Treasurer Jim Chalmers denies energy bill relief election 'bribe', says Government responding to pressure

The Albanese government will use the federal budget as a springboard into an election campaign set to be dominated by price pressures.

Both major parties are vowing to make Australians better off as Labor focuses on healthcare and the coalition slams the government for increases in power bills and grocery prices following a stinging run of inflation.

Ahead of his fourth budget, Treasurer Jim Chalmers announced a $150 energy bill rebate divided equally across the final two quarters of 2025 to help ease hip pocket pain.

It’s an extension of the government’s $300 subsidy that spanned a year’s worth of power bills, but Dr Chalmers denied it was a pre-election bribe for voters.

“I would describe it as a government responding to the pressures that people still feel despite this progress that we’ve made on inflation,” he said.

Tuesday’s budget would reveal Labor had saved and re-prioritised $95 billion over its term, Finance Minister Katy Gallagher said.

It includes $2.1 billion in the 2025/26 budget, including cutting $720 million on consultants, contractors and labour-hire as more money is pumped into the public service.

The savings would go towards housing, healthcare and cost of living support, Senator Gallagher said.

Labor says prudent fiscal management helped it deliver back-to-back surpluses - although this was helped by high commodity prices - and reduce the projected deficit.

The coalition has promised to slash public spending by pruning the public service headcount by more than 30,000 people, arguing the services Australians rely on hadn’t improved.

Senator Gallagher, who doubles as the public service minister, disagreed, saying extra staff had reduced waiting times for pensions.

“No amount of tricky phrasing will change the fact the new jobs we have brought on, the ones the coalition is promising to cut, are in frontline areas like Services Australia, Veteran’s Affairs and Defence,” she told AAP.

“The coalition is determined to return to worse services, expensive consultants and the era of robodebt all in order to pay for their $600 billion nuclear scheme.”

The coalition hasn’t outlined where it would cut but ruled out taking the axe to frontline services.

Shadow treasurer Angus Taylor said the coalition would work on boosting productivity and reducing spending to below economic growth to lower inflation.

He pointed to the 20 per cent growth of the public service as wasteful spending “at a time when households are struggling to pay the bills”.

“We need a productive, effective public service and we have some amazing people in our public service but a bigger team is not always a better team,” he said.