China, interest rate hikes putting handbrake on economy

Dominic Giannini | August 27, 2023

China’s economic woes and a lag in the sting of interest rate hikes have been flagged as the two biggest challenges to Australia’s economy. 

Treasurer Jim Chalmers says the economy has weakened as a consequence of what’s happening around the world as Beijing deals with slowing growth, decreasing exports, deflation and concerns within its property and banking sectors.

“It is concerning to see the weakness, the softness in recent weeks and months in the Chinese economy because it has obvious implications for us here in Australia,” he told Sky News on Sunday.

Dr Chalmers handed down his first intergenerational report this week which outlined that growth over the next 40 years would lag behind previous decades.

But opposition finance spokeswoman Jane Hume has hit out at the treasurer, accusing him of using the report as a Trojan horse to justify jacking up taxes.

Senator Hume said there needed to be more focus on solutions rather than a re-highlighting of economic concerns.

“The frustration with the intergenerational report is it didn’t really tell us anything we didn’t already know,” she said.

“We know that the pressures are going to be on aged care, on health and on the NDIS but … there doesn’t seem to be any solutions on the expenditure side.

“It just seems to be this inevitability that taxes are going to have to go up.”