“Dumb bigotry” and recession warnings: the week in politics
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What is the main topic discussed in this episode?
I'm Daniel James and you're listening to 7am.
What warnings did the IMF give about the global economy's impact on Australia?
This week the Albanese government has been forced to confront a growing sense of instability with fresh warnings from the IMF about the global economy including the potential impact on Australia. It places new pressure on Treasurer Jim Chalmers ahead of the budget as the government deals with a fuel supply scare that pulled the Prime Minister back to the country in the middle of an overseas mission to secure supplies for the nation.
This is an incident that obviously is regrettable, particularly given the timing in which it has occurred.
As Labor tries to steady nerves, the opposition is pushing a hard line of migration, with Angus Taylor reaching for politics that feels both familiar and deliberately divisive. So much so that it prompted a former Prime Minister to release a scathing statement.
Keating said Angus Taylor marks himself out as a political leader unworthy of the leadership of a party that has managed Australia for the greater part of the last century.
Today, Press Gallery veteran Paul Bongiorno on the economic anxiety hanging over the government, the opposition's incendiary pitch on migration and how both sides are trying to define the moment. It's Saturday, April 18. Paul, this week we had a pretty dire warning from the IMF that a global recession is looming as Jim Chalmers met with economic ministers in DC. How bad is it looking for Australia and for the government?
Well, Daniel, I've got to say it's looking very bad for everybody, Australia and the government, and we're all in the one boat. In fact, I don't think we can make a distinction between the government and Australia here. Albanese pointed out that what we've got is the biggest global spike that's ever happened in Australian history when it comes to oil and energy.
Of course, we're not immune. This is a global spike. It's the biggest global spike that has ever happened in history. And that's had an impact on inflation and on the price of fuel right around the world.
How is the Albanese government handling the fuel supply crisis?
And if we want to get a bit of an insight into what the International Monetary Fund, the World Bank, thinks these impacts will be, it put out its World Economic Outlook during the week.
Of course, if the shock gets larger, if the disruptions get more severe, then we could get more of an inflation shock that would last more into next year.
And it says the United States-Israel war on Iran risks creating, quote, an energy crisis of unprecedented scale that could end in global recession. And Jim Chalmers doesn't quibble with the assessment of the IMF that the situation could see Australia with higher inflation than most advanced economies.
I can't think of a more sort of complex time in which to prepare a federal budget in recent memory, Paul. How much pressure does the IMF warning and the war put on the Treasury ahead of next month's budget? And how does it change what we can expect?
All of those questions are extremely relevant.
And Chalmers, I think, summed it up pretty well when he said during the week, this is a very serious, very dangerous time for the world. Now, Australia is better placed and better prepared than a number of other countries, but we won't be spared the fallout from this very substantial economic shock.
And the world bank, the IMF, is warning that incomes, that is national incomes, personal incomes, will obviously fall. Now, this will be made worse if the usual prescription that we get from the Reserve Bank and central banks around the world is that if inflation is running out of control, you up interest rates. So you make life more miserable, especially for borrowers. And by borrowers, we don't only mean people borrowing to fund their mortgage, to fund their home, but borrowers in business, small business. This can have, well, a devastating impact. And during the week, I was talking to a quite senior advisor to the Prime Minister, who said that Albanese is well aware that walking this tightrope is in danger of poking the bear of the Reserve Bank, that if the Reserve Bank judges that the Treasurer or the government's got it wrong, they'll go harder with interest rates.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:01–0:08
2
What warnings did the IMF give about the global economy's impact on Australia?
0:08–2:15
3
How is the Albanese government handling the fuel supply crisis?
2:15–4:47
4
What is the opposition's stance on migration and how is it affecting politics?
4:47–10:18
5
How does the IMF warning affect the upcoming federal budget?
10:18–15:10
Speakers
3 identifiedMore from 7am
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