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Chalmers delivers back-to-back blacks in budget

The budget for beginners: All you need to know

Source: TND

Treasurer Jim Chalmers will announce a federal budget feat that eluded the previous Morrison government and has not been seen for nearly 20 years.

Later on Tuesday, Chalmers will reveal a $9.3 billion surplus for the 2023-24 financial year, achieving back-to-back surpluses.

It is the first time the federal budget will be in the black for consecutive years since just before the global financial crisis in 2007-08.

However, the ABC reports that the next three financial years will each have higher deficits than the Albanese government had expected due to “unavoidable spending”.

Chalmers is promising his second-straight surplus will not come at the expense of cost-of-living relief.

His third budget as federal Treasurer, to be delivered on Tuesday, will show a $10.5 billion improvement on forecasts in December, with the mid-year update having shown a deficit of $1.1 billion.

Chalmers said the financial achievement would sit alongside significant measures to ease cost-of-living pressures, as the economy dealt with stubborn levels of inflation and sluggish growth.

“Another surplus is a powerful demonstration of Labor’s responsible economic management, which makes room for cost-of-living relief and investments in the future,” he said.

“The forecasted surplus has come on top, not at the expense, of those doing it tough.”

Budget papers will show the budget will be more than $200 billion better off over the six years to 2027-28, compared to forecasts made before the last federal election.

Prime Minister Anthony Albanese told a government caucus meeting on Monday it would be able to have downward pressure on inflation, while wages rose and the gender pay gap was closing.

Inflation is forecast to drop to 2.75 per cent by December, according to the budget papers, a year earlier than the Reserve Bank predicted it would fall back within its target band of 2-3 per cent.

“The budget will ease cost-of-living pressures, not add to them, and incentivise investment in a future made in Australia,” Chalmers said.

“Despite the substantial progress we’ve made, spending pressures continue to intensify, and there’s more work to do to clean up the mess left by the coalition.”

But leading economists say the projection that inflation will fall back into the RBA’s target range by the end of 2024 will be hard to achieve.

The centrepiece of cost-of-living measures will be $107 billion worth of changes to stage-three tax cuts that kick in from July.

While the tax cuts were earmarked after they passed parliament earlier in the year, Chalmers has indicated further relief measures will also be announced on Tuesday night.

Finance Minister Katy Gallagher said the budget had struck the right balance.

“Our budget discipline means we’ve found more than $77 billion in savings and reprioritisations since coming to office, redirecting this spending towards the services that Australians rely upon,” she said.

“We understand there’s still pressures on the budget, including spending on the NDIS, aged care, hospitals, Medicare and debt interest.”

-with AAP

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