Treasurer Jim Chalmers and Finance Minister Katy Gallagher say good economic management has lowered the deficit. Photo: Jim Chalmers Facebook.
The Federal Government is congratulating itself on the Final Budget Outcome and an underlying deficit $6 billion lower than the $28.3 billion forecast in the May budget.
But while the nation braces for what is widely anticipated to be another hike to the official interest rate tomorrow (29 September), the Federal Opposition says government spending remains woefully out of control.
Treasurer Jim Chalmers has credited the improvement to the bottom line to a $1.4 billion decrease in payments and a $4.6 billion increase in receipts.
It was not driven by commodity prices but by more investor income.
“In fact, mining profits came in lower than what was anticipated,” Dr Chalmers said.
“It is overwhelmingly from higher super and investor income than what we anticipated in the Treasury’s forecasts in May … We made a lot of progress in the budget, and we’ve continued to make even more progress since then.
“This multi‑billion‑dollar improvement has been delivered despite months of more severe global volatility.
“Responsible economic management is a defining feature of this government, and you can see that here.
“The bottom line is better than what we inherited, better than what was forecast at the election, and it’s improved again since the budget.”
Finance Minister Katy Gallagher said spending less across some government portfolios, as well as “a couple of national partnership payments”, has helped the bottom line.
“We are investing in those services that people really rely on. But in the last budget we’ve found savings, including in the NDIS, of over $35 billion,” she said.
“So, we are doing our bit. I take responsibility for that, making sure that we’re getting the budget in better shape, that we are finding savings where we can.
“But also … people expect their hospitals to be funded, their schools to be funded, their aged care system to be funded, NDIS to be funded, the Defence area of government funded, all of these areas.
“The pressure is increasing, not decreasing, in that. So, we have to take decisions about how we meet all those pressures and run the budget at the same time.
“The deficit’s coming in lower than what we forecast at budget, and again that’s because we’re so focused on making sure we do our bit to help with the inflation challenge.”
The Coalition, however, says higher taxes Australians have paid have been squandered due to Labor’s “reckless spending”, which is keeping inflation and interest rates higher for longer, and hurting all Australians.
Deputy Opposition Leader Jane Hume said Labor had been handed a “massive windfall revenue” and still can’t get its spending under control.
“This is Labor’s fiscal record – more tax, more spending, more debt,” Senator Hume said.
“After all that revenue, Australians are still being left with deficits as far as the eye can see, and future generations will be left to pay that bill.
“Labor had an opportunity to use higher tax receipts to repair the budget. Instead, it has squandered that revenue on a spending spree that is growing at almost twice the rate of the economy, and he still has no plan to pay down Labour’s trillion-dollar debt.
“Jim Chalmers and Katy Gallagher have turned crisis-level spending into business as usual.”
Most economists agree the Reserve Bank of Australia will hike interest rates again on Tuesday, when its board concludes its sixth meeting this calendar year.
It would be the fourth rise this year, and if it is a standard 25-basis-point increase, the official cash rate would reach a 15-year high to sit at 4.6 per cent.
Dr Chalmers said he would not anticipate the RBA’s decision, but he acknowledged “that a lot of Australians will be apprehensive” about the central bank’s deliberations.
“Our job [Federal Government] is to manage the budget and the economy in the most responsible way that we can,” the Treasurer said.
But shadow treasurer Tim Wilson said Dr Chalmers “keeps fuelling” inflation and higher interest rates through government spending.
“This announcement is a desperate attempt to distract Australians from the prospect of three more interest rate rises thanks to Jim Chalmers’ addiction to spending and inflation – including tomorrow,” he said.
“That will push many families and small businesses over the edge.”
Speaking in Tasmania Monday afternoon, Anthony Albanese said his government had supported tax cuts, free TAFE, and multiple health initiatives to help lower the cost of living.
“All aimed at making a difference, because we know people are doing it tough,” the Prime Minister said.
Original Article published by Chris Johnson on Region Canberra.
