Additional support for Australians struggling with cost-of-living pressures is coming in this month's pre-election budget, with federal Treasurer Josh Frydenberg hinting at one-off payments and refusing to rule out changes to the fuel excise.
Subscribe now for unlimited access.
or signup to continue reading
But in an interview with Australian Community Media, publishers of this newspaper, the Treasurer declared the uncertain times of repeated natural disasters, including this month's floods, as well as the war in Europe, were all the more reason to rein in spending and retain "fiscal firepower".
While declaring the "time for large scale economy-wide emergency support is over," Mr Frydenberg promised his fourth budget and third pandemic budget, which he will deliver on March 29, would chart the path to balancing the government's books while acknowledging many Australians were currently finding it hard to meet basic costs.
"There will be a cost-of-living component to this budget addressing what are real pressures on families. At the same time the budget will see an improvement to the bottom line as a result of a stronger economy," he told ACM.
"Initiatives that we've undertaken have provided tax relief, childcare relief and energy-related energy cost relief, but there will be additional measures in this budget."
While he remained tight-lipped, the Treasurer did reveal $46.8 million would be spent over four years on a new "ReBoot" employment plan for disadvantaged young people.
It is designed to help about 5000 people aged between 15 to 24 find work. Mr Frydenberg also revealed there would again be a Women's Budget Statement with "very significant financial commitments" focused on health, leadership, women's safety and women's economic security.
READ MORE:
Before a likely May election the Treasurer was facing calls, including from within the Coalition, to do more to ease the pressure of rising costs being exacerbated by surging fuel prices.
Options on the table include a one-off payment for low- to middle-income earners.
"There's been a lot of speculation about what may or may not be in the budget. I'm not going to get on to the sticky paper on that," he said.
Unprecedented challenges presented by the Black Summer bushfires and COVID-19 and extraordinary levels of support have led to back-to-back record deficits, including the $143.2 billion record descent into the red in 2020-21.
The mid-year update in December forecast a $99.2 billion deficit this financial year and budget shortfalls for the rest of the decade.
Assisting the Treasurer in the long task of budget repair is growing tax revenue spurred by the unemployment rate falling to 4 per cent, a fall in welfare payments as a result, and booming prices for iron ore and coal which are more than double the rates forecast last year. The budget is expected to forecast unemployment with a three in front of it in the next few months.
"We're being careful not to bake in those higher prices in this budget," Mr Frydenberg said.
"What we have sought to do is have a prudent, responsible approach to commodity price forecasts and that has been our practice. It wasn't the practice of our political predecessors who did bake in long-term structural spending off the back of what turned out to be temporary but higher commodity prices.
"It is also not necessarily a permanent feature of future budgets because the prices are volatile."
The Treasurer said he did not want to overheat the economy. Natural disasters, this month's devastating flooding in NSW and Queensland, the war in Europe and ongoing COVID costs required a delicate balancing act, he said.
"It is uncertain and that's why we have to improve the bottom line at times like this when the economy is recovering strongly so that we retain that fiscal firepower to respond as required for future events," Mr Frydenberg said.
"The floods are certainly going to require significant spending and a significant rebuild. In terms of the Ukraine situation, that's very volatile and that's going to flow through to higher inflation. And COVID is still with us and so we're spending billions of dollars on vaccines and treatments and PPE and other requirements from that pandemic."
Any talk about budget repair leads to concerns reining in spending will lead to cuts to public services.
Asked if there would be some cuts coming for public services, Mr Frydenberg was non-committal.
"Well, I'm not going to get into the specifics of individual measures, but we have been hiring in the public service. We have been providing new tasks and new roles to which they've performed brilliantly," he said.
"Our focus has been on ensuring that the health response through COVID has been properly funded. And we now see record funding for hospitals, for schools, for aged care, for disability support.
"Where our focus is on now is growing the economy, getting an unemployment rate down and in doing so reducing debt as a share of the economy and that's what you'll see in the upcoming budget which is a fiscal dividend from a stronger economy."
In addition to the Women's Budget Statement's "very significant" commitments", the Treasurer said there would be significant investments in key areas of infrastructure, energy, digital transformation skills and manufacturing.