Treasurer bats away Reserve Bank blame game claims

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Treasurer bats away Reserve Bank blame game claims

Even as rate hikes put pressure on Australians, the treasurer insists his government maintains a good relationship with the Reserve Bank.

National accounts data, which will be released on Wednesday, is expected to show a soft and subdued economy with sluggish GDP growth.

Pre-empting the results, Treasurer Jim Chalmers said the Reserve Bank of Australia’s cash rate hikes have “smashed the economy”, prompting critics to claim he was shifting blame.

But Dr Chalmers has insisted he works closely with the RBA and was pointing at economic pressures affecting Australians.

“It would be a bit strange, frankly, if the treasurer of Australia couldn’t point to the sorts of things which are slowing our economy,” he told ABC news on Tuesday.

“We work well and closely with the governor of the Reserve Bank.

“We’ve got different responsibilities, but we’ve got the same objective, and our objective is to get on top of this inflation challenge without smashing an economy which is already weak.”

Global economic uncertainty, persistent prise pressures and higher interest rates were all combining to slow the economy in substantial ways, Dr Chalmers said.

Australia’s annual inflation rate rose to 3.5 per cent in the 12 months to July, according to statistics bureau data released on Wednesday – slightly hotter than expected but down from 3.8 per cent in June.

While some progress has been made, the treasurer acknowledged there was still a way to go.

“When people are doing it tough as they are now, the job of the government … is to try and do what we can to make things easier,” he told Sunrise.

“We need to do that in a way that doesn’t put additional pressure on people or smash an economy which we expect is already quite weak.”

Asked whether Australia would follow in the footsteps of other nations and cut rates, Dr Chalmers said he doesn’t pre-empt decisions the independent central bank’s decisions.

Nationals senator Bridget McKenzie has claimed Australia’s interest rates have remained high because the government “won’t get its own budget under control”.

“While Australians are struggling with mortgage payments higher than they’ve seen in their lifetime, and rents that are going through the roof, they’re shifting the blame every single day of the week,” she told the Today show.

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