Portfolio — 18 March 2026

The Treasurer, Jim Chalmers, used a round of media interviews on 18 March to accept responsibility for the Reserve Bank's second interest rate hike of the year, attributing the worsening inflation outlook to pre-existing domestic pressures exacerbated by the Middle East conflict [TA-260318-treasu-75e6ce4377ce]. He told the ABC that the economic consequences of the conflict are "extremely serious and potentially enduring," with recovery contingent on the duration of hostilities and the time needed to restore oil and gas infrastructure [TA-260318-treasu-fa31236313e7].

**Rate hike and inflation**

The Treasurer's acceptance of responsibility for the RBA's second hike positions the government as owning the inflation outcome rather than deflecting blame to global events alone [TA-260318-treasu-75e6ce4377ce]. He identified pre-existing inflationary pressures as the baseline, with the Middle East conflict acting as an accelerant [TA-260318-treasu-44546ad45d2e].

**Defence and energy security**

The Treasurer confirmed the government has received no formal request to deploy naval escorts to the Strait of Hormuz, noting Australia's current military commitment involves a Wedgetail aircraft deployed to protect over 100,000 Australians in the region [TA-260318-treasu-44546ad45d2e]. On domestic fuel security, he indicated the government is considering extending the operational life of Australia's two remaining domestic fuel refineries beyond 2027 to ensure supply resilience, while ruling out compulsory rationing as a current expectation [TA-260318-treasu-fa31236313e7].

**Budget and fiscal strategy**

The Treasurer confirmed the Expenditure Review Committee is meeting to identify further savings for the May Budget, acknowledging Australians face simultaneous pressure from higher petrol prices and interest rates [TA-260318-treasu-fa31236313e7]. Treasury has modelled multiple scenarios on the conflict's economic impact, which the Treasurer will outline in a speech to the Australian Business Economists in Melbourne the following day [TA-260318-treasu-fa31236313e7].

**Strategic framing**

The Treasurer framed the government's approach as a shift toward a new economic model in which national security and economic security are intertwined, prioritising resilience against rolling global shocks rather than relying on extended periods of stability [TA-260318-treasu-fa31236313e7].