Hey, big spender: Treasurer Jim Chalmers promises one last cost-of-living surprise in Bugdet

After rolling out billions of dollars in pre-election cost of living relief, the Treasurer is planning one more big announcement before the PM calls the election.

Treasurer Jim Chalmers’ big-spending fourth budget still has one cost of living surprise left to unveil after promising free GP visits, cheaper medicines, a reduction in beer excise and a $150 energy supplement.

After rolling out billions of dollars in pre-election cost of living relief, the Treasurer is planning one more big announcement before the PM calls the May election as early as this weekend.

Government sources confirm the cost of living surprise will be unveiled on Tuesday and it doesn’t involve housing or tax cuts.

Treasurer Jim Chalmers confirmed more help was incoming on the eve of the budget, insisting that better times are ahead.

“By getting the budget in better nick, we’ve been able to find room to help with the cost of living, strengthen Medicare, and invest in the future,’’ he told news.com.au.

“In less than three years, we’ve turned two big Liberal deficits into two Labor surpluses, shrunk this year’s deficit, and reduced Liberal Party debt by $177 billion.

“Together we’ve shown you can make progress on inflation without sacrificing jobs, which is remarkable compared to what we’ve seen around the world.

“Inflation is down, real wages and living standards are growing again, unemployment is low, debt is down, interest rates have been cut and growth is rebounding solidly.

“This Budget puts a premium on responsible economic management, helps finish the fight against inflation and ease the cost of living for Australians.”

Treasurer Jim Chalmers is promising to reduce the cost of living with his fourth federal budget. Picture: AAP/Lukas Coch

What we know so far

The Treasurer has rolled out billions of dollars in new spending in recent weeks including changes designed to provide relief for families through cheaper medicines and GP visits, cuts to student HECS debts, and a reduction in beer excise for schooners at the pub.

It follows a big injection of funding for public schools and childcare and a $150 energy rebate. But if follows criticism that the Albanese Government hasn’t done enough to rein in spending.

Free GP visits

Families and self-funded retirees could save up to $657 a year under the Prime Minister’s ‘free’ GP visit plan depending on the number of visits they make to the doctor and where they live.

The Health Department has crunched the numbers on a range of scenarios for the biggest overhaul of Medicare in decades for singles, couples, families, retirees and young people on a mental health plan, and it shows a significant reduction in costs.

Under the proposed changes, Medicare payments for common visits will increase from November 1, 2025, with the expansion of the bulk billing incentive to all Australians and the incentive payment for practices that bulk bill every patient.

The Liberal Party announced they wouldn’t “stand in the way” of the plan, accusing the Labor Party of making “a mess” out of bulk billing. Mr Dutton then announced he would not only match the plan but outbid it spending $9 billion.

Cheaper medicines

The Prime Minister has pledged he will slash the cost of prescription medicine in Australia to the lowest level in twenty years if re-elected, pledging Aussies will not pay more than $25 for a Pharmaceutical Benefits Scheme (PBS) script.

In a huge move designed to make the federal election all about Medicare, the Prime Minister unveiled the big change overnight promising it will come into force on January 1, 2026, but only if he secures a second term.

It could save people with chronic health conditions up to $200 a year with the government providing everyday examples of a perimenopausal woman or a child with ADHD saving around $80 a year on a standard script.

The cost of medicine on the PBS is already frozen at $7.70 a script for concession cardholders. However, non-concession card holders pay $31.60.

Under the changes proposed that will be slashed to $25 a script in a move designed to also put downward pressure on inflation.

“Cheaper medicines is another way we are helping with the cost of living, while putting downward pressure on inflation – our number one focus,’’ Mr Albanese told news.com.au.

Prime Minister Anthony Albanese is offering lots of pre-election sweeteners. Picture: AAP Image/Joel Carrett

$150 energy rebate for all

Energy rebates worth $150 that are designed to reduce the impact of expected price hikes will be extended for every Australian for another six months in a pre-election sweetener.

Despite widespread criticism that the Prime Minister failed to deliver on his pledge before the last election that he would bring down the price of power by $275, the government is saddling up to offer more rebates.

However, the new rebates are only for six months, delivering two more $75 hits of relief each quarter until the end of the year.

The previous rebates were worth $300. The Australian government announced the initial $300 energy rebate for all households and a $325 rebate for eligible small businesses, starting July 1, 2024.

Those rebates were designed to expire in July, 2025 but will now be extended until the end of the year.

The new rebate will be offered at a reduced rate of $150 – covering off for many families on expected price hikes.

Home equity scheme offered to more workers

The Albanese Government has also announced changes to the home equity scheme to allow more workers on higher incomes to access the scheme.

In a bid to woo people trying to enter the housing market, the Albanese Government is set to lift the income and property price caps for a shared equity scheme known as Help to Buy.

The income caps will be lifted from $90,000 to $100,000 for individuals and from $120,000 to $160,000 for joint applicants and single parents.

Under the Help to Buy program, the federal government makes an “equity contribution” of up to 40 per cent of the cost of a new home or 30 percent of existing homes.

That means you only need to take out a mortgage for 60 to 70 per cent of the property and as a result you have much lower interest rate payments.

Buyers still need to pay a mortgage for their share of the property but won’t need to pay rent on the stake owned by the government. The government will retain the stake until you sell or buy the government out.

The changes mean that single parents earning up to $160,000 will now be eligible for the scheme for the first time, and the value of the house you can buy will rise to $1.3 million in Sydney. When you factor in a 40 per cent equity stake that means you would need to cover a mortgage of $800,000 – or less depending on your deposit – to buy the home.

Price caps are being lifted on the Help to Buy scheme. Picture: AAP Image/James Ross

Beer excise down

Anthony Albanese will also freeze beer taxes for the next two years in a shameless pitch to voters ahead of an election that is tipped to be called within the next week.

The Prime Minister has confirmed “we will freeze the indexation on draught beer excise for two years” on Friday night, in what he described as a win for beer drinkers, brewers and hospitality businesses.

With schooners and pints tracking closer to $15 and $20 in major cities, publicans have expressed fears the steep prices are driving customers away.

It follows warnings that a half of the cost of a $59.99 slab of Coopers Pale Ale was going to the taxman.

The amount of alcohol excise charged for beer and spirits increases twice a year, in February and August, in line with inflation.

What’s the big surprise?

In 2022, the Morrison Government bowed out with a cash splash that included an $8.6 billion cost-of-living package to slash the petrol tax by 22 cents per litre for six months, gives 10 million low and middle-income earners a one-off, bonus tax rebate of $420, and hands $250 cheques to six million pensioners and welfare recipients.

News.com.au has confirmed that income tax cuts are not in the mix for the 2025 budget, but a targeted one-off payment is a possibility.

But the spend-a-thon comes at a price with expectations that the budget will forecast a decade of deficits.

Treasurer Jim Chalmers said that as a result of the government’s efforts to get the Liberal debt down, in nominal terms, gross debt is expected to be $177 billion lower this financial year than forecast before the last election.

The Treasurer said that the Budget will reveal the Albanese Government has helped engineer a turnaround in the bottom line of $207 billion over the seven years to 2028-29, the biggest ever nominal budget turnaround in a single Parliamentary term.