If, as expected, Wednesday’s national accounts show the sixth consecutive quarter with either negative or zero growth, it will be a legacy Jim Chalmers won’t be keen to take ownership of.
Like high inflation, poor productivity and now an economy grinding to a halt, there is always someone or something else to blame. And this is true to the extent that it ignores homegrown causes.
But the Treasurer knew exactly what he was doing with the language he briefed out to the press gallery on Sunday afternoon.
It sought to set up the Reserve Bank and the rest of the world as the ongoing fall guys.
It appears as orchestrated as it was predictable. And it matters little that Chalmers may have said similar things before, considering the context he was now delivering it into.
Of course he wasn’t jawboning the RBA, Chalmers insists. Merely making an observation of fact just ahead of the quarterly national accounts, which are likely to be ugly.
With emotive language such as interest rates “smashing the economy”, there can be only one inference.
This inference was turned into an implicit threat by his assistant minister, Matt Thistlethwaite, who on Monday morning followed up his boss in what can only be assumed was a multi-office pre-emptive strike against what will be a bad set of national accounts numbers.
What this sought to establish was a war footing over who is not only now responsible for inflation but who is to blame for the economic impact of monetary policy.
But Chalmers will find himself short of economists who might be willing to support him in this venture. One economist went as far as to call it a direct threat to the RBA. And at some point the central bank is likely to stand up for itself. If a battle of credibility is what the government is seeking, then it is one it is not assured of winning.
If there was a three-pronged plan in the government’s political arsenal, Plan A was obviously to hope to heaven that rates simply came down by themselves. This was a forlorn hope, considering the degree to which fiscal policy was at best benign or in fact adding to the problem.
Plan B was to buy a drop in inflation through subsidies, followed by swapping out the board of the bank. Plan C was a break-glass option to blame the bastards. It now appears we are seeing the full release of Plan C. Make the RBA the villain if things don’t go the government’s way. This is a dubious strategy considering the degree of cynicism voters already possess.
Anthony Albanese, like his Treasurer, is dismissive of the claim that the government is jawboning the Reserve Bank. They are just stating what they claim to be true.
This is irrelevant. Both know the impact of political language – and the language Chalmers used was deliberate and calculated.
The underlying message is one it wants to keep percolating in the minds of the electorate.
It may be crude but whether it is effective or not is questionable.
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The Albanese government provides no rationale or narrative for its disconnected actions. Everything is spin. We’ve seldom seen a government this poor in such critical fields at such a dangerous time.