The federal budget has been updated and there's a gloomier outlook for the nation's finances. Soft economic conditions and increased spending have deepened the deficits in the years ahead.
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00:00The budget has been updated and the Treasurer is promoting the highlights.
00:07The economy is growing, but slowly. Inflation is moderating. Real wages and real incomes are growing. Unemployment is low.
00:16But over the last six months, the nation's bottom line has deteriorated.
00:22The deficit for this year is a little smaller than forecast in May, but in the following years, the forecast deficits are getting larger, now totalling $144 billion over four years.
00:35Tax revenue is high, but spending is even higher. Some of that is indexed social services payments going up, and the cost of the GST deal with Western Australia.
00:48But most of it is from the expansion of services.
00:52We're talking here about extra kids enrolled in early childhood education. We're talking here about indexation of the age pension. We're talking about strengthening Medicare.
01:01This is another illustration of what we get with a big spending, big taxing, big Australia Labor government.
01:11That's got a lot of help for a lot of people.
01:13As a share of the economy, outside of the COVID pandemic and the 1990s recession, spending is the highest it's been since the mid-80s.
01:22This is the biggest spending government we have seen outside of wartime or crisis.
01:27The Coalition has criticised the spending, but given limited detail about what it would cut.
01:34It would be madness in economic terms, given how little growth there is in the economy right now, to slash and burn in the budget.
01:40With an election just around the corner, there's more than $5 billion stashed away for policy announcements that haven't yet been announced.
01:48But Labor really wants voters to focus on the surpluses it's already delivered, and the household support already offered, with energy bill relief and extra childcare.
01:59The Coalition wants voters to focus on the structural problems with the budget, and attribute them to the government of the day.