EDITORIAL: No end in sight to cost-of-living pain for families as Budget looms

Treasurer Jim Chalmers has begun to walk a fine line. It is a line which must balance what the nation needs — responsible financial management — against what Labor is about to offer up. A pre-election Budget.

The very words “pre-election Budget” are a dead giveaway. They define what a Government seeking re-election will want to ensure it has up its sleeve — giveaways.

Of course Dr Chalmers was not expecting to hand down the Budget next week. Labor would have liked to have announced an election date straight after WA voters re-elected Labor Premier Roger Cook. But dealing with Cyclone Alfred blew away those plans, forcing Anthony Albanese to rule out the widely-expected April 12 election, forcing Dr Chalmers to hand down the Budget next Tuesday.

And so the Treasurer has started to lay down a few markers — and on Tuesday warned voters not to expect big offerings. That’s what we would expect him to say with the economy operating in a time of global political and economic uncertainty.

But it should not be overlooked that, having expected the election campaign to have begun by now, the Government started the year with big promises, including $7 billion for a Queensland highway, $8b for Medicare, $3b on train infrastructure in NSW and Victoria, and a $2.4b bail-out of a bankrupt South Australian steel mill.

And on Tuesday the small print from Dr Chalmers was his acknowledgement that next Tuesday’s Budget would contain provisions for further announcements to be made during the election campaign.

There are also warnings that Cyclone Alfred will cost the Australian economy at least $1.2b, and concern about the direct and indirect impact of Donald Trump’s tariff wars.

The Budget will unveil a deficit close to the $26.9b predicted in December. Budgets are already set to be drenched in red ink for years to come. And Deloitte’s Budget monitor on Monday warned that a predicted hung Parliament and the desire of crossbenchers to extract spending promises would present further challenges.

While the jobless rate remains low and inflation has fallen from 7.8 per cent to 2.4 per cent under the Labor Government, living standards have barely budged. Of 18 Western economies, including the US, Britain, Canada and Japan, Australian living standards improved the least, at just 0.15 per cent a year on average over the past decade, according to the Organisation for Economic Co-operation and Development.

On Tuesday shadow treasurer Angus Taylor claimed that “instead of responsible financial management, we’ve seen reckless spending, increased taxes, and poor policy decisions that have only made life more expensive for families and businesses.”

The taxation surge that allowed the Government to promise billions in infrastructure, social welfare and economic subsidies is ending. But cost-of-living pain and the decline in living standards seem far from over.