The Albanese government has unveiled a $15 billion package of welfare increases, bulk-billing incentives and energy bill discounts, in a budget it says is not inflationary, but paves the way for more tax hikes and spending restraint.
On a net basis, the government has spent $20.6 billion of this in the budget and banked the rest, more than 80 percent.P said it did not consider the budget to be in surplus because it uses a different measure, but welcomed the government saving more than 80 per cent of the revenue upgrades since October 2022, saying his “remains critical to our rating on Australia because long-term challenges linger”.
Overall, the budget forecast inflation to fall from 6 per cent this financial year to 2.75 per cent in 2024-25, which is back inside the Reserve Bank of Australia’s target band.Economic growth will slow from 3.25 per cent this year to 1.5 per cent next year due to high interest rates and a slowing global economy.
The debt and deficit outlook is despite measures to try to shore up the medium-term structural position of the budget. The plan to reduce the growth rate of the NDIS from 14 per cent to 8 per cent by 2026, and push it lower beyond that, will offset what would have been a $15 billion blowout over the forward estimates, and save $59 billion over 10 years.The decision to double the tax on earnings from the component of superannuation accounts over $3 million will raise $2.
The tax-to-GDP ratio will hit the Coalition’s old self-imposed ceiling of 23.9 per cent in 2023-24, before dropping back to 23.3 per cent, in part due to the stage three tax cuts which begin on July 1, 2024.Dr Chalmers said he was “encouraged by the willingness of the Australian community to engage in a conversion to get the budget in much better nick”.
The biggest short-term test of the budget was to help the needy with the cost of living while not exacerbating inflation.