Chalmers proposes to deliver a ‘very responsible Budget’
Middle East conflict has left Australians 'paying the price' but treasurer warns of more pain to come.
A surge in inflation driven by a spike in fuel prices from the Iran war is “confronting”, the treasurer concedes, with the upcoming Budget set to focus on combating the issue.
Inflation figures for March released Wednesday showed the headline rate rise from 3.7 per cent to 4.6 per cent for the month, following the cost of fuel soaring by about a third after the closure of the Strait of Hormuz.
The data has increased the likelihood the Reserve Bank will hike interest rates for the third time in a row when it next meets on Monday and Tuesday.
Treasurer Jim Chalmers said May’s Federal Budget would be focused on bringing down inflation levels.
“Those inflation numbers were confronting yesterday. They show that Australians are paying a hefty price for this war in the Middle East,” he told ABC TV on Thursday.
“We expect the costs and consequences of that conflict on the other side of the world to persist for a while longer yet.
“It’s also why the Budget that we hand down in two Tuesdays time will be a very responsible Budget which will be focused on this inflation challenge.”
While price pressures had been most visible for petrol and diesel, it had also flowed through to other sectors of the economy such as construction, Chalmers said.
Alongside inflation, the Budget would seek to tackle generational inequality, the treasurer indicated.
“When we think about the intergenerational unfairness in the Budget, in our economy and our society more broadly, a couple of the drivers of that are in housing, are in the tax system,” he said.
But shadow treasurer Tim Wilson said the government scrapping some of the discounts for the capital gains tax or tinkering with negative gearing in the name of generational fairness, as some have speculated, would not make things equal.
“I’ve yet to hear a single argument that increasing a tax increases the chance of giving economic opportunity,” he told ABC Radio.
“What the prime minister isn’t doing is giving the next generation of Australians hope about building a better future for self-starters who want to get ahead and creating an economic environment of opportunity.”
