Treasurer’s interview slip hints at budget surprise

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Treasurer Jim Chalmers has tipped a substantial boost to the budget bottom line after a verbal slip on live television that hinted at the prospect of a surplus.

The treasurer said the stronger outlook would include “upward revisions to surplus” before he corrected himself to emphasise the revisions would show the big gains in tax revenue this year.

But he warned that the economy would slow and that this would mean a slowdown when measured per head of population, although Treasury officials have brought forward the date when they expect wages to grow in real terms.

On cost-of-living relief, the treasurer said: “People will be getting several hundred dollars if they are on pensions and payments.”Credit: Alex Ellinghausen

Asked on Sky News whether he would show a “symbolic surplus” in the budget on Tuesday, the treasurer said that question was only possible because Labor had saved the increase in revenue rather than spending the proceeds.

“You wouldn’t even be asking me these questions were it not for the responsible approach that we’ve taken to the budget over the course of two budgets now, banking most of the upward revisions to surplus,” he said.

He quickly clarified that he was referring to the “upward revision to revenue” because the question had been about a surplus.

Chalmers revealed a key aspect of the revenue forecast by saying that only 20 per cent of the revenue gain came from stronger prices for commodities such as coal and iron ore, saying much more came from domestic factors such as better employment and wages.

Those numbers go to the heart of a looming political contest between Labor and the Coalition over whether the improvement in the bottom line is the result of factors outside the government’s control – such as commodity prices – or its management of the economy.

In a series of television interviews on Sunday morning, Chalmers signalled a package of energy subsidies for 5.5 million families and one million small businesses that he said would be worth “several hundred dollars” to each recipient.

The energy package will be delivered with the states under deals flowing from last year’s federal decisions to cap the price of gas and coal and work with state and territory governments to pass rebates to households in their energy bills.

The gains for households will depend on their location because Chalmers said the final package was the result of eight different deals with states and territories with varying levels of financial aid.

“People will be getting several hundred dollars if they are on pensions and payments, or a small business,” Chalmers told ABC News.

“But as I said, depending on where you live, what the price pressures are, depending on how much the states and territories are prepared to kick in, because this is a co-investment with them.”

Asked about a higher JobSeeker rate for all recipients on unemployment benefits, Chalmers warned against speculation about an across-the-board increase.

“I would encourage your viewers to be careful about the assumptions that people are making about the budget on Tuesday night,” he told the ABC.

“There will be cost of living relief which extends beyond one age cohort or another.”

The Seven Network reported last week that the government would increase JobSeeker for people aged 55 and over, triggering strong criticism of the government from social service groups that are seeking an increase for all.

A single person with no children receives a base rate of $693.10 per fortnight on the JobSeeker program but a person aged 60 or older who has been on the benefit for nine months receives $745.20.

With inflation at 7 per cent, the base rate would rise by about $50 per fortnight to keep up with the cost of living over the year, given JobSeeker is indexed to the consumer price index, but the Australian Council of Social Services is seeking an increase in real terms to lift vulnerable people out of poverty.

ACOSS chief executive Cassandra Goldie said the JobSeeker rate should rise to at least $76 per day – or $1064 per fortnight.

“JobSeeker, Youth Allowance and other payments are too low to sustain a living for anyone, regardless of age,” she said.

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