more to come, our very own Treasurer Jim Chalmers advised: “but they (Treasury) don’t expect at this point a recession”. Well, Treasurer, can we take that, as they say, to the bank? Maybe even get a rebate on our home loan repayments? A guarantee of non–foreclosure if we lose our job? Or our business?

This from a Treasury that last April said inflation would be totally unthreatening.

Treasury predicted inflation would be just 4.25 per cent over the June 2022 year – it printed at 6.1 per cent.

Treasury assured that inflation would then come right back to just 3 per cent by June this year – even the RBA is predicting (more correctly, hoping) it will be at least double that, at 6.3 per cent.

And note, that Treasury forecast of just 4.25 per cent for the 2022 June year was made when 10 months of the year had already passed and Russia had long since invaded Ukraine, sending energy prices rocketing.

Some Treasury. Some ‘forecasting’.

Federal Treasurer Jim Chalmers. Picture: Martin Ollman/Getty Images

All with of course, a little bit of help – on energy prices - from our woke Australian state and federal governments, all utterly supine, political-gender non-specific, to the great global Climate Change Cult.

More pointedly, the Treasury that is now “not expecting a recession” is the very same Treasury, headed by the very same Treasury head Steven Kennedy, which last April predicted:

Growth in the economy over 2022-23 would be a very strong 3.5 per cent, easing only to a still solid 2.5 per cent in 2023-24.

The RBA now says we will (be lucky to?) get just 1.5 per cent in both years.

Hmm, maybe Kennedy should see if he can borrow his boss’s wheels for a bit.

Two big points.

First the general one: predictions, as the physicist Niels Bohr advised, especially about the future, are difficult. I would add, almost certainly, almost always, just plain wrong.

Secondly, more relevant to our current future: we’re not just in the ‘normal’ uncharted waters, it’s like we are trying to navigate the uncharted waters in a whole different galaxy.

We’ve never had the Reserve Bank raising interest rates from zero before; and indeed every single central bank in the entire world (apart from Japan: a story in its own right) doing so as well.

This is because we’ve all never – and this is in its own way a rather sobering wake-up call - been so silly as to take them all the way down to zero before.

And promise to keep them there; RBA Governor Philip Lowe wasn’t the only one.

I give him credit for breaking his ‘promise’; as I had earlier predicted – or, in the context of this column, maybe rather say ‘assured’ - he would.

That’s actually the ultimately key point.

Governor Lowe is trying to just nudge them higher month-to-month – we’ve had four 25-pointers in a row now, and (at least) another one next month.

He thinks this will enable him to – (too) slowly - tame inflation without tipping us into that recession and sending unemployment soaring.

I’m put in mind of the ‘boiling frog analogy’. The temperature just gets raised gradually.

Guess what? The frog still gets boiled .