Election 2022: Jim Chalmers aiming for October budget to tackle cost of living

Jim Chalmers has revealed that if Labor wins the election on May 21 he will likely present an entirely new budget in October.

Labor’s Treasury spokesman Jim Chalmers in Sydney. Picture: John Feder

Jim Chalmers has revealed that if Labor wins the election on May 21 he will likely deliver a ministerial statement on the economic and budget outlook when the new parliament meets in June and present an entirely new budget in October.

In an exclusive and wide-ranging interview with The Weekend Australian, Labor’s Treasury spokesman said the first budget of an Anthony Albanese-led government would focus on “the cost-of-living crisis” and the “tricky economic conditions” it would inherit.

Dr Chalmers urged voters to trust Labor on economic management and named his party’s climate change policy aimed at decarbonising the economy, creating cleaner and greener energy, along with new jobs and business opportunities, as a transformative reform on par with floating the dollar.

With the final budget outcome for this financial year to be presented to the government in September, Dr Chalmers said he expected a Labor government to deliver a new 2022-23 budget in October.

“It would make no sense to wait until May of next year if we were successful (at the election) to hand down the government’s first budget,” Dr Chalmers said. “My preference would be for a budget in the second half of October, subject to the advice of Treasury and consultation with my colleagues. That first budget will be about implementing our commitments, recognising that the defining challenges in the economy are skyrocketing inflation, falling real wages and not having enough to show for all that debt.

“We would be inheriting the trickiest set of economic conditions that an incoming government has inherited, probably, since the war … So we take those challenges very seriously and we have an economic plan which is carefully designed and calibrated to deal with those challenges.”

A Labor government would schedule the first sittings of the 47th parliament in June, at which Dr Chalmers would deliver a ministerial statement on the outlook for the economy and provide a budget update, and the government’s response.

“It would be appropriate for a new treasurer to outline his thinking to the parliament in or near that first sitting of the parliament via some kind of ministerial statement,” Dr Chalmers said. “My intention would be to keep the parliament abreast of the substantially tricky economic conditions that we would inherit if we won office.”

The opposition is concerned that the budget position may be worse than the government has estimated due to overly optimistic wage and productivity estimates.

“Historically the government has overpromised and under­delivered on their wages forecast,” Dr Chalmers said. “We hope that that’s an exception this time round and we get some genuine wages growth. Time will tell if that happens or not.

“One of the hidden lies at the core of the budget is that the government has heroic assumptions about productivity. They assume that productivity growth will just miraculously reappear without actually having a plan to invest in the drivers of productivity and economic growth.”

While Dr Chalmers noted Labor had supported the ­Coalition’s cost-of-living relief measures in the budget, and his party would further reduce the cost of childcare, medicines and power bills, he was cautious about promising to increase wages in the short-term.

“We are realistic and responsible and measured about our claims about wages,” he said. “It is a problem that has been developing for some time and it will take some time to turn around. The difference between us and the government is that we care about it and we’ve got policies to get real wages growing again.”

Dr Chalmers said Labor’s climate change and energy policy, designed to meet its net-zero carbon emissions by 2050 target by upgrading the electricity grid, supporting the take-up of electric vehicles and developing renewable energy, would be seen by ­future generations as a landmark economic reform.

“Cleaner and cheaper energy is our floating the dollar or our superannuation moment,” he said. “This policy, of all of our policies, gives us the best chance of unlocking tens of billions of dollars of investment, hundreds of thousands of jobs, (and) get ­energy costs down for households but also for businesses.”