A war of words has erupted after the Coalition’s finance spokesperson said inflation was “out of control” before being reminded it was higher when she was in government.
Jane Hume said the government must do more to help tackle inflation and aid struggling Australians after the Reserve Bank passed on another cash rate hike on Tuesday.
Tuesday’s decision marked the 13th increase since last May but the first in five months, with the official cash rate now at 4.35 per cent – the highest since 2011.
In announcing her decision, governor Michele Bullock said inflation was still too high and proving stubbornly persistent, leaving the door open to further rate rises.
Senator Hume said the Albanese government had left the Reserve Bank with “no choice” but to hike rates because of Labor’s inaction in tackling “out of control” inflation.
The quarterly inflation rate is 1.2 per cent.
“The government needs to do more to get inflation down … The concern for many mortgage holders is that the government has had their eye off the ball and they’ve spent the last 17 months focused on the wrong priorities,” Senator Hume told ABC Radio.
“And in fact the cost-of-living crisis has been getting worse, and that’s been driven by higher and higher inflation.
“It’s not just that headline inflation, it’s that sticky core inflation that’s not being driven by international factors … That’s something the Treasurer simply cannot acknowledge right now.”
She was reminded by interviewer Patricia Karvelas that inflation was higher the last quarter the Coalition was in government – 2.1 per cent – and asked whether inflation was “out of control then”.
Senator Hume said inflation then had been significantly driven by international factors stemming from Russia’s invasion of Ukraine and Covid supply chain issues.
“Now inflation has set in,” she said.
A spokesperson for Treasurer Jim Chalmers said it was “embarrassing and humiliating” for Senator Hume to describe inflation at 1.2 per cent as “out of control”.
“She was reminded on radio today that inflation was almost twice that in the last full quarter of the government she was part of,” the spokesperson said.
“Dutton-style negativity is no substitute for economic credibility.
“You’d think the opposition would make more sense in Angus Taylor’s absence but unfortunately not.”
Assistant Treasurer Stephen Jones on Wednesday said the government's “fiscal restraint” continued to be “absolutely necessary”.
“We’re ensuring that as new revenue comes in, that it’s banked and goes towards paying down the previous government’s debt and bringing down the deficit,” he told Sky News.
“We’re not doing the cash handout thing that was the pattern under the previous government, but we’re ensuring that we can provide targeted cost-of-living relief, particularly in the area of childcare and your medicines and energy bill relief … that is actually helping to bring inflation down.”
Deputy Liberal leader Sussan Ley questioned whether any Australian felt better off than they did a year ago.
“People are not feeling well off, they are feeling very worried about the future,” she told Sky News.
“Nothing this government says is reassuring about the future.”
Assistant Competition, Charities and Treasury Minister Andrew Leigh said there was no denying that the latest rate rise was “tough for Australian households”.
“We’re always looking at ways we can assist Australian households. By bringing down the first surplus in 15 years, effectively the federal government is taking the approach of a householder who says now is the time to pay down a bit more of the mortgage,” he said.