{"id":388359,"date":"2026-04-20T07:14:07","date_gmt":"2026-04-20T07:14:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/388359\/"},"modified":"2026-04-20T07:14:07","modified_gmt":"2026-04-20T07:14:07","slug":"chalmers-says-iran-war-will-raise-inflation-and-unemployment-warning-fallout-of-conflict-could-be-severe-australian-politics","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/388359\/","title":{"rendered":"Chalmers says Iran war will raise inflation and unemployment, warning fallout of conflict could be \u2018severe\u2019 | Australian politics"},"content":{"rendered":"

The treasurer, Jim Chalmers<\/a>, says inflation and unemployment are expected to rise because of Donald Trump\u2019s war in Iran, warning ahead of next month\u2019s federal budget that the economic fallout from the conflict could still become \u201csevere\u201d.<\/p>\n

Playing down expectations of major revenue increases from soaring commodity prices, Chalmers said some forecasters had not adequately assessed the negative effects on Australia from slower growth and rising joblessness.<\/p>\n

After talks with international counterparts in Washington DC last week, Chalmers conceded the closure of the strait of Hormuz<\/a> was driving frustration and uncertainty.<\/p>\n

\u201cFrom an economic point of view, the end of the war can\u2019t come soon enough,\u201d he said as ministers gathered in Canberra for cabinet meetings on Monday.<\/p>\n

\u201cBut even if and when the ceasefire sticks, even when the war ends, even when the strait is properly reopened, we don\u2019t expect things to go back to normal straight away.<\/p>\n

\u201cThe consequences of this war in the Middle East are already serious, and there is still a risk that they become severe.\u201d<\/p>\n

Sign up for the Breaking News Australia email<\/a><\/p>\n

Chalmers confirmed planned cuts to the NDIS<\/a> will be \u201ceasily the most important part of the savings package that we will present on budget night\u201d.<\/p>\n

Inflation is expected to rise to above 5% in Australia as global supply chains are buffeted by the war, including disruption to about 20% of global fuel supplies.<\/p>\n

In mid-March, Treasury modelling suggested inflation could peak at the \u201cmid to high fours\u201d, but those figures were quickly described as too conservative. On Monday, Chalmers said even the past few days had been \u201ca wild ride\u201d for those trying to frame the 12 May budget.<\/p>\n

\u201cWe do expect inflation to be higher, we do expect growth to be slower \u2013 and slower growth typically, not always, \u2026 means higher unemployment, so that\u2019s what we\u2019re dealing with,\u201d he said.<\/p>\n

\u201cThe key factors which will determine whether we get a bit more inflation or a lot more inflation, a bit less growth or a lot less growth, will be how long the war continues, how long it takes to reopen the strait \u2026 and how long it takes for the global economy to get back to something that looks a little bit more like normal.\u201d<\/p>\n

The government has joined international efforts to push for the reopening of the strait, and will attend another conference of more than 40 countries this week.<\/p>\n

Labor will push ahead with tax reform, a productivity package and spending cuts. Along with the prime minister, Anthony Albanese, Chalmers has promised a focus on intergenerational fairness, including through changes to property investor tax breaks including negative gearing and the 50% capital gains tax discount.<\/p>\n

The Sydney Morning Herald and The Age reported<\/a> on Monday that Labor is leaning towards a return to the pre-1999 capital gains tax system, altered by the Howard government to increase investment.<\/p>\n

Disability advocates and state governments are nervous about cuts to the NDIS.<\/p>\n

The $52bn scheme grew by more than 10.3% last year, and is on track to cost $63bn by 2028-29. Labor wants to bring growth down to between 5% and 6% annually.<\/p>\n

Chalmers will brief state and territory treasurers on the plans on Tuesday.<\/p>\n

Billions in cost-of-living support are expected, including the $2.55bn temporary cut to the fuel excise, as well as other \u201ceconomic resilience\u201d plans to help business and consumers during fallout from the war.<\/p>\n

The opposition leader, Angus Taylor, said Labor had lost control of inflation before the war started. <\/p>\n

\u201cWe\u2019d already seen inflation going up, we\u2019d seen interest rate increases, now many more on the horizon. Australians\u2019 standard of living is going backwards at a time when we need it to be going forwards. <\/p>\n

He said Labor was launching \u201cthought bubbles\u201d on housing plans. <\/p>\n

\u201cThe one thing that\u2019s consistent in everything I\u2019ve heard so far is they want to put extra taxes on housing. <\/p>\n

\u201cI want to see more housing in this country for young Australians. <\/p>\n

\u201cLabor keeps talking about things that are going to reduce supply.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The treasurer, Jim Chalmers, says inflation and unemployment are expected to rise because of Donald Trump\u2019s war in…\n","protected":false},"author":2,"featured_media":388360,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":{"0":"post-388359","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-new-zealand","11":"tag-newzealand","12":"tag-nz"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/388359","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=388359"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/388359\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/388360"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=388359"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=388359"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=388359"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}