Federal Budget preview: Treasurer Jim Chalmers reveals tax, aged care promises

Treasure Jim Chalmers has revealed the upcoming federal budget will “put a premium on what is responsible and sustainable”.

Exclusive: Jim Chalmers will not spring any surprise tax changes in next month’s budget, with the Treasurer instead prioritising another round of spending cuts for his repair mission.

The Treasurer signalled that could include delaying and redesigning major projects, as he promised to help the states handle soaring building costs and labour shortages he warned were putting “timelines and infrastructure budgets under extreme pressure”.

But while Australia’s growth forecast will be slashed, Dr Chalmers confirmed the government would fund a 15 per cent pay rise for aged care workers, which is tipped to cost almost $8bn over four years.

Speaking in Washington DC, the Treasurer said the budget would “put a premium on what is responsible and sustainable” during what is expected to be the two weakest years since 2001, other than the global financial crisis and the peak of the pandemic.

“We understand that people are under the pump … We will provide meaningful support where we can,” he said.

“We are serious about managing the economy in the most responsible way, and that requires trimming spending in some areas in order to make important investments.”

Treasurer Jim Chalmers has revealed some budget promises on aged care and taxes. Picture: NCA NewsWire / Martin Ollman

As he puts the finishing touches on the budget, Dr Chalmers said he would not go beyond tax changes already announced on superannuation concessions and multinational rates.

The cost of living package will be headlined by energy bill relief, and he did not rule out lifting the JobSeeker unemployment benefit from $693 a fortnight after receiving an independent review led by former Labor minister Jenny Macklin.

“This is an important input into our thinking about the budget, but we’ve also been realistic and upfront about saying that there are more good ideas provided to us than there is the capacity to fund all of them,” he said.

As net overseas migration soars to about 350,000 this year, Dr Chalmers said Australia still had not filled “the gap created by Covid”.

But he said he was “concerned about the state of the housing market”, particularly sharp rent rises, as he blasted the Coalition and the Greens for blocking Labor’s $10bn affordable housing fund.

Dr Chalmers refused to say when Labor’s flagship election pledge on housing affordability – the “Help to Buy” scheme for government equity contributions – would be implemented.

Treasurer Jim Chalmers meets with US Treasury Secretary Janet Yellen in Washington DC today. Picture: Supplied

On major projects, the Treasurer said he had discussed cost pressures with his state counterparts, and that the commonwealth would work with them “to build infrastructure in the most efficient, cost-effective way”.

With talks in Washington dominated by fears of further economic turbulence, Dr Chalmers urged his international colleagues to follow Australia’s world-leading bank regulations, saying Australia was the only country that made it a core requirement for banks to hold capital to cover interest rate risks.

This has left Australia’s big four as the world’s top four best capitalised banks, according to a recent Morgan Stanley analysis, providing a crucial buffer against global uncertainty fuelled by rate hikes needed to dampen inflation.

Originally published as Federal Budget preview: Treasurer Jim Chalmers reveals tax, aged care promises