Jim Chalmers (Rankin, Australian Labor Party, Treasurer) Share this | Hansard source

I really appreciate the member for McEwen's question but also his focus on the impacts in real communities like his of what we're seeing around the world right now. The escalation of the conflict in the Middle East has been dramatic and so has its impact on the global economy. We are seeing a great deal of volatility play out on markets for equities, commodities, currencies and bonds and also in risk indexes. Markets were especially pessimistic over the last couple of days, but they've rebounded substantially so far today in reaction to some comments from President Trump.

The most significant impacts have been on energy prices, including oil. Oil was trading just under $90 before question time, but it got up to almost $120 a barrel yesterday. It was about $60 at the start of the year and $73 at the start of this conflict, to give people a sense of the scale of the increase. This sort of volatility, especially in energy markets, puts upward pressure on global inflation at the same time as the conflict weighs on global growth. The longer this drags out, the more serious the economic consequences.

We did have an inflation challenge before these developments of risk, making it worse. We will update our inflation forecasts in the budget in the usual way. But we also need to remember that we have very substantial advantages and very solid economic foundations in this country. We are not immune to what's happening around the world, and we are not complacent, but we are very well placed as a country and as an economy, and that's my main message today.

Last week's national accounts showed we had stronger economic growth than any major advanced economy. We've got low unemployment. We've got higher participation. We've got stronger jobs growth and lower debt as a proportion of our economy than the major advanced economies as well. We have one of the most robust and best regulated financial systems in the world, and the Council of Financial Regulators has been meeting daily to stay across developments on markets. We have large stockpiles of fuel, and the ministers are engaging with primary industries to stay across the pressures in those industries as well. We've empowered the ACCC to police the service stations and issue on-the-spot fines if necessary, and we've increased the maximum penalties five times to $50 million. We're prepared to take other responsible steps if necessary.

We do have a lot going for us but a lot coming at us as well. We will continue to work through these developments to make sure that our people and our economy are as resilient as possible in the face of all of this global economic volatility and uncertainty.

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