Jim Chalmers handed down a desperate Budget every economist feared could spell disaster. Now, with the Australia teetering on the edge of a recession – here’s how he’s trying to spin it… writes PETER VAN ONSELEN

What do you do when you’ve handed down a budget and pretty much every respected economist criticises it? 

Dismiss their musings as just ‘partisan attacks’ and pat yourself on the back for your excellent performance because no one else will. That has been the post budget tactic adopted by Jim Chalmers in recent weeks. 

Denial isn’t just a river in Egypt.  

Chalmers made his point on a number of occasions in Question Time, where ministers get to pick questions for themselves that get asked by their own backbench. It is the ultimate display of parliamentary performative art. 

The Treasurer has even managed to contort himself into a self-compliment for the release of shockingly anemic economic growth numbers this week. The economy has only grown by 1.1 per cent annually despite record high immigration. 

That makes it the worst yearly growth numbers (outside of the pandemic) in more than 30 years. 

Without immigration Australia would be deep in recession already and with high inflation: a catastrophic mix.  

A lot to think about. Treasurer Jim Chalmers (pictured) claims that his budget did the right thing given slowing economic growth

Yet, in Chalmers mind, the poor results are evidence of his excellent economic management. Proof positive that his expansionary budget was the right call to make, because without the assistance being provided, the bad numbers would be even worse. 

The line of argument is especially funny when you consider that immediately after the budget when economists expressed concerns that it spent too much – making the budget expansionary – the Treasurer denied this. 

Now that the data shows the economy is tanking he’s relying on the very argument he dismissed as untrue to defend himself.  

So Chalmers now thinks that he deserves applause for delivering an inflationary budget during a cost of living crisis. Doesn’t he understand that any cost of living crisis only keeps getting worse if inflation persists? 

It risks lengthening the timeline of the pain ordinary voters are feeling.  

Perhaps ignorance – deliberate or otherwise – is why the Treasurer is now taking aim at the conga line of economists criticising his decision making. Dismissing their concerns because they are allegedly just ‘partisan critics’. I have always found it amusing when politicians of all political stripes use this line of attack.

Cost of living pressures don't go away if inflation remains high. Most economists think it isn't coming down fast enough

Cost of living pressures don’t go away if inflation remains high. Most economists think it isn’t coming down fast enough

Essentially if you disagree with them some politicians try and dismiss you as a partisan opponent. The very same politicians who sign up to a political party and in turn choose to build a career off the back of blindly following that party’s ideology every step of the way brazenly attack others for displaying partisan bias? 

It is laughable pot calling the kettle black stuff. 

Being Treasurer is a serious job, yet get your head around this word for word extract from one of Jim Chalmers’ media releases: 

‘Our balanced approach to fighting inflation without smashing the economy is bang-on’ and ‘our political opponents and partisan critics are dead wrong’. 

If that’s not undergraduate political rhetoric I don’t know what is. 

The serious issue for the country is that we have persistently high inflation with little prospect of a cut in official interest rates any time soon. Yet this is happening as the economy falters to the point where we are on the cusp of an official recession. 

The budget went down like a lead balloon, despite Treasurer Jim Chalmers (pictured) praising himself

The budget went down like a lead balloon, despite Treasurer Jim Chalmers (pictured) praising himself

Unfortunately there is no painless way out of this conundrum. 

The government gambled that inflation and interest rates would come down later this year despite the budget pushing in the opposite direction. It took that risk because it wanted to put more money in people’s pockets before the election in order to reap the political rewards for doing so. 

Yet it now appears that the tactic could backfire. 

None of these decisions have been taken on economic grounds. Politics has dictated the decision making every step of the way.  

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