Jim Chalmers is blaming Australia’s accelerating inflation on Trump – but voters aren’t buying it
News Source
•Wed, 28 Oct 2026 05:58:24 GMT
📰 What Happened
Treasurer Jim Chalmers says the Middle East war is the main reason inflation hit 4.3% in September. The numbers back part of his case. Fuel prices jumped 9.4% in the month and were 24% higher than a year earlier. But voters are not convinced. An Essential poll found nearly a third blame government spending for the cost-of-living squeeze. Only 24% pointed to overseas events like the oil shock, and 19% blamed supermarkets. Chalmers also points to a boom in spending on data centres for artificial intelligence, which is soaking up workers and materials.
🔍 The Backstory
Government spending is close to a record share of the economy. Economists including Chris Richardson say public demand is adding to price pressure rather than easing it. The bank's preferred measure of underlying inflation also rose, from 3.6% to 3.7%. Reserve Bank officials told a Senate hearing they worry more about inflation becoming stuck than about rising unemployment. The bank is widely expected to lift the cash rate to 4.85% next Tuesday, the highest since the global financial crisis.
🎯 Why It Matters
Blame matters politically, but the bill lands on households either way. Another rate rise would push mortgage costs to their highest since 2008.
Treasurer Jim Chalmers says the Middle East war is the main reason inflation hit 4.3% in September. The numbers back part of his case. Fuel prices jumped 9.4% in the month and were 24% higher than a year earlier. But voters are not convinced. An Essential poll found nearly a third blame government spending for the cost-of-living squeeze. Only 24% pointed to overseas events like the oil shock, and 19% blamed supermarkets. Chalmers also points to a boom in spending on data centres for artificial intelligence, which is soaking up workers and materials.
Government spending is close to a record share of the economy. Economists including Chris Richardson say public demand is adding to price pressure rather than easing it. The bank's preferred measure of underlying inflation also rose, from 3.6% to 3.7%. Reserve Bank officials told a Senate hearing they worry more about inflation becoming stuck than about rising unemployment. The bank is widely expected to lift the cash rate to 4.85% next Tuesday, the highest since the global financial crisis.
Blame matters politically, but the bill lands on households either way. Another rate rise would push mortgage costs to their highest since 2008.