Scott Morrison has taken a crack at New Zealand and other countries as he comes under pressure over his economic management ahead of the Australian election.
As Australia prepares to go to the polls later in May, focus has turned to the economy, with it being revealed last week that annual inflation was at 5.1 percent, with a quarterly jump of 2.1 percent. Both were above market expectations.
It led the Reserve Bank of Australia to increase cash rate by 25 basis points to 0.35 percent. That's the first time the RBA has lifted the rate in 11 years.
Morrison, the Australian Prime Minister, fronted a press conference on Tuesday blaming rising prices on global factors and saying record-low interest rates weren't going to continue forever. He mentioned other indicators like low unemployment and positive economic growth and said his Government had created an economic "shield' for Australians.
What is happening in other countries isn't happening here, Morrison said.
"Those 8.5 per cent inflation rates in the United States could have been here. Those almost 7 per cent inflation rates in New Zealand could have been here.
"All of those pressures that have had those more serious impacts in other countries, just like the death rates from COVID that were overseas, all could have happened here. The shield that we have put in place through our strong economic plan has prevented that from occurring."
It's true that New Zealand's annual inflation rate recorded to the end of March did come in at 6.9 percent, the highest in more than 30 years. The Government here has also laid the blame on the likes of the war in Ukraine and supply chain issues internationally.
However, the quarterly inflation increase - meaning how much it has risen over the last three months - for New Zealand is lower than Australia's at 1.8 percent. That suggests inflation in Australia is currently increasing at a greater rate than here in New Zealand.
Morrison was pushed on whether his "shield" had shattered considering the RBA rise.
"Absolutely not, because of what we're seeing. And when you when you look at what Australia is experiencing compared to - look across the ditch in New Zealand, look across at Canada…" the Australian Prime Minister said.
A journalist interjected: "We don't live in New Zealand". Morrison said that's right.
"You don't live in Canada and you don't live in New Zealand. What we have avoided in Australia is what is happening in those countries. Australia's economic policy shield that has seen our economy through these last two years is also what it is setting us up as we set out in the Budget for the decade ahead."
He said there are "few places that people would rather be than right here in Australia."
The New Zealand Government has consistently said a suite of increases to the minimum wage, benefits and tax credits will help lower-income families fight rising prices. Although those didn't come into effect until April, after the latest annual inflation data cut-off.
The Government did, however, slash fuel excise taxes and halve public transport costs in mid-March, which Finance Minister Grant Robertson suggested could be why annual inflation came in just under 7 percent, where the markets had forecast it to be.
The Reserve Bank of New Zealand lifted the official cash rate (OCR) by 50 basis points in April, the largest increase since May 2000. That followed successive lifts over the last six months, taking the OCR to 1.5 percent.
"The Committee agreed that their policy 'path of least regret' is to increase the OCR by more now, rather than later, to head off rising inflation expectations and minimise any unnecessary volatility in output, interest rates, and the exchange rate in the future."
The Australian Prime Minister is under immense pressure ahead of the Australian election on May 21. The latest Newspoll this week showed Labor ahead on a two-party basis at 53 percent compared to the Coalition (between the Australian Liberals and Nationals) at 47 percent.
Morrison, however, remains the country's preferred Prime Minister over Labor's Anthony Albanese.
