The treasurer is utterly at odds with those in the Reserve Bank who say the economy is running a bit too hot – and he does not mind if Australians watch the argument live.
Jim Chalmers will be as blunt as he needs, as often as he needs, to make sure voters know he fears the economy will be “smashed” to a standstill by high interest rates.
The political tactic is transparent but risky. It is unusual for a treasurer to be so direct in blaming the Reserve Bank’s interest rate decisions for “smashing the economy” – as Chalmers did on Monday – even though it is a statement of the obvious. But does this justify a public rift with the central bank? Independent economist Saul Eslake finds fault with the sharp language.
Reserve Bank governor Michele Bullock has avoided some of the more drastic steps taken overseas. In effect, she has tolerated some of the price pressures to avoid a deeper downturn. Eslake says Chalmers could have explained this dynamic.
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