Treasurer Jim Chalmers is optimistic that his third budget will drive inflation down, despite the fact that Australian households will receive a $7.8 billion cost-of-living adjustment.
Presenting a second consecutive surplus tonight, Chalmers was eager to emphasize that his budget would combat inflation rather than exacerbate it, even with energy bill refunds, a pharmaceutical price freeze, and further rent aid.
The treasurer presented his new financial paper as a “responsible way to deliver some substantial cost of living relief” to Charles Croucher, chief political editor of Mark News.
He would not, however, comment on whether it would be sufficient to “artificially put pressure on the Reserve Bank to lower interest rates” by causing the Consumer Price Index to decline, as would be expected if every home received a $300 energy bill reduction.
“You’ll have to ask the Reserve Bank, but our intention here, our objective – I think we will be successful – is to put downward pressure on inflation with this budget,” he stated.
“Our reasonable approach and the way we’ve constructed our cost of living assistance, especially with regard to energy and rent reduction, will accomplish that.
“A second surplus, the first back-to-back surpluses in almost two decades, the spending restraint that we’ve shown, the savings that we found elsewhere in the budget.”
Chalmers left Australians with a hefty promise, saying it was not in his hands whether the power refund ended up “baked in” to future budgets.
“People will find it a little bit easier to pay their energy bills, a little bit easier to pay their rent,” Chalmers stated.
They’ll receive further assistance in addition to a tax cut for all taxpayers. “We are aware that many are struggling and that many are being overworked.
“More help is on the way.” However, Angus Taylor, the shadow treasurer, referred to it as the “wrong budget for the time” and dubbed cost-of-living adjustments a “Band-Aid” for a bullet wound. “It’s not going to do the job.
The reason is you still have inflation that is high and you’ve got wages that haven’t been able to keep up,” he stated.
“If you want to improve the purchasing power of someone’s pay packet, the best way is to beat inflation and that means the government has to show restraint.”
Still, he declared that the opposition would back the budget’s billion-dollar handouts for hard-working Australians.
However, Taylor committed to opposing the government’s $13.7 billion in tax breaks for essential minerals and renewable hydrogen, calling them “handouts to billionaires” as part of the Future Made in Australia initiative.
