Australians will get more help with the cost of living in Tuesday’s Budget, but the Federal Government is eyeing an exit date when it can leave the task of driving economic growth to the private sector.
Finance Minister Katy Gallagher acknowledges it is never easy for governments to withdraw supports, especially ones that have continued for a period of time.
But she believes Australians recognise some — such as the electricity bill rebates that will be extended for a further six months — were only ever intended as temporary or one-offs.
Other measures aim to deliver broader community benefits, like the push for more bulk-billing doctors and skills training.
“We’ve been going through . . . a period of subdued glow growth, high inflation, people have been hurting in terms of cost-of-living pressures, and so government does have a responsibility to respond to that and to lean in and help where we can,” Senator Gallagher told The West Australian.
“But obviously, governments lean in with their Budget when they have to and then, at the right time, governments lean out.”
Government spending — both State and Federal — has kept the economy afloat during the slowdown over the past 18 months, but now the private sector is starting to tick up again.
Senator Gallagher said the time would be right for the Government to pull out when the private sector was playing a greater role in supporting the economy.
“We’re seeing the beginnings of that, but people are still under a fair bit of pressure right now,” she said.
Tuesday’s Budget will include a third round of electricity rebates, taking another $150 off people’s power bills over the second half of the year, as well as promises of cheaper medicines from January, more bulk-billing doctors and greater access to subsidised childcare.
Treasurer Jim Chalmers said the Government was keeping such cost-of-living measures “under more or less constant review”.
“This is hip pocket help for households, and that’s because we know that the cost of living is front of mind for most Australians, and it’s front and centre in the Budget,” he told Seven’s Sunrise on Sunday.
The Coalition has indicated it won’t hinder the passage of the rebates, although it labelled it “a band aid on a bullet wound” amid an ongoing stoush about the need to reign in spending.
Senator Gallagher has found another $2.1 billion worth of cuts and redirected spending to help the bottom line that will be revealed on Tuesday.
This includes $720 million in reduced spending on contractors and labour hire for the public service, along with savings in the health, climate and Indigenous portfolios.
It brings the total savings since Labor took office to almost $95 billion.
Dr Chalmers has already confirmed he will be handing down a Budget in deficit.
Shadow finance minister Jane Hume insisted the Coalition would return the Budget to structural balance — “not windfall surpluses” — through restoring the principle that spending shouldn’t outpace economic growth and by cutting 36,000 public servants.
But she wouldn’t put a deadline on the pledge.
“Is it going to be able to happen in the first year of a Coalition government? I very much doubt that because there is so much Labor baked-in spending that’s going to be very, very difficult to unwind,” Senator Hume said.
Senator Gallagher said she wouldn’t take any instruction from the Opposition about spending restraint.
“They’re the ones that are going to nationalise and build seven nuclear power stations across the country. How is that responsible budgeting?” she said.
“I haven’t heard one coherent ‘grow the pie’ policy, I just haven’t.
“I think the contrast between our growth story and theirs is pretty clear. At least we have one that’s coherent . . . but theirs, you know, I just don’t think they’ve done the work.”
https://thewest.com.au/politics/federal-politics/federal-budget-offers-of-cost-of-living-support-but-government-is-looking-to-private-sector-c-18130033
