Nat Barr has confronted Treasurer Jim Chalmers over Australia’s escalating interest rates, government expenditure and tax burden as mortgage holders prepare for another financial squeeze.
During an interview on Sunrise, the host questioned why Australia was heading towards one of the highest cash rates among developed nations. The Reserve Bank was widely expected to raise the rate from 4.35 per cent to 4.60 per cent on Tuesday.
Barr pointed out that only Iceland was expected to have a higher rate, with the United States, United Kingdom, New Zealand, Canada, Denmark, Sweden and Singapore all sitting below Australia.
“Why are we performing so poorly by global standards? We have the second-highest cash rate in the developed world. You know these figures,” Barr said.
Chalmers resisted the criticism, saying Australia’s economic position could not be judged by interest rates alone.
“The first thing to recognise is that inflation and interest rates are increasing across the world,” the Treasurer said.
“And if you want to compare Australia with other countries, you need to consider the complete picture.”
Nat Barr has challenged Treasurer Jim Chalmers over rising interest rates, government spending and high taxes as Australian households face mounting mortgage pressure.
Chalmers rejected claims that government spending had been allowed to run out of control.
“Our economic growth is stronger than that of almost every other major advanced economy,” Chalmers said.
“We also have stronger employment growth than those economies, as well as significantly lower levels of debt.
“So when comparisons are made, it is important to look at all of the relevant measures.”
Barr responded that the broader economic data did little to reassure families dealing with rising repayments and the increasing cost of living.
“But Jim, people don’t experience it that way. The messages coming in are saying, ‘Those figures might be positive, but this is what is happening around my kitchen table.’ That is the reality they are facing,” she said.
The Sunrise presenter then turned to the government’s spending levels, asking whether increased expenditure was putting further pressure on inflation.
“Government spending has risen to 26.9 per cent of GDP, its highest level outside the pandemic period since around 1986. Do you accept that this is contributing to the inflation crisis?” Barr asked.
Chalmers again rejected the suggestion that government expenditure had surged unchecked.
Australia is facing one of the highest cash rates among developed economies.
“In terms of government spending, we have reduced it substantially since coming to office,” he said.
“Government spending as a proportion of the economy has fallen considerably over the past four or five years.”
Barr pressed him again, pointing to concerns raised by economists and the Reserve Bank about government spending and demand in the economy.
‘But you’ve got economists and even the RBA Governor saying your high government spending is contributing to this. Do you accept that it’s still too high?’
Chalmers said there was more work to be done on the budget.
‘I accept that there is always more work to do to get the budget in even better nick, to build on the very substantial progress that we have made already,’ he said.
‘If you look at that final budget outcome we released yesterday, the budget deficit for this year is around half what we inherited when we came to office.
‘It means that even in that one year, even since the budget, the budget’s $6 billion stronger, debt is $10 billion lower.’
Barr then turned to tax, telling Chalmers: ‘You are on target to become the highest-taxing treasurer in Australian history. That’s what people are feeling.’
Chalmers disputed the characterisation and pointed to tax levels under former Coalition treasurer Peter Costello.
‘Well, our tax levels are lower than what they were under Peter Costello. That’s an important point that I think people are missing, reacting to those stories today,’ he said.
‘But even that story today acknowledges that taxes were higher under Peter Costello.
‘A lot of people from the other side of politics point to Peter Costello as a model. He had higher taxes in his budgets than I have in mine.
‘So I just think that’s an important bit of perspective.’
