Speaking in Washington after meeting with G20 finance ministers,the International Monetary Fund and the World Bank,Chalmers also warned that the risk of further escalation in the Middle East could see inflation spike again.
From left:Treasurer Jim Chalmers,British Chancellor of the Exchequer Jeremy Hunt,US Treasury Secretary Janet Yellen,Canadian Deputy PM and Finance Minister Chrystia Freeland,and NZ Finance Minister Nicola Willis.AP
Noting that a miscalculation “could turn the events of recent days into a full-blown regional war”,Chalmers said:“This is primarily a concern about the innocent people in the Middle East – we don’t want to see more lives lost. But we also don’t want to see more damage done to the global economy.
“So global factors will be a big part of the next few weeks as we put the finishing touches on the budget.”
Chalmers’ comments came after on Friday sparked fears of an between two of the Middle East’s biggest military powers.
While the move appeared to be limited in scope,world leaders – who have been urging Israel and Iran to avoid sparking a broader war in the region – once again called for de-escalation.
Video from Isfahan,Iran,shows air defences activated and projectiles in the sky.X
Chalmers said the Middle East conflict and Russia’s war in Ukraine were the two biggest influences on global economies and would also shape Australia’s coming budget.
The May 14 budget would have a much bigger emphasis on economic security,he said,while – which is affecting Australian commodities and exports – would negatively impact revenue by billions of dollars and force the government to “do more with less”.
“To be really blunt about it,we won’t see anything like the revenue upgrades that we saw in the first two budgets in our third budget,” he said,noting that a drop in the price of had already wiped $9 billion from the budget this year.
“That is part of the reason why we need a slightly different fiscal strategy – to try and do more with less,but also to try and recognise that in a global economy which is slowing,with a Chinese economy which has been sluggish,that has big implications for us.”
Treasurer Jim Chalmers in Washington on Friday.X/@JEChalmers
The treasurer attended 19 meetings during his whirlwind trip to Washington,including with US Treasury Secretary,Ukraine Finance Minister Sergii Marchenko,and US Federal Reserve Chair.
He is yet to meet any members of Trump’s team,but asked how he might be preparing for a potential change of administration,Chalmers replied:“We play the cards that we’re dealt in Australia. The Americans choose their own presidents and leaders,and that’s obviously appropriate.
“But we are confident that in either scenario,we’ll continue to be well-represented and we’ll continue to have our interest recognised here in the US because we’re such close friends.”
Concerns about the future of Australia’s relationship with its most important security partner emerged last month after,now the,describing him as “nasty” and “not the brightest bulb”.
During an interview with former Brexiteer Nigel Farage on Britain’s right-leaning GB News,Trump also suggested Rudd may not be welcome under a second Trump presidency,after Farage relayed questions from Sky News Australia concerning comments Rudd had previously made describing Trump,a “traitor to the West” and “the most destructive president in history”.
Rudd was the head of the Asia Society at the time and says he was speaking in his capacity as a member of an independent think tank.
“I’m not going to get into those conversations,” Chalmers said when asked about the conversations he had with Rudd on the matter.
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