The treasurer has warned that major budget cuts are ahead as he prepares to submit his first budget later this year.
Jim Chalmers and his Treasury Secretary Katy Gallagher said they were scouring the country’s budget to draw a line under perceived waste and disorder.
But after inheriting a trillion dollars in debt, any savings won’t be enough to bring the budget back into line.
Camera Icon Treasurer Jim Chalmers has indicated that more budget cuts are coming. NCA NewsWire/Dan Peled Credit: News Corp Australia
“When it comes to the budget position, I think there’s reason to take a more substantial look at curbing and curbing some of this wasteful spending that we’ve inherited,” he told the Australian Financial Review.
The pair have already identified $350 million in savings from removing the coalition’s community development program — which was used by the previous administration to funnel money into fringe seats.
An additional $500 million was found by scrapping a regionalization fund that had yet to get off the ground.
Speaking to Nine, Education Minister Jason Clare said it was about ensuring Australians got “value for money”.
“We inherited some huge challenges,” he said on Saturday.
Camera icon Mr. Clare insisted Labour’s promises were safe while Nine radio’s Neil Mitchell harassed him. Credit: Channel 9
“We need to ensure that when we hand over the new budget in October … we get value for money, taxpayers get value for money.”
The focus of Dr. Chalmer will be to carry out Labor’s election promises.
Mr. Clare insisted Labour’s cornerstone promises, such as cheaper childcare, were safe from the budget razor gang.
“We must keep our promises, and we will deliver on them… absolutely,” he told Nine.
But he was forced to ignore Dr. Chalmer to argue that the government would not automatically push for the Fair Work Commission to align wage increases with inflation.
Camera icons government will not automatically push for future wage increases to cushion inflation Credit: News Regional Media.
“We also said that before the elections,” said the education minister.
“We said there were special circumstances where real wages had declined in the past 12 months, and we predicted they would decline over the next 12 months.”
But the big challenge for the new treasurer is looking at the next election and how Labor can advocate for budget recovery, indicating that reforms could be on the agenda.
“Something has to change the way the country views its economic and fiscal challenges, and my contribution to that is to institutionalize some of this thinking,” he said.
Camera icon Inflation could reach seven percent by the end of the year. NCA NewsWire/Dan Peled Credit: News Corp Australia
With inflation projected at seven percent and concerns about an impending recession, Dr. Chalmers that the state seeking benefits in October should look elsewhere.
“There may have been a time when state budgets were arguably weaker than Commonwealth budgets. But that’s not the case now,” he says.
“I am heartened by the recognition across the country that we all have our budget challenges and that there is no bottomless pit of Commonwealth money to solve it all.”
