Global environment is the main force shaping economic decisions: Chalmers
Make us a preferred source
Make us a preferred source on Google
The news: Treasurer Jim Chalmers will point to productivity, budget sustainability and resilience in a volatile world as his three priorities in this second term of the Albanese government as part of a speech at the National Press Club on Wednesday.
He will also point to recent warnings from the World Bank that global economic growth is likely to be nearing the weakest result seen in about two decades.
“The international environment and the global economy will be the main influences which shape and constrain our choices this term,” Chalmers will say on Wednesday, noting the recent spike in oil prices and “perilous times for the global economy”.
“There are opportunities as well as risks in all this volatility for Australia,” he will say.
“The rules and ideas that made up what we thought of as the global order are being re-written. This is the fourth economic shock now in less than two decades, a near permanent state of upheaval.”
To increase resiliency, he will point to plans to secure capital, shore up supply chains, build partnerships in the region, diversify trade and modernise the economy.
The context: At the National Press Club last week, Prime Minister Anthony Albanese announced that Chalmers would hold a roundtable in Canberra in August with businesses and unions as part of a commitment to lifting languishing productivity growth.
Chalmers will also say there are suggestions that investors may well be becoming more attracted to Australia’s markets as they become more wary of the US, listing the outperformance of local shares and the steeper US bond yield curve as signs this could be the case.
What he said: Referring to global volatility, he will say the democratic world has been left “vulnerable” as governments have not met the aspirations of the working class.
“We have a responsibility here and an obligation. A responsibility to rebuild confidence in liberal democratic politics and economic institutions — by lifting living standards for working people in particular. And an obligation to future generations to deliver a better standard of living than we enjoy today,” he will say.
Chalmers will confirm that his economic plan is to begin with delivering on election commitments on housing and energy, but that’s “not the limit” of the government’s ambitions.
And he will emphasise Australia’s success with bringing down inflation while keeping unemployment low and getting real wages growing while conceding that business growth now needs to pick up faster.
“Private demand contributed all the GDP growth in March and that’s good, but that growth was still subdued,” he will say.
“The level of business investment is now at a twelve-year high, it’s grown every year of our government, but we need it to grow deeper and faster.
“Our Budget is stronger, but not yet sustainable enough. Our economy is growing, but not productive enough. It’s resilient, but not resilient enough — in the face of all this global economic volatility.”
The source: Treasurer Jim Chalmers National Press Club speech excerpt
