Canberra – Treasurer Jim Chalmers will face a grilling from leading economists on Friday as he seeks input for the upcoming May budget, amid growing skepticism about the government’s economic forecasts and calls for significant policy adjustments.
The series of roundtable meetings, convened at short notice last week, will involve multiple 90-minute sessions operating under Chatham House rules, according to reports in the Australian Financial Review. Treasury Secretary Jenny Wilkinson will similarly attend. The meetings come after recent economic data revealed a more complex picture than previously anticipated, with inflation proving stickier than expected and productivity growth remaining stagnant.
Westpac chief economist Luci Ellis, a former Reserve Bank assistant governor, has publicly urged the government to consider indexation of income tax brackets, a proposal that is expected to be raised during the discussions. This call for tax reform comes as the government navigates a challenging economic environment marked by persistent inflation and rising interest rates. The Australian Bureau of Statistics recently reported GDP growth of 2.6 per cent in 2025, the highest rate in nearly three years, but economists warn that this growth masks underlying productivity issues.
Economists are also questioning the effectiveness of the government’s budget strategy, with a recent survey by the Economic Society of Australia and The Conversation revealing that only one-third of top economists gave Chalmers’ third budget an A or B grade – a significant drop from the two-thirds who awarded it similar marks in 2023. Thirteen of those surveyed gave the budget a D or E, indicating widespread dissatisfaction with its approach to tackling inflation and fostering economic growth.
The survey also highlighted doubts about the government’s ability to bring inflation back within the Reserve Bank’s 2-3 per cent target band, with more economists predicting it will remain above target than those who believe it will be achieved as forecast. Chalmers had predicted inflation would return to the target band “perhaps even by the conclude of this year,” a claim met with skepticism by many economists.
Pressure is mounting on Chalmers to outline a clear pathway to surplus and pursue bold tax reform, as well as to address concerns about flatlining productivity. According to The Australian, economists will urge him to cut spending and undertake significant changes to the tax system. The treasurer’s appetite for reform will be tested as he balances the need for fiscal responsibility with the political realities of implementing potentially unpopular measures.
The meetings follow a period of pre-budget messaging from Chalmers focused on “global uncertainty,” a phrase some observers anticipate will be used to explain potential shortcomings in the budget’s economic forecasts. The treasurer faces a crucial test in the coming months, as he attempts to navigate a complex economic landscape and deliver a budget that addresses the concerns of economists and the broader public.
