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Another surplus for federal budget

A second straight budget surplus will not come at the expense of cost-of-living relief, the treasurer says.

Treasurer Jim Chalmers and Prime Minister Anthony Albanese. File photo: AAP

Treasurer Jim Chalmers and Prime Minister Anthony Albanese. File photo: AAP

The federal budget on Tuesday will reveal a $9.3 billion surplus for the 2023/24 financial year, the first time the country’s finances will be in the black for consecutive years for almost two decades.

Jim Chalmers’ third budget as treasurer will show a $10.5 billion improvement on forecasts made in December, with the mid-year update having shown a deficit of $1.1 billion.

The last time Australia recorded back-to-back surpluses was in 2007/08, just before the Global Financial Crisis hit markets.

Chalmers said the financial achievement would sit alongside significant measures to ease cost-of-living pressures, as the economy deals 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 it would be able to have downward pressure on inflation, while wages were rising and the gender pay gap was closing.

Inflation is set 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 two-to-three per cent.

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“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.”

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

While the tax cuts were earmarked after they passed parliament earlier in the year, the treasurer has indicated further relief measures would also be in the budget.

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.”

– AAP

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