Post-budget election rumours swirl as Labor defends cost of living measure

Labor has been accused of throwing Australians pre-election “sweeteners”, with economists warning it could have the opposite effect.

Anthony Albanese has swatted away suggestions his big-spending, “inflation fighting” budget is a pre-election sweetener, restating his intention to finish a full term before Australians return to the polls.

A federal election is due by May next year, but there is speculation the Prime Minister will want to go before the economy softens, and as voters get the benefits from Tuesday’s budget including the $300 power bill rebate and the start of tax cuts fro July 1.

There are concerns the government’s $3.5bn power bill relief package, which would give 10 million households $300 off their bills over the next year, that could free up additional spending, spurring inflation.

If the government can buck those expectations and put downward pressure on inflation as it claims it will be able to do, an early election wouldn’t be out of the question.

But the Prime Minister wouldn’t weigh in on whether that was something he was considering.

“Look, we’re focused on the economy and getting the settings right and we’ll leave the political obsession to our opponents,” Mr Albanese told ABC News.

Labor have been accused of trying to buy an interest-rate cut ahead of the next election. Picture: NCA NewsWire / Martin Ollman

In the budget, fresh Treasury forecasts have inflation returning to the target 2-3 per cent by the end of the year, raising hopes interest rates could be cut soon after.

The government, well aware that Australians are “doing it tough” in the cost of living crisis, announced its headline making $3.5bn power bill relief package for all households in the budget.

But despite recording a $9.3bn surplus, Treasurer Jim Chalmers said there would be deficits in the following years and employment would drop off

Opposition Leader Peter Dutton accused Labor of trying to “buy itself an interest rate reduction”.

“I think they’re setting themselves for an election this year, I think they’re worrying about the economy deteriorating,” Mr Dutton said.

The Coalition’s finance spokeswoman Jane Hume said the budget “certainly” had the “sugar hits” Australians could expect in the lead-up to an election.

Dr Chalmers denied the assertion the cost-of-living package was about getting voters in a “good mood” before the next election.

“That’s not our motivation. Our motivation here is understanding that people are doing it tough, and that we need to provide substantial cost-of-living relief in a responsible way. That’s what the budget does,” he said.

Asked whether there would be another budget before the next election, Dr Chalmers said that “remains to be seen”.

Treasurer Jim Chalmers said he was prepared to deliver a fourth budget if required. Picture: NCA NewsWire / Martin Ollman

“I will certainly be ready to deliver another budget next year,” he said.

“Our intention, our inclination, is to go full term. But that decision is taken by the Prime Minister.

“If I need to do a fourth budget before we go to the people, I would be happy to do that, be ready to do that, but that is not a decision I take on my own.”

Mr Albanese said there would be a March budget because of the May election deadline.

“Well, you can’t do a budget and an election in May. So by definition, you have to bring forward a budget,” he said.

Originally published as Post-budget election rumours swirl as Labor defends cost of living measure