Treasurer Jim Chalmers' big spending a 'very risky strategy', Warren Hogan declares, after IMF slashes growth forecast
Treasurer Jim Chalmers has taken a 'very risky strategy' with Labor's big public spending under the Albanese government, a leading economist has declared, as fiscal turbulence from United States President Donald Trump's trade war looms.
The International Monetary Fund has downgraded its growth forecasts for Australia and many economies around the globe due to astronomically high tariffs between the US and China.
Many in the Coalition criticised Labor after the report arose, as the IMF called for nations to strengthen economic buffers in the face of fiscal headwinds from the trade war.
Judo Bank's chief economist Warren Hogan also criticised Labor's economic management when he was asked his thoughts on Mr Chalmers' performance as Treasurer over the past three years.
'He's done a good job at selling their story around trying to reorder the priorities of government, but he's also gilded the lily a little bit on a lot of this strategy,' Mr Hogan told Sky News' Business Now.
'The reality under this government is government spending has hit new record highs.
'It is a very risky strategy to essentially be taking all the benefits that we've had over the last 20 years from the mining boom and the commodity boom and these wonderful exports that we have had and then spending them.'
He pointed to the indirect backlash Australia could face amid trade tensions between the two largest economic superpowers.
It was forecast Australia's economy will suffer a $13b setback in 2025 and Aussies finally experiencing easing price pressures could see costs surge again due to President Trump's tariffs.
Australia's growth has been downgraded by 0.5 per cent to 1.6 per cent, while the US' growth has been slashed by 0.9 per cent and global growth is projected to be half a per cent lower than if the President's tariffs were not implemented.
'As we're seeing in the last month, this trade war is serious and we're right in the middle of it,' Mr Hogan said.
'If we have any shock to our export markets because of what's happening between the US and China, if the demand out of China shrinks, the government's revenues are gonna get hit hard and then this question of can we afford it will come front and centre.
'I think our budget is very vulnerable to a significant blowout in this operating environment and we don't have any space for that because we are now in deficit.'
Directing his sights back at the Treasurer, Mr Hogan called for Labor to reel in large government spending.
'I don't think the Treasurer's done a bad job, but I don't agree with the policy strategy,' he said.
'I think it's risky. I think we need to contain the growth of the size of government in this country.'
Mr Hogan's call comes after the Treasurer and Mr Taylor locked horns at the Business Debate on Wednesday where cost of living, taxes, business investment, and much more took centre stage.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Advertiser
2 hours ago
- The Advertiser
Familiar face returns for election as stadium divides
A slew of familiar faces have popped up as candidates in a surprise state election that continues to be dominated by a controversial stadium plan. Among those putting their hands up ahead of the Tasmanian election are former Liberal state attorney-general Elise Archer, who will run as an independent at the July 19 poll. The snap election, which will be the state's second in 16 months, was called after Premier Jeremy Rockliff refused to resign following a successful no-confidence vote in his leadership. Ms Archer is contesting the Hobart-based seat of Clark after she was dumped from her frontbench role and quit parliament following bullying allegations. She denies any wrongdoing. She said she decided to run after being frustrated about the state's financial situation and poor governance under the Liberal-led minority administration. Minority government seemed "inevitable" and sensible but experienced independents were needed, Ms Archer said. Mr Rockliff declined to comment on his former colleague's tilt as an independent while unveiling the Liberals' seven candidates for the seat of Lyons on Sunday, but he reiterated only a majority government could provide stability. "A vote for an independent is a vote for politics and instability," he said. The premier was in Launceston on Sunday, announcing a pledge to expand women's healthcare service The Bubble and reduce the need for women and girls in the north to travel for care. The Greens, which could have a role in deciding who forms government in the 35-seat lower house, have called on both parties to clarify their position on the controversial Macquarie Point stadium. The stadium in Hobart is a condition of the AFL granting the island state a team licence and has been backed by the Liberals and Labor, but the Greens and some independents oppose the project due to its potential $1 billion price tag. The Greens insist York Park in Launceston, which hosted 15,000 people for a Friday clash between Hawthorn and Adelaide, should be the home of football. Mr Rockliff said his party supported the stadium as it would keep the state economy strong. "We keep investing in people, in infrastructure that grows our economy, so we can fund those essential services that all Tasmanians care about," the premier said. Labor Leader Dean Winter said his party was consulting with stakeholders over legislation allowing the stadium to bypass planning and development approvals, but he reiterated support for the project. "We understand that that's the link between the AFL team that Tasmania has desperately wanted," he said in Old Beach, north of Hobart, to announce a plan to slash development rules in half to get housing built faster. Ms Archer said she couldn't support the stadium due to the cost, noting "no other AFL team has had such strict requirements placed on it like Tasmania". A slew of familiar faces have popped up as candidates in a surprise state election that continues to be dominated by a controversial stadium plan. Among those putting their hands up ahead of the Tasmanian election are former Liberal state attorney-general Elise Archer, who will run as an independent at the July 19 poll. The snap election, which will be the state's second in 16 months, was called after Premier Jeremy Rockliff refused to resign following a successful no-confidence vote in his leadership. Ms Archer is contesting the Hobart-based seat of Clark after she was dumped from her frontbench role and quit parliament following bullying allegations. She denies any wrongdoing. She said she decided to run after being frustrated about the state's financial situation and poor governance under the Liberal-led minority administration. Minority government seemed "inevitable" and sensible but experienced independents were needed, Ms Archer said. Mr Rockliff declined to comment on his former colleague's tilt as an independent while unveiling the Liberals' seven candidates for the seat of Lyons on Sunday, but he reiterated only a majority government could provide stability. "A vote for an independent is a vote for politics and instability," he said. The premier was in Launceston on Sunday, announcing a pledge to expand women's healthcare service The Bubble and reduce the need for women and girls in the north to travel for care. The Greens, which could have a role in deciding who forms government in the 35-seat lower house, have called on both parties to clarify their position on the controversial Macquarie Point stadium. The stadium in Hobart is a condition of the AFL granting the island state a team licence and has been backed by the Liberals and Labor, but the Greens and some independents oppose the project due to its potential $1 billion price tag. The Greens insist York Park in Launceston, which hosted 15,000 people for a Friday clash between Hawthorn and Adelaide, should be the home of football. Mr Rockliff said his party supported the stadium as it would keep the state economy strong. "We keep investing in people, in infrastructure that grows our economy, so we can fund those essential services that all Tasmanians care about," the premier said. Labor Leader Dean Winter said his party was consulting with stakeholders over legislation allowing the stadium to bypass planning and development approvals, but he reiterated support for the project. "We understand that that's the link between the AFL team that Tasmania has desperately wanted," he said in Old Beach, north of Hobart, to announce a plan to slash development rules in half to get housing built faster. Ms Archer said she couldn't support the stadium due to the cost, noting "no other AFL team has had such strict requirements placed on it like Tasmania". A slew of familiar faces have popped up as candidates in a surprise state election that continues to be dominated by a controversial stadium plan. Among those putting their hands up ahead of the Tasmanian election are former Liberal state attorney-general Elise Archer, who will run as an independent at the July 19 poll. The snap election, which will be the state's second in 16 months, was called after Premier Jeremy Rockliff refused to resign following a successful no-confidence vote in his leadership. Ms Archer is contesting the Hobart-based seat of Clark after she was dumped from her frontbench role and quit parliament following bullying allegations. She denies any wrongdoing. She said she decided to run after being frustrated about the state's financial situation and poor governance under the Liberal-led minority administration. Minority government seemed "inevitable" and sensible but experienced independents were needed, Ms Archer said. Mr Rockliff declined to comment on his former colleague's tilt as an independent while unveiling the Liberals' seven candidates for the seat of Lyons on Sunday, but he reiterated only a majority government could provide stability. "A vote for an independent is a vote for politics and instability," he said. The premier was in Launceston on Sunday, announcing a pledge to expand women's healthcare service The Bubble and reduce the need for women and girls in the north to travel for care. The Greens, which could have a role in deciding who forms government in the 35-seat lower house, have called on both parties to clarify their position on the controversial Macquarie Point stadium. The stadium in Hobart is a condition of the AFL granting the island state a team licence and has been backed by the Liberals and Labor, but the Greens and some independents oppose the project due to its potential $1 billion price tag. The Greens insist York Park in Launceston, which hosted 15,000 people for a Friday clash between Hawthorn and Adelaide, should be the home of football. Mr Rockliff said his party supported the stadium as it would keep the state economy strong. "We keep investing in people, in infrastructure that grows our economy, so we can fund those essential services that all Tasmanians care about," the premier said. Labor Leader Dean Winter said his party was consulting with stakeholders over legislation allowing the stadium to bypass planning and development approvals, but he reiterated support for the project. "We understand that that's the link between the AFL team that Tasmania has desperately wanted," he said in Old Beach, north of Hobart, to announce a plan to slash development rules in half to get housing built faster. Ms Archer said she couldn't support the stadium due to the cost, noting "no other AFL team has had such strict requirements placed on it like Tasmania". A slew of familiar faces have popped up as candidates in a surprise state election that continues to be dominated by a controversial stadium plan. Among those putting their hands up ahead of the Tasmanian election are former Liberal state attorney-general Elise Archer, who will run as an independent at the July 19 poll. The snap election, which will be the state's second in 16 months, was called after Premier Jeremy Rockliff refused to resign following a successful no-confidence vote in his leadership. Ms Archer is contesting the Hobart-based seat of Clark after she was dumped from her frontbench role and quit parliament following bullying allegations. She denies any wrongdoing. She said she decided to run after being frustrated about the state's financial situation and poor governance under the Liberal-led minority administration. Minority government seemed "inevitable" and sensible but experienced independents were needed, Ms Archer said. Mr Rockliff declined to comment on his former colleague's tilt as an independent while unveiling the Liberals' seven candidates for the seat of Lyons on Sunday, but he reiterated only a majority government could provide stability. "A vote for an independent is a vote for politics and instability," he said. The premier was in Launceston on Sunday, announcing a pledge to expand women's healthcare service The Bubble and reduce the need for women and girls in the north to travel for care. The Greens, which could have a role in deciding who forms government in the 35-seat lower house, have called on both parties to clarify their position on the controversial Macquarie Point stadium. The stadium in Hobart is a condition of the AFL granting the island state a team licence and has been backed by the Liberals and Labor, but the Greens and some independents oppose the project due to its potential $1 billion price tag. The Greens insist York Park in Launceston, which hosted 15,000 people for a Friday clash between Hawthorn and Adelaide, should be the home of football. Mr Rockliff said his party supported the stadium as it would keep the state economy strong. "We keep investing in people, in infrastructure that grows our economy, so we can fund those essential services that all Tasmanians care about," the premier said. Labor Leader Dean Winter said his party was consulting with stakeholders over legislation allowing the stadium to bypass planning and development approvals, but he reiterated support for the project. "We understand that that's the link between the AFL team that Tasmania has desperately wanted," he said in Old Beach, north of Hobart, to announce a plan to slash development rules in half to get housing built faster. Ms Archer said she couldn't support the stadium due to the cost, noting "no other AFL team has had such strict requirements placed on it like Tasmania".
ABC News
4 hours ago
- ABC News
Tasmanian Labor consulting on 'right process' for Macquarie Point stadium approval
Tasmanian Labor says it is trying to understand what the "right approval process" is for the Macquarie Point stadium, suggesting it may walk back its support for the fast-track process currently in place. The $945 million proposed waterfront stadium is being assessed by the Tasmanian Planning Commission as a Project of State Significance (POSS). But the government and others involved in the project fear the project will be unable to meet the strict timelines set out by the AFL. In June, knowing it had the support of Labor, the Liberal government introduced special legislation that would have allowed the project to bypass the planning system. It was due to be debated later this month. Instead, following a no-confidence motion in Premier Jeremy Rockliff, Tasmania is facing its fourth election in seven years. Now, Labor appears to be reconsidering its support for the legislation. When asked at a press conference if Labor would be pursuing the enabling legislation, leader Dean Winter said the party was "consulting" with stakeholders about the right process. "We need to make sure that we can get this thing built," said Mr Winter. "We've looked at the legislation and also understood from Legislative councillors that there are some real challenges there, so we'll be making announcements around that following consultation." The Legislative Council is ruled by independents and minor parties at a nine-to-six split, meaning even with both major parties on board, nothing is guaranteed. Regardless of which process it goes through — legislation or POSS — the project has to be approved by both houses of parliament. "We need to make sure whatever goes to the Legislative Council can actually get approval," Mr Winter said. "That's going to require a lot of hard work and a parliamentary process that makes sense." He would not be drawn on whether he thought the legislation would pass the upper house in its current form. "We have to get it approved and finding the right approval process to maximise the chances of actually getting it built is the most important priority here," Mr Winter said. Regardless of whether Labor wins government on July 19, its support is likely to be essential. Greens candidate Helen Burnet said while she would like Labor to walk away from the stadium altogether, she hoped the party would at least drop its support for the legislation. "They've been very unclear in the past. They've flip-flopped. It's really important with such a massive issue that they're making it very clear for Tasmanians before they vote.
West Australian
4 hours ago
- West Australian
Amazon mega deal underscores economic relationship with US, minister says
Amazon's $20bn investment into Australian data centre infrastructure underscores the economic relationship with the US ahead of Anthony Albanese's first face-to-face with Donald Trump, Labor's industry tsar says. The Prime Minister announced the mega deal with Amazon at the tech giant's headquarters in Seattle overnight. Speaking to media, Mr Albanese also said he and the US President had 'scheduled' a meeting on the sidelines of the G7 in Canada after Mr Trump confirmed he would attend the summit. Pressure has been mounting on Mr Albanese to secure a carve out from sweeping US tariffs and shore up Washington's support for AUKUS after the Trump administration launched a review of the $368bn defence pact. Industry and Innovation Minister Tim Ayres said on Sunday the deal was 'not designed' to send a message to Mr Trump but that 'it certainly does underscore the depth of the economic and strategic and technological relationship' with the US. 'It's not just about trading in goods and services,' Senator Ayres told Sky News. 'It's about collaboration around science and research and development and in industrial terms.' He singled out AUKUS as 'offering opportunities for Australian and United States firms … to invest in each other's economy', highlighting it as 'a real counterpoint to the position that the United States has adopted around tariff announcements'. 'They are not the act of a friend, as has been said repeatedly by me and my colleagues,' Senator Ayres said. 'They are not in Australia's interest, but they're not in the United States' interest either. 'Australian steel, for example, exported to the United States, feeds into American supply chains and supports competitive industry that provides good jobs for American workers. 'Why on Earth would anybody want to make Australian steel in the United States more expensive? 'That's what the tariff measures do.' He said Mr Albanese would be putting that 'position directly to the President of the United States' when they meet next week. 'But the Amazon announcement does underscore how vital the direct economic relationship really is,' Senator Ayres said. At his Seattle press conference announcing the deal, Mr Albanese said he would raise tariffs and AUKUS with Mr Trump. Though he stopped short of saying the Amazon announcement was a message to the US leader. 'The US (Free Trade Agreement) has been important,' Mr Albanese told reporters. 'It's enjoyed bipartisan support in Australia and indeed in the United States. 'And so we welcome very much American investment in Australia.' He added it was 'important to recognise as well that the United States has a two for one surplus when it comes to the trading relationship in not just in goods, but in services as well'. 'And we want to grow the economic relationship between our two countries,' Mr Albanese said. 'And I'm sure that when I have the opportunity to have discussions with President Trump, we will speak about the important economic relationship between our two countries, which is in the interests of both Australia and the United States.' Under the deal, Amazon has committed to pumping cash into developing data centres in Melbourne and Sydney over the next five years, focusing on storage, networking, analytics, and secure services supporting cloud and AI. The firm will build renewable energy sources to support its operations. Speaking alongside Mr Albanese, Amazon Web Services chief executive Matt Garman dismissed concerns Australia's grid lacked the power needed for AI. 'I think definitely the explosion of AI requires a lot of power, so that's one of the things we're thinking about,' Mr Garman told reporters. 'I think here in the United States, we see nuclear as part of that portfolio. 'Our investments in Australia are wind and solar, but I think depending on the local setup and economies and other things, it's a global question, but there's no question that we will continue to need more and more power going forward.'
