‘Difficult decisions’: Albo’s dire warning for Aussies ahead of budget

Australians are being warned to brace for “difficult decisions” in next month’s Budget, with the $3 billion petrol excise cut to end, and a trillion dollars of inherited debt made worse by rising interest rates.

Australians should brace for “difficult decisions” to be made in next month’s Budget, Prime Minister Anthony Albanese has warned, as his government seeks a balance between cost-of-living relief and almost a trillion dollar debt.

Treasurer Jim Chalmers has already ruled out extending the $3 billion petrol excise cut for another six months, while Mr Albanese remains reticent to axe the $240 billion stage three tax cuts despite openly speaking against them.

Mr Albanese told colleagues at a Labor caucus meeting on Tuesday that there will be “difficult decisions” in the October budget.

Prime Minister Anthony Albanese. Picture: NCA NewsWire / Martin Ollman

“We need to address the cost of living issues Australians are facing while being mindful of the trillion dollars of debt we have inherited,” he said.

“We must be straight with Australians about the challenges before us and the difficult decisions we must take.”

The size of the debt is set to accelerate faster than initially predicted as interest rates continue to rise.

Gross debt was forecast at the March budget to reach $977 billion this financial year and top $1 trillion in 2023-24, but increasing interest rates are likely expected to further impact on this.

Seizing on cost-of-living pressure, Opposition leader Peter Dutton continued to pressure the Prime Minister over his election commitment to cut power bills by $275 by 2025.

“The Prime Minister promised on 100 occasions before the last election that the power prices of families would come down by $275. Now, he’s not mentioned that figure one day since,” Mr Dutton said.

“It’s clear to me that this government has no plan to try and help the Australian families who are under pressure at the moment, and that pressure is mounting.”

Mr Dutton also pointed to the petrol price excise ending at the end of the month, but declined to say if he believed it should be extended or not.

Opposition Leader Peter Dutton. Picture: NCA NewsWire / Martin Ollman

Mr Albanese said he would be introducing cost-of-living measures around cheaper childcare and cheaper medicine, promised during the election, to parliament this week.

“We understand the pressures that people are under, and we wanted to undertake measures that alleviate cost of living pressures,” he said.

But the child care measures, a $6.2 billion plan which will increase the top subsidy from 85 per cent to 90 per cent and taper down, do not come into effect until July next year.

The medicine commitment drops the cost of Pharmaceutical Benefits Scheme by $12.50 and starts from January 1.