Al-anwar Newspaper English news in Australia
A substantial lift in tax payments and booming commodity prices are set to deliver a $50bn boost to the budget bottom line, the Treasurer has revealed.
Jim Chalmers, who will hand down his first budget on October 25, on Tuesday said the improvement was welcomed but stressed it was temporary and “difficult decisions” would still need to be made.
Half of the boost has come from higher than expected tax revenues but the bulk will be delivered from commodity prices, which remain higher than earlier forecasts but are beginning to drop.
But Australians hoping it would translate to cost of living relief will be sorely disappointed.
Instead, Dr Chalmers insisted he would be handing down a “bread and butter budget” focused on key election promises in childcare, aged care and cheaper medicines.
“We wanted to be upfront with people about what we are seeing in those numbers as they settle,” the Treasurer said.
“It’s the beginning, not the end of a big national conversation about the structural position of the budget and how we fund the things that we value in not just in our economy but in our society, whether it’s healthcare or the other essentials that we need to provide.”
Additional cost of living relief would make it harder for the Reserve Bank, who have aggressively hiked rates over the last five months to curb inflation, to hit the brakes on further rate rises.
“We don’t want cost of living relief to be counter-productive,” Dr Chalmers added.
The deficit will remain “north of $30bn” and the government has major concerns about the spill over of promises not delivered by its predecessors.
“Much of that spending will spill over from last year into this year,” he said.
Provisions for $5.5bn in costs incurred from the pandemic, such as in aged care and for respiratory clinics, and the flood crisis were not made by the former government, Finance Minister Katy Gallagher said.
“These were costs (where) no provision was made for,” she said.
“On top of that, there are, and we are working through this calmly in the budget process, but there is a range of other programs right across the public service where they were funded for the short term but they are ongoing programs and we are having to work through those as well.”
But opposition finance spokesman Angus Taylor has accused the government of failing to support struggling Australians.
“What we saw from Labor today was a $50 billion windfall, a huge improvement in the budget position based on a very, very strong economy, but we saw no plan other than spending Australians money,” he said.
“No plan is going to deal with those cost of living pressures, those interest rate pressures Australians are facing. Bread-and-butter for Labor is more tax and spending and that’s not what we need.”
