Finance Minister Katy Gallagher and Treasurer Jim Chalmers have delivered the mid-year budget update. Photo: Andrew McLaughlin.
Forecast public service savings are improving the budget’s bottom line, even though government spending initiatives have jumped this financial year and include a $233 million boost to CSIRO.
The CSIRO’s extra funding, on top of its $1 billion budget, is to maintain its research capability despite recent job losses and the promise of hundreds more to come.
The extra money will be directed towards research in critical minerals, artificial intelligence and climate change preparedness.
Treasurer Jim Chalmers said research remained a priority for the government.
“The costs have escalated and so the CSIRO has to make decisions about how they manage their resources,” he said.
“From government’s point of view, we have been increasing and that is because we believe in the crucial role that science, broadly, and the CSIRO, plays in the future of our economy.”
CSIRO management, however, intend on sticking to its mass sacking plan that will see 350 research jobs go, adding to the 700 lost recently.
The Treasurer and Finance Minister Katy Gallagher have handed down the Mid-Year Economic and Fiscal Outlook (MYEFO), showing that while short-term spending has decreased overall, Treasury has upgraded its inflation forecast for the next two years to be higher than the forecast rise in wages.
The mid-year budget update shows Federal Government decisions since the May budget will add another $2.2 billion to the coffers over four years.
This despite its super tax plans being watered down to lose $3.8 billion off revenue and another $1.8 billion being added to government initiatives this financial year.
Dr Chalmers said while the government had a good story to tell on real wages growth, there was always an “element of uncertainty” around inflation forecasts.
“We acknowledge that the inflation forecasts have been revised up and that’s because recent data has been a little bit higher than expected,” he says.
“That has implications for real wages.”
The majority of savings found won’t kick in until the second half of the forward estimates and the largest savings come via the Australian Public Service’s forecast $6.8 billion reduction in the spend on external consultants and reduction in staff travel expenses.
There is a further $691.3 million in MYEFO for the ACT, including the extra CSIRO funding.
Ongoing initiatives for the capital (some previously announced) include:
- $219.7 million (over five years) to fix the roof of National Gallery of Australia
- $119.2 million to the Australian War Memorial to support its financial sustainability and the completion of its redevelopment in 2026
- $53.6 million in additional funding for the Commonwealth Avenue Bridge Upgrade and Scrivener Dam Dissipator Strengthening works
- $24.4 million to deliver the ACT Health and Aged Care Package committed in the 2025 election including:
- $10.5 million to deliver three new fully bulk billed general practice clinics
- $10.1 million in new capital infrastructure to increase the availability of respite care in the ACT
- $3.8 million to support a private provider to operate the Interchange Health Co-op in Tuggeranong and maintain bulk billing
- $17 million to progress the development of the Ngurra Cultural Precinct
- $10 million for lighting around Lake Burley Griffin’s Central Basin and surrounds to improve safety and usability of public spaces
- $5.8 million to extend the Parliament and Civics Education Rebate Pilot program for the 2026 and 2027 calendar years
- $4.5 million for the National Library of Australia to complete the replacement of heritage windows, doors and façade
- $4.1 million for smaller commitments – Multicultural Festival for Social Cohesion and Community Connections, Chisholm Cricket facilities upgrade, National Hockey Centre, Margaret Timpson Park upgrade.
Senator Gallagher acknowledged that more work needed to be done to address a hike in APS workers compensation claims, which are forecast to be 40 per cent higher this financial year and rising to 70 per cent in 2028-09.
She said the spike could be largely attributed to an increase in psychological disease frequency.
“We need to do more work on this,” the Minister said.
“This is another one of those programs where you see it start to increase faster than you would like.
“We need to go back and have a look at what’s happening and look at how we moderate some of that.”
The budget bottom line has also been helped by a continuing higher tax take, with $32.6 billion more expected to be collected over the next four years.
The Treasurer addressed the issue of whether existing tax cuts will be enough to help offset continuing tough economic times.
“I understand from time to time people call for more tax cuts,” Dr Chalmers said.
“I think we have shown a willingness and ability to make room for that when we can. We understand that bracket creep is a genuine issue in our budget.”
Original Article published by Chris Johnson on Region Canberra.
