Labor will ‘fail in its duty’ on inflation, cost of living unless it solves financial pressures says Coalition MP Jane Hume

Opposition finance spokeswoman Jane Hume says Labor are putting ‘bandaids on bullet holes’ ahead of Tuesday’s budget.

Federal Treasurer Jim Chalmers and Prime Minister Anthony Albanese.

Opposition finance spokeswoman Jane Hume says Labor will have “failed in its duty” unless it tames inflation and restores the standard of living through next week’s budget.

Senator Hume claimed Labor had spent more than $200bn since coming to office and that it needed to bank a “structural surplus” not just a “windfall surplus” on Tuesday.

She said a Coalition government would not have wasted more than $400m on a “failed referendum” or $40m on advertising the rejigged stage three tax cuts.

“Australians have seen their real disposable income go backwards by around 7.5 per cent in the last two years, purely because of inflation because of higher interest rates and because of bracket creep because of taxes. And that’s what we’d like to see concentrated on in the medium term,” she told Sky News,

“These windfall gains, these windfall surpluses, they mean nothing, unless you can sustainably return a surplus in the medium term.”

She said boosts to programs like commonwealth rent assistance in the next budget would only be “bandaids on bullet holes”.

“Let’s not forget that this inflation is not just sticky, it’s also homegrown and simply providing more and more subsidies could potentially make the problem worse because it pushes up aggregate demand, particularly from the public sector side,” she said.

“You need to look at some of those big spending areas like NDIS and aged care, which this government came to office saying that it was going to get under control and has failed to do so.”

Senator Hume criticised Labor for boosting the public service by 10,000 more people and that the Coalition would not have invested taxpayer money in an American quantum computing company as the government had done earlier this year.

While raising concern with bracket creep, Senator Hume would not pre-empt whether the Opposition Leader would unveil a policy to tackle the issue in his budget reply.

But she did say the Coalition was “not talking about restoring the stage three tax cuts as they previously were”.

Jim Chalmers says Tuesday’s budget will focus on middle Australia and “be good for mums and families” in addressing the cost of living crisis.

He said the tax cuts would “be the foundation stone” of addressing cost of living but more help was on its way.

While the cost of living relief would “not be identical” to what was seen in the last budget, Dr Chalmers said it would be “substantial” and pointed to the government’s willingness to take the edge of rent and energy bills.

He defended Labor’s failure to deliver a $275 reduction in power bills promised at the last election, declaring it was “modeling done in 2021, about an outcome in 2025”.

Dr Chalmers said the government would not “chase the petrol price up and down” through a fuel excise and focus on tax cuts and other cost of living relief instead.

“We want to help motorists because we know that they’re under pressure, but we just think that there are more effective ways to do that elsewhere in the budget, rather than the sort of multibillion dollar outlays we’ve seen in the past when it comes to the petrol excise,” he said.

He said he was confident the tax cuts would not have an impact on inflation.

“The treasury analysis we released in January of this year made it very clear (there would be) no additional pressure on inflation, because the size of the tax cuts are broadly similar, and (there will be) perhaps a modest improvement when it comes to labor supply,” he said.

When asked if he would take responsibility should there be another rate hike, Dr Chalmers said “I take responsibility for the fiscal settings in the budget”.

Dr Chalmers says migration is “coming back down to normal levels” and has ruled out lifting visa fees to continue putting downward pressure on the figures.

“Net overseas migration next year will be about half of what it was last year and that shows that net overseas migration is coming back to more normal levels,” he told Sky News.

“One of the reasons for that is the work that we’ve done ending the pandemic visa, cracking down on the student migration system. All of this has had an impact and what you will see in the budget.”

When asked if visa fees would be lifted Dr Chalmers said “people shouldn’t expect to see that in the budget”.

“Australia’s migration program has been strong, really since the war. And it’s been part of the success of our communities and the strength of our economy,” he said.

“But it’s not the primary driver of (the positives) we’re seeing in the budget. The primary driver of that is what we’re seeing in the labour market.”

Dr Chalmers said putting superannuation on paid parental leave would cost $1.1bnin this budget.

“Once it’s fully up and running, it’ll be a bit north of $600 million a year,” he said.

“So a really substantial investment in the moms and dads of our country to make sure they’re still getting super when they’re on the government paid parental leave scheme.”

He said he would be “ready to deliver a fourth budget” in March or April, before a May election.

Opposition Rreasury spokesman Angus Taylor has left the door open to the Coalition subsidising nuclear power.

Mr Taylor was asked if the Coalition would subsidise the alternative power source, to which he said it would depend on whether projects “were capable of delivering a commercial return”.

When Mr Taylor was quizzed on whether he believed nuclear was capable of delivering such a return, he said: “yes I do”.

Mr Taylor said Labor must ensure it is “restrained in spending” in next week’s budget.

“We’ve seen spending growing in real terms much faster than the economy in the last two years. We have seen a government that loves to spend, I mean, it’s their natural instinct,” he told ABC’s Insiders.

“They’re going back to COVID-era spending.”

Mr Taylor said “no amount of government subsidies” would have an impact through the Future Made in Australia plan unless the government got the “basics right”.

“There’s no case for subsidies whilst you’re not getting the basics right... we’re seeing major manufacturers leaving the country right now,” he said.

Mr Taylor said the Coalition hasn’t “been frightened of divestiture powers in the past” when asked on supermarket divesture powers.

However, he said the Opposition was still “working its way through the issue” when it came to forcibly breaking up the supermarket monopoly.