Treasurer drops big hint on budget and issues one warning

Jim Chalmers has dropped a huge clue on the next budget but warned Aussies not to expect this one thing when it’s handed down.

Treasurer Jim Chalmers has earmarked the last Tuesday in October as the day he hands down his first budget.

But he’s warning Australians hoping the first Labor budget would help ease the cost of living could be left wanting.

“We have serious fiscal constraints, and our ability to deal with some of those challenges in a way that you might have been able to in 2000, are not what they are now,” Dr Chalmers said.

“I just want people to recognise that, you know, we’re not working up as we speak, a package of household support.”

The clue came in his address to the Sky News’ Australia’s Economic Outlook forum, where Dr Chalmers said he was confident about the nation’s future despite “choppy waters” ahead.

The Treasurer has revealed when he wants to hold his first budget. Picture, John Gass

“There is a genuine sense of collaboration as we try to address some of the issues that we can track at the moment,” the Treasurer said.

“There couldn’t be a better time to put our heads together about these challenges. I think in the community there has been a bit of a mood shift or a bit of a gear shift.”

Dr Chalmers confirmed he met with the national energy regulator and West Australian Premier on Wednesday.

Meetings with Reserve Bank governor Philip Lowe and the Business Council of Australia are to follow on Thursday.

The date for Dr Chalmers’ first budget will be subject to the finalisation of the parliamentary sitting calendar.

While optimistic about the future, the Treasurer said there was “no use mincing words” when discussing the impending inflation challenge.

Ms Westacott said it was time to stop kicking the can down the road. Picture: Toby Zerna

“It will get worse before it gets better. Inflation will be in my view significantly higher than the 5.1 per cent that we saw in the most recent data,” Dr Chalmers said.

“So we need to be upfront with all of that.”

Business Council of Australia chief executive Jennifer Westacott said it was time to stop “kicking the can down the rod” on economic repair and workplace productivity changes.

“But we have got to do that in a way that‘s about growth,” she told the conference.

“I don‘t think you cut your way out of this, you have got to grow your way out of this.”

Both Dr Chalmers and Ms Westacott agreed they did not believe Australia is heading towards a recession.

“That’s not on my list of fears for our domestic economy,” the Treasurer said.