The Economic Turmoil Is Here to Stay

Scott Morrison has acknowledged that costs of ordinary things are rising. Still, he has emphasized that this is due to external reasons.

On Friday, Opposition Leader Anthony Albanese emerged from COVID-19 solitude; hence, the campaign trail’s attention shifted back to growing living costs. According to the prime minister, increased inflation and strain on household budgets are due to forces beyond the government’s control. “External pressures on the economy will persist for some time,” he said in Tasmania on Friday; “especially when we witness the disruption of the conflict in Europe and the disruption caused by the epidemic.”

The Reserve Bank of Australia’s inflation rate has jumped to 5.1 percent, the highest level in two decades; this prompted anticipation that it may raise interest rates for the first time in 12 years when it meets next on Tuesday. The coalition, according to shadow treasurer Jim Chalmers, is neglecting cost-of-living challenges. “What matters most to Australians is that keeping up is becoming increasingly difficult and getting ahead is nearly impossible.”

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Treasurer Josh Frydenberg defended the government’s economic management. Still, he disputed that he attempted to persuade the Reserve Bank to delay raising interest rates until vital wage numbers are released later in May. “I’m not suggesting I’m going to pre-empt any judgment made by an independent body, such as the Reserve Bank,” he told ABC Radio.

According to the treasurer, many of the difficulties confronting the Australian economy, such as workforce shortages, have no silver bullet. Still, the country’s finances are on track. Concerns about growing living costs have spread to power pricing. Fresh numbers indicate a 141% increase in wholesale power rates in the first three months of this year compared to the same period in 2021.