‘Hit the nerve’: Prime Minister’s pledge on the economy

The new third stage of tax cuts and cost of living relief will come into force on Monday. Workers earning $30,000 a year will receive an additional $354. Each household will receive a $300 energy rebate that will be automatically deducted from their energy bills.

Premier Anthony Albanese and Treasurer Jim Chalmers on Sunday touted stage three tax cuts and other measures including a $300 energy credit and a wage hike for low-income workers, denying they would overstimulate the economy.

During a visit to an Indian sweets factory in Melbourne, Mr Albanese said the Government was doing what it could to bring down inflation while helping Australians.

“Our goal is to make sure we address the short-term issues that are causing cost-of-living pressures on families,” he said.

“But we also want to make sure we have the right economic conditions, which is why we have achieved budget surpluses that put downward pressure on inflation.”

He said the Sweet Magic plant was an appropriate place to talk about the government’s economic plans “because our goal is to hit a nerve.”

“The sweet spot is to put downward pressure on inflation while lowering the cost of living,” he said.

“Tomorrow will be a big day – 2.6 million bonus recipients will also receive a pay rise, while 13.6 million Australian taxpayers will receive a tax cut.”

Fears the RBA will raise rates from 4.35 per cent, its highest level since late 2020, rose after the CPI rose to 4 per cent in May.

Chalmers said he hoped inflation would be subdued despite May and March figures of 3.6 per cent, above the RBA’s target of 2-3 per cent.

The Australian Bureau of Statistics will release a major report for the June quarter on 31 July, just days before the next RBA board meeting on 6 August.

Michele Bullock, the RBA Governor, has always said that if necessary, the RBA will raise interest rates again to bring inflation under control.

On Sunday, the opposition went on the attack, with senior MP Michaelia Cash saying the government’s package would do nothing to help Australians.

“Back to the real world, when Australians wake up today, they will find it hard because of the policies of this government,” she told Sky News.

“It’s not inflation; This is jimflation.”

Shadow Treasurer Angus Taylor blamed inflation on the government.

“The Albanian Labor government has utterly failed to address the root of Australia’s cost of living crisis – inflation,” Mr Taylor said in a statement.

“We are in a deep cost of living crisis and Labour sees no light at the end of the tunnel.

“The Albanian Labor government has no vision for a low-inflation, high-growth economy. They have no plan for economic prosperity.”

Mr Chalmers admitted many households were “in a difficult position” due to higher living costs and higher interest rates, but said he expected Government policies to be “helpful in tackling inflation”.

“We are confident, but not satisfied, that we will overcome this inflation problem,” Mr Chalmers said.

“We can provide cost of living relief and we can get a better budget without destroying the economy.”

Speculation about another interest rate hike gained momentum on Wednesday after stronger-than-expected inflation data encouraged investors to increase bets on another hike ahead of the RBA’s next meeting.

“I think it’s really clear that the interest rate increases that are already in the system are already putting a lot of pressure on people,” Chalmers said.

“We’ve seen that in a lot of economic indicators. I understand that, and that’s another reason why this aid tomorrow is so important.”

But he warned Australians should not expect easing inflation to be easy.

“Inflation in our economy will continue to fall. It doesn’t always follow a perfectly straight line”

“We’ve seen it all over the world as well. We’ve seen it here in Australia as well.

“But our role is to try to make people’s lives easier.

“That’s why tax cuts, energy bill reductions, wage increases, cheaper medicines, paid parental leave – that’s what all of this was designed for.”

Meanwhile, all federal politicians will receive a pay rise on Monday following a decision by an independent judge, the Remuneration Tribunal.

Mr Albanese will receive a raise of $20,543, taking his annual salary to $607,500, while Deputy Prime Minister Richard Marles will receive a raise of $16,197, taking his annual salary to $478,983.

Opposition Leader Peter Dutton will receive a $14,617 pay raise, bringing his annual salary to $432,250.