This sitting week in Canberra the Albanese Labor Government fought everyone but their home-grown cost-of-living crisis.

Treasurer Jim Chalmers tries to blame his Government’s economic woes on the Reserve Bank of Australia (the RBA), the Opposition Leader, the Productivity Commission – even the laws of economics.

Labor moans that the RBA is ‘smashing the economy’. The independent RBA hiked the cash rate 11 times to contain Labor’s home-grown inflation, however their last hike was over 300 days ago on 8 November 2023.  In his May budget, the Treasurer predicted inflation would be below 3 per cent by Christmas. Christmas is 100 days away and core inflation rose in the April to June quarter from 3.6 to 3.8 per cent. Now the Treasurer’s crystal ball is cloudy.

RMIT economics professor Sinclair Davidson said “All the economic indicators are going the wrong way, and what is the government doing? Fighting with the RBA.”

Former RBA board member Graham Kraehe said “For the treasurer to then be coming out and saying, ‘Well, this is the Reserve Bank’s fault’. I don’t think another serious economist in the country … would agree with that.”

Warren Hogan said “We are going backwards in terms of our living standards. Our productivity is falling, our government is growing, and … our standards of living as one of the world’s wealthiest countries is going to go away.”

Like the economists, the cold hard facts don’t lie. Australia has reported its sixth consecutive quarter of negative GDP per person growth, the longest per capita recession in 50 years.

Living standards (real disposable income per capita) have fallen by 8.7 per cent, productivity has collapsed 6.3 per cent, personal income taxes are 25.3 per cent higher, interest paid on mortgages has almost tripled and (little wonder) household savings are down 10.2 percentage points.

The cost of electricity is up 14 per cent (even after rebates) but I hear local stories of far higher increases. Health and education costs are up 11 per cent, food 12 per cent, housing 15 per cent, rents 16 per cent and insurance 17 per cent.

Australian household disposable incomes have fallen 8 per cent but in the rest of the world’s major economies rose 3 to 4 per cent.

In May 2022 the former Coalition government left an economy with low unemployment, strong growth, and recovering government finances.  Labor have had a smashing time squandering it.