Treasurer Jim “chicken” Chalmers is having a good old whinge about the economy he created today:
Jim Chalmers has declared the Reserve Bank is “smashing the economy” with its aggressive run of rate hikes in comments that shift blame on to the central bank governor, Michele Bullock, ahead of data expected to show growth slowing to a crawl.
With increased government spending holding up an economy saddled with anaemic household consumption, faltering business investment and a decline in home building, GDP figures to be released on Wednesday are expected to show the Australian economy expanded by a meagre 0.2 per cent in the June quarter.
This would slash annual economic growth from 1.1% in March to just 0.9% for the last financial year – the weakest annual GDP result since the end of the early 1990s recession outside of the coronavirus pandemic.
Over the eight quarters of Treasurer Chalmers, six have been negative in per capita terms, with the economy contracting by 1.2%.
There has been no experience like this in Australia for fifty years.
For the most part in economics, politicians claim or disavow credit for stuff that was going to happen anyway.
One can rarely point to explicit and obvious policy blundering to blame sub-standard macro outcomes.
But, in the case of the Chalmers recession, it is possible.
His two key decisions,
- to flood the nation with cheap foreign labour in order to crush wages, and
- to allow the gas cartel to war-profiteer,
delivered an idiosyncratic inflation shock that forced the RBA to hike interest rates for longer than other developed economy central banks.
With Australia’s world-beating household debt, this was always going to crush the economy.
It is not the RBA’s fault. It is directly Jim “chicken” Chalmers who is to blame.
