Budget Deficit to Remain Near Predictions, Chalmers Confirms
Treasurer Jim Chalmers has affirmed that the budget due next Tuesday will reveal a deficit close to the $26.9 billion anticipated in the December update. He also indicated that revenue gains from high commodity prices and a strong jobs market are no longer a factor.
Budget Prepared Amidst Economic Shifts
The government finalized its fourth Labor budget after disruptions caused by ex-Tropical Cyclone Alfred, which impacted plans for an earlier April election call.
Focus on Economic Progress
In a speech delivered in Brisbane, Chalmers welcomed the chance to emphasize the economy during the upcoming election campaign. He cautioned that a vote for Peter Dutton could jeopardize the fragile post-pandemic recovery:
- “Inflation is down.”
- “Incomes are strengthening.”
- “Unemployment is very low.”
- “Interest rates are coming down.”
- “Debt is down.”
- “Growth is picking up.”
Chalmers highlighted these trends as a “remarkable combination” and “exceptional” compared to global economic challenges, referencing New Zealand’s recession struggles.
Deficit Projections Remain Steady
Addressing the deficit, Chalmers stated that “Revenue upgrades have actually come off very significantly since the highs of October 2022.”
He added, “Treasury doesn’t expect the bottom line this year or over the forward estimates to change very substantially from Myefo.”
Political Landscape and Economic Performance
Following Labor’s consecutive surpluses, the Coalition intends to utilize Treasury forecasts of persistent deficits over the next decade to criticize the Albanese government’s financial management.
The Treasurer’s speech at the Queensland Media Club follows recent signs of a notable increase in Anthony Albanese’s personal approval rating, according to the latest Guardian Essential poll.
Factors Influencing Public Opinion
The Reserve Bank of Australia’s (RBA) rate cut in February, the first in four years, coupled with the government’s response to floods in Queensland and New South Wales, appears to have boosted support for the Prime Minister. Polls suggest a swing against Labor on election day.
“The Australian economy has turned a corner,” Chalmers asserted.
“We saw that in the most recent national accounts which showed growth in our economy rebounded solidly. At the same time, real wages and living standards are growing again, supported by our tax cuts and the interest rate cut, and sentiment has been zigzagging up overall, as a consequence.
“These are all early and encouraging signs that momentum is building. We know people are still doing it tough and that’s why cost of living continues to be our major focus.”
Chalmers mentioned that the budget will include provisions for announcements during the election campaign while downplaying the potential for significant new spending next Tuesday.