THE SQUIZ

The pre-Budget announcements keep rolling in with Treasurer Jim Chalmers announcing electricity bill assistance of up to $500 each household for more than 5.5 million households. The electricity bill support is part of a four-year, $14.6 billion cost-of-living package that Chalmers announced on Monday morning, with further details to come on Tuesday night. Also new is the announcement that tweaks to the petroleum resource rent tax will see the government collect an additional $2.4 billion over the next 4 years from the booming gas industry. It’s complicated and has to do with how much income the gas companies can claim tax deductions on (see, we told you…), but the peak industry body supports the change, saying it “will provide greater certainty for our industry”. And it was a busy Sunday for Chalmers who was on the media rounds when a slip of the tongue indicated that Tuesday might see the announcement of Australia’s first surplus since 2007…

A SURPLUS? IN THIS ECONOMY?

We mentioned this last week, and speculation has only continued to grow. It’s feasible that the government has collected more revenue than it spends in this current financial year, at least according to rumours and Chalmers’ tiny slip yesterday. If it is the case, analysts say it’s partly because of strong coal and iron ore prices, but mainly due to historically high employment and growth in wages. That all adds up to a tax collection bonanza for the federal government. As for the politics, the Coalition’s Treasury spokesman Angus Taylor is shaping up to claim that the surplus is due to factors outside of Labor’s control, while our sky-high inflation rates are “homegrown” and not “coming from Vladimir Putin” (which is a reference to the pressure the Ukraine war has put on the global economy). Whatever does happen in Tuesday’s budget, Chalmers is expected to forecast a slowing economy – and he’s not the only one with a mixed forecast…

WHO ELSE IS WARY?Over in Omaha, legendary investor Warren Buffett is hosting the annual Berkshire Hathaway shareholder meeting where the investment genius’s every word is treated as gospel. Like Chalmers, Buffett also expects a slowdown in the economy, and he warned about risks from tensions between the US and China, the struggling commercial property sector (thanks to empty office buildings), and the recent instability in the banking system. Asked about the looming debt ceiling crisis in the US (where the government is about to run out of money if lawmakers don’t agree to raise the borrowing limit), Buffett said he couldn’t imagine US politicians would allow the country to default on its debt. Biden will meet with top lawmakers – including his main antagonist Republican Speaker Kevin McCarthy – in Washington mid this week.