Jim Chalmers confirms budget surplus will be ‘north’ of $20bn

Jim Chalmers has revealed the nation’s first budget surplus in 15 years will come in above $20bn.

Jim Chalmers fiscal repair today would allow for more scope for cost of living relief in ‘future budgets’. Picture: NCA NewsWire / Martin Ollman

Jim Chalmers has revealed the nation’s first budget surplus in 15 years will come in above $20bn, saying the improving fiscal position will provide flexibility to roll out further cost-of-living relief in “future budgets”.

Speaking in Canberra to announce the appointment of a new chairman of the Productivity Commission, the federal Treasurer said the Finance Department in coming weeks would confirm the final figure, after tax revenues through 2022-23 soared as more Australians found work and commodity exports earnings boomed.

“The current expectation of the officials is that the surplus for (2022-23) will be around $20bn, or more likely just north of that figure,” Dr Chalmers said.

While opening the door to more support for struggling households down the track amid a once-in-a-generation cost-of-living crunch, Dr Chalmers hosed down speculation of more immediate help. “We’re not currently working on a new package of cost-of-living relief, we’re foc­used on rolling out billions of dollars in cost-of-living relief that we have already announced,” he said.

Cost-of-living pressures continue to hammer household finances, and inflation figures on Wednesday are set to show double-digit percentage increases in prices for essentials such as food and electricity, alongside accelerating rental costs.

Barring a surprisingly weak consumer price report, most economists say mortgage holders, many of whom have experienced 40 per cent jumps in interest repayments in the past year, will be hit with a 13th rate hike when the Reserve Bank of Australia board meets on August 1.

To offset soaring power prices, more than five million vulnerable households will receive $500 taxpayer-funded discounts on their energy bills this quarter, while eligible small businesses will get $650, in a co-funding deal with the states.

“The government’s main focus is on providing cost-of-living relief by rolling out the commitments that we’ve made over our first two budgets,” Dr Chalmers said. “But what a much better budget position allows for is, it gives you the flexibility down the track in future budgets – if you want to do more on the cost-of-living front, it gives you the flexibility to do that.”

The Treasurer said a major consideration for any additional spending was that while inflation was moderating, it was “higher than we want it to be”.

“It’s really important that the government is not adding unnecessarily to those pressures,” Dr Chalmers said.

“And so by banking such a big proportion of the upward revisions to revenue, then we’re making our contribution on that front.”

With the budget forecast to plunge back into a $13.9bn deficit this financial year before sinking deeper into the red across the foreseeable future, Dr Chalmers cautioned that “we also need to recognise that even though the budget is in much better nick in the near term, we’ve still got those longer-term intensifying pressures as well”.