Savings hunt before the December update

Chalmers said the federal budget faces "very substantial and intensifying pressure", and told ABC's Insiders that no serious observer of current events would conclude anything other than that. Further savings are being sought for the mid-year economic and fiscal outlook, due in December, on top of the $44.9bn in cuts over four years the May budget already identified.

The treasurer cautioned that cutting larger sums would hit essential services, and that spending cuts are not the only factor pushing up inflation. Speaking on Sunday, he challenged critics of government spending to identify the services that should go, saying anyone who opposes strengthening Medicare, cutting income taxes or other cost-of-living relief should nominate where that should be cut.

Recession ruled out, but no immunity from global drag

Chalmers said a recession is not anticipated in Australia, but the protracted Middle East conflict is weighing on global growth and the country is not immune from its effects. The longer the conflict drags on, the bigger the impact on the global and Australian economies, through inflation and downward pressure on growth, he added.

Inflation, rates and the private-demand argument

Inflation reached 4% in the year to August, up from 3.5%, and the Reserve Bank has lifted its key interest rate to 4.6%, the highest figure since 2011. Chalmers pointed to the private sector as the driver of rising inflation, and said budget settings are not the primary driver of prices in the economy.

• •He called the US-led eight-month war against Iran, which has severely curtailed global oil supplies from the region, "disastrous" for cost-of-living pressures.
• •For every $5 of demand in the economy, he said, $1 is public and $4 is private.

Wilson attacks, Charlton defends

Shadow treasurer Tim Wilson said Chalmers should be sacked, claiming his decisions have increased inflation to generate tax windfalls. He told News24 that the treasurer had actively stoked inflation and fundamentally undermined the success of the country. Wilson also accused Chalmers of announcing an "Argo-style salvation trip for investment" because he had created a problem of sovereign risk.

Assistant science and digital technology minister Andrew Charlton said a recession, which would ease inflation, would bring devastating consequences, throwing hundreds of thousands of people into unemployment queues and pulling a huge amount of demand out of the economy. "It's pretty easy to have low interest rates and low inflation if your economy goes through a recession," he told News24. Making sure the country avoids that path is a big priority for the Labor government, he added.

The treasurer is also due to travel to Japan for meetings with business leaders and the country's finance minister, in an effort to boost investment and improve fuel security.