Labor delivered the Federal Budget in Parliament House Tuesday evening, 25 March – its fourth since being elected in 2022. Photo: Michelle Kroll.
Tax cuts for everyone, more energy bill relief and cheaper medicines are the key selling points of Jim Chalmers’ fourth budget but, with an election about to be called, they are all measures previously announced.
The Treasurer delivered the Federal Budget in Parliament House Tuesday night (25 March), declaring the economy to be on track for a soft landing compared to other advanced countries battling with international and domestic pressures.
Insisting the budget and the Australian economy was in better shape than it was when Labor took office from the Coalition, Dr Chalmers nevertheless had to confirm his government’s run of delivering surpluses was over.
A deficit of $42.1 billion is forecast in 2025-26, which the Treasurer noted is lower than what was forecast at the last election and also lower than at the mid-year fiscal update.
The expected deficit for the close of the current financial year is $27.6 billion.
Yet, declared Dr Chalmers, “our economy is turning the corner”.
He said inflation was down, incomes were rising, unemployment was low and interest rates were coming down.
“On all these fronts, our economy and our budget are in better shape than they were three years ago,” the Treasurer said.
“This progress has been exceptional, but not accidental. The credit belongs to Australians in every corner of our country.
“We’ve come a long way, but there’s more work to do.”
In what amounts to Labor’s election pitch, the Federal Budget’s main priorities are: helping with the cost-of-living; strengthening Medicare; building more homes; investing in every stage of education; and making the economy stronger.
“Treasury expects the global economy to grow three-and-a-quarter per cent for the next three years – its slowest since the 1990s,” Dr Chalmers said.
“It’s already forecasting the two biggest economies in the world will slow next year, with risks weighing more heavily on both.
“Australia is neither uniquely impacted nor immune from these pressures, but we are among the best placed to navigate them.
“We’re emerging from this spike in global inflation in better shape than almost any other advanced economy.”
The budget confirms that every Australian taxpayer will get further modest tax cuts over the next two years, continuing the cuts Labor started handing out in July last year.
When the $17 billion in tax cuts are fully implemented, the average earner will have an extra $536 in their pocket each year.
The budget also locks in a 20 per cent cut on all student loan debts, a raise to the minimum repayment threshold and a reduction in repayment rates, to bring total student debt relief for more than three million Australians to $19 billion.
As was announced just two days ago, $1.8 billion to extend the energy bill relief initiative is a flagship budget measure, with every household and about one million small businesses to get a further $150 off their electricity bills this year.
On health and the Pharmaceutical Benefits Scheme, the Treasurer confirmed another recently announced policy designed to win votes.
“Tonight, we reduce the maximum price for a PBS script from $31.60 to $25,” he said.
“Pensioners and concession cardholders will still pay $7.70 a script because we froze their costs as well.
“We’re also investing $1.8 billion to list more life-changing and life-saving medicines on the PBS.
“For example, cutting the cost of a lymphoma treatment will save some Australians more than $600,000.”
While praising the government’s strengthening of Medicare, the Treasurer used his budget speech to also send a message to big pharma in the United States, which is urging President Donald Trump to go after Australia’s PBS prescription subsidy regime.
“The Pharmaceutical Benefits Scheme is a great Labor creation and a great Australian institution,” Dr Chalmers said.
“We are strengthening it because Australians need us to, not weakening it because American multinationals want us to.
“A Labor government created Medicare as well, and only Labor governments strengthen it.
“Tonight, we are proud to make the single largest commitment to Medicare since its creation. A record $8.5 billion to lift bulk billing rates and build our health workforce.
“Because of this investment, nine out of 10 GP visits should be fully bulk billed by the end of the decade.”
Other budget measures include another 50 Medicare Urgent Care Clinics; investment in public hospitals; abolishing non-compete clauses for most workers; replacing the Child Care Subsidy activity test with a new Three Day Guarantee; green manufacturing; attempts at housing relief, and legislation to lock in 100,000 free TAFE places annually from 2027.
But they have all been announced before and all form the basis of Labor’s re-election campaign.
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