If you’re expecting cost of living relief in the next Federal Budget, I’m sorry to say you may be disappointed. Prime Minister Anthony Albanese and Treasurer Jim Chalmers have warned offering such help can sometimes be ‘counter-productive’ so I guess it’s everyone for themselves!!!!!
“I want to level with people … You want to be careful when you are providing cost of living relief it has an economic benefit,” Chalmers told Today on Thursday morning.
“You can actually provide cost of living relief that’s counter-productive … We don’t want to see that.
“But [the budget] will be responsible and it will have an economic dividend as well. So that it doesn’t add to these inflationary pressures.”
The next budget will drop on October 26. It will be the Labor government’s first and it’s coming at a time when the cost of living is really sinking its teeth in so no doubt they’re feeling the pressure.
In the previous budget former Treasurer Josh Frydenberg announced a bunch of (admittedly, pretty meagre) cost of living measures including one-off cash payments and a temporary excise on fuel, which made the cost of petrol 22 cents cheaper per litre for consumers.
But everything’s become a lot more expensive since then. Floods, escalating war in Europe, gas and coal shortages, rising inflation aaaaand *deep breath* interest rate hikes have all affected the cost of living in Australia.
By the end of October its expected inflation will be even higher than its current rate of 6.1 per cent, and the fuel excise, which was put in place by the previous government for six months, will have expired.
So what can we expect the government to do about it?
Albanese said “difficult decisions” will have to be made by the government between now and October 26.
Some decisions it has already made include not extending the fuel excise, not handing out one-off paycheques or bonuses to welfare recipients, and not offering any more tax offsets like the Coalition did for the past few financial years (you may remember a juicy tax return last time).
But Labor has promised to deliver on some of its election promises in the next budget, including childcare subsidies, cheaper medicines and tax cuts for electric vehicle purchases. All good things, of course.
“It is all about dealing with the constraints in our economy which are pushing up inflation, whether it is labour and skills shortages, a lack of training, whether it is issues in energy — all of these other key investments that we want to make in the budget are about lifting the speed limit on the economy without adding to the inflationary pressures,” Chalmers said on ABC News Breakfast on Thursday.
Chalmers said he’d been having “frank” conversations with Australians about the budget and the economy, but he’s also optimistic. Always look on the bright side of life, Jim says!
“Inflation will start to moderate next year and we’re realistic about that … but there is genuine reason to be optimistic about our economy.”
Ok, you be optimistic about the economy and I’ll be pessimistic about my bank account. Seems fair.
See you in October.
