Govt to unveil $14.6b in savings and reprioritisations in mid-year outlook
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The news: The Mid-Year Economic and Fiscal Outlook (MYEFO) will include $14.6 billion of additional savings and reprioritisations.
Another $8.8 billion in spending will also be revealed, which the government is describing as "unavoidable" to ensure programs and services are not cut, in addition to automatic spending.
The numbers: The savings include $5.2 billion from aged care reforms, $1.6 billion in the Defence portfolio that will be redirected towards the Australian Defence Force, support for Ukraine and the response to the Royal Commission, and $7.8 billion across the Commonwealth.
The government said more details would be included in the MYEFO on Wednesday.
There will be $16.3 billion in payment parameter and other variations. This spans indexation adjustments and funding changes due to demand.
The spending spans $1.8 billion for veterans, $3.6 billion for aged pensioners due to indexation, $3.1 billion in extra childcare subsidy payments, $2.6 billion in school funding due to more enrolments, $2.3 billion in Medicare and Pharmaceutical Benefits Scheme (PBS) costs and $1.8 billion in disaster recovery funding.
And $8.8 billion will be spent on “unavoidable” costs to keep programs and services running, including $2.5 billion for new and amended PBS listings, $871 million to extend health and aged care programs due to end such as aged care Covid-19 support, $719 million for Infrastructure Investment Program projects, $647 million as part of the National Disability Insurance Agency funding that was terminating and $249 million to protect against Avian influenza.
The context: The government's spending will be a critical focus when MYEFO is released, with some economists saying it needs to be reined in to shore up the budget and reduce pressures on inflation. The Albanese government has maintained that it has taken a responsible and prudent approach to managing the nation's finances.
What they said: "In this update, we have worked hard to find responsible savings while also dealing with the significant spending pressures we are facing," said Minister for Finance Katy Gallagher.
“As we have done at every economic update since coming to Government, the Albanese Government remains focused on finding responsible savings to make room for priority investments in cost of living, housing and Medicare."
The source: Finance Minister media release
