‘Higher than we’d like’: Treasurer Jim Chalmers grilled on inflation
Finance Minister Jim Chalmers faced criticism over Australia’s rising inflation in a television appearance, admitting the latest figures were higher than he wanted and that could impact wages.
The annual inflation rate rose from 3.4 per cent to 3.8 per cent in the 12 months to December, according to data released by the Australian Bureau of Statistics on Wednesday.
Australians are bracing for a potential rate hike following a rise in annual inflation when the Reserve Bank of Australia holds its first meeting of 2026 next week.
Mr Chalmers spent most of his day dodging questions about the inflation rate; He rejected suggestions that the rise in inflation was due to public service spending and rejected calls for his government to rein in spending.
Mr Chalmers told the ABC’s 730 on Wednesday night: “Inflation is much lower than when we came into office but it is still higher than we would like.”
“Today’s numbers were not much higher than we expected, but they were higher than we wanted.
“We know people are still under pressure… We’re acting on this with cheaper drugs and more bulk billing, student debt relief, two more tax cuts for working Australians, while also improving the budget, including the most recent update in December.”
He was criticized by presenter David Spears, who questioned whether the Chancellor of the Exchequer was willing to take responsibility solely for low inflation.
“Doesn’t it have something to do with you when you come up?” he asked.
Mr Chalmers replied: “I have said many times that I take responsibility for all aspects of my business. But more than taking responsibility, we take action. We cut taxes, we reduce the cost of living, we make the budget better.”
Mr Chalmers said he expected inflation to remain “moderate” over the next 12 months.
He also said there would be reform and further budget repairs in the May budget.
The Finance Minister has previously suggested that real wage growth will occur in the next financial year, but the latest inflation figures may affect this.
Asked whether living standards would rebound, Mr Chalmers said: “It remains to be seen.”
“So you’re not sure right now whether living standards will drop?” The host pressed on, prompting Mr Chalmers to turn around: “In the rest of my sentence David said clearly that when inflation is higher than we want it will have implications for real wages.”
“But we have been experiencing continuous real wage increases for two years.
“When we took office, real wages were falling very rapidly, we consciously reversed this.
“This is under pressure at the moment as we get higher inflation data than anyone would like.”
