Fiscal restraint to define federal budget as costs rise
Finance Minister Jim Chalmers has vowed to make spending restraint a key feature of the federal budget as the government points to major cost pressures.
Dr Chalmers said responsible economic management and spending restraint would be defining features of the 12 May budget and was “vital in the context of significant and inevitable spending pressures”.
“We’ve made a lot of progress together, but we still have a lot of work to do, and that’s why sensible savings and spending restraint are the central focus of our economic plan,” he said in a statement.
Treasury figures released on Friday night highlighted spending pressures of more than $60 billion in coming years; This includes $25 billion for hospital funding agreements with states and $14 billion for defense investments.
Other significant pressures include new and amended Pharmaceutical Benefits Scheme lists of more than $6 billion, $4.4 billion in extra disability support payments to retirees and $3.2 billion in additional Jobseeker income support.
Some of the pressures come from indexation caused by high inflation, while the high exchange rate also undermines previously anticipated income increases.
Finance Minister Katy Gallagher said the government was focused on “carefully managing the budget while spending responsibly on the services and support Australians need”.
“This means investing in hospitals, strengthening our national security and ensuring we have room in the budget for additional spending in response to natural disasters and inevitable infrastructure cost pressures,” Senator Gallagher said.
The government has promised that the budget, which is under pressure due to high inflation and rising borrowing costs of government debt, will focus on intergenerational equality.
But negative gearing and unexpected tax expectations from possible changes to capital gains tax (CGT) were ignored.
The proposals to boost home ownership come as Prime Minister Anthony Albanese warns that young Australians believe the property system is against them.
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