Chalmers Blames Middle East War for Rising Inflation Ahead of RBA Rate Hike

Treasurer Jim Chalmers is pinning the blame for rising inflation on the ongoing war in the Middle East, rather than low unemployment or wage earners.

Chalmers made these comments ahead of a widely expected rate hike from the Reserve Bank of Australia (RBA) next Tuesday, which would take interest rates to a 15-year high and make Australia's cash rate the second highest in the developed world after Iceland.

The near-record tax haul under Labor has added to scrutiny of its fiscal management. The government released fresh budget figures on Monday showing a $6 billion improvement in the deficit, with $4.6 billion coming from higher tax receipts from superannuation funds that have benefited from the AI boom and a resilient stock market.

Economists and think tanks are calling for targeted tax rises to cool demand rather than hiking rates for mortgage holders. Chalmers argued that Australians would be 'apprehensive' about the RBA's deliberations, and said he wouldn't blame low unemployment for any rate rise.