Jim Chalmers and Katy Gallagher reveal improved Australian budget deficit as Labor warns spending pressures remain
Final budget figures are expected to show the deficit is billions better than first thought, but the Albanese government says demand on commonwealth coffers is growing.
Finance Minister Katy Gallagher has warned “pressures on the budget are not decreasing”,
despite the budget bottom line for 2025-26 being better than first thought,
She and Treasurer Jim Chalmers are set to release the final budget outcome (FBO) on Monday.
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By continuing you agree to our Terms and Privacy Policy.“These new numbers show that the deficit has come in smaller than expected in the May budget and much smaller than we inherited a bit over four years ago,” Mr Chalmers said in a social media video.
“It’s remarkable when you consider everything that’s coming at us from around the world that we’ve been able to continue to improve the budget bottom line.”
Amid calls for the Albanese government to rein in spending, Senator Gallagher insisted Labor had “been showing spending restraint” as she fronted media ahead of the FBO’s release.
“And the fact that the budget and the final budget outcome comes in with half the deficit that we inherited in 2022 and is lower than what we forecast at budget time shows how much work we have been doing, whether it’s been savings, paying down debt – all of that, in the last few years, to make sure that the budget’s in as good a shape as possible,” she told ABC’s News Breakfast.
“We’ve been very mindful of the role that we play across the economy, but … the challenges that we’re having now in relation to inflation are not caused by government spending.”
Asked if deferring some policies could take some heat out of the economy, Senator Gallagher said it was a balancing act and that the National Disability Insurance scheme overhaul, expected to save almost $38bn over the next four years, had helped improve the FBO.
“But the … pressures on the budget are not decreasing,” Senator Gallagher said.
“We’ve got aged care, defence, health – all of those areas where we’re seeing more and more pressures coming our way.
“We have to manage that, and we’re doing that, but dealing with some of these spending pressures and trying to repair the budget over time is a big effort.
“We’ve put a lot of effort in, but there’s more work to do.”
More to come...
Originally published as Budget ‘pressures’ growing despite better bottom line
