By Renju Jose
SYDNEY, May 10 (Reuters) - Australia's Labor government
said on Wednesday the billions in cost-of-living relief unveiled
in the federal budget for families and businesses will not
worsen inflationary pressures and put more pressure on the
central bank to lift rates further.
Australia on Tuesday boasted the first budget surplus in 15
years after its coffers swelled from bumper mining profits and a
strong job market, with unemployment now at near 50-year lows of
3.5%, boosting income tax while curbing welfare payments.
But inflation sits at near 30-year highs of 7.0%, forcing
the government to announce relief measures aimed at lowering
power bills and easing pressure on consumer prices.
"We wanted to take pressure off families whilst we didn't
put pressure on inflation," Prime Minister Anthony Albanese told
ABC Radio. "We make no apologies for the fact that some of the
most vulnerable Australians are people we're providing
assistance for in this budget."
The budget includes a A$14.6 billion ($10 billion)
cost-of-living plan, set to deliver up to A$3 billion in direct
energy bill relief for low-income families and small businesses.
It also has set aside more money for unemployment allowances and
other income support payments.
Treasurer Jim Chalmers brushed aside concerns the support
measures could stoke inflation, saying all the relief would not
impact the economy at the same time.
"Broadly across the economy, we don't expect (the support)
to be adding to these inflationary pressures," Chalmers told ABC
television, adding some measures will be "actually taking some
of the sting out of inflation."
Chalmers says his budget is restrained on spending, while
also giving some relief, after the Reserve Bank of Australia
(RBA) last week stunned markets with a rate rise rather than the
pause expected by markets.
The RBA has warned that risks to inflation were on the
upside given low productivity growth, rising energy prices and a
surge in rents.
($1 = 1.4743 Australian dollars)
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(Reporting by Renju Jose in Sydney; Editing by Stephen Coates)
Messaging: @renjujose))
