Nat Barr’s brutal question to Chalmers

Nat Barr did not hold back during Tuesday's interview

Federal Treasurer Jim Chalmers has fended off pointed questions on whether his recent remarks describing interest rates as “smashing the economy” were a ploy to shift attention ahead of June quarter GDP figures.

His comments were widely seen as a thinly veiled shot at the Reserve Bank.

“Is this an attempt for you to shift the spotlight?” Sunrise host Nat Barr asked Mr Chalmers on Tuesday.

Mr Chalmers denied he was trying to shift the spotlight onto the RBA or that there was a shift in the government’s rhetoric.

“I think it is self-evident that the interest rates rises … are slowing our economy,” he said.

“I’ve been making that point for some months.”

He said it “would be strange” if, as treasurer, he could not explain soft economic growth.

“I think a lot of people understand the pressure that comes from higher interest rates and that is what I was acknowledging,” he said.

Treasurer Jim Chalmers was grilled on whether his RBA comments were made to avoid Australians thinking poor GDP figures were his fault.

Judo Bank Chief Economic Adviser Warren Hogan discusses the “slowest rate” of “real” economic growth in Australia since the early 1990s recession. “This is the slowest rate of real economic growth since the early 1990s recession,” Mr Hogan said. “So, this is going to portray an economy with very weak consumer spending, no growth in the construction sector outside of infrastructure and of course an inflation pulse that is still persistent and hanging around.”

He also dismissed any rift with the RBA, saying the government was working “closely with the Reserve Bank” to combat inflation.

“We’ve got different responsibilities, but we’ve got the same objective, and our objective is to get on top of inflation in our economy,” Mr Chalmers said.

“We’ve made some progress, but we’ve got further to go. We need to do that in a way that doesn’t put additional pressure on people or smash an economy which we expect is already quite weak.”

The Treasurer has previously highlighted the pressure interest rate hikes have put on the economy numerous times, but his recent comments were especially colourful.

The fresh GDP data due out on Wednesday is tipped to show Australia’s economy grew by just 0.2 per cent, which would represent a drop in annual growth from 1.1 per cent to 0.9 per cent.

Treasurer Jim Chalmers says he takes ‘responsibility for (the government’s) part of the fight against inflation’. Picture: NewsWire / Martin Ollman

Barr later asked Mr Chalmers if he was ramping up the language because “you don’t want Australians to think (cost-of-living pressure) is your fault”.

He said he took “responsibility for our part of the fight against inflation”.

“I take responsibility for those surpluses that we’ve delivered, the cost-of-living relief we’re rolling out,” he said.

“We anticipated a weaker economy in the budget. We’re dealing with that now, and so I take responsibility.”