Jim Chalmers, the treasurer, has confirmed that the upcoming budget, scheduled for next Tuesday, will reveal a deficit close to the $26.9 billion that was predicted in the December update. He also indicated that the lucrative windfall tax gains, stemming from high commodity prices and a thriving job market, are no longer a possibility. With an election originally set for April that was aborted due to ex-Tropical Cyclone Alfred, the government has had to quickly finalize its fourth consecutive Labor budget.
Despite this, Chalmers remained optimistic in a speech delivered in Brisbane, welcoming the opportunity to prioritize the economy during the upcoming election campaign. He cautioned that voting for Peter Dutton, the opposition leader, could jeopardize the fragile economic recovery following the pandemic. He highlighted achievements such as decreased inflation, strengthening incomes, low unemployment, declining interest rates, reduced debt, and increasing growth, comparing these positively against global trends, including New Zealand’s economic struggles.
Chalmers addressed the deficit, stating that revenue upgrades have significantly decreased since the peak of October 2022. He affirmed that the predicted financial outcomes for this year and the future estimates are unlikely to differ substantially from the Mid-Year Economic and Fiscal Outlook (MYEFO). The Revenue upgrades are expected to decrease as Treasury has indicated a minimal change in financial projections.
Chalmers acknowledged that while the Australian economy is showing signs of improvement, as evidenced in the recent national accounts, the government’s focus remains on managing the cost of living. The budget will apparently include provisions for further announcements during the election campaign, but Chalmers downplayed the likelihood of significant new spending initiatives next Tuesday.
Amidst mounting pressure, the Coalition is expected to critique the Albanese government for its financial management, pointing towards Treasury forecasts of deficits extending into the next decade. Despite these challenges, the latest Guardian Essential poll suggests an increase in Prime Minister Anthony Albanese’s approval rating, bolstered possibly by the first rate cut in four years in February and the government’s response to natural disasters in Queensland and northern New South Wales.
Chalmers’s speech to the Queensland Media Club comes at a strategic time, aiming to rally support for the incumbent government, highlighting its economic achievements and resilience strategies.
Source: https://www.theguardian.com/australia-news/2025/mar/18/jim-chalmers-confirms-federal-budget-will-include-deficit-close-to-296bn-predicted-in-december
