The deputy leader of the Liberal Party has been urged to reflect on the impact of the coalition’s massive Covid spending on inflation in a fiery ABC TV interview.
Sussan Ley told ABC News Breakfast she is “disappointed” with treasurer Jim Chalmers’ budget and suggested the cost-of-living measures could backfire and inflict further pain on struggling families.
“There was an expectation that the RBA would not raise rates, but now that they have this budget in front of them, they are talking about rolling back forecasts,” she said.
“Households are under siege. The average family [will be] going backwards by $25,000 a year,” she claimed.
But host Lisa Millar questioned Ms. Ley’s claims – as economists are divided on whether the budget will push or prolong inflation.
She also noted that the coalition’s stimulus packages put significant pressure on Budget during Covid, and questioned whether these were more inflationary than Dr Chalmers’ measures.
Sussan Ley has been urged to reflect on the impact of the coalition’s massive Covid spending on inflation in fiery ABC TV interview with Lisa Millar
“We spent what was necessary,” Ms. Ley said.
Again Millar asked, “Yeah, but didn’t it contribute to some of the inflation we’re seeing now?”
Mrs. Ley said, “Those expenses were critical.”
Millar repeated her question, to which Mrs Ley said: ‘It helped Australians through.’
Finally, Millar snapped and said, “Are you going to answer the question?”
Economists are divided on the impact of Dr. Chalmers’ Budget – including an increase to Jobseeker and Commonwealth Rent Assistance – on inflation.
KPMG chief economist Brendan Rynne said there is a risk that the budget will push up interest rates and that the fight against inflation will be extended.
However, several economists, including NAB’s Alan Oster, view the budget as having a relatively neutral impact.
Ms Ley did not acknowledge any involvement of coalition decisions in inflation.
She said: ‘Inflation is a result of this Labor government’s tax and spending policies. They clearly don’t have a good plan to deal with inflation.’
‘Ffrom Toorak to Townsville, from Perth to Penrith and everywhere in between and I see that effect on small businesses on everyday Australians, on households and they’re really struggling and there’s no proper plan to deal with their cost of living crisis.
“People will talk about anything and everything, but everyone recognizes that there is a crisis and I can assure you it is sweeping across Australia. I know you’ve had people on your program to talk about it.”
Dr. Chalmers said Tuesday night his budget would “help those who need it most” — unveiling a $3.5 billion plan to help 12 million Aussies see a doctor for free under Medicare, a $40 cash raise every two weeks for benefit recipients, including benefit, youth benefit and disability pensions.
The budget includes a $500 a year utility bill package for households earning less than between $108,000 and $117,000, and programs that will benefit Australians through services rather than cash.
Dr. Chalmers said Tuesday night his budget would “help those who need it most”
They include cheaper medicines and childcare for some families, higher salaries for caregivers and help for Aussies struggling to break into the housing market – including allowing more Australians to buy a house with smaller deposits.
But hidden in the plan were some nasty shocks to taxpayers, including confirmation that he will abolish the Lower and Middle Income Tax (LMITO, or ‘Lamington’ Compensation) – which will cost around 10 million Australians up to $1,500 at tax time, despite rising cost of living.
Meanwhile, smokers will be stabbed with higher prices, the stage three tax cuts due to take effect in the middle of next year aren’t going anywhere – mainly benefiting Australians earning more than $200,000 – and voluntary contributions to super will be taxed at 30 per cent after the balances reached $3 million.
In a speech announcing his budget on Tuesday evening, Dr Chalmers said he was desperately trying not to increase inflationary pressures – with a consumer price index of seven per cent.
“This budget has been carefully calibrated to alleviate inflationary pressures, not to amplify them,” said Dr Chalmers.
“The pressure on the budget is acute – but as a Labor government we will always strive to help those who need it most.”
Dr Chalmers has denied that the budget will contribute to inflation.
READ MORE about what’s in Dr. Chalmers sits