Prior to the 2022 federal election, then Shadow Treasurer, Jim Chalmers, reiterated breathlessly that Labor was going to “go through the budget line by line” to end the so-called “waste and rorts”.
During Labor’s first term, Chalmers crowed that the “adults are back in charge”.
He claimed every piece of good economic news, including each interest rate cut, as a credit to Labor’s responsible economic management.
Unashamedly, he blamed every piece of bad economic news, including recent increases in inflation, on anyone except himself and the government of the day.
And I mean anyone.
As things currently stand, Australia is the only major Western economy that has again lost control of inflation after having dampened it for a short period of time.
Elsewhere around the globe, inflation has subsided and central banks are steadily reducing interest rates.
Australia remains the outlier – unable to finally put the inflation genie back in the bottle – due to high levels of government spending, high immigration and declining productivity.
Not to be accused of self-reflection, Labor has instead blamed the war in the Ukraine, the economy it “inherited” and global factors for this homegrown inflation fanned by deliberate government policy settings.
The innocent denials from Chalmers are meaningless political spin at best and wearing thin with the electorate.
It reminds me of the small child who pretends not to know who wrecked their mum’s make up despite having a face covered in the cold hard evidence.
Ultimately, Chalmers is the tyre-kicker and economic commentator in chief in the Albanese Labor government.
He understands very little about how the economy works and even less about how to manage it.
That said, he is still better at pretending to know what’s going on than any other member of the government.
Which is a roundly terrifying prospect.
I will give him credit that he is great at pretending to be competent.
Great at pretending to understand the underlying macroeconomic and microeconomic factors which influence our economy.
Oh, and great at defecting blame for even the slightest economic hiccup.
On Tuesday, the Reserve Bank of Australia increased the cash rate by 25 basis points from 3.6 per cent to 3.85 per cent on the back of persistent and increasing inflation, strong employment figures and heady demand.
Much more than a slight economic hiccup for those playing at home.
There is also a prospect of further rate rises due to a concern that the inflation is structural and entrenched.
Which leads us to the dirty P-word that no one in Labor really wants to talk about: productivity.
Under Labor, our economy continues to do less with more – so it doesn’t take a genius to work out that the cost of the “more” is going to flow through to prices.
RBA governor, Michelle Bullock, expressly stated that productivity is a material issue and that this constrains the potential of the economy which means any increase in private demand potentially poses a challenge for inflation. That’s a fair enough point and one of the ‘range of factors’ that Bullock said was responsible for the increase in inflation. When asked about fiscal policy, Bullock noted that the Treasurer is conscious of inflation but that the RBA would ‘work with what we have got’.
Hardly a ringing endorsement.
In truth, the Treasurer has shrugged off a $57 billion whoopsie-daisy overspend in the budget, declining productivity, and the fact that government spending is a whopping 27 per cent of GDP – the highest ever level outside of wartime or crisis.
So, when asked about the re-emergence of inflation and the interest rate hike, Chalmers used Governor Bullock’s nuanced analysis as a political human shield – declaring emphatically that the pressure on inflation is coming from private demand and that no mention was made about government spending, ergo the government is not the problem.
The bit that Chalmers left out is that the hefty components of the recent CPI increase, such as housing and childcare, have been heavily impacted by a further widening of the subsidy floodgates.
The price of childcare has grown 20 per cent since 2022 and 10 per cent over the last year.
Similarly, Labor’s five per cent deposit scheme for first home buyers has seen prices of eligible homes jump 3.6 per cent since it was introduced in October 2025.
This is despite advice from Treasury, trotted out by Housing Minister Claire O’Neil, that the price impact had been estimated to be 0.5 per cent nationally over 6 years.
And if Chalmers wants to talk about private demand, that conversation must be had in the context of the 1.3 million net immigration to Australia under this Labor government.
Good luck blaming any of those price-fuelling policies on either the Morrison government or the war in Ukraine.
Similarly, it’s unfair to blame private demand itself because the real issue is a lag to adjust supply after Labor lit a fire under demand.
This is not organic garden-variety demand.
This is Labor handing over the choccies and then blaming first home buyers et al for eating them.
Following the RBA announcement, several noted economists commented on the material contribution that government spending has made to inflation. It’s obvious to anyone paying the remotest bit of attention.
With his glass jaw shattered, Chalmers accused AMP chief economist Shane Oliver of being political, essentially because he didn’t back up Chalmers’ alibi.
Objectionable, yes.
But no doubt Oliver can hold his own against Arts grad and Keating sycophant, Chalmers.
Worryingly for Australians is that the RBA now forecasts that inflation could reach 4.2 per cent and the cash rate may be hiked to 4.3 per cent by the end of 2026 to bring inflation back within in the band by mid-2028.
Unfortunately, sustained inflation will mean negative real wage growth and a continual decline in living standards – meanwhile, we will all pay more in tax due to bracket creep.
We get poorer while Chalmers and Labor get festively plump on the consequences of their own economic mismanagement.
As it is, this Labor government hasn’t got a handle on spending, and it has no real intention of getting it under control.
Instead of the grownups being in charge, Labor managed the economy like a teenager driving a manual for the first time.
Instead of putting an end to waste and rorts, Labor has started a breeding program.
And instead of being lean, agile and productive, Labor’s policies have created a force-fed foie gras economy in desperate need of a health kick.
Against this backdrop, Teflon Jim continues to commentate, kick tyres, and dish out blame wherever he can.
Caroline Di Russo is a lawyer with 15 years of experience specialising in commercial litigation and corporate insolvency and since February 2023 has been the Liberal Party President in Western Australia.