Treasurer Jim Chalmers faces growing unease among Coalition-leaning Labor MPs about potential further interest rate hikes and stagnant living standards as Australia awaits an intergenerational report outlining long-term economic challenges.

The government is pursuing a productivity package aimed at cutting regulatory costs by $10 billion and exploring licensing regimes to manage AI rollout, while debates over AI-related copyright law adaptions continue.

Analysts, including UNSW professor Richard Holden, question whether modest reforms will yield durable productivity gains and warn current policies may dampen growth by affecting the industrial relations environment and investment climate.

Chalmers briefed a small private policy group ahead of Treasury’s intergenerational report, arguing that future productivity will come from a series of smaller reforms rather than a single lever.

The intergenerational report and policy directions are shaping backbench sentiment as Labor tries to balance inflation relief, housing affordability, and long-term productivity.

Prime Minister Anthony Albanese defended measures including housing tax concession changes, but backbenchers remain skeptical about delivering meaningful growth through reforms.

The upcoming intergenerational report, the first in three years, will map 40-year socioeconomic and economic changes and will be used by the Opposition to critique Labor’s economic management.

Some MPs criticize Labor’s messaging that compares Australia to other economies, warning it could be seen as rationalizing decline; criticism also comes from Labor figures and the Business Council of Australia about productivity and living standards.

Chalmers indicated a possibility of one or two rate rises this year, with a move to around 4.6% anticipated on September 29, amid concerns about inflation and productivity.