Federal budget: Jim Chalmers’ budget formula to be relief, repair, reform

Jim Chalmers will hand down a Budget on Tuesday night with its bottom line in the red, few surprises and a largely unaddressed structural deficit.

Then the Government has to use it as a springboard into an election campaign.

The Treasurer has repeatedly said over the past couple of months anyone looking for hints about what would be in this Budget – a rare fourth one delivered in a single term – should look at the first three.

But he’s been clear there will be no surplus from windfall revenue upgrades this time, after delivering two sets of books in the black.

“The Budget will be focused primarily on two things: more cost-of-living help where we can do that in an affordable and in a responsible way, and also strengthening our economy and making it more resilient in the face of all of this global economic uncertainty,” he said on Friday.

“So it will have that familiar combination of relief, repair and reform.”

Dr Chalmers and Prime Minister Anthony Albanese are pleased with the economic story Labor has to tell amid times of global turmoil.

Inflation is back down in the Reserve Bank’s target band of 2-3 per cent, employment growth has continued to be strong, wages are up and government debt is down thanks some $90 billion in savings found since Labor won office.

But households are continuing to feel the pressure after four years or high prices and are still looking to the Government for more supports.

AMP deputy chief economist Diana Mousina says further cost-of-living relief in this budget must be well-targeted.

“The Government has to be careful in how much it wants to give back to the economy, it wouldn’t want to stoke inflation again,” she said.

“They’ve got a bit of money to play around with, because the revenue numbers have been a bit better than expected, because the economy has been a bit holding up.

“The stuff that people care about leading up to the election is like the cost of living relief that they’re talking about … so the $300 scheme for electricity, maybe some more targeted relief for the most vulnerable groups as well.”

She’s tipping another increase to Commonwealth rent assistance to help the lowest-income families with housing costs.

The Government has also announced another round of its electricity bill rebates in a move that was widely expected.

It has already announced a multibillion-dollar focus on health, with several sets of measures aimed at lowering the cost of seeing a doctor and buying medicines.