60 Minutes reporter Tom Steinfort grills Jim Chalmers over inflation and interest rates

A reporter grilling federal treasurer Jim Chalmers let fly with a four-letter-word after his frustration at the cost of living crises boiled over during an interview.

Tom Steinfort was interviewing Dr Chalmers for a 60 Minutes segment airing Sunday night when he asked if Australia was in a similar position to the early 1990s when the country was plunged into a recession.

‘There’s absolutely no chance that interest rates will get to the level that they were at in the early 1990s,’ Dr Chalmers said.

The comment prompted a fiery response from Steinfort who declared: ‘We’re all f***ed if they do’.

‘Is that going to get on the show?’ a stunned Dr Chalmers asked.

The interest rate in January 1990 peaked at a record high 17.5 per cent – more than five times the current interest rate of 3.35 per cent which is already causing borrowers to feel the pinch.

60 Minutes reporter Tom Steinfort (pictured) said even he was feeling the pinch when he looked at his own mortgage bill amid a string of interest rate hikes 

Borrowers with a $700,000 mortgage are paying more than $1,000 more a month on average than a year ago (file image)

Borrowers with a $700,000 mortgage are paying more than $1,000 more a month on average than a year ago (file image)

Dr Chalmers assured Steinfort there wouldn’t be a repeat of the 1990’s economic meltdown his predecessor, Paul Keating, described as ‘the recession we had to have’.

‘We don’t expect there to be a recession in the Australian economy,’ Dr Chalmers said.

‘The Treasury forecasters, the Reserve Bank and others are not expecting a recession… But I need to be upfront with your viewers and say that we do expect our economy to slow considerably.’

Mortgage holders are likely to be hit with another rise in their monthly repayments when the Reserve Bank delivers its 10th interest rate hike in a row this week, as is widely expected.

The central bank is tipped to deliver another 25 basis point hike after comments made last month suggested the bank was growing impatient with high inflation now sitting at 7.8 per cent.

This would take the cash rate from 3.35 per cent to 3.6 per cent when the board meets on Tuesday.

Annual repayments are now typically $12,000 higher than they were in May 2022 following nine consecutive rate hikes.

Steinfort asked Dr Chalmers about stage three tax cuts set to be introduced next year.

The move will see the richest Australians who have no need for mortgages get a major windfall.

‘How do you marry that up?’ the reporter said.

‘That people who are well off aren’t feeling the brunt of inflation at the moment and you’re going to give them tax breaks on top of that.

‘They’re laughing all the way to the bank literally and to Mykonos and wherever else they want to go at the moment with all their money.

‘How does that make sense?’

Treasurer Jim Chalmers said he doesn't believe Australia will fall into a recession

Treasurer Jim Chalmers said he doesn’t believe Australia will fall into a recession

Another interest rate increase is expected this week from the Reserve Bank (file image)

Another interest rate increase is expected this week from the Reserve Bank (file image)

Dr Chalmers said the government’s ‘priority when it comes to cost of living relief is people on lower incomes’.

‘That’s been our priority for some time and that’s our priority in the may budget.’

The stage three tax cuts due in July 2024 will remove the 37 per cent tax bracket and drop the 32.5 per cent tax bracket to 30 per cent. The higher tax threshold will also increase from $180,000 to $200,000.

The would provide tax relief to those on higher incomes because everyone earning between $45,001 and $200,000 would now pay the same 30 per cent rate.

The tax cuts were made into legislation in 2018 and 2019 and the country’s interest rate is independently set by the RBA, leaving the Treasurer unable to affect either.

‘Certainly the Prime Minister understands and the government understands that people are under real pressure,’ he said.

‘We’re doing what we can to deal with it within the constraints of a responsible budget.’

He did, however, add that he believes inflation has peaked, meaning interest rates hikes should ease off.

‘Most likely that inflation peaked at Christmas time and has started to moderate, but we won’t know until we get that next set of data.’

Quarterly inflation figures will be released on April 26.

The hope is the measures already in place will have brought down, or at the very least, halted Australia’s current inflation rate of 7.8 per cent.

‘Even as it (inflation) moderates, we can’t be complacent about it because it’s still going to be a challenge in 23, just like it was in 22,’ Dr Chalmers said.

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