With an expected decade of deficits on the horizon, Treasurer Jim Chalmers will try to convince voters that Tuesday’s federal budget manages to balance the need to keep a lid on spending while giving struggling households enough support.
Another key pillar of Mr Chalmers’ fourth budget as treasurer will be shoring up Australia’s economic “resilience” in the face of rising global uncertainty, most notably the spectre of further tariffs under United States President Donald Trump.
After two federal budget surpluses, this time the treasurer will have to sell a deficit of around $26.9 billion, with an election looming just around the corner.
But while the Coalition has accused Labor of handing down a “budget for five weeks” — referring to the length of an election campaign — Mr Chalmers described it as a responsible budget that will help with the cost of living while setting up Australia’s future.
Doing the media rounds on Tuesday morning, the treasurer touted the previous surpluses and an $207 billion turnaround in the budget’s fortunes, while playing down expectations of any big surprises.
“We’ve delivered two surpluses, we’ve shrunk the deficit for this year, we’ve engineered that $207 billion improvement — that means less debt and less debt interest at the same time,” he said outside an entrance to Parliament House in Canberra.
“So that we can make room to strengthen Medicare and help with the cost of living and build Australia’s future as well.”
While Mr Chalmers and Prime Minister Anthony Albanese have identified cost of living as the number one issue in the mind of voters, and therefore a focus of the budget, most if not all of their key support measures have already been announced, including boosts to Medicare and the Pharmaceutical Benefits Scheme.
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Over the weekend the government announced an extension to the energy bill relief scheme, meaning another $150 for all households at a cost of about $1.8 billion over the forward estimates.
But he would not be drawn on whether it will become a permanent feature of budgets going forward, if the government is re-elected in May.
“From budget to budget, we review the cost-of-living policies to make sure that we’re doing what we meaningfully can to help people in the most responsible way,” he said.
The energy bill relief, along with other previously announced measures, have already been provisioned for in the budget.
‘Make the economy more resilient’ is the contingency
Another “defining feature” of the budget, which the treasurer was keen to stress on Tuesday, is shoring up Australia’s economic resilience amid what he called “global economic uncertainty”.
The Trump administration is expected to announce a new wave of reciprocal tariffs next week on April 2 — which they have labelled “Liberation Day” — with fears several key exports could be impacted.
In response, Mr Chalmers foreshadowed that there would be “a little bit of funding” to promote a new “Buy Australia” campaign, alongside investments in green metals.
“We’re a very trade exposed country. We’re not uniquely impacted by these tariffs out of Washington DC, but we’ve got a lot of skin in the game,” he said.
“And so what the budget will be about in addition to helping with the cost of living and strengthening Medicare, it will also be about making us more resilient to these external shocks.”
Asked if there was a contingency in the budget to deal with any unexpected tariff announcements, the treasurer said the plan was to “make the economy more resilient”.
“When we talk about building Australia’s future, what we’re really talking about is making our economy more competitive and dynamic and productive but also more resilient,” he said.
“Now this is a new world of uncertainty, and the budget will be a platform for prosperity in that new global context.“
Coalition paints a dire picture
After Australia’s bottom line is revealed when Mr Chalmers stands up in the House of Representatives this evening, attention will turn to the Coalition who will be under pressure to provide details of how they plan to cut back on Labor’s spending.
The Coalition has already agreed to match many of the government’s key measures, including an $8.5 billion lift on Medicare.
Speaking to journalists in Parliament House on Tuesday morning, Shadow Treasurer Angus Taylor painted a grim picture of the economy.
He said the situation was “dire for Australian households” who are struggling to put food on the table; the economy was a “complete and utter disaster”; and that there had been an “absolute loss of hope” amongst people keen to buy a house or pay off their mortgage.
Mr Taylor also attacked the treasurer, who he said “doesn’t understand economics”.
One of the Coalition’s key messages in recent weeks has been their plan to cut waste in the public service, which Mr Taylor returned to on Tuesday.
“You don’t need to have a bigger team to have a better team and I’ve got to say that this treasurer seems to think the exact opposite,” he said.
As for Mr Chalmers’ focus on resilience, Mr Taylor added: “The only resilience this bloke wants is at the election. That’s all he cares about. This is a budget for the next five weeks.”
