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Next Tuesday also introduces a wellbeing budget to report on health, climate impacts, and child poverty.
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Budget to focus on inflationary pressures, cost of living: Treasurer
21 October 2022
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10 minute read
Next week’s Federal Budget would aim to support low to middle-income earners as the government strives to bring inflation under control, Treasurer Jim Chalmers said yesterday.
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Its biggest challenge was tackling rising prices that eat away at people’s living standards and their capacity to put food on the table, Dr Chalmers told ABC Radio.
“That’s why the priority of the Budget is to try and get a handle on this inflation problem, we’ve got indexation of payments for good reason to try and be helpful when inflation is high,” he said.
“We understand that when inflation is high and rising as it is now, when there’s pressure on family budgets, that some Australians are more vulnerable to that than others — we’re doing what we can to provide some responsible cost of living relief but we need to do that in a way that doesn’t make inflation worse and that’s our priority.”
The Treasurer would also introduce a wellbeing budget to measure performance on climate change, physical and mental wellbeing, and the extent of child poverty.
“I think one of the key lessons that people drew from the pandemic — but in some cases some of us have believed all our lives — is that you can’t have a more robust and resilient economy if you don’t have more robust and resilient people,” he said.
“I’ve always seen economic strength, social mobility and the wellbeing of our people as complementary, not at odds with each other.
“I’ll get the ball rolling with a detailed statement in the Budget next week on a conversation about how we better measure progress in our economy.”
Additionally, the Treasurer said the Federal Budget would discuss the risks both it and the economy faced due to climate change.
“The primary discussion in the Budget, which I hope people will engage with when I release it on Tuesday, is what are the costs of doing nothing, what are the risks to our economy ... why it’s so important that we engage in meaningful ways with climate action.”
“I’m pleased and proud that for the first time we’ve been able to include a proper discussion of that in a Commonwealth Budget.”
Dr Chalmers said the government had found an additional $6.4 billion in spending commitments before factoring in flood relief.
“This is one of the late breaking things that we want to try and include in the Budget if we can,” he said.
“Our primary focus will always be on the human consequences of what’s happening in these flood-affected areas but there will be consequences for the Budget and the economy as well.”
“The Budget is being buffeted and the economy is being buffeted by a combination of four things — natural disasters, rising inflation, deteriorating in the global economy, and serious structural assistance spending pressures on the Budget as well.”
Those spending pressures which Dr Chalmers referred to were cost increases in the NDIS, borrowing, health, and defence.
The Treasurer also confirmed that the cost of the stage three tax cuts had blown out by $10 billion, to $254 billion, over 10 years.
“I think it’s been pretty clear that these tax cuts make an impact on the Budget, but I think the point that we’ve been making is that they come in a couple of years’ time — we’ve got more pressing priorities,” he said.
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