Treasurer defends inflation record at recent presentation

Treasurer Jim Chalmers confirmed the budget deficit for last financial year was $6 billion better than the $28.3 billion forecast in May.

He said that showed the government had been “limiting spending growth” and doing the work to curb inflation ahead of the Reserve Bank’s looming decision on Tuesday whether to again hike the official cash rate to a possible 4.6 per cent. The projected national debt was lower than forecast in the May budget, with health costs and other payments down $1.4 billion and revenue up $4.6 billion more than expected.

Finance Minister Katy Gallagher credited the budget savings to less spending across aged care, childcare and the pharmaceutical benefits scheme (PBS). However, she and Chalmers pushed back on suggestions the government could do more to help households, pointing to global economic pressure and the Iran-US war as “absolutely disastrous” for family budgets in Australia.

Chalmers said while the government was committed to working on productivity gains, the benefits would “unfortunately” be felt in the “coming years, not necessarily the coming days and weeks”. Prime Minister Albanese also blamed global inflation as the primary issue driving up interest rates.