Federal government set to announce a surplus for this financial year
The Federal government is forecasting a surplus of nine-point-three billion dollars for this financial year, ahead of this evening's budget
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00:00 The government is keen to talk up one stat in particular, that is, if this budget surplus
00:06 can be delivered, it'll be just the second time in 20 years a government has delivered
00:11 two consecutive budget surpluses.
00:13 So while it is uncommon, it's certainly not all that unexpected.
00:17 The Treasurer has been talking up for months the possibility of delivering a surplus, saying
00:21 it was within sight.
00:23 It now seems he will be able to do so if all things remain well until the end of June.
00:29 But we do know too that the good times won't last.
00:32 The government's made clear that while a surplus is expected this financial year, for the three
00:37 following years to come, budget deficits are going to be larger than what was forecast
00:42 in the MIEFO delivered late last year.
00:44 So increased deficits for the three years ahead.
00:47 And that could complicate the other main story of this budget, which is inflation.
00:52 We know the Reserve Bank Governor has said she is watching federal and state budgets
00:56 very closely for the money they are injecting into the economy and the impact that will
01:00 have on inflation as to whether or not the Reserve Bank perhaps tips up interest rates
01:05 in the months ahead or pushes them down later on this year, if possible.
01:10 The Treasurer says the government can do both.
01:12 It can invest in the economy, it can try and create growth and push down inflation too.
01:17 Here's what Jim Chalmers had to say on this earlier this morning.
01:21 Pressure is a privilege is the first point that I would make about that.
01:24 But this budget is all about putting downward pressure on inflation, not upward pressure
01:27 on inflation.
01:29 And you'll see that in the inflation forecast that you've had a look at in the course of
01:33 the last couple of days.
01:35 This budget will be part of the solution when it comes to inflation, not part of the problem.
01:40 Tom, the Coalition is already pouring some cold water on the budget figures.
01:44 Yeah, the Coalition has come out and not really celebrated the news of a possible budget surplus,
01:50 saying this is what it calls a windfall surplus.
01:53 It says the government is simply the beneficiary of higher than expected commodity prices and
01:57 bracket creep, where people's incomes grow and crawl into higher tax brackets.
02:02 They wind up paying more tax than expected.
02:05 It says it wants to see what it calls a structural surplus, where spending and revenue are sort
02:11 of more closely aligned.
02:13 Here's the Shadow Finance Minister, Jane Humes, speaking on this earlier.
02:16 Jim Chalmers is returning a surplus, not because of his hard work, but because of the hard
02:21 work of ordinary Australians.
02:23 This is a surplus that's been gained on the back of high commodity prices and more importantly,
02:28 because of bracket creep, because people are paying more taxes because of the inflation
02:33 that Jim Chalmers has failed to tame.
02:36 Now the Coalition has also been pressed on its own tax plans, given we are within 12
02:41 months or so of an election, particularly whether or not it would restore the stage
02:45 three tax cuts.
02:46 It was, of course, quite critical of the changes the government's made to the stage three tax
02:50 cuts included in tonight's budget, though it did eventually wind up supporting them
02:55 in the Parliament.
02:56 The Coalition making clear it won't restore stage three to its original form, but says
03:00 it will have its own new tax plan to take to the election, which it won't be revealing
03:05 for some time yet.
03:06 [BLANK_AUDIO]