Federal budget 2023: Jim Chalmers delivers a cautious budget
Treasurer Jim Chalmers has produced a cautious budget on Tuesday night. Photo: TND/Getty
Treasurer Jim Chalmers has handed down his first full budget – a cautious, politically clever and methodical document, but one aimed ultimately at idealists.
Dr Chalmers’ conservative budget delivers a $4 billion surplus in the current financial year and shaves a further $125.9 billion off the deficit – a significant political achievement at a time when perceptions only the Coalition can manage money might be reset.
But the Treasurer has told Parliament this consolidation of the nation’s finances is not just about inflation but the bigger goals of political reform and a Labor agenda for Australia’s future.
“These are the foundations on which our government is building a stronger economy and a fairer society,” he told Parliament just after the budget was released at 7.30pm.
The budget’s headline programs provide its outlines: Spending to fix Medicare; an overdue tax on gas extracted on Australian soil; investment in renewable power and storage, and support for those on the margins of the economy.
It’s a budget about “seeing our people through the hard times – and setting our country up for a better future”, Dr Chalmers said.
In the meantime, Dr Chalmers said global economic growth still presents a weak outlook in coming years, but the budget promises that the Australian economy will begin working in the service of wage earners sooner.
Wages will grow at 4 per cent by next financial year, putting them ahead of rising prices (3.5 per cent) and on track for real pay rises of a scale not seen since 2009.
Increasing the rate of JobSeeker has been presented as a litmus test for the government’s values in a budget focused most of all on economic growth and sustainable services to improve Australians’ lives.
Dr Chalmers has delivered a cleverly assembled political solution that will draw fair criticism about not doing enough and an inevitable Liberal Party campaign against the long-term unemployed.
But the government will also spend more on poverty alleviation for unemployed Australians than any other in three decades.
JobSeeker recipients will claim a $500 one-off energy bill cost relief program, a $30-a-fortnight rise in rent assistance and a $40 rise in JobSeeker itself.
Over 50,000 single-parent families will also receive an extra $176 a fortnight, while often punitive requirements placed by Centrelink on unemployed people older than 55 will be relaxed.
The centrepiece of Dr Chalmers budget is a more than $5.5 billion plan to shore up Medicare’s future.
But the policy also reflects his higher ambitions for reform: Making essential services “secure, reliable and sustainable”.
Last year reports and a parliamentary inquiry into GP waiting times that identified days-long wait times for bulk-billed consultations and the increasing unavailability of free medical services in others.
“Families are being forced into a lose-lose choice between getting the help they need or paying their bills,” Dr Chalmers said.
“It means more problems go undiagnosed or untreated. And it means our workforce is not as healthy or productive as it could be – and should be.
“The government will spend $3.5 billion to subsidise free doctors’ visits for a group of 11 million Australians it says face difficulties seeing a doctor, including children and pensioners.”
In the lead-up to the budget, the Treasurer had warned that services like Medicare were under threat from a structural shortfall in the nation’s finances after the problem went more than a decade without acknowledgement by governments of both stripes.
Last year, the Treasurer started a national conversation about how the government raises revenue to pay for services this year and it has so far delivered changes to superannuation tax breaks for the super rich and the mining industry untouched by other governments.
On Tuesday night, he confirmed he intends that conversation to continue in future budgets.
“The inescapable truth is that the federal government cannot put all the services that Australians expect and deserve on a more sustainable footing by ourselves,” he said.
More changes will be needed to a revenue base increasingly reliant on income tax to hold together services in the face of ballooning costs and demand, especially after the fiscal challenge of tax cuts for high-income earners take more than $20 billion more from the budget from next year.
The hard part lies entirely in front of him, but with this budget the Treasurer has made the case for people who care about progressive values to go along for the ride.