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Opposition hits out at Labor’s ‘vanity’ budget

Labor's budget cuts national deficit by $42 billion

Shadow treasurer Angus Taylor says the government’s Tuesday budget was a “vanity project” for the Treasurer.

The government was grandstanding, just as it was abandoning election pledges to help voters withstand the rising cost of living, Mr Taylor said.

The Coalition will receive a rare moment in relative prime time on Thursday with the Opposition Leader’s customary budget reply speech: Its senior MPs dedicated Wednesday to road-testing attack lines.

Mr Taylor said the unusual timing of the Treasurer’s budget (which comes only six months before his next) showed the budget’s purpose was not to give the nation an economic update.

“Why did we have a budget now when we normally have a budget in May? Is this a vanity project for Jim Chalmers? Is this simply about him?” he said on Wednesday.

“It’s a lot of talk.’’

‘There is no plan’

“There’s a lot of doom, there’s a lot of gloom. There’s a lot of commentary, there’s a lot of forecasting, but there is no plan. What Australians want is a clear, comprehensive plan,” Mr Taylor said.

Mr Taylor rejected the concept of the structural deficit at the heart of Dr Chalmers’ budget.

He said the economy could be grown faster to bridge any divide between revenues and outlays.

Opposition Leader Peter Dutton hands down the Coalition’s budget reply on Thursday night.

On Wednesday, Mr Dutton seized on a figure in the budget papers that showed consecutive double-digit rises to electricity and gas prices combining to a more than 50 per cent increase, which would be a significant contributor to inflation in coming years.

He said that recently soaring power prices conflicted with a Labor election commitment. That pledge was to reduce the cost of power bills for households by $275 annually by the end of 2025; it was based on an assumption that renewables would lower prices.

“The government said only six months ago that families would see a $275 reduction – now they are told [it is] a 56 per cent increase,” he said.

“People on fixed incomes, pensioners, they are really, really copping it in this budget and it is a grim budget.”

Election promise

Prime Minister Anthony Albanese said on Wednesday that the election promise on power bills had been “consistent with the modelling we took there, which was about the fact that the cheapest form of new energy is clean energy”.

In his budget speech to Parliament, the Treasurer named policies such as childcare subsidy extensions and cheaper medicines on the PBS as the centrepiece of Labor’s policy response.

There might be more in store for electricity prices – and perhaps power companies, he suggested at the National Press Club on Wednesday.

Dr Chalmers said the government was looking at intervening in the market to tame rising prices. He refused to “narrow down” the conversation by publicly commenting on policy options.

‘Energy policy chaos’

Later on, during question time on Wednesday, the Treasurer began his answer to a question from Mr Taylor with some comedy.

Dr Chalmers alleged that his now opposite number, when energy minister, had concealed notice of an impending rise to household power prices so that it would not be released until after the Coalition lost the May election.

“When I got given this [question], I couldn’t believe my eyes,” he said.

“The guy has got his fingerprints all over this energy policy chaos that we’ve inherited [and …] has the nerve to ask us a question about energy prices.”

Mr Dutton and Mr Taylor both later hammered a point about declining household wealth under inflation.

Tuesday’s 2022-23 budget sees the tight labour market pushing wages growth to 3.75 per cent in 2022-23 and 2023-24, before falling to 3.25 per cent in 2024-25, according to Treasury predictions.

Treasury expects a full 0.75 per cent and 1 per cent of each annual rise to come from rising electricity and gas prices, with household bills for each forecast to increase by 20 per cent next year, with more in store.

The replacement of an ageing power grid with one equipped for renewables will put downward pressure on prices in the long term, Treasury says.

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