The Squiz 

Cost of living relief is the Albanese Government’s top priority in its latest Federal Budget delivered last night. Every Aussie household will save $300 on their energy bill and those doing it the toughest will get a 10% increase in their Commonwealth Rent Assistance. That comes on top of the stuff we already knew about, like personal income tax cuts coming on 1 July and the wiping of some student debt. Helping Aussies weather these ongoing tough economic times is an important plank in the government’s pitch as we head towards the next election, due between August 2024 and May 2025. With that in mind, Chalmers says it’s “a responsible Budget that helps people under pressure today and invests in the promise and potential of the more prosperous future that we can make together.” 

Gimme the numbers…

• Back in December, Treasury was forecasting a deficit of $1.1 billion. So the +$10 billion turnaround with the expected $9.3 billion surplus is mainly because unemployment has stayed low and lots of people are paying income tax. It also helps that minerals like iron ore are still earning us a bucket…
• Don’t hold your breath – Chalmers reckons we are heading back into deficit next year and the years following thanks to growing demands in defence, the NDIS, aged care and paying off our COVID-sized debt. 
• But the big picture figures show Australia is set to hang in there – if things go our way. Economic growth forecasts have been trimmed back to 2.25% in 2025/26 and unemployment is set to hit 4.5%. The big question is still on inflation and getting it down… 

So what’s the bottom line?

We like what you did there… Well, there’s still lots of focus on Treasury’s prediction that inflation will fall under 3% by the end of the year. Since coming to government in 2022, Chalmers has talked about inflation remaining “higher for longer” – and in light of the new forecast, he’s flipped that to say “inflation is expected to be lower, sooner”. To say the Coalition and some economists are sceptical the government can pull it off is an understatement, with Opposition Treasury spokesman Angus Taylor calling the Budget a “big-spending, big-taxing con job”… For its part, Team Albanese says the Budget will put downward pressure on inflation, taking it from 3.6% now to 2.75% by mid next year. This will be a huge part of the political discourse over the coming months, but in the meantime, here’s a good winners and losers guide – may you be more column A than column B…