‘Proud’ Treasurer points to biggest budget turnaround ‘on record’

Katy Gallagher and Jim Chalmers were out spruiking Labor's budget early on Tuesday.

Katy Gallagher and Jim Chalmers were out spruiking Labor's budget early on Tuesday. Photo: AAP

A “very proud” Treasurer Jim Chalmers says the budget he will unveil within hours will show “the biggest budget turnaround on record”.

Dr Chalmers will announce a slim $4 billion surplus forecast on Tuesday night, along with smaller deficits over the next few years.

“It’s a budget in Labor’s best traditions but also Australia’s best traditions, help for the vulnerable, broadening and extending more opportunities, and investing in the future of our country and its people,” he said ahead of his big speech.

“In dollar terms, it will show the biggest budget turnaround on record, as a consequence of our responsible economic management.

“We are now forecasting a surplus this year, smaller deficits after that, and less debt throughout the budget. If this eventuates, this will be the first budget surplus in 15 years.”

As Finance Minister Katy Gallagher took to Twitter to make her own promise – “You’ll be hard pressed to find a budget that does as much heavy lifting in the interest of women’s equality as this one” – Dr Chalmers also dropped hints about a likely hike in the JobSeeker payment.

He was asked on Tuesday if a rise was likely for all recipients.

“We’ve been saying for some time, and you’ll see tonight, the cost of living relief in this budget is broader than what has been speculated on,” he said.

“It has a number of elements. It won’t all be limited by age or other distinctions.”

Senator Katy Gallagher said the budget would build on last October’s for women’s equality.

“The PM, the Treasurer and myself have said women have been front and centre of our budget decisions, and I think you’ll see that tonight,” she said.

Responding after Coalition Treasury opposition spokesman Angus Taylor’s said “a drover’s dog can deliver a budget surplus this year”, Dr Chalmers said the the opposition had its chance, and failed nine times over the previous decade.

“Angus Taylor is not a serious person, he’s not making a serious contribution, and that’s why nobody takes him seriously,” he said.

First budget surplus in 15 years to be unveiled

Dr Chalmers said he was aware of the historic significance of delivering a budget surplus – Labor’s first since Paul Keating was treasurer – but that his eyes were “forward to the future”.

“This is a forecast for a surplus this year. There are always good reasons to be cautious about it. We will know for sure in a couple of months’ time,” he said.

“What we already know is that the much, much stronger budget position that I will release tonight won’t be possible if we copied the approach of our predecessors, or we haven’t imposed on the budget the sort of discipline that makes it possible for us from that stronger foundation to look after people in the here and now, at the same time we invest in their opportunities in the future.”

Dr Chalmers defended the almost $15 billion in cost-of-living relief in Tuesday’s budget as carefully calibrated and targeted, saying it will have a minimal impact on inflation.

This has been queried by some economists, who argue any government funds that end up in people’s pockets leads to more spending and added inflationary pressure.

The budget will contain up-to-date forecasts for inflation and while they are yet to be revealed, Dr Chalmers said it would come down faster and deliver a boost to real wages sooner.

After hitting a likely peak of 7.8 per cent in the December quarter, inflation as measured by the consumer price index is now on its way down.

But at 7 per cent, it’s still uncomfortably high and leaving the federal government with a tricky balancing act of providing cost-of-living relief to vulnerable households without fanning the inflation fire.

While wages have been lifting relatively quickly, rising prices have eroded these gains and led to massive declines in real wages.

Prime Minister Anthony Albanese said the looming budget was “about helping people struggling to make ends meet while not adding to inflation”.

“It will be about providing affordable, effective and targeted cost of living relief, delivering historic investments in Medicare and health, supporting vulnerable Australians, growing the economy and strengthening the budget to make our finances more secure for the future,” he said in Question Time on Tuesday.

“Tonight’s budget will be a responsible budget, stronger foundations for a better future, that is what we will be providing tonight – cleaning up the mess that we inherited.”

Fresh economic growth forecasts will also be unveiled on Tuesday night.

Based on the Reserve Bank’s latest economic forecasts, the economy is looking weaker than thought earlier, with growth of just 1.25 per cent expected over the year to December.

-with AAP

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