Treasurer Jim Chalmers has stepped up his defence of the Albanese government's cost-of-living strategy, labelling the measures "responsible" despite stern warnings from the International Monetary Fund that such policies risk fueling Australia's inflationary fire.
The IMF’s latest World Economic Outlook, released on April 14, cautioned that "popular" untargeted subsidies—specifically citing the $2.55 billion halving of the fuel excise—are often poorly designed and costly.
The fund argued that broad stimulus measures complicate the task for central banks, advocating instead for temporary, narrowly targeted support for low-income households.
This comes as the Reserve Bank of Australia prepares for a potential May rate hike to 4.35%, following a resurgence in inflation that economists fear could peak near 6% this year.
Speaking in Brisbane en route to G20 talks in Washington D.C., Dr Chalmers insisted the government is focused on fiscal discipline.
He flagged that the upcoming May 12 budget has been significantly revised since February to account for Middle East volatility and the threat of a global recession if oil transit through the Strait of Hormuz is disrupted.
"The budget I hand down won’t be identical to the one we contemplated earlier this year," the Treasurer told ABC Radio.
He emphasised that the package will prioritise "budget repair" and finding savings to ensure government spending—currently at near forty-year highs—does not place additional upward pressure on prices.