Australian Treasurer Jim Chalmers reveals no extra cost of living relief in upcoming federal budget

Treasurer Jim Chalmers has given more details about his first federal budget, revealing key areas of concern.

Exclusive: The federal budget will not contain any extra cost of living relief beyond what Labor promised at the election, as Jim Chalmers warns families to brace for “a bumpy ride for the next year or so”.

And while the government has ruled out tweaking the stage three tax cuts this month, the Treasurer said his first budget was only the start of a national conversation about tax, suggesting changes could be considered if needed in the years to come.

In an exclusive interview in Washington DC, where he has been meeting global economic leaders, Dr Chalmers said the government did not have any additional measures up its sleeves to help households fight inflation.

“We’re not contemplating in this budget cost of living relief beyond wages, medicines, TAFE, childcare – the measures that we’ve already announced,” he said.

“Our cost of living plan hangs together pretty well, but most of all, it’s responsible, it’s targeted to the conditions and it will make a meaningful difference without pushing up inflation.”

Treasurer Jim Chalmers has given a grim warning ahead of his first federal budget. Picture: NCA NewsWire / Gary Ramage

With the budget to show inflation remaining higher for longer next year, Dr Chalmers said: “I’m confident we can get to the other side but I’d be kidding the Australian people if I told them it’s not going to be difficult.”

But the budget will also predict stronger wages growth in the years to come, with the Treasurer saying Labor was focused on ensuring “strong and sustainable” pay rises.

In recent weeks, Dr Chalmers stoked a debate about the viability of the stage three tax cuts, which will deliver a 30 per cent tax rate for everyone earning between $45,000 and $200,000 from the middle of 2024.

While he has since ruled out adjustments this month, he said the government would continually assess its policies to ensure they matched economic conditions.

Managing Director of the International Monetary Fund Kristalina Georgieva met with Australian Treasurer Jim Chalmers this week.

Australian Treasurer Jim Chalmers also met with the Chair of the Federal Reserve of the United States Jerome Powell while in the US this week.

“There’s been a lot of conversation about tax in the last few weeks but we have always seen the October budget as the beginning of that conversation and not the end,” Dr Chalmers said.

“What we’ve said over the course of the last few weeks, myself and the Prime Minister, is we’ll always try to do the right and responsible thing. That doesn’t pre-empt any decisions down the track, it’s just a statement of our approach to the budget.”

Since the election, the Treasurer has also vowed to lead a conversation about how to pay for the rising cost of essential services.

He refused to be drawn on whether he hoped this would lead to further tax reforms — other than the government’s plan to tackle multinational tax avoidance — being delivered in this term of parliament.

“I think it is important that I point out that tax reform begins with multinational tax reform and that the country needs a conversation beyond that about how we pay for the level of services that Australians have got a right to expect,” Dr Chalmers said.