That is a huge turnaround from a projected deficit of A$36.9 billion in October, although underlying structural pressures are seen keeping the budget in the red in years ahead. The centre-left Labor government has announced A$14.6 billion in cost of living relief, which Treasurer Jim Chalmers promises won't worsen inflation as the central bank raises rates to keep price rises in check. "This will be a responsible Budget, which focuses on people doing it tough," said Chalmers in an interview with ABC Radio on Monday.
"Our motivation throughout has been to try and take pressure off the cost of living rather than add to these inflationary pressures on the Budget." The government will also set aside a A$11.3 billion for wage rises for aged care workers and extend financial support for single parents, while banking most of the savings to put budget on a more sustainable footing.
To boost revenues, it would also raise the tax paid by the
offshore LNG industry, a move that should increase revenue by
A$2.4 billion over the next four fiscal years, and increase
tobacco tax by 5% a year over the next three years.
Defence spending is set for the biggest increase since World
War Two amid plans to spend A$368 billion out to the 2050's on
nuclear powered submarines from the UK and United States.
The government is also set to forecast a lower unemployment
rate than previously projected, with real wages expected to
return to positive growth earlier than previously forecast.
The previous Liberal National government had "Back in Black"
mugs made in 2019 when it came within a whisker of a surplus,
only for emergency pandemic spending to blow a record-breaking
hole in the accounts.
($1 = 1.4758 Australian dollars)
(Reporting by Stella Qiu; Editing by Sam Holmes)
