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Australia government says budget to help ease high inflation

May 12, 2024
in Business
Australia government says budget to help ease high inflation
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SYDNEY (Reuters) – Australian Treasurer Jim Chalmers said on Sunday he expected this week’s federal budget would help ease the country’s stubbornly high inflation, as many Australians continue to grapple with cost-of-living pressures.

“We do expect the budget, as I said, to put downward pressure on inflation rather than upward pressure on inflation,” Chalmers said in an Australian Broadcasting Corp television interview aired on Sunday.

Reserve Bank of Australia economists forecast consumer inflation, which was 3.6% in the first quarter, to pick up to 3.8% by June and stay there until the end of the year, underlining the home-grown inflation challenge.

The central bank has fought the persistently high inflation by raising interest rates 425 basis points since May 2022 to a 12-year high of 4.35%.

Chalmers said the budget, to be handed down on Tuesday, would have a “primary focus on inflation but not a sole focus”.

“The budget will be a responsible budget, it will ease cost-of-living pressures and it will invest in a future made in Australia,” the treasurer added.

Officials said on Tuesday the budget would have a big focus on housing, as rising rents, interest rate hikes and surging living costs in recent years have inflamed what was already among the world’s least affordable housing rental markets.

Chalmers has said the government will chart a responsible middle path with the budget, putting a second surplus within reach despite more spending measures.

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