Leading up to the federal budget in May, Prime Minister Anthony Albanese is being pushed to slash spending on “very costly” significant projects all over Australia.
The Grattan Institute has made a number of recommendations to cut spending on initiatives like Victoria’s Suburban Railway Loop and raise taxes in response to worries that Australia would experience budget deficits over the next 25 years.
Treasurer Jim Chalmers forewarned in October’s budget that Australia’s debt would reach $44 billion in 2023–2024 and keep increasing by an average of 14% over the next four years.
In addition, the think tank has suggested cutting back on “wasteful” expenditure and scrapping “megaprojects,” which it believes are misguided and end up costing taxpayers billions.
The research claims that one of the most significant cost savings possible to governments is to stop making poor judgments. Poorly thought out, frequently politically motivated decisions have proven to be extraordinarily expensive, especially as “megaprojects” have increased in frequency.
A “questionable” economic case led to the report’s recommendation to scrap the Andrews government’s Suburban Railway Loop, saving $2.2 billion as part of Labor’s $9.6 billion infrastructure splurge.
The advise comes at a bad time considering that Victoria has been abusing $250 million of her own state budget to “bribe” locals into supporting SRL projects while facing a $165 billion debt problem.
A probable budget overrun of the $15.4 billion Inland Rail Project, a freight network between Melbourne and Brisbane, is another infrastructure project under consideration.
The government is examining further options to offer “responsible, targeted cost of living relief.”
Additionally, it believes that eliminating the Family Tax Benefit part B for couples and removing Western Australia’s special GST arrangement may save $15 billion.
Redesigning the stage three tax cuts, increasing GST, and enacting both inheritance and carbon taxes to increase revenue are among other contentious ideas.
All eyes are on the May 9 budget and the Albanese government’s ability to reduce the debt as Australia struggles with high inflation and numerous cost of living challenges.
Sussan Ley, the deputy leader of the Liberal Party, emphasized the importance of the next budget and how many people were experiencing financial hardship.
People have a sense of being left behind, she said on Wednesday.
It is crucial that the government creates a sound budget.
