Jim Chalmers has taken a leaf out of his mentor Wayne Swan’s class warfare playbook in spraying landlords seeking to “profiteer” from successive rate hikes.
The Treasurer should read the room and understand that the 3.3 million households reeling from 12 rate hikes want less blame shifting and more accountability.
Chalmers’ week of pain will continue on Wednesday when national accounts are expected to reveal sluggish and decelerating economic growth under a backdrop of global instability.
The day after handing down his first budget last year, Chalmers declared “inflation is public enemy number one … inflation is the dragon we need to slay”.
Unfortunately, Chalmers has put his sword in his sheath and used Reserve Bank of Australia governor Philip Lowe as a shield in declaring “a lot of Australians … will find this decision difficult to understand and difficult to cop”.
The risk of the RBA being forced to tip the economy into recession grows with every rate rise.
As mortgage holders brace for at least another two rate hikes in coming months, Lowe’s warning that the “upside risks to the inflation outlook have increased” is a serious concern.
Despite The Australian on Tuesday revealing homeowners were enduring the heaviest debt burden since at least the early 1980s and renters on average are spending a slightly lower share of their disposable income on housing costs than before the pandemic, Chalmers went after landlords.
“We don’t want to see people profiteering. We don’t want to see people gouging. People are under enough pressure as it is without landlords or others doing the wrong thing by (working people),” Chalmers said.
The class warfare rhetoric is unnecessary. It’s something you would expect of a Greens MP or union leader. The majority of landlords are acutely aware of the pressures facing families and businesses paying rent during a cost-of-living crisis.
As Treasurer of the nation, Chalmers must front up and be sympathetic to the pain of all Australians regardless of whether they are working-class people.
Ahead of the federal election, Anthony Albanese promised to end the class warfare waged by predecessor Bill Shorten. The government’s industrial relations reforms, climate change policies, superannuation tax changes and franking credits overhaul undermine the Prime Minister’s promise.
Chalmers – who is legitimately concerned about the cost-of-living crisis and has carefully calibrated policies to support the most vulnerable – has spent recent weeks rejecting concerns from economists, the Coalition and business groups that Labor’s big-spending May 9 budget would lift inflation and drive up rates.
While the RBA has described the budget’s impact on inflation as “broadly neutral”, opposition Treasury spokesman Angus Taylor predictably linked Tuesday’s rate hike with the budget.
“Today’s rate hike makes it very clear that Labor’s budget did nothing to fight inflation. In the three weeks since the budget, we have seen markets, economists and now the RBA itself react to the budget by increasing their forecasts for inflation and interest rates,” Taylor said.
After a year of blaming the Coalition, Vladimir Putin and global financial markets for high inflation and mortgage pain, Albanese and Chalmers must sharpen their swords to slay the “inflation dragon”.
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