‘Smashing’: Jim Chalmer’s warning for Aussies

Treasurer Jim Chalmers has warned rate rises are “smashing the economy” but firmly rejected claims his comments represent a split with the Reserve Bank.

As the government prepares voters for new data expected to show economic growth is tanking, the Treasurer has moved to clarify his comments overnight regarding the impact of rare rises on the economy.

“With all this global uncertainty on top of the impact of rate rises which are smashing the economy it would be no surprise at all if the national accounts on Wednesday show growth is soft and subdued,” Dr Chalmers said overnight.

“We anticipated a soft economy at Budget time and that’s what most economists now expect to see in these new numbers for the June quarter.

“We are striking all the right balances between a primary focus on inflation and understanding the pressures on people in an economy already being hammered by higher interest rates and global volatility.”

Those comments prompted national headlines the treasurer is trying to shift blame onto the central bank governor, Michele Bullock.

But speaking to news.com.au, the treasurer insisted there’s no split with the Reserve Bank despite repeatedly warning interest rates are hammering home owners in recent months.

“This is not a new point I’m making, I’ve said it before,” the treasurer told News.com.au on Monday morning.

“Global uncertainty and higher interest rates are smashing household budgets and slowing the economy, that’s just a fact and we see it in the data.

“We have different responsibilities to the Reserve Bank but the same objective, to get on top of inflation without hammering an economy which is already very soft.

“We are working well with the independent Reserve Bank and making progress on inflation which has halved since it peaked in the year we came to office.

“The Liberals and Nationals want higher interest rates because they think the more people are hurting the more it will help them politically.”

The treasurer has previously remarked on interest rates “hammering” the economy twice in June and in July.

“The rate rises which are already in the system, are already hammering the economy. We saw that in the National Accounts for March,” he said in a June 18 press conference.

In July, he repeated the remarks again in an interview on ABC Radio. “We know that discretionary spending has been absolutely hammered by higher interest rates,” he said.

GDP figures to be ­released on Wednesday are expected to show the Australian economy expanded by just 0.2 per cent in the June quarter.

That would slash annual economic growth to just 0.9 per cent for the last financial year – one of the weakest annual GDP result since the end of the early 1990s recession.

“In a weaker economy being buffeted by global uncertainty and higher rates it beggars belief the Liberals want to cut hundreds of billions of dollars in spending without coming clean on what that means for jobs, Medicare, pensions or the broader economy,” Dr Chalmers said.

“Their approach is dangerous and divisive and would make life harder for people already doing it tough enough.”

Meanwhile, Anthony Albanese’s approval ­ratings have slumped to the equal-lowest level since he became Prime Minister.

Mr Albanese’s disapproval rating rose three points to 54 per cent, which is the highest level of dissatisfaction in his performance since the May 2022 election.

Liberal leader Peter Dutton’s approval rating fell a point to 39 per cent, with a two-point rise in dissatisfaction with his performance as Opposition Leader to 52 per cent.

An exclusive Newspoll conducted for The Australian shows only a quarter of voters ­believe inflation would be lower under the Coalition, while 18 per cent ­believed that it would be higher.