Jim Chalmers, Australia's treasurer, warned about significant economic pressures due to global conflicts, particularly the war against Iran which has strained oil supplies. He announced plans for budget cuts ahead of a mid-year update in December, after identifying $44.9 billion worth of cuts over four years earlier this year. Chalmers defended government spending by challenging critics to specify what services should be cut while attributing inflation partly to the private sector's role in driving economic demand and prices.
Written locally by qwen2.5:14b on 2026-10-04,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
Story summary
Jim Chalmers, Australia's Treasurer, warned of "very substantial and intensifying" economic pressures ahead, especially due to the prolonged conflict in the Middle East with Iran, which has severely affected global oil supplies. In a Sunday interview on ABC’s Insiders, Chalmers defended Labor’s spending policies, stating that government actions are not primarily driving inflation in Australia. He pointed out that private sector activity is contributing far more significantly to inflation than public demand. Despite acknowledging the impact of rising costs and inflation at 4% year-to-year to August, Chalmers insisted Australia was unlikely to face a recession despite global economic turmoil. Additionally, he criticized critics for not specifying which services should be cut in response to budget pressures.
Written for “Economic Turmoil In Australia” on 2026-10-05,
grounded in this article and the 1 other(s) covering the same event.
Jim Chalmers has warned of “very substantial and intensifying” economic pressures on the horizon but insists he’s not planning for a recession, as he prepares to find new ways to cut the budget ahead of its mid-year update.
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he → warn → update
The treasurer on Sunday called on critics of government spending to name the services that should be cut, as he points the finger at the private sector for driving up inflation in Australia amid the protracted conflict in the Middle East.
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he → call → East
Chalmers said the US-led eight-month war against Iran, which has severely curtailed global oil supplies from the region, has been “disastrous” for cost-of-living pressures.
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which → say → pressures
He also said there was “very substantial and intensifying pressure” on the federal budget.
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He → say → budget
“No serious observer of what’s going on right now would conclude anything other than [that],” he told ABC’s Insiders.
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he → go → Insiders
“The longer this thing drags out, the bigger the impact on the global economy and on the Australian economy, whether it’s … on inflation or downward pressure on growth.
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it → drag → growth
“We’re not anticipating [a recession] here in Australia, but certainly it is weighing on global growth, and we’re not immune from that.
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we → anticipate → that
Inflation has jumped to 4% in the year to August, from 3.5%, while the Reserve Bank lifted its key interest rate to 4.6%, the highest figure since 2011.
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Bank → jump → 2011
Chalmers said the government was working on finding further savings to the budget in the mid-year economic and fiscal outlook, due in December, after cuts of $44.9bn over four years were identified in the May budget.
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cuts → say → budget
The treasurer said cuts to government spending weren’t the only factor driving up inflation in the economy, and cutting larger sums would impact essential services.
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cutting → say → services
“If people don’t want us to strengthen Medicare, for example, or cut income taxes, or provide cost-of-living relief in other ways, then they should nominate where that should be cut,” he said on Sunday.
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he → want → Sunday
Beyond the war’s impact on driving up prices in Australia, Chalmers said the private sector was partly to blame.
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sector → drive → Australia
“For every $5 of demand in our economy, $1 is public, $4 is private,” he said.
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he → say → economy
But the shadow treasurer, Tim Wilson, said Chalmers should be sacked, claiming his decisions have increased inflation to generate tax windfalls.
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decisions → say → windfalls
“He’s actively stoked inflation, and he’s fundamentally undermined the success of this country, and now he’s announced today he’s on a sort of Argo-style salvation trip for investment, because he’s created a problem of sovereign risk,” he told News24.
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he → stoke → News24
The assistant science and digital technology minister, Andrew Charlton, said the consequences of having a recession, which would ease inflation, would be devastating.
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which → say → inflation
“If you have a recession, you throw hundreds of thousands of people on to the unemployment queues, and that pulls a huge amount of demand out of the economy,” he told News24.
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he → have → News24
“It’s pretty easy to have low interest rates and low inflation if your economy goes through a recession.
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economy → ’ → recession
“As a Labor government, that is a big priority for us to make sure that we don’t go into a recession that drives a lot of people into unemployment.”
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that → make → unemployment
Chalmers will travel to Japan for meetings with business leaders and the country’s finance minister, in an effort to boost investment and improve fuel security.
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Chalmers → travel → security
The Aporia
