Editorial: Jim Chalmers warns of slow growth but we need economic clarity

Jim Chalmers does not want Australians to have high hopes for the economy next year. Ahead of the release of this week’s National Accounts data on Wednesday, the Treasurer has set the bar low for expectations. Sluggish growth of 0.4 per cent through July to September is the expected result when he addresses the media. “We know that higher interest rates, global economic uncertainty and cost of living pressures are weighing on households and the economy, and we expect to see that in this week’s National Accounts data,” Dr Chalmers said on Sunday. “Treasury’s growth forecasts in the mid-year update later this month will show it expects slow growth in our economy to continue in the near‑term. “We’ve been planning and preparing for a soft landing, and with the economy still growing, inflation back in the band, and unemployment with a four in front it we are on track for one.” Chalmers still boasts about Labor’s two surpluses, built off of soaring mining royalties. But the Government’s next budget — currently scheduled for March — is expected to be far less rosy. Economist Chris Richardson declared Dr Chalmers’ luck was running out, pointing to an expected fall in iron ore prices and slower inflation slamming tax receipts. “The luckiest government Australia has ever seen — at least in budgetary terms — didn’t take the opportunity to get the national budget better prepared for the long haul,” he said. Oxford Economics will reveal on Monday it believes Australia’s economy will expand two per cent next year as interest rates remain high and a trade war looms. “Our forecast for growth in 2025 is much lower than it was a year ago, owing to the lingering inflation problem and tight policy settings,” Oxford’s Sean Langcake said. “As we head into an election season and with many of Australia’s trading partners set to announce tariff policies, there is an air of uncertainty that will weigh on business sentiment in the new year.” It begs the question — what is the Federal Government’s economic plan? Ahead of an election set to be defined by the cost-of-living pressures still felt across the country, and voters’ economic exhaustion, Labor’s response has been merely to admit voters don’t know what the Government is doing. “We acknowledge that even with the remarkable progress we’ve made in the national data, that doesn’t always translate to how people are faring and feeling in the economy,” Chalmers said. It’s a frank admission that no matter how much the Treasurer speaks, Australians are not feeling better off at all. Households are still shocked at the supermarket, Australians are struggling with housing costs and voters are pessimistic about the future. Australians did not elect Labor to simply ride the economic rollercoaster. The Treasurer needs a plan, and he needs to assure Australians it can work.