Albanese government faces inflation and productivity stalled at midway point
Chalmers promised Labor's second term would focus on productivity. But inflation stays high. Productivity growth has stopped.
After winning last year's election, Treasurer Jim Chalmers said Labor's second term would focus on productivity. It would also tackle inflation.
Both goals are struggling. The Reserve Bank Governor said this week that inflation is too high.
It's driven by domestic supply and capacity pressures. Productivity is doing nothing.
Chalmers pointed to a small dip in monthly inflation numbers as cause for hope. Prime Minister Anthony Albanese has flagged more cost-of-living support measures in December's budget update.
Both moves add demand to the economy. They risk clashing with the RBA's efforts to fight inflation.
- 4 per cent
- Annual headline inflation
- 3.6 per cent
- Annual underlying inflation rate
- Jim Chalmers
- Treasurer
- Michele Bullock
- RBA Governor
Why it mattersHigh inflation that keeps going and productivity growth that has stopped both threaten household budgets. They also threaten long-term economic growth. More government spending could work against the RBA's efforts to cool prices.
AustraliaAustralian households face ongoing pressure on costs and wages, while uncertainty over inflation may delay the RBA's eventual interest rate cuts.
✓ Claims checked against the source. checked 2 h ago
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