Treasurer reveals Australia’s biggest hurdles as he hands down his first budget

Jim Chalmers said the nation is in a time of “great challenge and change” and made a point of repeating one crucial word nearly 10 times in his Budget speech.

Federal Treasurer Jim Chalmers, pictured with his children Leo 7, Annabel 5 and Jack 3, promised a responsible, affordable and sustainable Budget. Picture: NewsWire / Sarah Marshall

Jim Chalmers has done his best to make sure Australians know Labor’s first federal budget in nearly a decade is “responsible”.

The Treasurer used the word eight times in his speech on Tuesday night.

Speaking at Parliament House in Canberra, Mr Chalmers echoed his recent warnings about inflation and other economic pressures swirling around the world.

He said the budget “makes hard decisions for hard times” and stressed the government had shown “restraint”.

The Treasurer issued a warning to Australians, foreshadowing more difficult decisions about government spending.

Mr Chalmers said the “hard truth” about the nation’s economy was that it wasn’t “delivering” in the way Australians needed it to.

“It isn’t as resilient as we need it to be for the challenges we face together,” he said.

Mr Chalmers said his first budget as Treasurer and Labor’s first in nearly a decade was only the beginning of the Albanese government’s mission to repair its balance sheets.

“And it’s just the beginning of the conversation we need to have as a country,” he said.

Jim Chalmers warned Australians his ‘bread and butter’ budget was just the beginning of repairing the government’s balance sheets. Picture: NCA NewsWire

This conversation would be about Australia’s economic and fiscal challenges and about the choices people living here need to make about “what’s affordable and what’s fair”.

“So we can pay to service the debt that was left to us – when borrowing costs are the fastest growing budget pressure, rising at more than 14 per cent a year over a decade,” Mr Chalmers said.

“And so we can pay for the things that Australians value most.”

Speaking to journalists before his budget speech, Mr Chalmers said tax reform should be part of that conversation.

Asked if Australians might need to be prepared to pay higher taxes in order to fund public services, the Treasurer did not rule it out.

“I think tax needs to be part of the conversation,” he said.

“What we’ve done in this budget is built a foundation for a more sustainable budget … but there is more work to do.”

The budget backed in Mr Chalmers’ anticipated reforms to the way the government taxes multinational companies.

The changes include expanding successful tax compliance programs and giving the tax office additional resources to stamp out tax avoidance.

The changes will save $4.7bn over four years, but less than a billion of that amount will come from tax receipts.

Defending the limited return, Mr Chalmers said this was just the first step and Australians could expect further reforms following consultation with the OECD.

In his speech on Tuesday night, Mr Chalmers reflected on the fact Australia was faced with the prospect of a third global downturn in 15 years.

The lingering effects of the Covid-19 pandemic and the war in Ukraine have been driving inflation and subsequent higher interest rates.

While promising to support cheaper childcare and more paid parental leave, Jim Chalmers said the Budget was ‘just the beginning of the conversation we need to have as a country’.

Mr Chalmers said the budget was designed to “strengthen the buffers against adversity and begin to build a better future”.

The government committed to cheaper childcare, more paid parental leave, cheaper medicines, more affordable housing and a “future made in Australia”.

It invested $6.1bn into hospitals, in Medicare and extended Covid support, as well as $2.5bn to hire more registered nurses to staff aged care facilities.

Mr Chalmers said his first budget was designed to do three things – to provide “responsible” cost of living relief, to target investments and to begin the “hard yards” of budget repair.

The deficit for the rest of this financial year is now expected to be $36.9bn, down from the $41.1bn originally forecast.

Mr Chalmers said Australians knew there were “hard days to come”.

“Getting through this period stronger than we were before will rely on the best of our character – our resilience, our pragmatism, our co-operation and our confidence, and above all, our belief in each other,” he said.

“And it will rely on a government dedicated and determined – to confront challenges ignored for too long, and to seize the opportunities that won’t wait any longer.”