SYDNEY: Australia’s centre-left Labor government said it would include 9.84 billion dollars in the federal budget over the next four years for cost-of-living relief for businesses and families, which it promised wouldn’t stoke inflation.
The federal government said the plan was designed to directly ease price pressures and inflation, which has eased in the first quarter but still sits near 30-year highs of 7.0 per cent.
Treasurer Jim Chalmers said, ahead of the federal budget, “The centrepiece of the budget would be cost-of-living relief that does not add to inflation.”
“Citizens are under the pump. We have carefully calibrated and designed this Budget so it takes the pressure off the cost of living rather than add to it.”
The government is set to unveil financial assistance for more than five million low-income families, small businesses and pensioners struggling with high power bills in the budget.
Chalmers has stated his budget would be restrained on spending so as not to add to inflationary pressures, while giving some relief after the Reserve Bank of Australia (RBA) the previous week stunned markets with a rate increase, defying trader expectations for an extended pause.
The RBA warned that high risks to inflation were on the upside given low productivity growth, increasing energy prices and the rent surge.
The new relief measures come after the government set aside A$11.3 billion for a wage increase for aged care workers over 4 years, announcing an additional 5 per cent tobacco tax and A$2.4 billion in more tax on gas and oil producers.
Australia’s deficit has expected to shrink sharply, the budget has expected to show, as its coffers bulge with tax windfalls from commodity exports, yet the outlook would be a sober one as fiscal challenges loom.
