SYDNEY, June 26 (Reuters) – Australian Treasurer Jim Chalmers said inflation could hit 7% this year, in line with forecasts from the central bank, whose board will be reviewed by the new government for its ensure workers are represented.
The Labor government won a national election in May after nine years in opposition, and Chalmers said he would deliver a statement on the economy when parliament sits in July, ahead of an October budget.
Chalmers said in a television interview on Sunday that a review of the Reserve Bank of Australia (RBA), whose terms of reference have yet to be released, would also examine the composition and size of its board.
“Whether it’s broad enough in terms of geography and gender, all the other important considerations, but also making sure the right voices are represented around the table,” he said on Insiders. ABC.
Representing all parts of the economy would involve ‘making sure workers are represented’, he added, when asked if former union officials should be considered for upcoming vacancies. to the board of directors.
RBA Governor Philip Lowe warned in a speech on Tuesday that price pressures continue to build both globally and domestically and that inflation will now hit 7% by the end of the month. year, the highest pace in decades and well above the RBA’s long-term target band. 2-3%.
“This inflation problem will get tougher before it starts to subside,” Chalmers said on Sunday.
“I will update this forecast towards the end of July and take into account the most recent information we have on the economy, but the Reserve Bank said something about 7% – that does not doesn’t seem completely off the mark. mark.”
He added that he hoped inflation would moderate next year and declined to name a preferred figure for wage growth, saying only that the government wanted “sustainable wage growth”.
The budget, in structural deficit, would be impacted by the pressure of rising interest rates and the volatility of commodity prices, he said.
A 12% drop in iron ore prices last week – Australia’s biggest export earner – “has budgetary implications”, he said. (Reporting by Kirsty Needham; Editing by Michael Perry)