Treasurer Jim “chicken” Chalmers is warming up to spend.
In a speech to parliament on Wednesday, the Treasurer said increased public expenditure had protected the nation from recession, despite economists warning it was putting upward pressure on inflation.
“The economy has continued to grow, but barely … it would have been negative in the March and June quarters were it not for public final demand,” Dr Chalmers said.
Laying the groundwork for further expenditure, Dr Chalmers said next month’s budget update would show a “gradual recovery in the economy driven by rising real incomes thanks to our cost-of-living relief, jobs growth and progress bringing inflation down”.
“This is the soft landing we have been planning for and preparing for,” he added.
The major contributor to cost-of-living relief is the energy rebate program that compensates consumers for the gouging of the East Coast gas export cartel.
As the RBA said in this week’s minutes.
Looking ahead, headline inflation was forecast to remain temporarily within the 2–3 per cent target range until the September quarter 2025, when the scheduled end to energy rebates would see it pick up.
That ain’t happening. The rebates will be extended and be even larger.
Wholesale electricity prices are 20-30% above last year and getting worse by the day as the East Coast gas export cartel delivers Australia’s permanent energy winter.
The electricity price regulator will announce another round of large bill shocks in March to be implemented in July.
If the rebates don’t get rolled over and grow, the Sep 25 QTR inflation shock will be huge.
Ergo, it won’t happen in an election year, and probably never.
While the RBA pointlessly punishes households.
