Jim Chalmers rules out cost-of-living measures as treasurer defends budget surplus

Treasurer Jim Chalmers has defended his government’s budget surplus as Australians grapple with a burgeoning cost-of-living-crisis and rate hikes.

Dr Chalmers delivered a speech about the state of the economy at an event in Melbourne, hosted by the Brotherhood of St Laurence, on Tuesday.

He ruled out any new cost-of-living measures but revealed that a community wellbeing framework would be established. 

It comes as the budget surplus has ballooned to an estimated $20billion, well above the $4.2billion surplus flagged for the 2022-23 financial year in the last federal budget.

But the treasurer stressed that the surplus was ‘in addition’ to the government’s cost-of-living measures. 

Treasurer Jim Chalmers (pictured) defended the budget surplus and ruled out further cost-of-living measures during a speech he delivered on Tuesday

‘We have to show, as well as tell, that we don’t need to choose between acting responsibly with the budget and governing with compassion,’ he said in his speech.

‘In fact, one makes the other possible. Rejecting these dichotomies – wellbeing versus prosperity; society versus economy; compassion versus responsibility.’ 

‘Our efforts to strengthen the budget have not in any way come at the expense of helping people.’

The Albanese government have delivered of cost-of-living measures adding up to $14.6billion over four years that includes bulk billing incentives, energy bill relief and a lift in JobSeeker payments.

Treasury and the Reserve Bank have both claimed these measures were deflationary, primarily because the energy relief actually lowered inflation by 0.75 of a per cent in 2023-24.

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Dr Chalmers said that inflation, which sat at 5.6 per cent in the year to May, ‘is moderating’ but ‘will be higher than we like, for longer than we like’.

He referred to the economy ‘slowing’ because of the 12 interest rate rises made by the Reserve Bank over the past 13 months and ‘substantial global economic uncertainty’. 

‘The impact of higher prices and a slowing economy is felt disproportionately by people already doing it toughest,’ he continued.

‘In this complex environment, textbook fiscal policy requires us to take the pressure off inflation by rebuilding our buffers.’

The Albanese government have delivered of cost-of-living measures adding up to $14.6billion over four years that includes bulk billing incentives, energy bill relief and a lift in JobSeeker payments (stock image) 

‘To find ways of relieving cost of living pressures without adding to them. Meaningful tax reform to help fund our responsibilities.’

‘Returning most revenue upgrades to the bottom line. Keeping real spending growth down, focused on where we can make the most positive impact.

He revealed the Albanese government’s plans a establish a community wellbeing framework that features 50 measurable indicators such as health and work-life balance. 

This comes as a measure to help the government assess the impact of cost-of-living pressures.

The Treasurer is expected to release the first economic wellbeing statement in the next couple of weeks. 

‘Responsible economic management and compassion are complementary, not at odds,’ he added. 

‘Ours is a government of hard heads and warm hearts.’