State big spenders don’t worry Treasurer Jim Chalmers in his inflation fight

Federal Treasurer Jim Chalmers insists he is not concerned big-spending Budgets from the States – like that handed down by the Cook Government on Thursday — will undermine his efforts to fight inflation.

WA is spending a record amount on infrastructure, including another cost blowout for Metronet, and will hand nearly half a billion dollars to households and small businesses in another round of electricity bill relief.

There’s also free public transport for students and cash payments for their parents, stamp duty concessions for first-homebuyers and and extra $3.2 billion for the health system.

All this comes as the State posts a $3.2b surplus.

“The West Australian budget is in a bit better nick than some of the other Budgets — we were talking about that on the way here — but overwhelmingly, there’s pressures on all of the budgets,” Dr Chalmers said in a press conference with Finance Minister Katy Gallagher on Friday.

The Victorian Budget handed down earlier this week posted larger deficits and delayed a major infrastructure project, but it also handed out cash to parents with children at school and will spend more on housing and domestic violence services.

Queensland’s Government has flagged a $2.5b cost-of-living package in the months ahead of its election, including $1000 power bill rebates.

Nevertheless, Dr Chalmers said he was “not especially” worried these cash splashes would make his task of further curbing inflation more difficult.

“Obviously, we pay attention to the decisions that my counterparts make in their State Budgets,” he said.

“This cost of living challenge is so substantial that we need all shoulders to the wheel and so I think that that cost of living relief that the various State governments have announced will be welcomed by the people that we jointly represent — and is welcomed by us.”

However, he said his Budget, to be handed down on Tuesday, would be responsible and restrained.

The papers will show real spending growth will average 1.4 per cent over the six years from 2022-23 (when Labor took office) to 2027-28 — less than the 30-year average growth rate of 3.2 per cent.

“There will be savings in the Budget, there will be spending restraint in the Budget so that we can get the Budget in much better nick to make room for our priorities, which are cost of living and the Future Made in Australia,” Dr Chalmers said.