Labor’s increased surplus won’t woo stressed-out voters, experts say

Labor’s larger-than-expected surplus will do nothing to quell voters crushed by the cost-of-living crisis, a leading pollster says.

Labor’s larger-than-expected surplus will do nothing to quell voters crushed by the cost-of-living crisis, with one leading pollster fearing Labor is on a “short runway” to the next federal election but quickly “running out of tarmac”.

The final budget outcome, set to be released on Monday, will reveal an increased surplus from $9.3bn forecast in May to a projected figure in the mid-teens, with Treasurer Jim Chalmers saying the savings have come from less spending and not increased taxes or revenue.

Figures will also reveal gross debt has dropped by about $17bn since May’s estimate to $906.9bn.

Treasurer Jim Chalmers says the surplus is helping in the fight against inflation. Picture: NewsWire/Tertius Pickard

However Redbridge strategy and campaigns director Kos Samaras said most voters would be “agnostic” to a surplus, in which government revenue exceeds its expenses.

“Will they resent their money has been chucked aside and not placed into a service, probably not but none of that will have any connection to their lived experience,” he said.

“To voters, it’s an abstract thing that politicians talk about.”

The government spruiking a surplus while households are struggling with accumulated cost-of-living spikes, housing pressure, inflationary prices and interest rates will also not likely translate into an uptick in the polls.

“Many are reaching a stage where they can’t manage it and when the economy turns a corner, it will take many of these Australians many of years to recover from,” Mr Samaras said.

It’s bad news for the government given Monday’s Newspoll revealed Labor’s primary vote dipped to 31 per cent, the party’s equal lowest since the 2022 election, with the Coalition increasing its lead to seven points.

The major parties, however, remained deadlocked in a 50-50 split on a two-party preferred basis for the third month in a row.

With cost of living firming up to be a major political battleground, and a cash rate cut unlikely until February, Mr Samaras said Labor was “on a short runway and they’re running out of tarmac”.

Australia Institute chief economist Greg Jericho said a budget surplus wouldn’t “have much of an impact on Australians” but given the cost-of-living crisis there was “no justification for a surplus at the moment”.

“You run a surplus when you’re trying to slow the economy because you’re worried it’s overheating,” he said

“Running a deficit at the moment I think is very much economically prudent and warranted, so long as the spending is not done in a way that is going to fuel inflation by giving extra money to people who don’t need it.”

Dr Jericho pointed to “smart” anti-inflationary cost-of-living measures like Labor’s $300 energy rebate however said more needed to be done to increase JobSeeker and support for lower-income households.

“We’re a country, a rich country that has above-average poverty, especially among people over the age of 50, and know that people over the age of 50 make up about a third of people on JobSeeker,” he said.

“Raising the payments would be a smart move, as it would actually enable people who are on JobSeeker and looking for work to be able to survive while they’re doing that.”

Australia Institute chief economist Greg Jericho said the government should prioritise anti-inflationary cost-of-living measures over a budget surplus. Picture: NewsWire/ Martin Ollman

Greens economic justice spokesman Nick McKim echoed Dr Jericho’s concerns, saying Labor is “making a political choice to prioritise a budget surplus over doing more to help people’.

The minor party has called for policy measures like adding dental and mental health care to Medicare and increasing income support.

Dr McKim argued a policy like pushing states to implement rent freezes would also be “anti-inflationary” while giving tenants a reprieve.

“Australians don’t care about a budget surplus. They care that they can’t afford enough food to live healthily, and they care that they can’t pay their rents and their mortgages,” he said.

However, the government says an increased surplus will help “fight against inflation.

“What that final budget outcome will show is that we have turned two big Liberal deficits into two big Labor surpluses,” Mr Chalmers said earlier this week.

“That’s because of our spending restraint and our responsible economic management and the Reserve Bank governor has said that those two surpluses that we’ve now delivered are helping in that fight against inflation.”