![]() “Clearly, under the previous government, there were decisions taken where ongoing programmes were not funded in an ongoing sense, and that is creating pressure in those forward estimate views as well,” Gallagher said. The budget would also have to assign funds for “a couple of hundred terminating measures”, from digitising health records and closing the gap Indigenous programs, that would need spending commitments. “You’ll have to wait and see,” Gallagher said.Īmong the extra spending burdens on the budget were the extra $1.4bn for aged care support announced on Monday, and $2bn to cover flood-related costs, she said. The government was cautious about making any promises, such as whether it would abolish the $1.9bn in subsidies for the Beetaloo Basin gas projects and others. That would make it the sixth in as many months, a record sequence of increases. The 225-basis-point increase in the RBA’s cash rate is already the most in one spurt since 1994 and the bank governor, Phil Lowe, last week flagged another rate rise in October. The government is wary about increasing spending that would run counter to the efforts of the Reserve Bank of Australia to cool demand in the economy and inflation by hiking its key interest rate. The treasurer described the coming budget, scheduled for 25 October, as a “bread and butter” one, that would have to deal with “difficult” spending challenges. ![]() The rolling two-week iron ore price, for instance, was already about one-fifth below its level at the end of June, while the price of coking coal used in steelmaking was off more than a quarter.Ī lower-than-forecast take-up of Covid-related business support measures would have the effect of improving the budget’s position last year but would see revenues lowered this year as deductions for companies accumulate, Chalmers said. Sign up to receive an email with the top stories from Guardian Australia every morning “But the bulk of it is driven by temporary factors.” ![]() “This substantial improvement is welcome,” Chalmers said. The turnaround compared with a projected $79.8bn deficit projected in March by then treasurer Josh Frydenberg, but would still leave a gap “north of $30bn”.Ĭhalmers and the finance minister, Katy Gallagher, told a media conference that calculations of further deficits – the existing budget predicted a $78bn shortfall this year and $56.5bn for 2023-24 – were still being finalised. Supply issues had also delayed some infrastructure outlays. The fiscal ledger would also benefit from $20bn in “far lower-than-budgeted” tax payments, in part because the previous Morrison government had not managed to spend as it had proposed for items such as Covid vaccines. ![]()
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