Last month, Federal Treasurer Jim Chalmers stood in front of the Australian people to deliver his “plan” to bring down inflation.
But if there’s one thing the past two years have taught us, it’s not to trust a Labor Government with a plan.
Remember PM Anthony Albanese’s plan to build more than 40,000 affordable homes?
How about Energy Minister Chris Bowen’s plan to reduce energy bills by $275?
I call it Labor’s First Law of Economics: any part of the economy they plan to improve only gets worse.
In delivering his third Budget, Dr Chalmers said Labor’s economic plan would take three-quarters of a percentage point from inflation this year, and another half of a percentage point next year.
“Treasury is now forecasting inflation could return to target earlier, perhaps even by the end of the year,” Dr Chalmers said.
There was just one problem with Labor’s plan: reality.
As soon as the Budget was delivered, economists warned rather than bringing down inflation, Dr Chalmers had inflamed it.
Not that you needed to be a professional economist to see record government spending, record taxation and record net overseas immigration would create one of the worst inflation crises this country has seen.
On cue, inflation rose to 3.8 per cent a far worse figure than in the UK, US and much of Europe.
Under Dr Chalmers, government spending has reached 27.6 per cent of GDP, exceeding even pandemic-era spending, and still going up.
Much of this spending has been frivolous when constraint, for the sake of households, was needed.
Travelling across the country, I’ve yet to meet an Australian who thinks we need an extra 30,000 bureaucrats in Canberra, or it was prudent to spend nearly $500 million on the Voice to Parliament campaign.
We can throw in the $40m of your money Dr Chalmers is spending to sell you his broken promise over stage three tax cuts.
As a result of surging inflation, the Reserve Bank of Australia who, unlike the Treasurer, has to deal with reality confirmed during Budget Estimates what Australians were fearing: a 13th rate rise is on the cards.
The cost of Dr Chalmers’ plan has, as always, fallen on Australian households.
Australians now pay 62 per cent more on their mortgages than before the election.
In WA, we’re cumulatively spending an extra $1 billion per year on mortgage repayments.
It’s $1b not being spent in hospitality, entertainment even medical care and school fees.
That’s some plan.
Last month, along with “moderating inflation”, Dr Chalmers championed Labor’s plan for increasing wages and “expanding business investment”.
Again, that pesky obstacle reality got in the way.
In the same week, it was confirmed inflation had gone up, not down.
National Accounts data revealed the economy had contracted for five consecutive quarters and had entered a per-capita recession.
This means, per person, the economy is shrinking.
The figures showed how personal savings (down 9.9 per cent), disposable income (down 7.8 per cent) and productivity (down 7.8 per cent) have collapsed.
Independent economist Chris Richardson put it better than most when he said: “There is pain leaking out of every number in these accounts.”
Business investment, instead of expanding, has been decimated.
ASIC data shows that in WA, Australia’s economic powerhouse, business insolvencies are double what they were last year.
Just this week, the Small Business and Family Enterprise Ombudsman said 43 per cent of businesses had not made a profit last year, while calls to the Ombudsman’s helpline had risen 20 per cent.
Instead of responding to reality, Dr Chalmers is blaming it.
In response to the alarming figures revealed this week, he said the “primary reason” for Australia’s economic stagnation was the RBA, rather than his own policies.
It’s a long way from his confidence of last month, when he told the nation only Labor could be trusted with “an economic plan where growth and opportunity go together”.
On behalf of the country, I have a simple request for Dr Chalmers and Labor: please, no more plans.