Treasurer hints at energy bill relief, says cost of living help to come in budget
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More news: Treasurer Jim Chalmers has declined to rule out delivering more cost of living relief in the form of energy bill rebates in next week's budget.
“[I’m] obviously not going to commit to another round of energy bill rebates here with you in Brisbane a week out from the budget,” Chalmers said in response to questions about energy prices from reporters at the Queensland Media Club on Tuesday afternoon.
“There will be cost of living help, it will be meaningful and substantial and it will be responsible,” he said.
Pressed again, he said “there will be cost of living [help]” but declined to comment further on the form it would take.
“I think Australians need and deserve help with the cost of living. I think it’s all hands on deck when it comes to that important part,” he said, in reference to whether states should roll out more energy rebates.
He said the government and the economy had made progress but he understood that households were still under substantial pressure.
Chalmers also took a swing at the opposition’s nuclear plan, saying that the “dumbest thing that you can do would be commit to nuclear reactors in 15 or 20 years time” if the public wants lower electricity prices. He added that it leaves “old, unreliable” parts of the system in place for longer, introduces uncertainty and is expensive.
The treasurer responded to additional questions relating to the government’s fiscal management by reminding the media the Albanese government had delivered the first two surpluses in almost 20 years and delivered a $200 billion turnaround in the budget.
“That deficit is very substantially smaller when we came to office,” he said, about the figures to be formally unveiled next week.
“And we’ve been able to do all of. That … at the same time as we provided this cost of living help”.
ANZ tips federal budget to unveil $10 billion cash splash in 2025-26
More news: ANZ has published its federal budget preview, in which it indicates an expected underlying budget deficit of $20 billion in 2024-25 and $40 billion in 2025-26. On a headline basis, it's expected to be $41 billion this financial year followed by $65 billion the year after.
ANZ is expecting to see more cost-of-living relief measures, a possible amount pencilled in for future defence spending increases, health spending increases on the back of announcements and extensions to the Future Made in Australia package.
Additional net new spending is estimated to be around $2.5 billion in 2024-25, $10 billion in 2025-26 and $5 billion a year after that.
ANZ head of Australian economics Adam Boyton said in a note that financial statements from the Department of Finance are “showing a marked improvement in the fiscal position for this year” relative to the mid-year update. However, he said based on the profiling of the budget position in those statements he anticipates Treasury “are likely to take a more conservative approach and factor in less of an improvement in the budget starting point than we would”.
He said the budget forecasts for 2025-26 and beyond, on this basis, will “show a modest improvement” in the mid-year update.
Chalmers warns no major revenue upgrades and few surprises in budget
The news: Treasurer Jim Chalmers is gearing up for an election budget, warning there will not be the revenue upgrades some analysts are expecting but there will be "few surprises" as the government keeps its powder dry for an election campaign.
Speaking at the Queensland Media Club on Tuesday afternoon, Chalmers said some commentators had made “wild and wide-of-the-mark predictions” about surges in revenue, while some had wrongly predicted the tax-to-GDP ratio will go up.
In fact, Treasury anticipates this ratio to be stable or to go down, he said, noting further that revenue upgrades have come off “very significantly” since October 2022 highs and the upgrades in this budget will be the smallest of the four under the Albanese government.
Chalmers has sought to position the government as being best positioned to wrangle the uncertainty of the years ahead, using the speech to claim the opposition's policies would have pushed Australia into a recession and left people worse off.
The context: Chalmers said the budget will have five major priorities.
This includes supporting the recovery and rebuilding from Cyclone Alfred, with an additional $1.2 billion provision.
He said the cost of living, finishing the fight against inflation and rebuilding living standards was listed second.
The third is strengthening Medicare and funding urgent care clinics. Fourth is investing in “every stage of education”.
And fifth is making the economy more competitive, dynamic and productive.
“Most of the big initiatives under these headings have already been announced,” he said. These include: $8.5 billion for Medicare, with $644 million for urgent care clinics and an investment in women’s health; additional investments in Whyalla, iron and aluminium and Future Made in Australia; and funding for the Buy Australia campaign.
And he listed an extra $7.2 billion for Queensland’s Bruce Highway, $2 billion for Victoria’s Sunshine Station and $1 billion for rail links in Western Sydney. There are also debt reductions for students and graduates, and a three-day guarantee for early childhood education.
“This is more than we’d typically unveil before the budget,” he said. “And there’ll be provisions in the budget for policies we will announce in the campaign, not next week.
"All this means there will be fewer surprises on budget night."
What they said: “Treasury doesn’t expect the bottom line this year or over the forward estimates to change very substantially from MYEFO,” he said.
“We need to remember here that revenue upgrades are the exception, not the norm. Over the past 25 budget updates, upgrades have occurred in less than half of them, and in around only one in five budget updates before the pandemic.”
He said a fourth budget is "welcome" as an opportunity but "rare".
"Rare because for the first time since Chifley more than three quarters of a century ago there’ll be four budgets in one term."
The source: Treasurer Jim Chalmers speech at Queensland Media Club
