Treasurer Jim Chalmers refuses to ‘second-guess’ RBA despite previously criticising interest rate calls

Treasurer Jim Chalmers says he won’t “second-guess” the decisions made by the Reserve Bank of Australia despite previously saying they were “hammering” working families.

Dr Chalmers made the comments in Perth on Friday during a whistle-stop visit, hours after Ms Bullock told a parliamentary committee the RBA’s board was highly attuned to getting the timing wrong on interest rate cuts, saying that “arguably we were late raising interest rates on the way up, we didn’t respond as quickly as we should have to rising inflation.”

The RBA this week cut the cash rate for the first time since November 2020, from 4.35 per cent to 4.1 per cent.

When asked whether the Reserve Bank moved too late to help families, Dr Chalmers said: “I don’t second guess the decisions taken by the Reserve Bank Governor and her board.”

“I do welcome the governor’s candour and frankness, and we see that repeatedly, the opportunity to explain to Australians how the Reserve Bank is coming at our economic challenges,” he added.

“I think that’s a really good thing, but I’m not going to pass or second guess the commentary that she makes.”

Dr Chalmers had previously said working families had been “smashed” and “hammered” by high rates, in comments urging the Reserve Bank to cut rates much sooner than they did.

The Treasurer said on Friday that the Government would not “pretend that one interest rate cut will solve all of the challenges in our economy or deal with the pressures on household budgets, but it will help”.

Ms Bullock this morning poured cold water on hopes of more rate cuts sooner rather than later, telling the committee that the “job is not done” on inflation and that the 2.5 per cent inflation target was not likely to be reached until June.

But Dr Chalmers said inflation is heading in the right direction.

“These are not accidental outcomes, they’re deliberate outcomes.”

Speaking on the WA election, Dr Chalmers brushed off concerns about Prime Minister Anthony Albanese’s popularity.

It’s been confirmed the Prime Minister will skip Labor’s official State campaign launch on Sunday, but the Federal Treasurer denied that was due to concerns he has become a distraction.

“I wouldn’t have thought so, I mean Anthony Albanese has been a very regular visitor to the west and works very closely with Mr Cook,” Dr Chalmers said.

“I think Premier Cook’s an outstanding Premier in Australia . . . we couldn’t be more supportive but, overwhelmingly, it will be a State election fought on state issues.

“The Prime Minister will be here from time to time, but the election on the 8th of March is Roger’s show.”

The Treasurer also conceded the Federal election, due to be held by May 17, will be tight in mortgage belt seats. This includes Tangney and Hasluck in WA, which Labor seized from the Liberal Party in 2022.

“There’s no use pretending otherwise,” he said.

“This election will be hard fought, it will be close, it will be hotly contested in WA and right around Australia.”

Dr Chalmers was only in WA for about 12 hours. The whirlwind trip included a fundraising dinner with resources industry figures, followd by a morning run and a press conference to spruik this week’s interest rate cut before heading to the airport.