Small group of Aussies set to be $9000 better off
Prime Minister Anthony Albanese is set to hand down his Labor government's first federal budget on October 25th, in the face of soaring inflation and an ongoing cost of living crisis.
Despite the cost of groceries continuing to rise in the wake of the devastating floods, treasurer Jim Chalmers is warning Australians to brace for spending cuts and limited cost-of-living relief.
While most Aussies are battling day to day with the reality of inflation and a dark outlook for the global economy, Labor has refused to cancel the former government’s stage three tax cuts – meaning some 600,000 high-income earners will be better off by up to $9075 per year when the changes come into effect in 2024-25.
“There will be a substantial impact on the cost of living [from the floods], there will be a substantial impact on the budget and there’s no pretending otherwise,” Dr Chalmers told the Nine’s Today on Tuesday.
“We don’t yet know what the full impact will be on the cost of living, we don’t yet know how many billions of dollars this flood and its recovery will cost. What we don’t want to do, and we’ve seen this overseas, is provide cost-of-living relief in a way that just creates more inflation and pushes interest rates up higher than they would otherwise be.”
Chalmers then referenced the UK, where Prime Minister Liz Truss and Chancellor of the Exchequer Kwasi Kwarteng’s tax-cutting mini-budget last month caused chaos in money markets and brought the country’s pensions schemes to the brink of implosion, while the cost of the Great British Pound tanked around the world.
“The UK government itself is recognising that perhaps they got this balance wrong and they’re trying to recalibrate their settings,” he said.
“That is an important lesson for all of us. What we’ve tried to do is make sure that the cost-of-living relief that we give doesn’t make the job of the Reserve Bank harder.”
Labor has warned of a tough budget as global recession fears continue to loom, with Chalmers saying, “It won’t be fancy. It won’t be flashy. It will be responsible. It will be solid.”
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