/ 14 May 2024

It all comes down to this…

Jim Chalmers

The Squiz 

Treasurer Jim Chalmers will hand down the Federal Budget tonight with a $9.3 billion surplus for the 2023-24 financial year – his second surplus on the trot. But the next three years are expected to be deep in the red, due to “unavoidable spending”. Before that happens, Chalmers is facing calls to ‘please explain’ Treasury’s forecast that inflation will fall below 3% by Christmas. That contradicts the Reserve Bank which last week said it expects inflation to rise from the current rate of 3.6% to 3.8% by June, where it will remain for the rest of the year. After that, the central bank reckons inflation will fall within their target range of 2-3% by the end of 2025. 

Why the discrepancy?

Finance Minister Katy Gallagher says it’s due to budget measures that will be announced tonight that will take pressure off inflation, and money found or saved since coming to office. “Obviously, those decisions weren’t available to the RBA in their forecasts,” she said yesterday. But the Coalition’s spokesperson Senator Jane Hume says Chalmers’ “vastly different forecast” can be explained a few ways (and none of them are flattering…). That includes spending that will keep interest rates “higher for longer”, an expected rise in unemployment, or because Oz’s economic conditions will “worsen and that will dampen consumption”. Chalmers has acknowledged the tricky balance between growing the economy and providing cost of living relief without adding inflationary pressures to the mix. For his part, he reckons tonight will be about “restraint”, “relief” and “reform”.

So when does that show start?

The Budget is released at 7:30pm Eastern time when Chalmers will take to the dispatch box in the House of Reps. They do it that late for a couple of reasons… At that hour, the stock market is closed so any potentially market-sensitive information has time to percolate/be explained. And it’s a great way for the government to own the agenda before it gets picked apart by their political opponents, the media and stakeholders. As for how the day will go for Chalmers, he’s probably already had his early morning run… Then it’s off to Parliament House for a long day of briefings and selling the virtues of Team Albanese’s agenda. Journos from major outlets will be part of the ‘lock-up’ where they’re given the information ahead of time – and yes, they are literally locked up… This year for the first time, The Squiz will also be in Canberra for the big day, so wish us luck… 

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