Karl Stefanovic unleashes at Anthony Albanese’s government on Today Show

Falling inflation in Australia didn’t stop Karl Stefanovic from asking cheeky questions to Treasurer Jim Chalmers as the country grapples with a rise in the cost of living.

According to official data, inflation fell from over 7 percent to 5.6 percent in May, but mortgage payments, rents, electricity bills and grocery prices remain sky-high.

“The government seemed to be in a festive mood yesterday,” said the Today host.

“Do you really hear the pain of everyday Australians, or have some of your government gone tone-deaf?”

The pugnacious opening question caused Dr Chalmers to pause before replying that ‘of course’ the government knows that people are ‘hard pressed’.

Global pressure is slowing our economy. It is important to remember that inflation is moderating and we have record levels of employment.”

“That will make us better for the coming difficult months.”

But Stefanovic didn’t give up and hammered the treasurer with a follow-up question.

“I keep hearing the government say this, but the reality is that food, power and housing are causing grief across the country,” Stefanovic said.

“Even your childcare allowance is swallowed up by inflation.”

“People are losing faith in the government’s ability to handle this crisis. Do you have this?’

Dr. Chalmers replied that his government had the situation under control.

“This inflation challenge is taking longer than we would like.”

“What we’ve tried to do is take budgetary responsibility to provide this cost of living for Australians while also investing in the future of their economy.”

“That’s why next week, early July, there will be cheaper childcare for Australians and there will be relief on the electricity bill.”

Stefanovic argued: ‘We lose that relief on the electricity bill with inflation.’

“This (fiscal welfare measures) is all a celebration for the Reserve Bank which seems intent on hurting Aussie households.”

Dr. Chalmers said it was “very clear” that inflation was not caused by people on low wages being paid more.

“The Reserve Bank will of course make a big call (about raising the spot rate again) on Tuesday.”

“I have my own work to provide this cost-of-living assistance, invest in the future of the economy, and invest this surplus to build our buffers and resilience as we enter a pretty tough period in the global economy.”

The Reserve Bank will monitor retail data on Thursday for more evidence of a slowing economy before deciding on further rate hikes.

Economists expect a 0.1 percent month-over-month increase when the Australian Bureau of Statistics (ABS) releases its monthly data on retail sales and quarterly retail volumes.

Consumers have proved relatively resilient to economic challenges, but Australian Retailers Association CEO Paul Zahra said the slowdown was in full swing, especially for non-essentials.

“Of course we have to eat, so food still continues to do pretty well,” he tells AAP.

Research by the organization suggests that 400,000 people will shop less than usual during the year-end sale.

Mr Zahra said retailers were discounting more than usual during the period to boost sales.

A separate consumer survey by Manhattan Associates found that one-third of respondents postponed purchases or put them off until sales or special offers, while 51 percent said they had decided to wait indefinitely.

Mr Zahra said retailers faced a perfect storm, including lower demand, high cost of doing business, a surge in retail crime and a robust government reform agenda.

“There’s a collision between this cost-of-living crisis that we’re seeing with the cost-of-business crisis,” he said.

The ABS will also release vacancy data on Thursday.

The Reserve Bank board will meet on Tuesday for the next interest rate decision, with CommSec economists saying the possibility of a further 25 basis point rate hike is “barely balanced.”