Treasurer Jim Chalmers believes Australians are ready for hard decisions that will form a central part of the May Budget after revealing the economy will struggle for the rest of the decade without major reforms and cuts to government spending. Source: The Age.
In a speech that revealed economic growth was likely to be between 0.25 per and 0.5 per cent lower than expected over coming years, and the nation’s productivity level will not return to its long-term average until the early 2030s, Mr Chalmers said voters were looking for and would respect tough budget measures.
The May 12 budget, Mr Chalmers’ fifth, was already shaping as a key moment for the Albanese Government, which is under pressure over high inflation and a lift in official interest rates. But the war launched by Israel and the United States against Iran has made the budget situation even more difficult.
Mr Chalmers said budget decisions would be later than normal because of the war, including parts of three reform packages tackling government spending, tax and productivity.
He told the Australian Business Economists organisation in Melbourne yesterday that people understood the case for changes to address intergenerational equity and budget pressures, even if those changes caused some financial discomfort.
“I feel there is a level and a layer of understanding in the community that some hard decisions are warranted,” he said. “We will make hard decisions in May.”
Mr Chalmers signalled a tax reform package would include an overhaul of business taxes, largely aimed at encouraging firms to sink cash into new equipment and machines to make them more productive.
Other expected elements of the tax package including winding back the concession on capital gains tax and restrictions on negative gearing.
Tax reform will be joined by separate packages aimed at spending cuts and productivity measures.
Opposition leader Angus Taylor said Mr Chalmers had simply admitted that living standards for all Australians were going backward, with the Government having no plan to reverse the situation.
“This not an economic vision, this is an economic admission of failure,” he said.
“This is a treasurer lowering expectations again and locking Australians into a lost decade.
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‘We will make hard decisions’: Chalmers says expect a tough budget (Shane Wright and Natassia Chrysanthos, The Age)
