Democratic world is vulnerable, Chalmers warns
Western governments risk losing the faith of working people if they fail to meet their aspirations, Treasurer Jim Chalmers will warn as he admits country's economy and budget bottom line need to improve.
In a speech to the National Press Club on Wednesday, Chalmers will warn against assuming 'extreme volatility' seen around the world is temporary as he makes a pitch for productivity reform against the backdrop of conflict in the Middle East roiling global markets.
'In important ways, we outperformed our peers,' Chalmers will say, noting inflation has fallen without unemployment spiking. 'We should be proud of that, but not satisfied with that.'
The Australian economy has managed to avoid recession and maintained a labour market that is stronger than before the pandemic. However, the country's economic growth has lagged some of its peers, grinding backwards in the 12 months to March when accounting for population growth.
Eight days after Prime Minister Anthony Albanese made his own Press Club appearance urging the need to restore faith in government, Chalmers will pinpoint the need to boost living standards for working people.
'So much of the democratic world is vulnerable because governments are not always meeting the aspirations of working people,' he will say.
'Our budget is stronger, but not yet sustainable enough,' Chalmers will argue. 'Our economy is growing, but not productive enough. It's resilient, but not resilient enough – in the face of all this global economic volatility.'
While trade uncertainty is higher than it was during the global financial crisis, Chalmers will note there are opportunities for Australia if the country could diversify its trade, make the economy more resilient and shore up supply chains.
'Since Liberation Day, Australian shares have outperformed US ones,' he will say. 'These are normally signs that investors are becoming more wary of the US and more attracted to Australia's stable markets.'
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