AARON PATRICK: Treasurer Jim Chalmers’ $114 billion savings boast is fake news, it’s got to stop
The Treasurer’s claim the government has saved $114 billion is untrue, and ignores spending increases economists warn will make inflation worse.
Treasurer Jim Chalmers’ favourite lie is frequent, blatant and serious.
He uttered it four times today: on Sunrise, Today, Sky News and ABC News Breakfast.
“We’ve found $114 billion in savings,” he told Seven host Matt Shirvington Wednesday morning.
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By continuing you agree to our Terms and Privacy Policy.Over the past four months Dr Chalmers and other ministers have made the claim dozens of times, citing the figure as proof of financial discipline.
The fake boast began in December, just before publication of a mid-financial-year budget update.
“We’ve now found $114b in savings over our seven budgets and budget updates,” Dr Chalmers told Sky commentator Andrew Clennell. “That is five times more than our predecessors found.”
Grossly misleading
Anthony Albanese picked up the line in January, and was followed by other ministers.
On February 3, Employment Minister Amanda Rishworth told the Today Show: “And over the course of our government, we’ve improved the budget bottom line by $114b.”
The following day, in question time, Finance Minister Katy Gallagher mocked the Opposition: “On the budget handling, we have found $114b worth of savings. Frankly, when you were in government, you didn’t come anywhere near that.”
Two weeks later Mr Albanese told Guardian journalist Tom McIlroy in a podcast: “We’ve found $114b of savings since we came to government.”
In a press release yesterday responding to the interest rate increase, Dr Chalmers said: “The budget is more than $233 billion better than we inherited and we’ve found more than $114 billion in savings since coming to office.”
The number is grossly misleading, as the ministers must know.
Shifting blame
“Savings” is Canberra-speak for Budget cuts. The $114 billion includes money that has been shifted between government programs since the Labor Party was elected in 2022, which politicians call “repriortisations”.
As everyone knows, you don’t save money when you choose not to buy a new car so you can renovate your kitchen.
A press release from Dr Chalmers on December 17 citing the figure included the crucial “repriortisations” description, which is usually left out by ministers when they repeat the number.
Since coming to power, the Labor Government has decided to spend an extra $142 billion and increase taxes by $31 billion. In other words, government is getting bigger under Labor (spending and taxes are mapped out four years in advance).
The distinction could not be more crucial. Dr Chalmers is trying to convince Australians the Government does not deserve blame for rising interest rates, which are hurting millions of people. Credible economists say government deficits contribute to inflation, which is driving rates up.
To protect their reputations, Dr Chalmers and Ms Gallagher use the $114b figure to imply, falsely, they have cut spending.
“We’ve actually improved the Budget very substantially, and there will always be views about whether that’s too much or too little,” Dr Chalmers said this morning. “I understand and respect that.”
Called out
The latest four-year forecasts from the Federal Treasury predict cumulative deficits of $143b, which is more than any State spends in a year. The extra Federal funding includes debt relief for university students, increased subsidies for doctors and a bail out of the South Australian Whyalla steelworks.
One of the remarkable aspects of the Budget misrepresentation is the shameless way it has persisted despite being called out.
On February 4, a Treasury analyst-turned-business journalist, Luke Kinsella, wrote a detailed Australian Financial Review article pointing out the government was out by $225b — the difference between the claimed savings and the real spending increase.
The Coalition’s then-finance spokesman, James Paterson, questioned Ms Gallagher about the figure a week later in a Senate committee hearing. A YouTube clip of the encounter posted by Senator Paterson, which has been viewed almost 10,000 times, is an unintentionally hilarious example of political obfuscation.
“If you’ve gone and spent that and some more, you haven’t saved $114b,” he said.
She replied: “Yes we have.”
“How have you saved it if you’ve gone and spent it?”
“Because the demands on the Budget are greater than that.”
On Thursday, Dr Chalmers will give a preview of the 2027 budget to an economists’ group in Melbourne. To assuage their concerns government spending is contributing to an over-hot economy, he is likely to repeat his message that more cuts are coming.
Professional economists are an important constituency for the treasurer. Their assessments of his performance percolate through the media to the rest of the government, professional investors and the public.
If the Treasurer wants to enhance his credibility, he could stop pretending to practice financial rectitude and begin to pull back the giant welfare state being created by his government.
