Australians are being told not to expect "cheques in the mail" in the upcoming budget after Treasurer Jim Chalmers announced Labor's first budget in more than a decade will not include direct relief, despite the rising cost of living.
Dr Chalmers has pitched his budget, to be delivered on Tuesday, as “family-friendly” — with childcare subsidies and changes to paid parental leave.
The treasurer has conceded several factors are chipping away at household budgets.
Inflation is expected to outpace wage growth until mid-2024, meaning bills will get more expensive while wages are effectively going backwards.
'No cheques in the mail'
“Whether it's electricity, whether it's the impact of the natural disasters on grocery prices, the impact on the war in Ukraine, all of these things are having an impact on household budgets. We'll do what we can to help, where we can," he told SBS News on Sunday.
“But we don't want to make the situation worse by making inflation worse. And you do that if you spray too much money around.
The economy is expected to slow as inflation peaks towards the end of the year and as high energy prices and increasing interest rates squeeze businesses.
We see migration as a very important part of our economic policyJim Chalmers
Given these factors, Dr Chalmers said there will be no return to pandemic-style handouts or economy-boosting vouchers in his budget.
“People shouldn't expect that we will be sending cheques in the mail."
Faster visa processing promised
Dr Chalmers instead aims to bring down inflation by bolstering the workforce through immigration and job training.
“[There is] $42 million in the budget to help process the visa backlog, which was near a million people at one point,” Dr Chalmers said.
The Morrison government cut $875 million from the Department of Home Affairs migration program — which processes visa — over four years.
Dr Chalmers said there would be some extra funding for settlement services, to help refugees adjust to life in Australia.
“There'll be a modest increase in areas like helping to settle people from war-torn Ukraine, but we will always be supportive of settlement services. We know how important they are.”
Job losses could be on the way
Job losses are also expected as the economy slows, under the weight of inflation.
“I think people broadly understand that the economy will slow, and unemployment will tick up a bit, but still lower than what it was before the pandemic,” Dr Chalmers said.
Chief Political Correspondent Anna Henderson sat down with the Treasurer Jim Chalmers.
“There is a lot of expectation from families who are really struggling at the moment and know that there's a tough 12 months ahead with their petrol prices, their gas prices, their electricity prices, their mortgage payments," he said.
"This government, it seems, is just saying, ‘Well, more of you are going to be out of work and you're going to be paying more for all of those essential cost of living items'.
“Australians heard (Prime Minister) Anthony Albanese before the election saying that he had a plan for all of these issues. Well, it's clear now that they don't.”
Labor says it is offering targeted relief in ways that do not drive-up inflation, including cheaper childcare cheaper, changes to paid parental leave and infrastructure support, such as extending the National Broadband Network.
